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PRELIMINARY TITLE

EFFECT AND APsPLICATION OF LAWS


1. When do laws in the Philippines take effect?

Laws in the Philippines take effect after fifteen days following the completion of their
publication in the Official Gazette or in a newspaper of general circulation, unless it is otherwise
provided. (Art. 2, Civil Code, as amended by E.O. No. 200)

2. How shall the clause “unless it is otherwise provided” in Article 2 of the Civil Code
be interpreted?

The clause refers to the date when the law is to take effect and not to the requirement of
publication itself, which cannot in any event be omitted.

The clause does not mean that the legislature may make the law effective immediately
upon approval, or on any other date, without its previous publication. Publication is indispensable
in every case, but the legislature may, in its discretion, provide that the usual 15-day period be
shortened or extended. An example of this is the Civil Code which did not become effective after
fifteen days from its publication but “one year after such publication.” The general rule did apply
because it was “otherwise provided.” (Tanada v. Tuvera, 146 SCRA 446 [1986]

3. What does the law requiring publication of laws comprehend?

The law requiring publication of laws comprehends all statutes, including those of local
application and private laws, which should be published as a condition for their effectivity, and
shall begin fifteen days after their publication, unless the legislature fixes a different date for their
effectivity.

Covered by the law are administrative rules and regulations which are to be published if
their purpose is to enforce or implement existing laws pursuant to a valid delegation of power.
Interpretative regulations and those merely internal to a government agency need not be
published. (Tanada v. Tuvera, 146 SCRA 446 [1986])

4. If an administrative order is published by the UP Law Center in the National


Administrative Register pursuant to the Administrative Code of 1987, is the order valid?

No. The pronouncement of the Supreme Court in Tanada is clear and categorical.
Administrative rules and regulations must be published if their purpose is to enforce or implement
an existing law pursuant to a valid delegation of legislative power. The only exceptions are
interpretative regulations, those merely internal in nature, or those so-called letters of instructions
issued by administrative superiors concerning the rules and guidelines to be followed by their
subordinates in the performance of their duties. The fact that an administrative order is filed with
and published by the UP Law Center in the National Administrative Register, although required
under the Administrative Code of 1987, does not dispense with the requirement of its publication
in the Official Gazette or in a newspaper of general circulation.
In Republic v. Express Telecommunications Co., Inc., G.R. No. 147096, January 15, 2002,
the Supreme Court invalidated the Rules of Practice and Procedure adopted by the National
Telecommunications Commission despite the fact that it was filed with and published by the UP
Law Center in the National Administrative Register. In said case, the Supreme Court emphasized
once more that “publication in the Official Gazette or in a newspaper of general circulation is a
condition sine qua non before administrative rules and regulations can take effect.”

(NOTE: Section 3, Chapter 2, Book VII of the Administrative Code of 1987 requires
every agency to file with the UP Law Center three (3) certified copies of every rule adopted by it.
It further states that rules in force on the date of effectivity of the Code which are not filed within
three (3) months from date of efffectivity of the Administrative Code shall not thereafter be the
basis of any sanction against any party or persons.)

5. Is there a need to publish Supreme Court decisions in the Official Gazette as a


condition to their becoming effective or binding?

No. It is the bounden duty of a lawyer who is in the active practice of law to keep abreast
with decisions of the Supreme Court, particularly those where issues have been clarified,
reiterated, and published in advance in the Supreme Court Reports Annotated (SCRA) and
Supreme Court Advanced Decisions (SCAD). (Roy v. Court of Appeals, G.R. No. 80718, January
29, 1988)

6. What is the basis of the rule that ignorance of the law excuses no one from
compliance therewith?

The rule is based on expediency as well as necessity. If the rule were otherwise, it would
always be possible for a person to evade both criminal and civil liability by claiming that he was
not aware of the existence of a law which would render him liable. (Askay v. Cosalan, 46 Phil.
179) This rule, however, refers only to ignorance with respect to the application or interpretation
of a difficult or doubtful question of law. The latter may be the basis of good faith (Art. 526, Civil
Code) or may even create a quasi-contract of solutio indebiti. (Art. 2155, Civil Code)

7. Is there any difference between ignorance of the law and ignorance or mistake of
fact?

Yes, there is. While ignorance of the law is no excuse for not complying with it,
ignorance of the fact eliminates criminal intent provided there is no negligence. In addition,
mistake of fact may vitiate consent in a contract and make it voidable.

8. Explain Wharton’s concept of processual presumption.

Under Wharton’s concept of processual presumption (also known as presumed identical


approach), a foreign law is not within the scope of judicial notice. (Sec. 1, Rule 129, Revised
Rules on Evidence) It has to be proved as a fact in accordance with the rules of evidence. If the
proper foreign law is not established as a fact, for whatever reason, the presumption arises that
such foreign law is identical with the local law. (Wong Woo Yiu v. Vivo, 13 SCRA 552 [1965]) and
the court shall then proceed to apply the local law.
(ALTERNATIVE ANSWER: The party whose cause of action or defense is dependent
upon a foreign law has the burden of proving the foreign law. Said foreign law is treated as a
question of fact to be properly pleaded and proved in conformity with the law of evidence of the
State in which it is presented. The reason for this is that a court is not authorized to take judicial
notice of a foreign law. When proof of a foreign law is absent, it is presumed that the foreign law
is the same as the domestic law)

9. What are the exceptions to the rule that laws shall have no retroactive effect?

The following are the exceptions to the rule that laws shall have no retroactive effect:

1. When the law itself expressly provides for its retroactivity. (Art. 4, Civil Code)

2. When the law is penal in character insofar as it favors the accused who is not a
recidivist or a habitual delinquent, even though at the time of the enactment of such law final
sentence has already been rendered. (Art. 22, Revised Penal Code)

3. When the law is procedural so long as it does not affect or change vested rights.
(Aguillon v. Director of Lands, 17 Phil. 560)

4. When the law creates new substantive rights. (Arts. 2253, 2263, Civil Code; Bona v.
Briones, 38 Phil. 276)

5. When the law is curative in character in the sense that the purpose for its enactment is
to cure defects or imperfections.

10. When is a law a penal law?

A law is penal when it prescribes a criminal penalty imposable in a criminal trial.

It is also penal if it prescribes a burden or sanction equivalent to a criminal penalty (e.g.


disqualification from the practice of a profession) even if such burden or sanction is imposed in
an administrative proceeding. (Pascual v. Board of Medical Examiners, 28 SCRA 344)

11. S sells to B a residential lot in an exclusive subdivision in Makati City. The


document of sale contains a stipulation that not more than one single-family building should
be constructed on the property, the plans and specifications of which must be approved by
the seller. The document of sale also provides that the restriction shall be annotated on the
buyer’s title for 20 years.

Five years later, B starts to construct on his property a two-storey commercial


building for his car sales company. S immediately commences an action to stop the
construction on the theory that it violates the restrictions on B’s title. B defends on the
ground that the city’s new zoning ordinance has reclassified a portion of the subdivision –
which portion includes his property- as a commercial area. Judgment for whom?

Judgment for B. In general, laws are to be construed as having only prospective


application. Only laws existing at the time of the execution of a contract are applicable thereto
and not later statutes, unless the latter are specifically intended to have retroactive effect. A later
law which enlarges, abridges, or in any manner changes the intent of the parties to a contract
necessarily surpasses the contract itself and cannot be given retroactive effect without violating
the constitutional prohibition against impairment of contracts.

However, the foregoing principles admit certain exemptions. One involves police power
– a law enacted to regulate or govern certain activities or transactions. The ordinance in question
is a legitimate police power measure and must therefore be read into every contract. When a
portion of the subdivision was later reclassified as a commercial area, the restrictions in the
contract of sale between S and B limiting all constructions on the disputed lot to single family
residential buildings are deemed extinguished by the zoning ordinance and could no longer be
enforced. (Ortigas and Co. Ltd. v. Court of Appeals, 346 SCRA 748 [2000])

12. A committed a particularly heinous crime in 1984 which carries the maximum
penalty of death. Three years later, the trial against A has not yet been terminated so much
so that it was overtaken by the ratification of the 1987 Constitution which abolished the
death penalty. When the trial was finally concluded in 1995, Congress had already restored
the death penalty. If the trial court convicts A, should he be sentenced to suffer the penalty
of death?

The problem poses the following issue: When the death penalty was abolished in 1987
and was retroactively applied to A, did he gain a vested right thereto so that any future act
restoring the death penalty would no longer cover him? An affirmative answer would free A from
the fatal clutches of the death penalty.

There is no question that the abolition of the death penalty benefits A. Perforce, the
subsequent reimposition of the death penalty will not affect him. The framers of the Constitution
themselves state that the law to be passed by Congress reimposing the death penalty can only
have prospective application.

Well-settled is the rule that a person has no vested right in any rule of law which entitles
him to insist that it shall remain unchanged for his benefit, nor has he a vested right in the
continued existence of a statute which precludes its change or repeal, nor in any omission to
legislate in any particular matter. However, a subsequent statute cannot be so applied retroactively
as to impair a vested right that accrued under the old law. Courts have thus given statutes strict
construction to prevent their retroactive operation in order that the statutes would not impair or
interfere with vested or existing rights. Clearly, A’s right to be benefited by the abolition of the
death penalty accrued or attached by virtue of Article 22 of the Revised Penal Code. This benefit
cannot be taken away from him. (People v. Patalin, et. al., 109 SCAD 734 [1999])

13. Distinguish between mandatory laws and directory laws.

Mandatory (prohibitory) laws are those which relate to matters of substance, affect
substantive rights, and are the very essence of the thing required to be done. On the other hand,
those which are mere matters of form, or which are not material to or do not affect any
substantive right, and do not relate to the essence of the things to be done, so that compliance is a
matter of convenience rather than substance, are considered as directory.
14. Explain the doctrine of stare decisis.

The doctrine of stare decisis under Article 8 of the Civil Code expresses the rule that
judicial decisions applying or interpreting the law shall form part of the legal system of the
Philippines. The rule follows the settled doctrine that the interpretation placed upon the written
law by a competent court has the force of law. It is only when a prior ruling of the court finds
itself later overruled, and a different view is adopted, that the new doctrine may have to be
applied prospectively in favor of parties who have relied on the old doctrine and have acted in
good faith in accordance therewith. (Pesca v. Pesca, 356 SCRA 588 [2001])

15. In a cockfight involving the cocks of Chu Jan and Lucio Bernas, the sentenciador
declared Bernas’ cock the winner. Not satisfied with the sentenciador’s decision, Chu Jan
filed a case against Bernas with the then Justice of the Peace, praying that the judgment of
the sentenciador be voided and his cock be declared the rightful winner. After due hearing,
the justice of the Peace declared that the bout was a draw.

Unappeased, Chu Jan appealed to the then Court of First Instance. The CFI judge
dismissed the appeal on the ground that he knew of no law governing cockfights. He also
ordered the return of Chu Jan’s bet. Bernas appealed to the Supreme Court. What was the
result?

In Chu Jan v. Bernas, 34 Phil. 631, the Supreme Court reversed the order of dismissal
and remanded the case to the CFI. A judge should not refrain from rendering a judgment just
because there is no law that governs a particular case. In the absence of a law or principle of law,
the rules of fair play must be applied. (Sec. of Justice v. Lantion, 322 SCRA 160 [2000] When a
provision of law is silent or ambiguous, judges ought to invoke a solution responsive to the
vehement urge of conscience. (Amatan v. Aujero, 248 SCRA 511)

(NOTE: After due hearing in accordance with the decision of the Supreme Court
remanding the case to it, the CFI upheld the decision of the sentenciador, there being no clear
violation of law or evidence of fraud)

16. In a criminal trial for rape with homicide, the judge found the accused guilty.
Because of his religious convictions, however, the judge refused to impose the death penalty
upon the accused which was the penalty imposable for the crime. Did the judge commit a
reversible error?

Yes. Under the law, the penalty imposable for the crime of rape with homicide is death.
The law leaves no room for the exercise of discretion on the part of the trial judge to impose a
penalty under the circumstances other than the sentence of death. A court of law is no place for a
protracted debate on the morality of or propriety of the sentence, where the law itself provides for
the sentence of death as a penalty in specific and well-defined instances. Courts are not concerned
with the wisdom, efficacy or morality of laws. (People v. Veneracion, 249 SCRA 247 [1995])

17. Explain the Theory of Generality.

Any offense committed within Philippine territory offends the state. Therefore, any
person, whether citizen or alien, can be punished for committing a crime within our territory. This
rule is subject to the principles of international law and to treaty stipulations. (Art. 14, Civil
Code)

18. Mariano, a Filipino naturalized American, now a resident of California, comes


back to the Philippines as a balikbayan. He is arrested at the NAIA in possession of a .38
Smith and Wesson. Charged with illegal possession of firearms, he moves to quash the
criminal complaint based on his constitutional right as a Californian to bear arms. Decide.

Motion denied. The crime was committed within our territorial jurisdiction and is
therefore punishable here. Under the principle of generality, no one is exempt from our penal
laws, except those who enjoy diplomatic immunity under international law. (Art. 14, Civil Code;
Art. 2 Revised Penal Code; see also 3rd par., Art. 17, Civil Code)

19. Anton and Amy, husband and wife, are married in Baguio City. Anton goes to
Hongkong and marries Bonnie, a Filipina domestic helper. After a month of connubial bliss
in the Crown Colony, Anton goes to Singapore and marries Connie, a Filipina “house
manager.” After two months with Connie, Anton goes to Brunei where he marries Demi, a
Filipina GRO. After three months of connubial bliss in Brunei, Anton heads for home sweet
home. May Anton be prosecuted for bigamy in the Philippines at the instance of his first
wife, Amy?

No, Anton did not commit any crime in Philippine territory. Bigamy is committed by
entering into a second or subsequent marriage. The first marriage, which was entered into in the
Philippines, is not bigamous. The subsequent marriages, which are bigamous marriages, were all
entered into abroad, or outside Philippine territory, and therefore beyond our criminal jurisdiction.

20. What is conflict of laws? Distinguish it from a purely internal law.

Conflict of laws is that part of the municipal law of the state which directs its courts and
administrative agencies, when confronted with a legal problem involving a foreign element, to
apply either the local law or a foreign law. A purely internal rule, on the other hand, is a rule
meant for local cases, or cases which are devoid of any foreign element.

As distinguished from a purely internal law, conflict of laws do not purport to solve a
problem. They merely point to the law to be applied, whether local law or the foreign law.

21. Suppose a problem involves a foreign element, is the court of the forum
conclusively and absolutely obliged to apply the proper foreign law?

No. Even if there is a foreign element, the forum may be FORCED TO APPLY the
internal law:

a. If the conflicts rule so provides.

b. If the proper foreign law has not been properly pleaded and proved.

c. If the proper foreign law is contrary to a sound and important public policy of the
forum.

d. If the proper foreign law is contrary to universally recognized principles of morality.

e. If the proper foreign law is penal.

22. A and B, Filipinos, both women, enter into a same-sex marriage in Denmark,
where such a marriage is valid. Is the marriage also valid here?

The general rule enunciated in the first paragraph of Article 26 of the Family Code should
apply, under which marriages valid where celebrated are also valid here.

The case does not fit into any of the exceptions enunciated in the foregoing provision of
Article 26 of the Family Code. Therefore, same sex marriage is valid here if valid where
celebrated.

However, it would seem that the case falls under one of the exceptions to the application
of the proper foreign law, i.e., it runs counter to an important public policy of the forum- that a
marriage should be between a man and a woman. Because of this important public policy, same-
sex marriage is void here.

23. If a Filipino citizen is convicted by final judgment abroad, may he be required to


serve time here?

No, because there is no legislation allowing such practice. It would in effect require the
Philippine government not only to recognize, but also to enforce, a foreign judgment which is
penal in nature. (Opinion of the Secretary of Justice No. 142, s. 1992)

24. Francis, a citizen and resident of California, under whose law he was still a
minor, being only 20 years of age, was hired by ABC Corporation to serve for two years as
its chief computer programmer. After serving for only four months, he resigned to join XYZ
Corporation, which enticed him by offering more advantageous terms. His first employer
sues him in Manila for damages arising from the breach of his contractual employment. He
sets up his minority as a defense and asks for annulment of the contract on that ground. The
plaintiff disputes this by alleging that since the contract was executed in the Philippines
under whose law the age of majority is 18 years, he was no longer a minor at the time of the
perfection the contract.

Will the suit prosper?

No. Being an American citizen, Francis’s capacity to enter into a contract is determined
by his national law, under which he is still a minor. While the nationality principle under Article
15 of the Civil Code is intended to apply only to Filipino citizens, the Supreme Court had already
declared that the status or capacity of foreigners is to be determined on the basis of the same
provision or principle; i.e., by American law in the present problem.

Plaintiff’s argument that Francis was already of legal age when the contact was perfected
does not hold true because status or capacity is not determined by lex loci celebrationis but by
the nationality rule under Article 15 of the Civil Code.

25. Why are foreign decrees of divorce granted to Philippine nationals refused
recognition by our courts?

There are two fundamental reasons why foreign decrees of divorce granted to Philippine
nationals are refused recognition by our Courts:

1. In this jurisdiction we adhere to the nationality theory. Thus, Article 15 of the Civil
Code expressly provides that laws relating to family rights and duties, or to the status, condition
and legal capacity of persons are binding upon citizens of the Philippines, even though living
abroad. A decree of divorce is certainly one that will affect or involve the status and condition of
the parties.

2. It is well-settled that absolute divorce is contrary to public policy. The third paragraph
of Article 17 of the Civil Code declares that such a declaration of public policy cannot be
rendered ineffective by a judgment promulgated in a foreign country.

26. When may a divorce decree obtained in a foreign country be recognized in the
Philippines?

A divorce obtained abroad by an alien may be recognized in our jurisdiction provided


the decree of divorce is valid according to the national law of the foreigner. However, the divorce
decree and the governing national law of the alien spouse who obtained the divorce must be
proved. Our courts do not take judicial notice of foreign laws and judgments. Like any other
facts, both the divorce decree and the national law of the alien spouse must be alleged and proved
according to our law on evidence. (Garcia v. Recio, G.R. No. 138322, October 2, 2001)

27. Armand and Helen, both Filipinos, were married in the Philippines in 1977.
Three years later, they migrated to the United States and established their residence in
California. In 1987, they applied for, and were granted, US citizenship. In 1989, Armand,
claiming abandonment by Helen, secured a divorce in Reno, Nevada. In 1990, Armand
returned to the Philippines as a balikbayan and married Rosel who knew Armand’s past life.
Is the divorce secured by Armand in Nevada valid? How does it affect his marriage to
Rosel?

Yes. The divorce decree issued to Armand and Helen will be recognized as valid here
considering that at the time the decree was granted, both were already citizens of the United
States, a country which grants or allows absolute divorce. Considering, therefore, that the
marriage between Armand and Helen has been validly terminated in accordance with their
national law, Armand can freely marry Rosel.

28. Bill, an American, executed a Last Will and Testament in the Philippines. In
paragraph 1 of his will, he stated that his estate shall be distributed in accordance with
Philippine law. Is the testamentary provision valid?

The testamentary provision is not valid because it is contrary to the provision of


paragraph 2, Article 16 of the Civil Code which explicitly declares that it will be the national law
of the person whose succession is under consideration that will govern. (Bellis v. Bellis, 20 SCRA
358 [1967])

29. What is meant by renvoi?

Renvoi literally means a referring back.

The problem of the renvoi arises when there is a doubt as to whether a reference to a
foreign law for decision is a reference to the internal law only of said foreign law or is a reference
to the whole of the foreign law, including its conflict rules.

30. H and W, husband and wife, are citizens of California but domiciled in the
Philippines. H dies in Baguio City, leaving properties in Pasay City. Illustrate how the renvoi
doctrine operates.

Article 16, paragraph 2 of the Civil Code expressly provides that successional rights shall
be regulated by the national law of the person whose succession is under consideration. Since H
was a citizen of California at the time of his death, the law that should govern successional rights
to his estate should be the law of California.

However, the second paragraph of Article 16 of the Civil Code is not clear whether a
reference to California law under Article 16, paragraph 2 is a reference only to the internal law on
succession of California or is a reference to the whole of California law, including its conflict
rules. If the reference under Article 16, paragraph 2 is a reference to the whole of California law,
including its conflicts rules, there is a possibility that the renvoi problem may arise if California
law adheres to the domiciliary theory.

31. Peter, a Californian domiciled in the Philippines, dies leaving several properties
in Makati City valued at P50million. In his will, he gave all these properties to his brother,
John. To his illegitimate children, Arthur and Bernard, he left legacies of P1 million each.
Under the internal law of California, the testamentary dispositions are valid, while under
the internal law of the Philippines, there is an impairment of the legitimes of Arthur and
Bernard. Under the conflicts rule of California, the domiciliary principle is followed; the
internal law of the Philippines (which is the decedent’s domicile) respecting legitimes shall,
therefore, be applied. On the other hand, under the conflicts rule of the Philippines, the
nationality principle is followed; the internal law of California (of which the decedent is a
national) which does not recognize the system of legitime shall, therefore, be applied.

A Philippine court now sits in judgment to determine the validity or invalidity of


Peter’s testamentary dispositions. How shall the court rule on the matter?

In Aznar v. Christensen-Garcia, 7 SCRA 95 [1963], the Supreme Court accepted the


renvoi. As applied to the above problem, the answer is as follows: the law of the Philippines shall
be applied. Under the second paragraph of Article 16 of the Civil Code, the national law of Peter
shall govern. According to the internal law of California, the testamentary dispositions are valid,
but then its conflicts rule also says that the internal law of Peter’s domicile shall govern and not
the law of California. So, the case is referred back (renvoi) to the internal law of the Philippines.
The Philippine court must, therefore, apply its own law as directed in the conflict of law of
California, Peter’s national law.

32. Hillary, a Filipina, and her American husband, Bill, execute a joint will in
Arkansas when they were still residing in said State. The law of Arkansas allows the
execution of joint wills. If Bill dies, may the joint will be admitted to probate in the
Philippines?

Yes, but only insofar as Bill’s estate is concerned. While Article 819 of the Civil Code
prohibits the execution of joint wills here and abroad, such prohibition applies only to Filipino
citizens. Hence, the joint will which is valid where executed is valid in the Philippines but only
with respect to Bill. Under Article 819 of the Civil Code, the joint will is void with respect to
Hillary whose joint will remains void in the Philippines despite being valid where executed.

33. Juan is a Filipino citizen residing in Tokyo, Japan. State what law governs:

a) Juan’s capacity to contract marriage in Japan.

Juan’s capacity to contract marriage in Japan is governed by Philippine law, that is, by
the Family Code. This is pursuant to Article 15 of the Civil Code which provides, among others,
that laws relating to the legal capacity of persons are binding upon citizens of the Philippines
even though living abroad.
b) Juan’s successional rights as regards his Filipino father’s property in California.

By way of exception to the general rule on lex rei sitae under the first paragraph of
Article 16 of the Civil Code, a person’s successional rights are governed by the national law of
the decedent. Since Juan’s deceased father was a Filipino citizen, Philippine law governs Juan’s
successional rights as regards his deceased father’s property in California.

c) The extrinsic validity of the last will and testament which Juan executed while
sojourning in Switzerland.

The extrinsic validity of Juan’s will is governed by a) Swiss law, the law of the place
where the will was made, following the rule on lex loci celebrationis under paragraph 1 of Article
17 of the Civil Code; or b) Philippine law, by implication from the provisions of Article 816 of
the Civil Code which allows even an alien who is abroad to make a will in conformity with our
Civil Code.

d) The intrinsic validity of the will.

The intrinsic validity of Juan’s will is governed by Philippine law, the same being his
national law. (Art. 16, par. 2, Civil Code)

34. A, a Chinese national, donated in Germany in favor of F, a Filipino, a parcel of


land situated in the Philippines.

a) The law of which country governs the formalities of the donation?

The law of the Philippines – lex rei sitae – governs the formalities of the donation. The
lex loci celebrationis doctrine enunciated under paragraph 1 of Article 17 of the Civil Code does
not apply because the transaction relates to land and must therefore be governed by the law of the
place where the land is situated.

b) The law of which country governs the capacity of the Chinese to make the
donation.

The law of the Philippines – lex rei sitae – governs the capacity of the Chinese to
alienate. Here, the doctrine of national law under Article 15 of the Civil Code yields precisely
because the subject matter is land.

c) The law of which governs the intrinsic validity of the donation?

The law of the Philippines – lex rei sitae – governs the intrinsic validity of the donation.
The general rule on lex loci voluntatis (law of the place voluntarily agreed upon) or lex loci
intentionis (law of the place intended) yields to the lex rei sitae rule because the subject matter is
land.

35. Guber, a Swiss citizen and resident of Baguio City for the last forty years, died in
that city leaving six children and real and personal properties located in the Philippines. In
his last will and testament executed in Switzerland where the institution of forced heirs does
not exist, he designated Hansel, his eldest son, as his sole heir.

Can Guber’s other children question the validity of the will in the probate
proceedings filed before our courts?

No. Extrinsically, the will is valid on the presumption that Guber executed the will in
accordance with the formalities prescribed in Switzerland, which is all at once the place of
execution, his country, and his domicile. (Arts. 17 and 816, Civil Code)

Intrinsically, the will is also valid. The designation of the eldest son as sole heir is valid,
and will not properly constitute preterition as the term is understood under Philippine law,
because after all in Switzerland, of which the deceased was a national, there are no forced or
compulsory heirs. It is clear that the intrinsic validity of this provision shall be governed not by
Philippine law but by Swiss law. (Art. 16, par. 2, Civil Code)
36. While travelling in Tokyo, Japan, T executed a will before a diplomatic official of
the Philippines. Only two witnesses signed the attestation clause. Upon his return to the
Philippines, T filed a petition to probate the will. The petition is opposed on the ground that
the will is not attested by three witnesses. Assuming that in Japan two witnesses are
required to attest a will, may the will of T be admitted to probate?

No. Article 815 of the Civil Code allows a Filipino in a foreign country to make a will in
any form established by the law of the country in which he may be. However, paragraph 2,
Article 17 is more explicit and provides that when acts, such as a will, are executed in a foreign
country before diplomatic or consular officials of the Philippines, the solemnities established by
Philippine laws shall be observed in their execution.

HUMAN RELATIONS

37. Briggs & Stratton Enterprises appointed A as exclusive dealer of its farm
machineries in La Union. During the existence of their exclusive dealership agreement,
however, Briggs & Stratton sold 30 units of its farm machineries to a customer in La Union.
Is the company liable to A for damages? If so, what would be the basis of its liability?

The company is liable for damages because it abused its right. Under Article 19 of the
Civil Code, every person must, in the exercise of his rights and in the performance of his duties,
act with justice, give everyone his due, and observe honesty and good faith. When the company
directly dealt with a customer in La Union despite its exclusive dealership agreement with A, it
acted in bad faith thereby causing damage to A. The company may not exercise its right unjustly,
or in a manner that is not in keeping with honesty and good faith; otherwise, it opens itself to
liability for abuse of right. (Seacom, Co. Inc. v. Court of Appeals, November 25, 1999)

38. In his senior year in law school, Romeo received an incomplete grade in one
subject. Because of this academic deficiency, the school allowed him to take a removal
examination on the subject but result was not released by his professor till after the
graduation ceremonies. In the meantime, he was allowed to attend the graduation
ceremonies during which he went up the stage when his name was called, and he was
handed by the dean a rolled white sheet of paper symbolical of the law diploma. His
relatives took pictures of the occasion and then tendered a blow-out that evening.

In preparation for the bar examinations, Romeo took a leave of absence from his
work without pay. Using his savings, he enrolled at a pre-bar review class and attended it
without fail. When he later learned about the failing grade he obtained in his removal
examination, he immediately dropped from his review class. Is the school liable to Romeo
for actual and moral damages?
Yes, but only insofar as Romeo’s claim for actual damages is concerned.

In belatedly informing Romeo of the result of his removal examination, particularly at a


time when he already commenced preparing for the bar examinations, the school cannot be said
to have acted in good faith. The negligent act of a professor who fails to observe the rules of the
school by not promptly submitting a student’s grade, is not only imputable to the professor but is
an act of the school, being his employer. Schools and professors cannot just take students for
granted and be indifferent to them, for without the latter, the former are useless.

However, while the school is guilty of negligence and thus liable to Romeo for the latter’s
actual damages, it is not liable to Romeo for moral damages. As a senior law student, Romeo
should have been responsible enough to ensure that all his affairs, specifically those pertaining to
his academic achievement, are in order. Given these considerations, it is not therefore correct to
conclude that Romeo has suffered untold embarrassment in attending the graduation rites,
enrolling in the bar review classes and not being able to take the bar examinations. If Romeo was
indeed humiliated by his failure to take the bar, he brought this upon himself by not verifying if
he has satisfied all the requirements including his school records, before preparing himself for the
bar examinations. Certainly, taking the bar examinations does not only entail a mental preparation
on the subjects thereof; there are also certain requirements which prospective examinees must
meet. (University of the East v. Jader, 325 SCRA [2000])

39. Sofronio, a married man, misrepresented his status to Beatriz, a young college
student. Because of Sofronio’s protestations of love and promise of marriage, Beatriz
surrendered herself and became pregnant. Is Sofronio liable for damages?

Yes. The act of Sofronio in misrepresenting his status to Beatriz for the sole purpose of
convincing the latter to surrender herself is not only contrary to morals; it is also wilful in the
sense that there is fraud or deception. It is clear, therefore, that Article 21 of the Civil Code is
applicable.

40. In cases involving love affairs, is it necessary that the defendant be a married
man or that he had sexual intercourse with the plaintiff before he can be held liable for
damages?

In cases involving love affairs, it is not necessary that the defendant be a married man.
Neither is it necessary that there should be carnal intercourse. What is essential is that the
defendant should have committed an act which is contrary to morals or good customs or public
policy and that there should have been fraud or deception on his part. (Wassmer v. Velez, 12
SCRA 648)
41. After a brief courtship period, Marilou, a Filipina, fell in love with Ahmed, an
Iranian student enrolled in one of the universities in Metro Manila. After the couple dated
for several weeks, they agreed to get married. Ahmed then visited Marilou’s parents to
secure their approval.

Although Marilou was a virgin at that time, she started to engage in sexual relations
with Ahmed when the latter invited her to live with him at his apartment. For a few months,
the couple led a blissful relationship. Their relationship began to deteriorate when Ahmed
started to verbally abuse and physically maltreat Marilou. In one of their confrontations
before the barangay captain, Ahmed angrily repudiated his agreement to marry Marilou
and thereafter asked the latter to leave his apartment. In a suit by Marilou against Ahmed,
how should the court decide?
The court should render judgment for Marilou. The existing rule is that a mere breach of
promise to marry per se is not an actionable wrong. (Hermosissima v. Court of Appeals, 109 Phil.
629 [1960]; Wassmer v. Velez, 12 SCRA 648) However, where a man’s promise to marry is in fact
the proximate cause of the acceptance of his love by a woman and his representations to fulfill
that promise thereafter becomes the proximate cause of the giving of herself unto him in sexual
congress, proof that he had, in reality, no intention of marrying her and that the promise was only
a subtle scheme or deceptive device to entice or inveigle her to accept him and to obtain her
consent to the sexual act, could justify the award of damages pursuant to Article 21 of the Civil
Code not because of such promise to marry but because of the fraud and deceit behind it and the
willful injury to her honor and reputation which followed thereafter. It is essential, however, that
such injury should have been committed in a manner contrary to morals, good customs or public
policy.
In the instant case, it was Ahmed’s fraudulent and deceptive protestations of love for and
promise to marry Marilou that made her surrender her virtue and womanhood to him, and to live
with him on the honest and sincere belief that he would keep said promise, and it was likewise
these fraud and deception on Ahmed’s part that made Marilou’s parents agree to their daughter’s
living-in with him preparatory to their supposed marriage. In short, Marilou surrendered her
virginity, the cherished possession of every single Filipina, not because of lust, but because of
moral seduction. Ahmed though could not be held liable for criminal seduction punished under
Article 337 or Article 338 of the Revised Penal Code because Marilou was above 18 years of age
at the time of the seduction. (Gashem Shookat Baksh v. Court of Appeals, G.R. No. 97336,
February 19, 1993)
42. Without A’s knowledge, a flood drives his cattle to the cultivated highland of B.
As a result, A’s cattle are saved, but B’s crop is destroyed. Is A liable for the destruction of
B’s crop?

Yes. Article 23 of the Civil Code expressly provides that even when an act or event
causing damage to another’s property was not due to the fault or negligence of the defendant, the
latter shall be liable for indemnity if through the act or event he was benefited.

43. Danding Cojuangco is a known businessman-sportsman owning several


racehorses. From March 1986 to September 1989, several of his horses won sweepstakes
races on various dates and winning prizes in the aggregate amount of P2 million. Because he
was in exile in the United States, Danding sent letters of demand to the PCSO for the
collection of the prizes due him. However, the then PCSO Chairman consistently replied
that the demanded prizes are being withheld on advice of the PCGG which had earlier
issued a sequestration order against Danding’s properties. Is the PCSO Chairman
personally liable to Danding for damages?

Yes. Under Article 32 of the Civil Code, it is not necessary that the public officer acted
with malice or bad faith. To be liable, it is enough that there was a violation of the constitutional
rights of the petitioner, even on the pretext of justifiable motives or good faith in the performance
of one’s duties. Danding’s right to the use of his property was unduly impeded. While the PCSO
Chairman may have relied upon PCGG’s instructions, he could have further sought the specific
legal basis therefor. A little exercise of prudence would have disclosed that there was no writ
issued specifically for the sequestration of the racehorse winnings of Danding. There was
apparently no record of any such writ covering his racehorses either. The withholding of the prize
winnings of Danding without a properly issued sequestration order clearly spoke of a violation of
his property rights without due process of law (Cojuangco v. Court of Appeals, 309 SCRA 602
[1999])

44. In a criminal trial, the court rendered a decision acquitting the accused of the
crime charged, but without passing judgment on his civil liability. What is the effect of this
acquittal on the civil liability of the accused?

Our law recognizes two kinds of acquittal with different effects on the civil liability of the
accused. First is an acquittal on the ground that the accused is not the author of the act or
omission complained of. In this case, there is no civil liability since a person who has been found
to be not the perpetrator of any act or omission cannot and can never be held liable for such act or
omission. There being no delict, civil liability ex delicto is out of the question and the civil action,
if any, which may be instituted must be based on grounds other than the delict complained of as
contemplated in Rule 111 of the Rules of Court.

The second instance is an acquittal based on reasonable doubt. In this case, even if the
guilt of the accused has not been satisfactorily established, he is not exempt from civil liability
which may be proved by preponderance of evidence only. This is the situation contemplated by
Article 29 of the Civil Code where the civil action for damages is “for the same act or omission.”

For all intents and purposes, the acquittal of the accused was based on reasonable doubt.
Therefore, his civil liability was not extinguished by his discharge. Stated differently, it is an
acquittal based on reasonable doubt and a suit to enforce civil liability for the same act or
omission lies. (Manantan v. Court of Appeals, 350 SCRA 387 [2001])

45. When the accused in a criminal action is acquitted, may a civil action for
damages for the same act or omission still be instituted by the aggrieved party?

It depends. If the acquittal of the accused is on the ground that he did not commit the
offense charged, or what amounts to the same thing, if the acquittal proceeds from a declaration
in the final judgment that the facts from which the civil liability might arise did not exist, the
subsequent institution of a civil action to recover damages is, as a general rule, no longer
possible. There are, however, exceptions to this rule. They are: first, where the civil action is
based on an obligation not arising from the act or omission complained of as a felony (Arts. 31,
2177, Civil Code); and second, where the law grants to the injured party the right to institute a
civil action which is entirely separate and distinct from the criminal action. (Arts. 32, 33, 34, Civil
Code)

46. Pedro, a Filipino, and Peter, an American, were appointed as resident manager
and managing director, respectively, of a foreign corporation doing business in the
Philippines. Due to redundancy in their positions, Pedro and Peter started to have serious
differences. Unable to cope up with his quarrel with Peter, Pedro resigned.

On the day of Pedro’s departure, Peter circulated a memorandum to all employees


declaring Pedro as a “persona non grata” and urged the employees not to have further
dealings with him. Pedro retaliated by filing a criminal complaint for libel against Peter,
and a civil action for damages against Peter and the corporation, the latter as Peter’s
employer. The corporation promptly moved to dismiss the complaint on the ground that its
subsidiary liability attaches only upon Peter’s conviction for libel and proof of Peter’s
insolvency. Should the court dismiss the complaint?

Yes. Nothing could be clearer than that Pedro is suing the corporation in its subsidiary
capacity for Peter’s alleged defamatory remarks. Article 33 of the Civil Code provides
specifically that in cases of defamation, a civil action for damages, entirely separate and distinct
from the criminal action, may be brought by the injured party. In Joaquin v. Aniceto, 12 SCRA
308 [1964], the Supreme Court declared that Article 33 of the Civil Code contemplates an action
against the employer in its primary civil liability. It does not apply to an action against the
employer to enforce its subsidiary civil liability, because such civil liability arises only after
conviction of the employee in the criminal case or when the employee is adjudged guilty of the
wrongful act in a criminal action and found to have committed the offense in the discharge of his
duties. Any action brought against the employer before conviction of the employee is therefore
premature. (International Flavors and Fragrances (Phils.), Inc. v. Argos, 364 SCRA 792 [2001])

47. What is a prejudicial question? What are its elements?

A prejudicial question is a question which arises in a case, the resolution of which is a


logical antecedent to the issue involved in said case, and the cognizance of which pertains to
another tribunal. (People v. Aragon, 94 Phil 357 [1954])

Section 7, Rule 111 of the 2000 Revised Rules on Criminal Procedure limits a prejudicial
question to a “previously instituted civil action” in order to minimize possible abuses by the
subsequent filing of a civil action as an afterthought for the purpose of suspending the criminal
action. Under this provision, a prejudicial question has two essential elements, namely: a) the
previously instituted civil action involves an issue similar or intimately related to the issue raised
in the subsequent criminal action; and b) the resolution of such issue determines whether or not
the criminal action may proceed.

48. H and W own a parcel of land. To secure a loan, they mortgaged the property to
a bank. When the couple failed to pay, the bank foreclosed the mortgage and acquired the
property at the foreclosure sale. One week before the expiration of the one-year redemption
period, the couple commenced an action to annul the foreclosure sale charging that the
bank bloated their loan obligation by including excessive interests, penalties and other
charges.

Meanwhile, the one-year redemption period has expired prompting the bank to
consolidate its ownership over the foreclosed property. Not long after, the bank filed an ex-
parte application for writ of possession. The couple opposed the application on the ground
that the annulment case constitutes a prejudicial question which warrants the suspension of
the bank’s petition for writ of possession. Does the annulment case constitute a prejudicial
question?

No. A prejudicial question comes into play in a situation where a civil action and a
criminal action are both pending, and there exists in the civil action an issue that must be
preemptively resolved before the criminal action may proceed. In the instant problem, there is no
criminal action. Furthermore, the issue in the annulment case is whether the extrajudicial
foreclosure is valid; while in the case filed by the bank for issuance of a writ of possession, the
issue is whether the bank is entitled to the possession of the property after the expiration of the
period of redemption.

49. X was coerced into marrying Y. X sued for annulment. During the pendency of
the case, X married Z. When Z learned of the first marriage, Z sued X for bigamy. X now
alleges that the pendency of the annulment case is a prejudicial question. Is X correct?

X is wrong because the decision in the annulment case is not important. The first
marriage will either be annulled or not. IF NOT ANNULLED, bigamy can prosper. IF
ANNULLED, still bigamy can prosper, for when he married the second time, he was still
married to his first wife, a voidable marriage being considered valid until annulled.

50. X, a married man, is forced by Y to marry her. X then sues for annulment of
said marriage. Y retaliates with a charge of bigamy. After arraignment in the bigamy case,
X promptly moves to suspend the criminal proceedings until after the termination of the
annulment case on the ground that the annulment case is a prejudicial question. Should the
motion be granted?

Yes, because the annulment case poses a prejudicial question. If X was really forced
into marrying Y, then his consent was defective; hence, the second marriage is to be annulled on
that ground. He cannot therefore be guilty of bigamy.

CCIVIL PERSONALITY
51. Distinguish between juridical capacity and capacity to act.

Juridical capacity is the fitness to be the subject of legal relations, while capacity to act is
the power to do acts with legal effects. The former is inherent in every natural person and is lost
through death, while the latter is merely acquired and may be lost even before death. (Art. 37,
Civil Code)

52. Elated that her sister who had been married for five years was pregnant for the
first time, A donated 100,000 to the unborn child. Unfortunately, the baby died one hour
after delivery.

May A recover the 100,000 that she had donated to the baby before it was born
considering that the baby died? Stated otherwise, is the donation valid and binding?

If the baby had an intra-uterine life of not less than seven months, and provided there was
acceptance of the donation by the person representing the child, the donation is valid and
binding, donation being an act favorable to the child.

But if the baby had an intra-uterine life of less than seven months, it is not deemed born
since it died within 24 hours following its delivery, the donation never became effective since the
donee never became a person, birth being determinative of personality.

53. What is the presumption under the law when two persons who are called to
succeed each other perish in the same calamity, wreck, battle or conflagration?

If there is a doubt, as between two or more persons who are called to succeed each other,
died in the same calamity, wreck, battle, or conflagration, as to which of them died first, whoever
alleges the death of one prior to the other, shall prove the same; in the absence of proof, it is
presumed that they died at the same time and there shall be no transmission of rights from one to
the other. (Art. 43, Civil Code)

54. What are the presumptions on survivorship under the Rules of Court?

The presumptions on survivorship under the Rules of Court are those enumerated in
Section 5 (jj), Rule 131 thereof. Under this provision, when two persons perish in the same
calamity, such as a wreck, battle, or conflagration, and it is not shown who died first, and there
are no particular circumstances from which it can be inferred, the survivorship is presumed from
the probabilities resulting from the strength and age of the sexes, according to the following rules:

 If both were under the age of 15 years, the older is presumed to have survived;

 If both were above the age of 60 years, the younger is presumed to have survived;
 If one be under 15 and the other above 60, the former is presumed to have survived;

 If both be over 15 and under 60, and the sexes be different, the male is presumed to
have survived; if the sexes be the same, then the older; and

 If one be under 15 or over 60, and the other between these ages, the latter is
presumed to have survived.

55. When is the presumption given in Article 43 of the Civil Code applicable? How
about the presumptions on survivorship under the Rules of Court?

The presumption given in Article 43 of the Civil Code is applicable if the following
requisites are present: first, there is no proof as to which of two persons died first; second, they
are called to succeed each other.

The presumptions on survivorship under the Rules of Court, on the other hand, are
applicable if the following requisites are present: first, there is no proof as to which of two
persons died first; second, they must have died during a calamity; third, they are not called to
succeed each other.

56. While in Europe, X, age 58, and his son, Y, age 34, were killed in a vehicular
accident. There is no proof as to which of them died first. X left a fortune of P6 million. He
is survived by: 1) his daughter D; 2) his grandchildren E and F, children of Y; and 3) his
grandchildren G and H, children of the predeceased son, Z. How shall X’s estate be
divided?

Applying Article 43 of the Civil Code, it is clear that X and Y are presumed to have died
at the same time. The presumptions on survivorship under the Rules of Court by virtue of which
X is presumed to be the survivor cannot be applied because the two are called upon to succeed
each other. Consequently, there shall be no transmission of successional rights from one to the
other. Hence, E and F cannot represent Y in the succession. The estate of P6 million will,
therefore, be divided as follows: one-half thereof shall pass to G and H by right of
representation, which they shall divide equally, while the other half shall pass to D.

(NOTE: The above answer is clearly unjust as far as E and F are concerned, but Article
43 is clear. Dura lex, sed lex. An exception with respect to representation should have been
made.)

57. Jaime, who is 65, and his son, Willy, who is 25, died in a plane crash. There is no
proof as to who died first. Jaime’s only surviving heir is his wife, Julia, who is also Willy’s
mother. Willy’s surviving heirs are his mother, Julia, and his wife, Wilma.

a) In the settlement of Jaime’s estate, can Wilma successfully claim that her late
husband, Willy, had a hereditary share since he was much younger than his father and,
therefore, should be presumed to have survived longer?

Wilma cannot successfully claim that Willy had a hereditary share in his father’s estate.
Under Article 43 of the Civil Code, two persons who are called upon to succeed each other are
presumed to have died at the same time, in the absence of proof as to which of them died first.
Consequently, there shall be no transmission of rights from one to the other.

The above presumption is very different from the presumptions on survivorship


embodied in the Rules of Court. If the two persons who died are called upon to succeed each
other, regardless of whether they died during a calamity or not, Article 43 of the Civil Code shall
apply. If they are not called upon to succeed each other, so as long as they died during a
calamity, the presumptions on survivorship under the Rules of Court shall apply.

b) Suppose Jaime had a life insurance policy with his wife, Julia, and his son, Willy,
as the beneficiaries, can Wilma successfully claim that one-half of the proceeds should
belong to Willy’s estate?

This time Wilma can invoke the presumptions on survivorship and claim that one-half of
the insurance proceeds should belong to Willy’s estate, under Section 5 (jj), Rule 131, Rules of
Court, as this dispute does not involve succession. Under this presumption, the person between
the ages of 15 and 60 years is deemed to have survived the one whose age was over 60 at the
time of their death. The estate of Willy which is endowed with judicial personally stands in place
and stead of Willy, as beneficiary.

58. With the consent of her husband, a married woman adopted a child. What
surname should the adopted child bear?

The adopted child should bear the maiden surname of the adopter, not that of the
adopter’s husband. This is so to eliminate confusion considering that the adopted child has
generally the rights of a legitimate child. Besides, if the child were to use the surname of the
adopter’s husband, the public may be misled into believing that the husband had also adopted the
child, and the child can inherit from said husband in case of death. (Johnston v. Republic, April
30, 1963)

59. Elisa Santos, who is legally separated from her husband, Enrique Santos,
petitioned the court for a change of name from “Elisa Santos” to “Elisa Laperal,” her
maiden name, under Rule 103 of the Rules of Court. Elisa filed the petition on the theory
that she was already legally separated from her husband; that they had for many years now
ceased to live together; and that the continued use of her husband’s surname may cause
undue confusion in her finances. Rule on Elisa’s petition.

The change of name cannot be granted. First, the Rules of Court on change of name in
general cannot prevail over the specific provisions of Article 372 of the Civil Code which
specifically deals with wives who are legally separated. Second, even under Rule 103, the fact of
legal separation alone does not justify a change of name; otherwise, Article 372 can easily be
circumvented. (Laperal v. Republic, October 30, 1962)

60. A mother who has an illegitimate child marries a man other than the child’s
father. May the illegitimate child successfully petition to change his surname -- from the real
father’s name -- to that of the stepfather who has no objection thereto?

Yes, for an illegitimate child need not bear the stigma of illegitimacy during his whole
lifetime. After all, the stepfather was willing. Moreover, the change of name allowed in Rule 103
of the Rules of Court does not alter one’s status, rights, duties or citizenship. It merely changes
the appellation by which a person is known, identified or distinguished from others. (Calderon v.
Republic, April 5, 1967)

61. If a marriage is annulled, is the wife required to resume her maiden surname?

It depends. Under Article 371 of the Civil Code, in case of annulment of marriage, and
the wife is the guilty party, she SHALL resume her maiden name and surname. If she is the
innocent spouse, she MAY resume her maiden name and surname. However, she may choose to
continue employing her former husband’s surname, unless the court decrees otherwise, or she or
the former husband is married again to another person.

62. If a marriage is dissolved after the husband’s death, what surname may the
widow use?

Although the death of the husband dissolves the marriage ties, still the widow may desire
to cherish her deceased husband’s memory by the continued use of his surname. However, if she
does not want to, she is allowed to use her maiden surname again. Notice the use of the word
“may” in Article 373 of the Civil Code.

63. What if legal separation occurs, is the wife entitled to continue using the
husband’s surname even if she is the guilty spouse?

Article 372 of the Civil Code does not distinguish whether the wife is the guilty spouse or
not, unlike in the case of annulment of marriage under Article 371, because in legal separation the
marriage ties still subsist.

64. What is Republic Act No. 9048?

Republic Act No. 9048 which took effect on April 22, 2001 is the law which expanded
the basic quasi-judicial duties and functions of Civil Registrars as provided under paragraph c,
Section 479 of the Local Government Code. It amended Articles 376 and 412 of the Civil Code
by granting the city and municipal registrars, among other specified officials, the authority to
correct clerical or typographical errors and to change first name or nickname in the civil registrar
without need of judicial order.

65. May an Acting Local Civil Registrar validly exercise the additional powers vested by
R.A. 9048?

Pursuant to DILG Memorandum Circular No. 2001-92 dated July 26, 2001, an OIC or
Acting Local Civil Registrar cannot validly exercise the additional powers vested by R.A. 9048.
This is so because of Section 479 of the Local Government Code which provides that the
appointment of a local registrar shall be mandatory for city and municipal governments.

However, having an OIC or Acting Local Civil Registrar cannot be avoided in some
cases, as when the incumbent civil registrar is on leave, or traveling on official business outside
the city or municipality, or suspended from performing his duties as a consequence of a
disciplinary action. In these exceptional cases, when the period of absence of the incumbent civil
registrar is less than ten working days, the OIC or Acting Local Civil Registrar duly designated
by him shall only accept petitions for correction of clerical error or for change of first name but
the decision shall be rendered by the incumbent civil registrar upon his return to office. When the
period of absence is ten working days or more, the OIC or Acting Local Civil Registrar shall
accept petitions and subsequently render a decision.

The prohibition under DILG Memorandum Circular No. 2001-92 that an OIC or Acting
Local Civil Registrar cannot validly exercise the additional powers vested by R.A. 9048 shall not
be confused with the concept stated in the preceding paragraph. In the former, the presumption is
that there is no incumbent local civil registrar of the city or municipality, while in the latter, the
incumbent civil registrar is merely absent temporarily.

66. What kind of clerical or typographical errors are covered by R.A. 9048?

The clerical or typographical errors which are covered under R.A. 9048 are limited to
those mistakes committed in the performance of clerical work in writing, copying, transcribing or
typing an entry in the civil register that are harmless and innocuous, which are visible to the eyes,
or obvious to the understanding, and can be corrected or changed only by reference to other
existing record or records.

67. When is an error in the civil register considered clerical or typographical?

An error in the civil register is considered clerical or typographical when it meets one or
more of the following criteria: a) It is a mistake committed in the performance of clerical work in
writing, typing, copying, translating or typing an entry; b) It is harmless and innocuous; c) It is
visible to the eyes or obvious to the understanding; d) It can be corrected or changed only by
reference to other existing record or records; and e) the corrections must not involve change of
nationality, age, or status of the petitioner.

68. What kind of errors are not covered under R.A. 9048?

Those errors that involve the change of nationality, age, or status of the petitioner are
excluded from the coverage of the law. Consequently, any petition to correct any error that would
subsequently change the nationality, age, or status of a person shall be filed with the proper court,
and not with any local civil registrar.

69. On what ground may a petition for change of first name be filed?

Under R.A. 9048, the following are the grounds for the change of a person’s first name:
a) the petitioner finds the first name or nickname to be ridiculous, tainted with dishonor, or
extremely difficult to write or pronounce; b) the new first name or nickname has been habitually
and continuously used by the petitioner and he has been publicly known by that first name or
nickname in the community; c) the change will avoid confusion. Any of these grounds, if
supported with convincing proof, will be sufficient basis of changing a person’s first name.

70. Who may file a petition for correction of a clerical or typographical error or a
petition for change of first name in the civil register?

Pursuant to Sections 2(2) and 3 of R.A. 9048, any natural person may file a petition for
the correction of a clerical or typographical error, or a petition for change of first name. To qualify
as a petitioner, he must be of legal age and must have a direct and personal interest in the
correction of a clerical or typographical error in an entry and/or change of first name or nickname
in the civil register.

71. When is a person considered to have a “direct and personal interest” in a


petition for correction of a clerical or typographical error or a change of first name in the
civil register?

A person is considered to have a “direct and personal interest” when he is the owner of
the record, or the owner’s spouse, children, parents, brothers, sisters, grandparents, guardian or
any other person duly authorized by law or by the owner of the record sought to be corrected.

When a person is a minor or physically or mentally incapacitated, the petition may be


filed in his behalf by his spouse, or any of his children, parents, brothers, sisters, grandparents,
guardian or any other person duly authorized by law.

(NOTE: When the owner of the record authorizes another person to file a petition in his
behalf, the authority must be given in the form of a special power of attorney)

72. Who is a migrant petitioner?


A migrant petitioner is a petitioner whose present residence or domicile is different from
the place where his civil registry record or records are registered.

73. Juan Tutri was born on October 25, 1968, in San Juan, Ilocos Sur. He is now a
resident of Daet, Camarines Norte where he is permanently employed. Because of his
impending marriage, he discovered that his first name was recorded in the local civil
registry of San Juan, Ilocos Sur as Juanito instead of Juan, the name he has been using since
his elementary grades. Is Juan qualified to file a petition for change of first name? If so,
where should he file it?

Inasmuch as Juan has been using the name Juan since his elementary grades, he may file
a petition for change of first name under R.A. 9048. Thus, he is allowed to file his petition with
the civil registrar of Daet, Camarines Norte. Following the procedure for migrant petitioners
under R.A. 9048, the civil registrar of Daet, Camarines Norte must transmit Juan’s petition to the
civil registrar of San Juan, Ilocos Sur. In this case, the civil registrar of Daet, Camarines Norte is
the “Petition-receiving civil registrar” (PRCR), while the civil registrar of San Juan, Ilocos Sur is
the “Record-keeping civil registrar” (RKCR). In the problem presented, Juan is a “migrant
petitioner.”

74. What are the various types of clerical or typographical errors which can be
corrected under R.A.9048?

The various types of clerical or typographical errors which can be corrected under R.A.
9048 are as follows:

1. ONE OR MORE LETTERS WERE INTERCHANGED OR A CORRECT


LETTER WAS WRITTEN IN A WRONG ORDER OR SPACE WITHIN A WORD.

Petitioner has been using the name Mariano since his elementary grades. However, in his
birth certificate, his first name was spelled as Maraino. This is a clerical error within the
meaning of the law because it is clear that the letters “a” and “i” were interchanged.

2. ONE OR MORE LETTERS WERE OMITTED.

Petitioner has been using the name Josue in all his records, including his birth certificate.
However, in one of the birth certificates of his children, his name as the child’s father was written
as Jose instead of Josue. This is a clerical error within the meaning of R.A. 9048 because it is
clear that letter “u” was omitted between letters “s” and “e.”

3. UNNECESSARY LETTER OR LETTERS WERE INCLUDED.

In all his scholastic and employment records, petitioner’s name is spelled as Wendel
Ramos. However, what was entered in his birth certificate was the first name Wendell. This is a
clerical error within the meaning of R.A. 9048 because it is clear that the second letter “l” was
unnecessary.

4. ONE OR MORE LETTERS WERE ERRONEOUSLY USED.

In all his scholastic and employment records, petitioner’s name is spelled as Mercedita.
In her birth certificate, however, she found out that her first name was spelled Mercidita. This is
a clerical error within the meaning of R.A. 9048 because it is clear that letter “i” was erroneously
used for letter “e.”

5. ONE LETTER WAS SUPERIMPOSED OVER ANOTHER LETTER.


A civil registry clerk was preparing the birth certificate of Eric Santos. She was typing
the first name Eric but what she actually typed was Erin. To correct the letter “n,” she typed over
it the letter ”c” without first physically erasing the letter ”n.” As a result, letters “n” and “c” were
typed on the same space. This is a clerical error within the meaning of R.A. 9048.

6. HYPHEN WAS OMITTED IN A NAME THAT IS HYPHENATED. SINCE


HYPHEN IS PART OF THE NAME, ITS OMISSION WILL RENDER THE NAME
MISSPELLED.

Petitioner’s father is Cipriano Lumas-e, while his mother is Juliana Masa-ay. The names
of petitioner’s parents were correctly entered in petitioner’s birth certificate, but his own name
was entered as Ramon Masaay Lumase instead of Ramon Masa-ay Lumas-e. This is a clerical
error within the meaning of R.A. 9048.

7. UNNECESSARY SPACE OR CHARACTER WAS INADVERTENTLY


INSERTED WITHIN A NAME OR WORD.

Petitioner’s full name is Concepcion Santos Ramiro. In her birth certificate, however, her
name was entered as Concep cion Santos Rami9ro. In her first name, there is an unwanted or
unnecessary space between letters “p” and “c,” while in her last name, the figure or character “9”
was inadvertently inserted between “i” and “r.” These two errors are clerical within the meaning
of R.A. 9048.

8. THE MIDDLE NAME WAS ENTERED AS THE LAST NAME, OR THE LAST
NAME WAS ENTERED AS THE MIDDLE NAME. THIS ERROR BECOMES VISIBLE
TO THE EYES OR OBVIOUS TO THE UNDERSTANDING WHEN REFERENCE IS
MADE TO THE NAME OF THE MOTHER AND TO THE NAME OF THE FATHER.

Petitioner is Lucila Borja Malajacan. Her father is Francisco Malajacan, while her
mother is Marina Borja. In her birth certificate, however, her first name was entered as Lucila,
her middle name as Malajacan, and her last name as Borja. By referring to the names of
petitioner’s parents in the same document, it is visible to the eyes or obvious to the
understanding that her middle and last names were interchanged. The error is clerical within the
meaning of R.A. 9048.

9. IN ALL CIVIL REGISTRATION FORMS, THE ORDER OF ENTERING THE


COMPLETE NAME IS FIRST NAME, MIDDLE NAME AND LAST NAME, WHILE IN
SOME OF THE NON-CIVIL REGISTRATION FORMS, THE ORDER IS LAST NAME,
FIRST NAME AND MIDDLE NAME.

Petitioner’s name in his birth certificate was entered as Domingo Jose Simon in violation
of the order of entering names, which should be first name, middle name, and last name. As it
was entered, Domingo is the last name, Jose is the first name, and Simon is the middle name as is
observed in non-civil registration forms. Following the correct order of entering names in the
civil registration, petitioner’s name should have been entered as Jose Simon Domingo.

10. THE NAME OF THE MUNICIPALITY WAS ENTERED AS THE PROVINCE,


WHILE THE NAME OF THE PROVINCE WAS ENTERED AS THE MUNICIPALITY.

Petitioner was born in Magsingal, Ilocos Sur. However, what was entered in his birth
certificate was Magsingal as “province,” while Ilocos Sur was entered as “municipality.” It is
public knowledge that Magsingal is a municipality, while Ilocos Sur is a province. This clerical
error can occur also in the place of birth of the child.
11. ENTRIES WERE INTERCHANGED, AS WHEN THE NAME OF THE
“FATHER” WAS ENTERED UNDER THE COLUMN INTENDED FOR THE NAME OF
THE “MOTHER,” OR THE NAME OF THE “HUSBAND” WAS ENTERED UNDER
THE COLUMN FOR THE “WIFE,” VICE VERSA.

12. IN CASE OF AN IMPOSSIBLE EVENT WHEREBY REGISTRATION OF AN


EVENT WAS DONE AHEAD OF THE OCCURRENCE OF THE EVENT.

Simeona Valdez was born on February 12, 1975. However, what was recorded as her
date of birth in her birth certificate was February 22, 1975, while all the other entries in the same
birth certificate are February 15, 1975 (date when the attendant signed the document; date when
the informant provided the information; date when the clerk prepared the document; and the date
when the instrument was received at the office of the civil registrar.)

There is in this case an impossible event whereby registration of birth was done ahead of
the occurrence of birth. That the birth was registered prior to its occurrence indicates a glaring
clerical error especially if the date of birth, as recorded, is compared with the other significant
dates in the same document. This error is visible to the eyes and obvious to the understanding,
hence, it can be considered a clerical error, which can be corrected under R.A. No. 9048. In this
case, the correction is not an attempt to change the age of Simeona, but to correct the impression
that registration was done prior to the occurrence of birth.

13. THE DATE IS IMPOSSIBLE, AS WHEN THE DATE OF BIRTH OF A CHILD


WAS ENTERED AS FEBRUARY 31 INSTEAD OF FEBRUARY 21. THE ERROR IS
CLERICAL AS IT IS VISIBLE TO THE EYES AND OBVIOUS TO THE
UNDERSTANDING THAT FEBRUARY HAS ONLY 28 DAYS, AND THE ONLY
EXCEPTION IS DURING A LEAP YEAR WHERE THERE ARE 29 DAYS.

14. THE DATE APPEARS UNREASONABLE.

Filomena Etrata, 18 years old, was born on October 25, 1985. However, what was
recorded as her date of birth in her birth certificate was the year 1885. This error is clerical
within the meaning of R.A. 9048 because the error is visible to the eyes and obvious to the
understanding.

15. DATE WAS MISLEADING BECAUSE A NUMERIC CHARACTER OR


SYMBOL WAS USED FOR THE MONTH.

Pedro Singson was actually born on January 2, 1962. In accordance with the order of
writing the date in the birth certificate, the “day” should be entered first, followed by the “month”
and the last, the “year.” The month should be spelled out and not represented by numerical
symbol, like “January” and not “1”. However, the typist entered the date of birth of Pedro as “2-
1-62” which could be interpreted as “February 1, 1962” or “January 2, 1962.” In this case, the
petitioner may file a petition for correction of his date of birth. It is a case of clerical error within
the meaning of R.A 9048.

16. YEAR OF BIRTH WAS ERRONEOUS. THIS USUALLY OCCURS DURING


THE EARLY PART OF EVERY JANUARY.

Juan Arzadon was born on January 3, 1999. Because the typist was used to typing the
year “1998,” he erroneously entered the year of Juan’s birth as “03 January 1998.” This is a
clerical error within the meaning of R.A. 9048.

17. THE AGE OF THE MOTHER ENTERED IN THE BIRTH CERTIFICATE


OF HER CHILD WAS VERY MUCH BEYOND OR BELOW THE REPRODUCTIVE
AGE AS WHEN THE AGE OF THE MOTHER WAS 19 BUT WHAT WAS ENTERED IN
THE CHILD’S BIRTH CERTIFICATE WAS “91” OR “9”. THIS IS NOT CHANGING
THE AGE OF THE MOTHER WHICH IS PROHIBITED BY R. A. 9048 BUT TO
CORRECT SOMETHING WHICH APPEARS ABSURD, OR SOMETHING THAT
APPEARS IMPOSSIBLE TO HAPPEN IN A WOMAN’S LIFE.

18. ENTRIES WERE MADE FOR DATE AND PLACE OF MARRIAGE OF THE
CHILD’S PARENTS WHEN THE ENTRY SHOULD HAVE BEEN “NOT MARRIED.”

Jinggoy was born illegitimate on October 25, 1995. His parents were married only on
February 14, 1996. The birth of Jinggoy was applied for late registration only on March 5, 1996.
Being born illegitimate, Jinggoy used in his birth certificate the surname of his mother.

However, in the entry under “Date and place of marriage of parents,” the entries “14
February 1996, Baguio City” were made when it should have been “not married” following the
rule that only information obtaining at the time of birth shall be recorded in the birth certificate,
and not information prevailing at the time of registration. This is a clerical error within the
meaning of R.A 9048 because a future event cannot be recorded in the birth certificate. The
correction will not alter the status of the child who, by his recorded name, is an illegitimate child
who is legitimated by virtue of the subsequent marriage of his parents.

19. CORRECTION OF THE DATE OF MARRIAGE IN THE BIRTH


CERTIFICATE DOES NOT AFFECT THE STATUS OF THE CHILD.

Pedro and Monica were married on October 25, 1993. However, in the birth certificate
of their daughter, Esther, who was born on April 24, 1995, their date of marriage was indicated
therein as October 15, 1993. The error is considered clerical within the meaning of R.A. 9048.
This is so because the correction of the date of marriage from October 15, 1993 to October 25,
1993 will not affect the legitimate status of Esther.

20. DOUBT AS TO THE CORRECT SPELLING OF SURNAME. IN THIS CASE,


THE PETITIONER MUST SUBMIT CONVINCING AND CONCRETE EVIDENCE
THAT HIS ASCENDANTS AND OTHER RELATIVES WERE USING THE CORRECT
SURNAME SUCH AS THE SURNAMES CORPUS AND CORPUZ; GUTIERRES AND
GUTIERREZ; SERENO AND CERENO ETC.

75. What are the various types of “errors” which cannot be corrected under R.A.
9048?

1. USE OF “MARIA” AND “MA.” IN A COMPOUND FIRST NAME.

Petitioner was baptized as Maria Lourdes Imson Garcia. The same name was entered in
her birth certificate. When she started schooling, she used the name Ma. Lourdes Imson Garcia.
The name was abbreviated to “Ma.” in all her records, except her birth certificate. There is no
clerical error in this case. Petitioner’s name as recorded in her birth certificate is perfectly
correct. There is no misspelling; no misplaced letter, no omitted letter, no unnecessary letter, and
no misplaced word. There is no clerical error in this case. The petition to be filed should be for
change of first name and not for correction of clerical error.

2. ABBREVIATED FIRST NAME.

Petitioner’s name was entered in her birth certificate as Maria Lourdes Imson Garcia.
However, since she was a child, she has been using Marilou as her first name, and she has been
known in the community with that name. In fact, her school and other records show her first
name as Marilou. There is no clerical error in this case. The petition to be filed should be for
change of first name and not for correction of clerical error.

3. SURNAME OF AN ILLEGITIMATE CHILD BORN PRIOR TO AUGUST 3,


1988.

If a child is not recognized by the father, he is supposed to use the surname of the
mother. If the illegitimate child used the surname of the father without the latter having
recognized him, any petition of the child for correction or change of name under R.A. 9048 will
have to be dismissed for want of jurisdiction. This is for the regular court to decide.

4. THE DATE AND PLACE OF MARRIAGE OF PARENTS WAS LEFT BLANK


OR THERE WAS NO ENTRY.

Arnel Badua and Cornelia Disporo were married on January 15, 1996. On February 7,
1997, Cornelia gave birth to Evelyn. Prior to the birth of Evelyn, Arnel left the conjugal abode
and lived with another woman. Because of her husband’s infidelity, Cornelia registered Evelyn as
illegitimate with an “unknown” father. The item regarding the date and place of marriage of
parents was left blank.

Sometime in 1999, Arnel and Cornelia reconciled. It was then that Arnel discovered the
following: (a) The last name of Evelyn is Disporo, which is the maiden last name of his wife; (2)
His name as the father of Evelyn is not entered, but marked “unknown,” and (3) There is no
information about the date and place of marriage of the parents. The errors are not clerical within
the meaning of R.A. 9048 because the correction involves the change of status of Evelyn from
“illegitimate” to “legitimate.”

5. CORRECTION OF THE DATE OF MARRIAGE OF PARENTS WILL


AFFECT THE LEGITIMATE STATUS OF THE CHILD.

Emelyn Cruz and Nelson Santos lived together as husband and wife without the benefit
of marriage although both of them had no legal impediment to marry each other. On October 25,
1995, Emelyn gave birth to Madeline. On February 14, 1998, Emelyn and Nelson got married.
Meanwhile, the birth of Madeline was not yet registered. It was only on June 7, 1999 when
Emelyn registered the birth of Madeline under the rules governing the delayed registration of
birth. The complete name of Madeline as recorded in her birth certificate was Madeline Cruz
Santos, and the date of marriage of her parents was entered as February 14, 1998 and the place of
such marriage as Baguio City.

The civil registrar contends that the entries in Madeline’s certificate of live birth
(Madeline’s surname should have followed that of her mother’s because she was born
illegitimate, as well as the date and place of her parents) are erroneous because of the principle in
civil registration that only the facts obtaining at the time of birth shall be recorded in the birth
certificate and not those facts prevailing at the time of registration

6. ERRONEOUS CITIZENSHIP.

Ferdinand is a former Filipino who is now a naturalized American citizen. He came


back to the Philippines to marry her girlfriend, Imelda. After staying for two months, Ferdinand
returned to the United States, leaving the pregnant Imelda behind. A few months later, Imelda
gave birth to her first child, Irene. In Irene’s birth certificate, her citizenship was entered as
“Filipino,” instead of “American.” The error is not clerical within the meaning of R.A 9048
because it falls squarely within the prohibition of the law which provides that no correction must
involve the change of nationality of the petitioner. The problem shall be resolved in a regular
court.

THE FAMILY CODE


76. When did the Family Code take effect?

The Family Code took effect on August 3, 1998 – one year after the completion of its
publication in a newspaper of general circulation on August 4, 1987. (Modequillo v. Breva, 185
SCRA 73)

77. What is the statutory definition of marriage.

Marriage is a special contract of permanent union between a man and a woman entered
into in accordance with law for the establishment of conjugal and family life. It is the foundation
of the family and an inviolable social institution whose nature, consequences, and incidents are
governed by law and not subject to stipulation, except that marriage settlements may fix the
property relations during the marriage within the limits provided by law. (Art. 1, Family Code)

78. Judge Dredd, a municipal trial court judge, performed a marriage outside his
court’s jurisdiction. Is the marriage valid?

Yes. The solemnization by a judge of a marriage outside his court’s jurisdiction is


merely a resultant irregularity in the formal requisite laid down in Article 3 of the Family Code
which, while it may not affect the validity of the marriage, may subject the officiating official to
administrative liability. (Navarro v. Domagtoy, 259 SCRA 137 [1996])

79. An American movie actress married an American star in Hollywood. After


several months of marriage, the former obtained a valid divorce decree in Hollywood. If
she should come to the Philippines, will she be allowed to marry here?

Yes, provided she can get a certificate of legal capacity to contract marriage here. The
certificate must be obtained from the proper American diplomatic or consular official, a
requirement under Article 21 of the Family Code. The divorce will be recognized as valid here in
accordance with her national law and it is valid in the place which granted the same.

80. On Valentine’s day, 1996, Elias and Fely, both single and 25 years of age, went
to the city hall where they sought out a fixer to help them obtain a quickie marriage. For a
fee, the fixer produced for them an ante-dated marriage license issued by the Civil Registrar
of a small remote municipality. He then brought them to a licensed minister in a restaurant
behind the city hall, and the latter solemnized their marriage right there and then.

Is the marriage valid?

The marriage is valid. The irregularity in the issuance of a marriage license does not
adversely affect the validity of the marriage. The marriage license in this case is valid because it
was issued by the Civil Registrar. (Arts. 3 and 4, Family Code)

81. James and Kris were married in 1989. When their relationship soured, Kris
commenced an action for declaration of absolute nullity of marriage on the ground that the
marriage was solemnized without a marriage license. Kris presented in court a copy of her
marriage contract to prove that the license number was not indicated. Is this adequate to
declare the marriage void for lack of marriage license?

No. The failure to write the license number in a marriage contract is not a conclusive
proof as to the absence of a marriage license. It proved only the failure to record the license
number. (Geronimo v. Court of Appeals, 224 SCRA 494 [1963])

82. According to the third paragraph of Article 4 of the Family Code, “an
irregularity in the formal requisites of marriage shall not affect the validity of the marriage
but the party or parties parties responsible for the irregularity shall be civilly, criminally or
administratively liable.” What are these irregularities?

The following are some of the irregularities in the formal requisites of marriage which
shall not affect the validity of the marriage but the party or parties responsible therefor shall be
civilly, criminally or administratively liable:

a) a marriage which is solemnized by a priest, rabbi, imam or minister who is not


registered with the civil registrar general or who did not act within the written authority granted
him by his church or religious sect.

b) a marriage which is solemnized outside the court or outside the chambers of the judge
or outside the church, chapel or temple of the priest, rabbi, imam or minister, without a written
request of the parties.

c) a marriage which is solemnized by a priest, rabbi, imam or minister where neither


contracting party belongs to the solemnizing officer’s church or religious sect.

d) a marriage ceremony where no witnesses of legal age are present.

e) the marriage license was issued without publication of the application for ten
consecutive days.

f) a marriage license pre-signed by a local civil registrar but issued by a fixer.

g) a marriage license issued within the prohibited period of three months despite the lack
of or unfavorable parental advice to the intended marriage of a party who is between 21 and 25
years of age.

h) marriage between two persons who are between the age of 21 and 25 who were
issued a marriage license during the prohibited period of three months despite their failure to
undergo marriage counseling. (Arts. 6, 7(2), 8, 9, 15, 16, 17, Family Code)

83. What is the status of a marriage between two 16-year olds with parental
consent?

The marriage is void. This is so because the parties have no legal capacity to contract
marriage. The fact that the parents gave their consent to the marriage does not cure the infirmity
in the marriage. (Art. 5, Family Code)

84. Explain the requirement of parental advice under the Family Code. Is this
requirement indispensable for the validity of a marriage?

According to Article 15 of the Family Code, any contracting party between the age of 21
and 25 shall be obliged to ask their parents or guardian for advice upon the intended marriage. If
they do not obtain such advice, or if it be unfavorable, the marriage license shall not be issued till
after three months following the completion of the publication of the application therefore. A
sworn statement by the contracting parties to the effect that such advice has been sought, together
with the written advice given, if any, shall be attached to the application for marriage license.
Should the parents or guardian refuse to give any advice, this fact should be stated in the sworn
statement.

It is evident from the above provision that the requirement of parental advice is not
indispensable for the validity of a marriage. Consequently, even if the contacting parties are able
to secure a marriage license without the required parental advice and they got married even
before the expiration of three months following the completion of the publication of the
application for a marriage license, the marriage is perfectly valid, although the parties are
criminally, civilly, or administratively liable.

75. May a local civil registrar validly withhold the issuance of a marriage license if
he personally knows of an impediment to the intended marriage of the applicants?

No. The duty of the local civil registrar to issue a marriage license is only ministerial. In
case of any impediment coming to his knowledge, he is allowed only to note down the particulars
thereof and his findings thereon in the application for marriage license, and not to withhold the
issuance of the marriage license. The law directs him to issue the marriage license after the
completion of the 10-day publication period, unless ordered otherwise by a competent court, at
his own instance or at the instance of any interested party. (Art. 18, Family Code)

76. A and B are Filipino overseas workers in Libya. They fell in love and decided to
get married in accordance with Libyan law. On the day of the wedding, A fell ill and could
not make it to the ceremony. Upon advice of his Libyan lawyer, he requested his best man to
stand as proxy during the wedding. The marriage was celebrated in accordance with
Libyan law and valid there as such. Is the marriage valid in the Philippines?

Yes. Under Articles 26 of the Family Code, a marriage valid where celebrated is valid in
the Philippines. To this general rule, the law enumerates exceptions, but a marriage by proxy is
not one of those enumerated. Hence, the marriage is valid. Expressio unius est exclusio alterius.

77. While sojourning in New York, Erap and Gloria, Filipino citizens, exchanged
marital vows through the internet. Assuming such a marriage is valid in New York, is the
marriage valid here?

Yes, the marriage is valid here. The case does not appear to fall under any of the
exceptions mentioned in paragraph 1 of Article 26 of the Family Code. Such being the case, the
general rule on lex loci celebrationis applies, i.e., valid there, valid here.

78. Ana and Basilio were married in Baguio City in 1980. In 1984, Ana was offered
a teaching job in the United States which she accepted. In 1989, she applied for, and was
granted, American citizenship. The following year, she sued for divorce from Basilio in an
American court. After Basilio was served with summons, the American court tried the case
and decreed a divorce. Shortly thereafter, Ana married an American. Is Basilio capacitated
to remarry under Philippine law?

Yes. This case concerns the applicability of paragraph 2 of Article 26 of the Family
Code to a marriage between two Filipino citizens where one later acquired alien citizenship,
obtained a divorce decree, and remarried under his new national law.

Taking into consideration the legislative intent and applying the rule of reason, the
provision in question – Article 26 -- should be interpreted to mean to include cases involving
parties who, at the time of the celebration of the marriage, were Filipino citizens but later on, one
of them becomes naturalized as a foreign citizen and obtains a divorce decree. The Filipino
spouse should likewise be allowed to remarry as if the other party were a foreigner at the time of
the solemnization of the marriage. To rule otherwise would be to sanction absurdity and injustice.

The reckoning point is not the citizenship of the parties at the time of the celebration of
the marriage, but their citizenship at the time a valid divorce decree is obtained abroad by the
alien spouse capacitating the latter to remarry. (Republic v. Orbecido III, 472 SCRA 114 [2005])

(NOTE: The traditional rule which recognizes foreign divorce requires that the Filipino
is married to a foreigner and the latter sought and obtained a divorce, and that it must be a mixed
marriage from the start, is now deemed abrogated in view of the ruling in Orbecido III)

79. Article 34 of the Family Code dispenses with the requirement of a marriage
license for a man and a woman who lave lived together and exclusively with each other as
husband and wife for a continuous and unbroken period of at least five years before their
marriage. What are the essential requisites In order for the article to apply?

For Article 34 of the Family Code to apply, the following requisites must concur: a) The
man and the woman must have been living together as husband and wife for at least five years
before the marriage; b)The parties must have no legal impediment to marry each other; c) The
fact of absence of legal impediment between the parties must be present at the time of the
marriage; d) The parties must execute an affidavit stating that they have lived together for at least
five years and are without legal impediment to marry each other; and e) The solemnizing officer
must execute a sworn statement that he had ascertained the qualifications of the parties and that
he had found no legal impediment to their marriage.

80. A municipal trial judge is charged administratively for performing a marriage


between parties whom he knew are married persons. Accordingly, he agreed to solemnize
the marriage without a marriage license because of the affidavits of the parties that they
have been separated from their respective spouses for more than ten years already, and that
they have been in cohabitation exclusively with each other as husband and wife during the
same period. He argues that the marriage is exempt from the license requirement under
Article 34 of the Family Code. Is the judge’s defense tenable?

No. Not all the requisites of Article 34 of the Family Code are present in the case at bar.
In their separate affidavits, the couple categorically admitted the fact of their existing marriages.
The judge knew or ought to know that a subsisting prior marriage is a diriment impediment
which would make the subsequent marriage null and void. The fact that the couple had been
living apart from their spouses for a long time already is immaterial. Legal separation does not
dissolve the marriage when the separation is merely de facto, as in the case at bar. Just like
separation, free and voluntary cohabitation with another person for at least five years does not
severe the tie of a subsisting prior marriage. Marital cohabitation for a long period of time
between two persons who are legally capacitated to marry each other is merely a ground for
exemption for marriage license. (Borja-Manzano v. Sanchez, 354 SCRA 1 [2001])

81. Pepe and Maria were married in 1965. Their marital union bore a son, Sotero.
Maria died in 1984, and Pepe, in 1990. In 1985, following Maria’s death, Pepe married Nena
who had been his live-in partner since 1975 when he and Maria separated. Pepe and Nena
were married without a marriage license accordingly because they had been living
exclusively with each other as husband and wife for more than five years already.

To ensure that his inheritance rights are not adversely affected, Sotero institutes an
action to nullify his father’s second marriage grounded on the absence of a valid marriage
license. Nena defends the validity of the marriage on the basis of the following arguments:
a) that there was no need for a marriage license in view of her having lived continuously
with Pepe for five years before their marriage; and b) that Sotero has no legal standing to
question the validity of the marriage since Pepe is already deceased.

a) Were Pepe and Nena exempt from the license requirement when they got
married?

No. The exemption from the requirement of a marriage license under Article 34 of the
Family Code requires that the man and the woman must have lived together as husband and wife
for at least five years and without any legal impediment to marry each other during those five
years. The cohabitation of Pepe and Nena for nine years from 1975 to 1984 when Maria died was
one with a legal impediment; hence; not in compliance with the requirement of the law. On the
other hand, the cohabitation thereafter until the marriage in 1985, although free from legal
impediment, did not meet the 5-year cohabitation requirement.

b) Does Sotero have the standing to question the validity of his father’s second
marriage?

Yes. A void marriage may be questioned by any interested party in any proceeding
where the resolution of the issue is material. Being a compulsory heir, Sotero has the personality
to question the validity of the marriage of his father to Nena. Otherwise, his participation in the
estate of his father would be adversely affected. (Ninal v. Badayog, 328 SCRA 122 [2000])

82. Eulogio contracted two marriages during his lifetime. The first was with
Trinidad, in 1962 and the second was with Carmen, in 2005. Following Trinidad’s death in
2004, Eulogio married Carmen who had been his common-law spouse since 1975. Eulogio
and Carmen were married without a marriage license and, in lieu thereof, they executed an
affidavit attesting that they had been living exclusively and continuously as husband and
wife for 30 years already, and that they were not suffering from any impediment to marry
each other.

To ensure that their inheritance rights are not adversely affected, Eulogio’s
children institute an action for nullification of their father’s second marriage grounded on
the absence of a valid marriage license. Carmen defends the validity of the marriage on the
basis of the following arguments: a) there was no need for a marriage license in view of her
having lived continuously with Eulogio for 30 years prior to their marriage; and b)
Eulogio’s children have no legal standing to question the validity of the marriage because
their father is already deceased. Should the court dismiss the action?
Yes. While it is true that in Ninal v. Badayog, 328 SCRA 122 [2000], the Supreme Court
allowed therein petitioner to file a petition for the declaration of nullity of his father’s subsequent
marriage to therein respondent after the death of his father, the ruling in Ninal is not applicable to
the instant case for the reason that the impugned marriage therein was solemnized prior to the
effectivity of the Family Code. In Ninal, the Supreme Court declared that the applicable law to
determine the validity of the two marriages involved therein is the Civil Code, which was the law
in effect at the time of their celebration.

In the instant case, the marriage sought to be declared void was entered into during the
effectivity of the Family Code. The categorical language of A.M. No. 02-11-10-SC leaves no
room for doubt. The coverage extends only to those marriages entered into during the effectivity
of the Family Code. The language of Section 2(a) of A.M. No. 02-11-10-SC promulgated by the
Supreme Court which took effect on March 15, 2003 is plain and simple: a petition for annulment
or declaration of absolute nullity of marriage may be filed solely by the husband or the wife. The
right to bring such action is exclusive and this right solely belongs to them. Consequently,
Eulogio’s children cannot substitute their father in bringing the action to declare the marriage
null and void; they clearly have no cause of action in filing the action.
Nonetheless, all is not lost for Eulogio’s children. While A.M. No. 02-11-10-SC declares
that a petition for declaration of absolute nullity of a void marriage may be filed solely by the
husband or the wife, it does not mean that the compulsory or intestate heirs are already without
any recourse under the law. They can still protect their successional rights by questioning the
validity of the marriage of the spouses, not in a proceeding for declaration of nullity, but upon the
death of a spouse in a proceeding for the settlement of the estate of the deceased spouse filed in
regular courts. (Enrico v. Medinaceli, G.R. No. 173614, September 28, 2007)

83. Distinguish between void and voidable marriage.

Void and voidable marriages are not identical. A voidable marriage is valid until
annulled, while a void marriage is deemed not to have taken place at all. A voidable marriage
cannot be assailed collaterally, while a void marriage can be attacked collaterally. Consequently, a
void marriage can be questioned even after the death of either party, but a voidable marriage can
be assailed only during the lifetime of the parties to the marriage. The action or defense for nullity
is imprescriptible, unlike an action to annul a voidable marriage which prescribes. Only the
parties to a voidable marriage can assail it, but any interested party may attack a void marriage.

84. How may a void or voidable marriage be attacked?

Under Philippine jurisprudence, a void marriage may be subjected to a collateral attack,


while a voidable marriage may be assailed only in a direct proceeding. (Vda. de Jacob v. Court of
Appeals, 312 SCRA 772 [1999])

85. What is the interpretation given by the Supreme Court to the term
“psychological incapacity” as a ground for declaration of nullity of marriage?

The term “psychological incapacity” refers to a mental disorder of the most serious type
showing the incapacity of either or both spouses to comply with the essential marital obligations
of love, respect, cohabitation, mutual help and support, trust and commitment. It must be
characterized by judicial antecedence, gravity and incurability and its root causes must be
clinically identified or examined. (Santos v. Court of Appeals, 240 SCRA 20 [1995])

86. If existing at the inception of marriage, would the state of being of unsound
mind or the concealment of drug addiction, habitual alcoholism, homosexuality or
lesbianism be considered indicia of psychological incapacity?

In Santos v. Court of Appeals, 240 SCRA 20 [1995], the Supreme Court succinctly stated
that being of unsound mind, drug addiction, lesbianism or homosexuality may be indicia of
psychological incapacity, depending on the degree of severity of the disorder. However, the
concealment of drug addiction, habitual alcoholism, lesbianism or homosexual is not an indicia of
psychological incapacity to warrant the nullification of a marriage; it is only a ground for
annulment of marriage.

87. Paul and Dina were married in May, 1988. After their wedding, they proceeded
to the house of Dina’s mother, and there slept in the same room and on the same bed since
their wedding day until March, 1989. During this period, however, there was no attempt of
sexual intercourse between them. Dina claims that she did not even see the private parts of
her husband. When Dina underwent medical examination, the result shows she was still a
virgin. Is the failure of a spouse to provide sex to the other spouse constitutive of
psychological incapacity?

Yes. The failure of Paul to provide sex to his wife clearly demonstrates an utter
insensitivity or inability on his part to give meaning and significance to the marriage within the
meaning of Article 36 of the Family Code. Under the Family Code, one of the essential
obligations of marriage is procreation through sexual cooperation and is considered as the basic
end of marriage. Consequently, the senseless and protracted refusal of Paul to fulfill this marital
obligation is equivalent to psychological incapacity. (Chi Ming Tsoi v. Court of Appeals, 266
SCRA 324 [1997])

88. Despite her husband’s objection, the wife went to the United States to work as a
nurse. Although she promised her husband that she will just finish her 2-year employment
contract, she never came home anymore. Several years later, the husband went to the
United States on a job-related training program. He tried to locate his wife there to no avail.
He now contends that his wife no longer has any love or affection for him because she has
failed to communicate with him for at least seven years already and that such failure is a
manifestation of her psychological incapacity. Is the husband’s contention tenable?

No. In order to nullify a marriage under Article 36 of the Family Code, the
psychological incapacity of either or both spouses must be characterized by: a) gravity; b)
juridical antecedence; and c) incurability. The incapacity must be grave or serious such that the
party would be incapable of carrying the ordinary duties required in the marriage; it must be
rooted in the history of the party, antedating even the marriage, although the overt manifestations
may emerge only after the marriage; and it must be incurable or, even if it were otherwise, it
would be beyond the means of the party involved. The intendment of the law is to confine the
meaning of “psychological incapacity” only to the most serious cases of personality disorders
clearly demonstrative of an utter insensitivity or inability to give meaning and significance to the
marriage. Mere showing of irreconcilable differences and conflicting behavior is not enough to
prove that the parties failed to meet their responsibilities and duties as married persons; it is
essential that they must be shown to be incapable of doing so due to some psychological (not
physical) illness. (Republic v. Court of Appeals, 227 SCRA 401 [1993])

89. A week after their wedding, the husband started leaving his wife without
explanation. He would disappear for months, suddenly reappear for a few months, then
disappear again. During the time when he was with his family, he indulged in drinking
sprees with his friends and would return home drunk. He would force his wife to submit to
sexual intercourse and when she refused, he would inflict physical injuries on her.
Sometime later, the husband left his family again and that was the last his family heard
from him. The wife was constrained to look for a job as a manicurist to support herself and
her children. The wife later learned that her husband was imprisoned for some crime, and
that he had escaped from jail.

In the action filed by the wife against her husband for declaration of nullity of
marriage under Article 36 of the Family Code, she presented her sister-in-law as her only
witness who testified on the foregoing facts. Is there legal basis for the court to declare the
nullity of the subject marriage under Article 36 of the Family Code?

No, because the alleged psychological incapacity of the husband has not been proven to
exist. In Republic v. Court of Appeals and Molina, 268 SCRA 198 [1997], the Supreme Court laid
down the following guidelines in the interpretation and application of Article 36 of the Family
Code:

1. The burden of proof to show the nullity of the marriage belongs to the plaintiff. Any
doubt should be resolved in favor of the existence and continuation of the marriage and against its
dissolution and nullity;

2. The root cause of the psychological incapacity must be (a) medically or clinically
identified, (b) alleged in the complaint, (c) sufficiently proven by experts, and (d) clearly
explained in the decision;

3. The incapacity must be proven to be existing at “the time of the celebration” of the
marriage;

4. Such incapacity must also be shown to be medically or clinically permanent or


incurable;

5. Such illness must be grave enough to bring about the disability of the party to assume
the essential obligations of marriage;

6. The essential marital obligations must be those embraced by Articles 68 to 71 of the


Family Code as regards the husband and wife as well as Articles 220, 221 and 225 of the same
code in regard to parents and their children;

7. The interpretation given by the National Appellate Matrimonial Tribunal of the


Catholic Church in the Philippines, while not controlling or decisive, should be given respect by
our courts; and

8. The trial court must order the prosecuting attorney or fiscal and the Solicitor General
to appear as counsel for the State.

Taking into consideration these guidelines, it is evident that the wife failed to comply
with the above evidentiary requirements. Specifically, the wife failed to comply with guideline
No. 2 which requires that the root cause of psychological incapacity must be medically or
clinically identified and sufficiently proved by experts. Since no psychiatrist or medical doctor
testified as to the alleged psychological incapacity of her husband, there is no way by which the
husband’s psychological incapacity can be determined. (Republic v. Dagdag, 351 SCRA 425
[2001])
90. After several years of marriage, the wife institutes against her husband an action
for declaration of nullity of marriage under Article 36 of the Family Code. At the trial, the
wife described her husband as a harsh disciplinarian, unreasonably meticulous, and easily
angered. The husband’s unreasonable way of imposing discipline on their children was the
cause of their frequent fights as a couple. She complained that this was in stark contrast to
the lavish affection her husband has for his mother. Her husband’s deep attachment to his
mother and his dependence on her decision-making were incomprehensible to his wife.

Further adding to the wife’s woes was the husband’s concealment of his
homosexuality. Her suspicions were first aroused when she noticed her husband’s peculiar
closeness to his male companions. For instance, she caught him in an indiscreet telephone
conversation manifesting his closeness to his male caller. She also found several
pornographic homosexual materials in his possession. Her worse fears were confirmed
when she saw her husband kiss another man on the lips.
Is there sufficient basis for the court to declare the marriage void?
No. What the wife attempted to prove were her husband’s homosexual tendencies by
citing overt acts generally predominant among homosexual individuals. She wanted to prove that
the perceived homosexuality rendered her husband incapable of fulfilling the essential marital
obligations. Even assuming that the husband is a homosexual, this is insufficient as a ground to
annul his marriage with his wife. Nowhere was it proven by preponderance of evidence that the
husband was a homosexual at the onset of his marriage and that he deliberately hid such fact to
his wife. Homosexuality per se is only a ground for legal separation. It is its concealment that
serves as a valid ground to annul a marriage. Concealment in this case is not simply a blanket
denial, but one that is constitutive of fraud. It is this fundamental element that the wife failed to
prove. (Almelor v. RTC of Las Pinas, Br. 254, G.R. No. 179620, August 26, 2008)

91. In an action for declaration of absolute nullity of marriage under Article 36 of


the Family Code, the wife accuses the husband of psychological incapacity under the
following allegations of ultimate facts: a) her husband is cruel and violent; b) he is a
habitual drinker, staying with friends daily from 4:00 o’clock in the afternoon until 1:00
o’clock in the morning; c) when cautioned to stop or at least minimize his drinking, her
husband would beat, slap and kick her; d) at one time, he chased her with a loaded shotgun
and threatened to kill her in the presence of their children; e) at another time, she was
beaten badly that she filed a complaint for physical injuries, and for which her husband was
convicted; and f) he is emotionally immature and irresponsible.

Does the complaint state a sufficient cause of action for declaration of nullity of
marriage under Article 36 of the Family Code?

No. The term psychological incapacity as a ground for declaration of nullity of marriage
under Article 36 of the Family Code should refer to no less than a mental (not physical)
incapacity that causes a party to be truly incognitive of the basic marital covenants that
concomitantly must be assumed and discharged by the parties to the marriage which, as so
expressed by Article 68 of the Family Code, include their mutual obligations to live together,
observe love, respect and fidelity and render help and support. There is hardly any doubt that the
intendment of the law has been to confine the meaning of “psychological incapacity” to the most
serious cases of personality disorders clearly demonstrative of an utter insensitivity or inability to
give meaning and significance to the marriage. This psychological incapacity must exist at the
time the marriage is celebrated.

In the instant case, Lorna has failed to make out a case of psychological incapacity on
the part of her husband Zosimo, let alone at the time of the solemnization of the marriage.
Emotional immunity and irresponsibility, invoked by Lorna, cannot be equated with
psychological incapacity. (Pesca v. Pesca, 356 SCRA 588 [2001])

92. Husband vs. Wife for declaration of nullity of marriage under Article 36 of the
Family Code. Husband claims that the filing by his wife of a series of charges against him is
proof of his wife’s psychological incapacity. These charges include complaints for perjury,
false testimony, concubinage and deportation. He contends that the filing and prosecution of
these cases clearly show that his wife wanted not only to put him behind bars, but also to
banish him from the country. He asserts that this is very unusual for a wife who, instead of
protecting the name and integrity of her husband as the father of her children, had acted to
the contrary. He complains about her lack of attention to their children, immaturity and
lack of an intention to procreative sexually because she used to be on the pill even before
they got married. Did Husband make out a case of psychological incapacity?

No. Husband’s allegations are grossly insufficient to support a finding of psychological


incapacity. It is the height of absurdity and inequity to condemn Wife as psychologically
incapacitated to fulfill her marital obligations simply because she filed cases against him. Even if
taken as true, the alleged lack of attention to their children, immaturity and lack of an intention of
procreative sexuality, singly or collectively, does not constitute psychological incapacity.
Husband’s allegations merely show that he and his wife could not get along with each other. Mere
showing of irreconcilable differences and conflicting personalities in no wise constitutes
psychological incapacity. (Choa v. Choa, November 26, 2002)

93. In the suit by the husband against his wife for declaration of nullity of marriage
under Article 36 of the Family Code, the husband alleges the following: a) his wife had
extramarital affairs with several men whom he identified as a dentist in the AFP; a
Lieutenant in the Presidential Security Group; and the latest, a Jordanian national; b)
during their marriage, his wife turned out to be an irresponsible and immature wife and
mother; c) that his wife was once confined in a hospital for treatment by a clinical
psychiatrist, but despite her treatment, his wife did not stop from her illicit relationship
with the Jordanian national with whom she begot two children; d) that when the Jordanian
left the country, his wife reconciled with him bringing along her two illegitimate children by
the Jordanian; e) that he accepted her back and even considered the two illegitimate
children as his own; and f) that after one year, his wife left him again to join her Jordanian
lover and brought with her the two illegitimate children.

Did H make out a case of psychological incapacity?

No. The wife’s sexual infidelity or perversion and abandonment do not by themselves
constitute psychological incapacity within the contemplation of Article 36 of the Family Code.
Neither could her emotional immaturity and irresponsibility be equated with psychological
incapacity (Pecsa v. Pecsa, 351 SCRA 425 [2001]). It must be shown that these acts are
manifestations of a disordered personality which make her completely unable to discharge the
essential obligations of the marital state, not merely due to her immaturity or sexual promiscuity.

At best, the circumstances relied upon by the husband are grounds for legal separation
under Article 55 of the Family Code. The grief, frustration, and even the desperation of the
husband in his present situation cannot be denied. Regrettably, there are circumstances, like in
this case, where neither law nor society can provide the specific answers to every individual
problem. The husband’s marital predicament calls for sympathy, but first and foremost, it is the
duty of the courts to apply the law no matter how harsh it may be. (Bedel v. Bedel, January 29,
2004)

94. Sammy and Tessie were married in 1982. After ten years of married life, Tessie
filed an action to declare the marriage void because of her husband’s psychological
incapacity. In the case study conducted by the psychologist, Tessie submitted herself to a
psychological evaluation, while Sammy did not. On the basis of the report submitted by the
psychologist, the court thus declared Sammy to be psychologically incapacitated to perform
the essential marital obligations of his marriage to Tessie.

The Solicitor General assails the decision on the ground that Sammy’s
psychological incapacity has not been established by the totality of the evidence submitted.
This is because while psychological incapacity must be medically or clinically identified, and
sufficiently proven by experts. Sammy was not subjected to any psychological or psychiatric
evaluation. The incapacity of Sammy was based solely on interviews conducted by the
psychologist with Tessie.

Is psychological or psychiatric evaluation of the party alleged to be psychologically


incapacitated an indispensable requirement for declaration of nullity of marriage under
Article 36 of the Family Code.

No. The psychological incapacity of a party must be established by the totality of the
evidence presented. There is no requirement under the law that the party alleged to be
psychologically incapacitated should submit to a psychiatric or psychological evaluation. (Marcos
v. Marcos, 343 SCRA 755 [2000])

95. Edward first met Rowena while they were in college. That was in January 1996,
when Edward was a sophomore student and Rowena, a freshman. In March 1996, or
around three months of going out on dates, Rowena asked Edward that they elope. At first,
Edward refused. Her persistence, however, made him relent. Thus, they left Manila and
sailed to Cebu that same month; he, providing their travel money and she, purchasing the
boat ticket.

Edward’s funds lasted for only a month. In April 1996, they decided to go back to
Manila. Rowena proceeded to her uncle’s house and Edward to his parents’ home. As his
family was abroad, Rowena kept on telephoning him, threatening him that she would
commit suicide, Edward finally agreed to stay with Rowena at her uncle’s place. Thereafter,
Rowena’s uncle brought the two to a court to get married. The two then continued to stay at
her uncle’s house where Edward was treated like a prisoner -- he was not allowed to go out
unaccompanied. After a month, Edward escaped from the house of Rowena’s uncle.

In June 1996, Edward was able to talk to Rowena. Unmoved by his persistence that
they should live with his parents, she said that it was better for them to live separate lives.
They then parted ways. Edward subsequently filed a petition for declaration of nullity of
marriage accusing Rowena of psychological incapacity.

During the trial, the clinical psychologist provided expert testimony. She found the
couple psychologically incapacitated. In her report, she found Edward to be the reserved
type of a person and weak-willed. On the other hand, she found Rowena to be the aggressive
and rebellious type of a woman; exploitative in her plight for a life of wealth and glamour;
and dreams her marriage will bring her good fortune because Edward is part of a rich
family; in order to have her dreams realized, she used force and threats knowing that
Edward is weak-willed; and that upon the realization that there is really no chance for
wealth, she gladly finds her way out of the marriage.

Is the totality of the evidence enough to sustain a finding of psychological


incapacity?

Yes. The parties’ whirlwind relationship lasted more or less six months. They met in
January 1996, eloped in March, exchanged marital vows in May, and parted ways in June. The
psychologist who provided expert testimony found both parties psychologically incapacitated.
Edward’s behavioral pattern falls under the classification of dependent personality disorder, and
Rowena’s, that of the narcissistic and antisocial personality disorder.

By the very nature of Article 36 of the Family Code, courts, despite having the primary
task and burden of decision-making, must consider as decisive evidence the expert opinion on the
psychological and mental temperaments of the parties. Hernandez v. Court of Appeals, G.R. No.
126010, December 8, 1999, emphasizes the importance of presenting expert testimony to
establish the precise cause of a party’s psychological incapacity, and to show that it existed at the
inception of the marriage. And as Marcos v. Marcos, 343 SCRA 755 [2000] asserts, there is no
requirement that the person to be declared psychologically incapacitated be personally examined
by a physician, if the totality of the evidence presented is enough to sustain a finding of
psychological incapacity. Verily, the evidence must show a link, medical or the like, between the
acts that manifest psychological incapacity and the psychological disorder itself.

In the case presented, the psychological assessment produced the finding that both
parties are afflicted with personality disorders – dependent personality disorder for Edward, and
narcissistic and antisocial personality disorder for Rowena. The seriousness and gravity of the
diagnosis of the disorders considered, the psychological evaluation made by the expert witness is
decisive. (Te v. Te, G.R. No. 161793, February 13, 2009)

96. Has Molina been abandoned by Te?

Justice Nachura explains the answer in Te in this wise: “Lest it be misunderstood, we are
not suggesting the abandonment of Molina in this case. We simply declare that, x x x, there is
need to emphasize other perspectives as well which should govern the disposition of petitions for
declaration of nullity under Article 36. At the risk of being redundant, we reiterate once more the
principle that each case must be judged, not on the basis of a priori assumptions, predilections or
generalizations but according to its own facts. And, to repeat for emphasis, courts should interpret
the provision on a case-to-case basis; guided by experience, the findings of experts and
researchers in psychological disciplines, and by decisions of church tribunals.”

97. What prompted Te to “depart” from the rigid standards set by Molina?

Justice Nachura writes: “In hindsight, it may have been inappropriate for the Court to
impose a rigid set of rules, as the one in Molina, in resolving all cases of psychological
incapacity. Understandably, the Court was then alarmed by the deluge of petitions for the
dissolution of marital bonds, and was sensitive to the OSG’s exaggeration of Article 36 as the
‘most liberal divorce procedure in the world.’ The unintended consequences of Molina, however,
has taken its toll on people who have to live with deviant behavior, moral insanity, sociopathic
personality anomaly, which, like termites, consume little by little the very foundation of their
families, our basic social institutions. Far from what was intended by the Court, Molina has
become a strait-jacket, forcing all sizes to fit into and be bound by it. Wittingly or unwittingly, the
Court, in conveniently applying Molina, has allowed diagnosed sociopaths schizophrenics
nymphomaniacs, narcissists and the like, to continuously debase and pervert the sanctity of
marriage. x x x. The Court need not worry about the possible abuse of the remedy provided by
Article 36 , for there are ample safeguards against this contingency, among which is the
intervention by the State, through the public prosecutor, to guard against collusion between the
parties and/or fabrication of evidence. The Court should rather be alarmed by the rising number
of cases involving marital abuse, child abuse, domestic violence and incestuous rape.”

98. Rudy and Lorna met and became sweethearts in 1991. Planning to get married,
they applied for a marriage license with the local civil registrar in September 1994. They
had their first sexual relation in October 1994, and had regularly engaged in sex thereafter.
When the couple went back to the local civil registrar, the marriage license had already
expired. In order to push through with their marriage plans, in lieu of a marriage license,
they executed an affidavit in March 1995 stating that they had been living together as
husband and wife for at least five years. The couple got married that same day. After the
marriage ceremony, they went back to their respective homes and did not live together as
husband and wife.

Lorna later gave birth to a child named Tricia. Thereafter, she filed a complaint for
support against Rudy on her allegation that Rudy has “reneged on his obligation to
financially support her as his wife and Tricia as his daughter.” Rudy denied that he is
married to Lorna, claiming that their marriage is void since the marriage was facilitated by
a fake affidavit.

a) Does the court have jurisdiction to determine the validity of the marriage
between Rudy and Lorna in the pending action for support?

Yes, because of the rule that the validity of a void marriage may be collaterally attacked.
In Nicdao-Carino v. Yee-Carino, G.R. No. 132529, February 2, 2001, the Supreme Court ruled
that it is clothed with sufficient authority to pass upon the validity of two marriages despite the
main case being a claim for death benefits. Reiterating Ninal, the Supreme Court held that it may
pass upon the validity of a marriage even in a suit not directly instituted to question the validity of
said marriage, so long as it is essential to the determination of the case. However, evidence must
be adduced, testimonial or documentary, to prove the existence of grounds rendering an assailed
marriage an absolute nullity.

b) What is the effect of the false affidavit executed by Rudy and Lorna upon their
marriage?

The false affidavit renders their marriage void. The falsity of an affidavit cannot be
considered as a mere irregularity in the formal requisites of marriage. The law dispenses with the
marriage license requirement for a man and a woman who lave lived together and exclusively
with each other as husband and wife for a continuous and unbroken period of at least five years
before the marriage. The aim of this provision is to avoid exposing the parties to humiliation,
shame and embarrassment concomitant with the scandalous cohabitation of persons outside a
valid marriage due to the publication of every applicant’s name for a marriage license.

In the instant case, there was no “scandalous cohabitation” to protect; in fact, there was
no cohabitation at all. The false affidavit which Rudy and Lorna executed so they could push
through with the marriage has no value whatsoever; it is a mere scrap of paper. They were not
exempt from the marriage license requirement. Their failure to obtain and present a marriage
license renders their marriage void. (De Castro v. Assidao-De Castro, G.R. No. 160172, February
13, 2008)

99. Is judicial declaration of nullity of a void marriage necessary before a party


thereto can remarry?

Yes. Article 40 of the Family Code expressly provides that “the absolute nullity of a
previous marriage may be invoked for purposes of remarriage on the basis solely of a final
judgment declaring such previous marriage void.” Consequently, if a party to a void marriage
enters into a subsequent marriage without obtaining a final judgment declaring the nullity of the
previous marriage, such a subsequent marriage is void.

100. Article 40 of the Family Code expressly provides that there must be prior
judicial declaration of nullity of a previous marriage before a party thereto can remarry. Is
this provision applicable even when the first marriage took place before the effectivity of the
Family Code and the second marriage entered into during the effectivity of the Family
Code?

Yes. Article 40 of the Family Code expressly provides that there must be a prior judicial
declaration of nullity of a previous marriage before a party thereto can enter into a second
marriage. This provision is applicable to remarriages entered into after the effectivity of the
Family Code, regardless of the date of the first marriage. Said article is given retroactive effect
insofar as it does not prejudice rights in accordance with the Civil Code and other laws. (Atienza
v. Brillantes, 243 SCRA 32)

101. What is the rationale behind the rule that a void marriage must be judicially
declared void before a party thereto can remarry?

The rationale behind the rule is to do away with any continuing uncertainty on the status
of the second marriage.
102. H and W were married in 1992. After the marriage, W left to work abroad. She
would only come home to the Philippines on vacations. While on vacation in 2003, she
discovered that her husband had contracted a subsequent marriage with C in 2001, and that
in 2002, her husband filed with the RTC of Caloocan City a complaint for declaration of
absolute nullity of their marriage under Article 36 of the Family Code.
Aggrieved by her discovery, W filed with the RTC of Pasig City a complaint for
bigamy against her husband. During the pendency of the bigamy case, the RTC of Caloocan
City rendered a decision declaring the marriage of H and W null and void on the ground
that W is psychologically incapacitated to comply with her essential marital obligations.
This decision has since become final and executory.

Should the RTC of Pasig City convict H of the crime of bigamy?


Yes. At the time when H contracted a second or subsequent marriage in 2001, his
marriage with W was still legally subsisting. The finality of the decision declaring the nullity of
his first marriage with W came about only in 2007 or about six years after his second marriage. It
is evident therefore that H committed the crime charged. H’s contention that he cannot be charged
with bigamy in view of the declaration of nullity of his first marriage is without merit. The
Family Code settled once and for all the conflicting jurisprudence on the matter. A declaration of
absolute nullity of a marriage is now explicitly required either as a cause of action or a ground for
defense. Where the absolute nullity of a previous marriage is sought to be invoked for purposes of
contracting a second marriage, the sole basis acceptable in law for said projected marriage to be
free from legal infirmity is a final judgment declaring the previous marriage void. (Teves v.
People, G.R. No. 188775, August 24, 2011)

103. An information for bigamy was filed against Amado upon complaint of Benita
alleging that without his previous marriage having been dissolved, he contracted a
subsequent marriage with Clara. Amado, in turn, brought an action against Benita for
declaration of nullity of their marriage under Article 36 of the Family Code. The two cases
were then tried simultaneously, albeit in different courts.

After due hearing, the civil action for declaration of nullity of marriage was
decided first. In that case, the court declared the absolute nullity of the marriage between
Amado and Benita because of the latter’s psychological incapacity. Thereupon, Amado
moved to dismiss the pending criminal case for bigamy on the ground that since the first
marriage is already declared void, the marriage is deemed not to have taken place at all;
hence, the element of a previous subsisting marriage for the crime of bigamy is absent.
Should the court grant the motion?

No. Article 40 of the Family Code requires a prior declaration of nullity of a previous
marriage before a party may remarry. The clear implication of this is that it is not for the parties,
particularly the accused, to determine the validity or invalidity of the marriage. Only the courts
may determine and declare the nullity of a marriage. So long as there is no such declaration, the
presumption is that the marriage exists. No matter how obvious, manifest or patent the absence of
a requisite of marriage is, the intervention of the courts must be resorted to. Since the second
marriage was contracted before the judicial declaration of nullity the first marriage, all the
elements of the crime of bigamy are present. (Mercado v. Tan, 337 SCRA 122 [2000])

(NOTE: The dissenting opinion of Justice Vitug in the Mercado case is noteworthy. He
wrote: “The Family Code has not overturned the rule in criminal law and related jurisprudence.
Under Article 349 of the Revise Penal Code, bigamy is committed when a person contracted a
second or subsequent marriage before the former marriage has been legally dissolved. Only a
valid or voidable marriage is dissolved. A marriage void ab initio is merely declared. To commit
bigamy, the first marriage must be a valid or a voidable marriage. Since the first marriage of
Vicente was void initio, there was no valid prior marriage subsisting at the time of his second
marriage, hence, no crime of bigamy was committed.”)

104. May a petition for declaration of nullity of marriage be filed for a purpose
other than remarriage?

Yes. A petition for declaration of nullity of marriage under Article 40 of the Family Code
may be resorted to even for a purpose other than remarriage. Such a petition may be filed even if
the intention of the petitioner-spouse is to recover his/her rightful share in the community
property or conjugal partnership.

Crucial to the interpretation of Article 40 of the Family Code is the position of the word
“solely” therein. As it is placed, the word “solely” is meant to qualify the words “final judgment”
and not the phrase “for purposes of remarriage.” (Domingo v. Court of Appeals, 226 SCRA 572
[1993])

105. May a petition for declaration of presumptive death under Article 41 of the
Family Code be filed for a purpose other than remarriage?

No. Unlike in an action for declaration of nullity of a void marriage under Article 40 of
the Family Code, an action for declaration of presumptive death under Article 41 is available only
for the sole purpose of remarriage.

106. In an action for annulment of marriage, who are the parties who may
commence the action and within what period may the action be filed?

The following are the parties who may commence an action for annulment of marriage
and the periods for the filing of such action:

a) Lack of parental consent: The minor should bring the action within five years after
attaining the age of 21. For the parent or guardian, the action must be brought at any time before
such party reaches the age of 21.

b) Insanity: The sane spouse or person having legal charge of the insane spouse must
bring the action at any time before the death of either party. The insane spouse must bring the
action during a lucid interval or after regaining sanity, also before the death of the other party. The
reason in not providing for a 5-year period is that insanity recurs.

c) Fraud: The injured party must bring the action within five years after discovery of
the fraud.

d) Force, Intimidation, Undue Influence: The injured party must bring the action
within five years from the time the force, intimidation or undue influence disappeared or ceased.

e) Physical Incapacity: The injured party must bring the action within five years after
the marriage.

f) Sexually-Transmissible Disease: The injured party must bring the action within five
years after the marriage.

107. H and W were married in 2001. At the time of their marriage, W was aware
that H was impotent. Can W ask for the annulment of the marriage?

No, she cannot. In addition to the requisites expressly stated in paragraph 5 of Article 45
of the Family Code, in order that a marriage may be annulled on the ground of physical
incapacity or impotency, another requisite should be added: that at the time of the marriage, such
physical incapacity was unknown to the other party. This is so for the following reasons:

a) Under paragraph 5 of Article 45 of the Family Code, the only person who can bring
the action for annulment is the injured party. Now, if W was aware that H was impotent at the
time of the celebration of their marriage, how can she say that she is the injured party?

b) Besides, the equitable principle of estoppel is applicable here. When a party to a


marriage contract is aware that she is getting married to a man who is impotent, it is clear that she
is renouncing copulation, which is a purely personal right.

c) Furthermore, sexual intercourse is not the only end or purpose of marriage. There are
other purposes. This is clearly indicated by the fact that there is no maximum age requirement
imposed by law. Consequently, even when one of the parties has already reached the age when
copulation is no longer possible, the marriage is still valid. By parity of reasoning, the same can
be applied to the marriage of H and W.

108. Which voidable marriage under the law is not susceptible of ratification by
cohabitation?

Under the Family Code, marriages which are voidable because of the physical
incapacity of a party to consummate the marriage as well those by reason of affliction of a party
with a serious and incurable sexually-transmissible disease are not susceptible of ratification.
(Art. 45, Nos. 5 & 6, Family Code)

109. If drug addiction, habitual alcoholism, or homosexuality should occur only


during the marriage, would these constitute grounds for declaration of nullity or for legal
separation, or would they render the marriage voidable?

If drug addiction, habitual alcoholism, lesbianism, or homosexuality should occur only


during the marriage, they will constitute as grounds for legal separation under Article 55 of the
Family Code, but not as grounds for declaration of nullity under Article 36 or for annulment
under Articles 45 and 46 of the Family Code.

110. In an action for annulment of marriage, may the` respondent who failed to file
an answer be declared in default?

No. It is a fundamental principle in the law on marriage that a party in an action for
annulment of marriage cannot be declared in default because the granting of annulment of
marriage is fraught with dangers of collusion. The reason for the law is obvious from the policy
that marriage is not a mere contract, but an inviolable social institution in which the State is
virtually interested because the State finds no anchor than on good, solid and happy families.
(Tuazon v. Court of Appeals, 256 SCRA 158 [1996])

111. Abe and Betty got married in 1985. Due to violent fights, suspected acts of
infidelity and addiction on both sides, Betty sued Abe for declaration of nullity of their
marriage under Article 36 of the Family Code. Abe filed an answer denying Betty’s
allegations. At the trial, Betty presented witnesses, while Abe participated in the proceedings
through counsel. When Betty rested her case, Abe requested for postponement of the
presentation of his evidence which the court granted. On the scheduled hearing, however,
Abe and his counsel failed to appear despite notice. As a result, the court issued an order
declaring Abe to have waived his right to present evidence.
Without Abe having presented any evidence, the court rendered judgment in
Betty’s favor. Abe quickly assailed the decision on the ground that the court acted in excess
of its jurisdiction when it decided the case based solely on Betty’s evidence. He contends
that when he failed to appear, the court should have ordered the prosecuting attorney or
fiscal to intervene for the State and inquire as to the reason for his non-appearance instead
of forfeiting his right to present evidence. He invokes Article 48 of the Family Code. Is
Abe’s contention tenable?

Abe’s contention is not tenable. Article 48 of the Family Code is not applicable because
Abe was not declared in default by the trial court for failure to file an answer. He filed his answer
to the complaint and in fact contested Betty’s cause of action. He actively participated in the
proceedings, and the litigation was characterized by a no-holds barred contest and not by
collusion. The role of a prosecuting attorney or fiscal in an action for annulment of marriage is to
determine whether collusion existed between the parties and take care that the evidence is not
suppressed or fabricated. A vehement opposition to the annulment proceedings negates the
conclusion that collusion existed between the parties. Neither was there any allegation that
evidence was suppressed by either party. Hence, the non-intervention of the prosecuting attorney
or fiscal is not fatal to the validity of the proceedings in the trial court. (Tuazon, et. al. v. Court of
Appeals, 256 SCRA 158 [1996])

112. If a marriage is annulled or declared void by final judgment, may the former
spouses remarry? If so, how soon?

If a marriage is annulled or declared void by final judgment, the former spouses may
contract a valid subsequent marriage upon compliance with the recording requirements under
Article 52 of the Family Code. Under this article, the judgment of annulment or of absolute
nullity of marriage, the partition and distribution of the properties of the spouses, and the delivery
of the children’s presumptive legitimes shall be recorded in the appropriate civil registry and
registries of property. Under Article 53 of the Family Code, failure to comply with the foregoing
recording requirements will render the subsequent marriage void.

113. As the term is used in the Family Code, what is meant by presumptive legitime?

The term presumptive legitime is not defined in our law. It is actually a technical term
without a specific definition. But as the term is used in the Family Code, it refers to the advance
legitime (or a part of the “inheritance”) which arises only in cases of annulment of marriage and
declaration of nullity of marriage. It is deliverable to the common children of the spouses, and is
mentioned in Articles 50, 51 and 52 of the Family Code.

114. Distinguish between ordinary legitime and presumptive legitime.

Ordinary legitime arises only when a person dies. (Art. 777, Civil Code) The decedent
may either be a child, parent or spouse, ascendant or descendant. In a presumptive legitime, the
spouses whose marriage is annulled or declared void are still alive. It is the marriage itself which
“died” or is terminated.

While in both kinds of legitimes the marriage is terminated, the causes of termination
are not the same. In presumptive legitime, the cause is either the annulment of the marriage or its
nullification. In ordinary legitime, the cause of termination is the death of the decedent who is not
necessarily a spouse.

The term legitime in the law on succession presupposes the existence of a valid and
effective will; in presumptive legitime, no will is presupposed. It applies without any relation to
the existence or non-existence of a valid and effective will of the “spouses.”

115. What is the legal effect of the non-delivery by the spouses of the presumptive
legitimes of their common children?

If the marriage of the spouses is annulled or declared void, the law requires, among
others, the delivery of the presumptive legitimes to the common children of the spouses,
including their jointly adopted children. The delivery must be evidenced or recorded with the
appropriate civil registry and registries of property. Partition is not enough. There must be actual
delivery of the presumptive legitimes to the common children to consummate the process.

If a spouse remarries, the subsequent marriage will be considered void under Article 53
and Article 35, paragraph 6 of the Family Code.

LEGAL SEPARATION

116. What are the grounds for legal separation?

The grounds for legal separation under Article 55 of the Family Code are: (SAMPAL
LABI)

a) SENTENCE: Final judgment sentencing the respondent to imprisonment of


more than six years, even if pardoned.

b) ABUSIVE CONDUCT: Repeated physical violence or grossly abusive conduct


directed against the petitioner, a common child or the child of the petitioner.

c) MORAL PRESSURE: Physical violence or moral pressure to compel the


petitioner to change religious or political affiliation.

d) PROSTITUTION: Attempt of respondent to corrupt or induce the petitioner, a


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

e) ADDICTION: Drug addiction or habitual alcoholism of the respondent.

f) LESBIANISM: Lesbianism or homosexuality of the respondent.

g) LIFE: Attempt by respondent against the life of the petitioner.

h) ABANDONMENT: Abandonment of petitioner by respondent without


justifiable cause for more than one year.

i) BIGAMY: Contracting by the respondent of a subsequent bigamous marriage,


whether in the Philippines or abroad.

j) INFIDELITY: Sexual infidelity or perversion.

117. Rosa and Ariel were married in the Catholic Church of Baguio City on
January 5, 1988. In 1990, Ariel went to Saudi Arabia to work. There, after being converted
into Islam, Ariel married Mystica. Rosa learned of the second marriage of Ariel on January
1, 1991, when Ariel returned to the Philippines with Mystica. Rosa then filed an action for
legal separation on February 5, 1994.

a) Does Rosa have legal grounds to ask for legal separation?

Yes. The contracting of a subsequent bigamous marriage by Ariel, whether in the


Philippines or abroad, is a ground for legal separation under Article 55(7) of the Family Code.
Whether the second marriage is valid or not, Ariel having converted into Islam, is immaterial.
Moreover, the abandonment of Rosa by Ariel for more than one year is also a ground for legal
separation, unless upon returning to the Philippines, Rosa agreed to cohabit with Ariel which is
allowed under the Family Code. In this case, there was no such cohabitation and therefore, no
condonation.

b) Has the action prescribed?

The action has not yet prescribed. Under Article 57 of the Family Code, the aggrieved
spouse must file the action within five years from the occurrence of the cause. In the instant case,
the subsequent marriage of Ariel could not have occurred earlier than 1990, the year when he
went to Saudi Arabia. Hence, Rosa has until 1995 to bring the action for legal separation under
the Family Code.

118. Arnulfo caught his wife, Beatrice, having illicit relations with Cesar. He then
told her that he will file an action against her for legal separation to which the latter agreed
provided she will not be charged criminally. Subsequently, the complaint for legal
separation was filed. Beatrice defaulted. When questioned by the Public Prosecutor why
she failed to file an answer, Beatrice signified her intention to the petition for legal
separation. Is there a confession of judgment in this case which would justify the dismissal
of the petition?

No. On the contrary, the petition for legal separation should be granted in view of the
presence of other evidence. Here, there was only an extra-judicial admission and not a confession
of judgment (which usually happens when the defendant appears in court and confesses the right
of plaintiff to judgment or files a pleading agreeing to plaintiff’s demand). Even if the statement
of Beatrice really constitutes a confession of judgment, still, inasmuch as there is evidence of
sexual infidelity on the part of the wife independently of such statement, the decree of legal
separation should be granted since it would be premised not on her confession, but on the strength
of the evidence of sexual infidelity on the part of the wife. Indeed, what the law prohibits is a
judgment based exclusively or mainly on the confession of judgment. If a confession can
automatically and itself defeat the suit, any defendant who opposes the legal separation will
immediately confess judgment, purposely to prevent the giving of the decree.

119. H instituted an action for legal separation against his wife, W, on the ground of
sexual infidelity. Upon receipt of the summons, W requested an extension of 20 days to file
her answer. This was granted. W again moved for another extension of 30 days. This was
again granted, but she was given only a period of 20 days. Unaware of the order, she again
moved for another extension of 15 days from the expiration of the 30 days. The same was
denied and W was declared in default. Is the default order proper?

No. Article 60 of the Family Code provides that no decree of legal separation shall be
promulgated upon a stipulation of facts or by confession of judgment. This provision reflects the
call for the intervention of state attorneys or fiscals to take steps to prevent collusion between the
parties, especially in cases of uncontested proceedings for legal separation. Article 58 of the same
Code further mandates that an action for legal separation shall in no case be tried before six
months shall have elapsed since the filing of the petition in order to provide the parties a cooling-
off period. (Pacete v. Caraga et. al., 231 SCRA 321 [1994])

120. According to Article 58 of the Family Code, an action for legal separation shall
in no case be tried before six months shall have elapsed since the filing of petition, the
purpose being to provide the parties a cooling-off period. Is this requirement absolute?

The requirement is not absolute. As a rule, the filing of an action for legal separation
requires a “cooling-off” period of six months. (Art. 58, Family Code) However, when the ground
alleged is one of those falling under R.A. 9262, also known as the Anti-Violence Against Women
and their Children Act of 2004, there is no such “cooling-off” period because the courts are
mandated to proceed with the hearing of the case as soon as possible. (Sec. 19, R.A. 9262)

121. The husband obtained a decree of legal separation on the ground of sexual
infidelity on the part of his wife. May the wife inherit from the husband by intestate
succession? By will?

The wife cannot inherit from the husband by intestate succession. According to Article
63(4) of the Family code, the offending spouse shall be disqualified from inheriting from the
innocent spouse by intestate succession.

If the husband executed the will prior to the legal separation, it is clear that the wife
cannot inherit from her husband. According to Article 63(4) of the Family code, provisions in
favor of the offending spouse made in a will shall be revoked by operation of law. However, if the
will was executed subsequent to the legal separation, the wife will then be able to inherit from her
husband. In such a case, there is a tacit or implied pardon. (Art. 1033, Civil Code by analogy)

122. H and W were married a few years before the Family Code took effect on
August 3, 1988. After 15 years of married life, however, H obtained a decree of legal
separation after catching his wife having illicit relations with their neighbor. In the final
decree of legal separation issued by the court, the court ordered the forfeiture of W’s share
in the net profits earned by the conjugal partnership in favor of her children pursuant to
Article 63(2) in relation to Article 129 of the Family Code.
Not satisfied with the ruling regarding the forfeiture of her share in the conjugal
assets, W claims that the net assets of the conjugal partnership shall be computed in
accordance with Article 102 of the Family Code, instead of Article 129. She argues that
Article 102 applies because there are no other provisions under the Family Code which
defines net profits subject of forfeiture as a result of legal separation. She contends that her
vested right over half of the common properties of the conjugal partnership is violated when
the forfeiture is to be made pursuant to Article 129 in relation to Article 63(2) of the Family
Code.

W’s move raises the following issues; What law governs the property relations of
the spouses given that they were married before the effectivity of the Family Code? What
law governs the dissolution of their common properties since the decree of legal separation
was issued after the Family Code is already in effect?
As to their property relations, the spouses are governed by the regime of conjugal
partnership of gains. This is so because they were married when the operative law was the Civil
Code. As to the liquidation of their conjugal partnership assets, however, the Family Code is
applicable because it is already the operative law at the time of the dissolution of their conjugal
partnership.
In the instant case, the applicable law in so far as the liquidation of the conjugal
partnership assets and liabilities of H and W is concerned is Article 129 of the Family Code
(liquidation of the conjugal partnership) in relation to Article 63 (effects of a decree of legal
separation). The latter provision is applicable because according to Article 256 of the Family
Code ”[t]his Code shall have retroactive effect insofar as it does not prejudice or impair vested or
acquired rights in accordance with the Civil Code or other law.”
W’s contention that her vested right over half of the common properties of the conjugal
partnership is violated when her share in the conjugal partnership is forfeited in favor of her
children pursuant to Article 63(2) and 129 of the Family Code has no basis.

While it is true that the couple were married at the time when the operative law was the
Civil Code, the Family Code should be given retroactive application for purposes of determining
the “net profits earned” by the conjugal partnership which is subject to forfeiture. A spouse’s
claim of a vested right is not etched in stone. To be vested, a right must have become a title –
legal or equitable – to the present or future enjoyment of property. In one case, the Supreme
Court reiterated its long standing ruling that “prior to the liquidation of the conjugal partnership,
the interest of each spouse in the conjugal assets is inchoate, a mere expectancy, which constitutes
neither a legal nor an equitable estate, and does not ripen into title until it appears that there are
assets in the community as a result of the liquidation and settlement. The interest of each spouse
is limited to the net remainder resulting from the liquidation of the affairs of the partnership after
its dissolution. Thus, the right of the husband or wife to one-half of the conjugal assets does not
vest until the dissolution and liquidation of the conjugal partnership, or after the dissolution of the
marriage, when it is finally determined that, after settlement of conjugal obligations, there are net
assets left which can be divided between the spouses or their respective heirs.”

123. Is the computation of net profits earned in the conjugal partnership of gains the
same with the computation of net profits earned in the absolute community?
The term net profits is defined in Article 102(4) of the Family Code. Under this provision,
the term net profits “shall be the increase in value between the market value of the community
property at the time of the celebration of the marriage and the market value at the time of its
dissolution.” Without any doubt, Article 102(4) applies to both the dissolution of the absolute
community regime under Article 102 of the Family Code, and to the dissolution of the conjugal
partnership regime under Article 129 of the Family Code. The difference lies in the processes
used under the dissolution of the absolute community regime under Article 102 of the Family
Code, and in the processes used under the dissolution of the conjugal partnership regime under
Article 129 of the Family Code.
ON ABSOLUTE COMMUNITY REGIME: Applying Article 102 of the Family Code, the
“net profits” requires a prior determination of the market value of the properties at the time of the
community’s dissolution. From the totality of the market value of all the properties, the debts and
obligations of the absolute community are to be deducted and this will result to the net assets or
net remainder of the properties of the absolute community, from which the value of the properties
at the time of marriage is to be deducted, which then results to the net profits.

ON CONJUGAL PARTNERSHIP REGIME: Applying Article 129 of the Family Code,


the “net profits” requires a prior determination of the separate properties and debts of the spouses
under the following procedure a) an inventory shall be prepared, listing separately all the
properties of the conjugal partnership and the exclusive properties of each spouse; b) amounts
advanced by the conjugal partnership in payments of personal debts and obligations of either
spouse shall be credited to the conjugal partnership as an asset thereof; c) each spouse shall be
reimbursed for the use of his or her exclusive funds in the acquisition of property or for the value
of his or her exclusive property, the ownership of which has been vested by law in the conjugal
partnership; d) the debts and obligations of the conjugal partnership shall be paid out of the
conjugal assets. In case of insufficiency of said assets, the spouses shall be solidarily liable for the
unpaid balance with their separate properties, in accordance with the provisions of paragraph 2 of
Article 121; e) whatever remains of the exclusive properties of the spouses shall thereafter be
delivered to each of them; f) unless the owner had been indemnified from whatever source, the
loss or deterioration of movables used for the benefit of the family, belonging to either spouse,
even due to fortuitous event, shall be paid to said spouse from the conjugal funds, if any; and
g)the net remainder of the conjugal partnership shall constitute the profits, which shall be divided
equally between husband and wife, unless a different proportion or division was agreed upon in
the marriage settlements or unless there has been a voluntary waiver or forfeiture of such share as
provided in the Family Code.
124. Suppose Article 102 of the Family Code (which is a provision under the regime
of absolute community of property) is to apply in the instant case, is W entitled to receive
anything from the absolute community?
If H and W have no separate properties, the remaining properties of the couple are all part
of the absolute community. And its market value at the time of the dissolution of the absolute
community constitutes the “market value at dissolution.” When H and W were legally separated,
all the properties which remained will be liable for the debts and obligations of the community.
Such debts and obligations will be subtracted from the “market value at dissolution.” What
remains after the debts and obligations have been paid from the total assets of the absolute
community constitutes the net remainder or net asset. And from such net asset or net remainder of
the couple’s remaining properties, the market value at the time of the marriage will be subtracted
and the resulting totality constitutes the “net profits.” Since both H and W have no separate
properties, and nothing would be returned to each of them, what will be divided equally between
them is simply the net profits. However, the trial court forfeited the half-share of W in favor of
her children. Thus, if Article 102 is used in the instant case (which should not be the case),
nothing is left to W since both parties entered into their marriage without bringing with them any
property.
125. Given that Article 129 of the Family Code applies to the liquidation of the
conjugal assets of H and W, is the latter entitled to receive any property from the conjugal
partnership?

No. What remains in the conjugal properties of H and W (after payment of all debts and
obligations) should be divided equally between the spouses. However, since W herself is the
guilty party, her share from the “net profits” of the conjugal partnership is forfeited in favor of the
common children pursuant to Article 63(2) of the Family Code. Nothing will be returned to W
because in the conjugal partnership regime, there is no separate property which may be accounted
for in the guilty party’s favor. (Quiao v. Quiao, G.R. No. 176556, July 4, 2012)

PROPERTY RELATIONS BETWEEN


HUSBAND AND WIFE
126. Is an oral marriage settlement valid?

No. Under Article 77 of the Family Code, a marriage settlement or any modification
thereof, to be valid, shall be in writing, signed by the parties and executed before the marriage. In
the absence of a marriage settlement or when the marriage settlement is void, the mandatory
regime of absolute community of property shall govern the property relations of the spouses.

127. What economic system may be agreed upon by the future spouses in their
marriage settlement?

The future spouses may, in the marriage settlement, agree upon: a) absolute community
of property; or b) conjugal partnership of gains; or c) complete separation of property; or d) any
other property regime. (Art. 75, Family Code)

128. What are the instances under the Family Code where the terms of a marriage
settlement are modified, qualified or altered?

The following are the instances under the Family Code where the terms of a marriage
settlement are in effect modified, qualified, or altered: a) Article 66, on reconciliation of the
spouses after issuance of a decree of legal separation; b) Article 67, on revival of the former
property regime of the spouses; c) Article 128, on petition of one spouse for sole administration
of the conjugal partnership in case of abandonment by the other spouse or failure to comply with
his or her obligations to the family [same as Art. 101 of the Family Code]; (d) Article 135, on the
various grounds for judicial separation of property; and (e) Article 136, on joint petition of
spouses for dissolution of their property regime.

129. Ambo gives a donation propter nuptias of a parcel of land to Zenia, his future
wife. Due to a quarrel, the marriage is called off. Is the donation revoked by operation of
law?

I distinguish. If the donation propter nuptias was incorporated in the marriage settlement
executed and signed by Ambo and Zenia, the donation is rendered void by the non-celebration of
the marriage. (Art. 81, Family Code) However, if the donation propter nuptias was made
independently of the marriage settlement, the donation is revocable only at the instance of the
donor. (Art. 86 (1), Family Code)

130. If a marriage is annulled or declared void by final judgment, what happens to


the donation propter nuptias given by a future spouse in favor of the other?

There are two conflicting provisions under the Family Code.

Article 86, paragraphs 1 and 3 of the Family Code provides that if a marriage is
judicially declared void or annulled, the donation propter nuptias made in favor of a prospective
spouse may be revoked by the donor if the donee contracted the marriage in bad faith.

On the other hand, Article 43, paragraph 3, in relation to Articles 45 and 50 of the
Family Code, provides that the donation propter nuptias is revoked by operation of law if the
marriage is annulled or declared void if the donee contracted the marriage in bad faith.

It is submitted that Article 86 of the Family Code prevails over Article 43, the former
being the later law. This being the case, the donation is revocable only at the instance of the
donor.

131. Francisco donated to Cirila a parcel of land. The donation was made in a
public instrument, while the acceptance made by Cirila was embodied in the same public
instrument. Upon the death of Francisco, his nephews and nieces brought an action for the
recovery of the property on the ground that the donee, Cirila, was the common-law wife of
their uncle at the time of the donation, and that it is therefore void under Article 87 of the
Family Code. Will the action prosper?

Yes. Article 87 of the Family Code expressly provides that every donation or grant of
gratuitous advantage, direct or indirect, between the spouses during the marriage shall be void,
except moderate gifts which the spouses may give each other on the occasion of any family
rejoicing. The prohibition shall also apply to persons living together as husband and wife
without a valid marriage. Since Francisco and Cirila lived together as husband and wife without a
valid marriage, the inescapable conclusion is that the donation made by Francisco in favor of
Cirila is void under Article 87 of the Family Code. (Arcaba v. Batocael, 370 SCRA 414[2001])

132. H and W were married under the absolute community of property regime.
During the marriage, W inherited P1 million from her father. From said amount, she used
P200,000 to buy a diamond ring. Is the diamond ring included in the community property?

There are two views. Under Article 92(1) of the Family Code, the property acquired by
inheritance is expressly excluded from the community property. The diamond ring, having been
bought with the money received by W as inheritance, is therefore excluded. This is because there
was only a substitution of values which does not change the character of the property as an
inheritance.

Under Article 92(2) of the Family Code, however, jewelry forms part of the community
property. Since the diamond ring is a jewelry, the same forms part of the community property.

It is submitted that the first view is the better view because it is more in accord with the
law.

133. A parcel of land is registered in the name of Carolina Hernandez, “married to


Paulino Hernandez.” Assuming that the property is registered during the marriage of
Carolina and Paulino, is the property presumed as conjugal property?

No. The presumption under the law that all properties of the marriage belong to the
conjugal partnership applies only when there is proof that the property was acquired during the
marriage. The mere fact that the certificate of title was issued when the spouses were already
married is not sufficient proof of conjugality. Acquisition of title and registration are two different
acts. It is well settled that registration of property does not confer title but merely confirms one
already existing. It may be that the property was acquired by a spouse when he was still a
bachelor, but was registered only after his marriage, which explains why he was described in the
certificate of title as married. (Entonina v. Court of Appeals, 266 SCRA 627)

134. May a spouse alone perform acts of administration over the absolute
community or conjugal partnership properties without the consent of the other spouse?

Yes. Unlike an act of alienation or encumbrance where the consent of both spouses is
required, joint management or administration of the community property or conjugal partnership
property does not require that the husband and the wife always act together. Each spouse may
validly exercise full power of management alone, subject to the intervention of the court in proper
cases. Hence, the husband alone could file a petition for certiorari and prohibition to contest the
writ of demolition issued against the conjugal property with the Court of Appeals without being
joined by his wife. The reason is that it is a mere act of administration. (Docena v. Judge
Lapesura, 355 SCRA 658 [2001])

135. As President of Banzai Corp., Tony arranged a loan of P10 million from PNB
for the corporation. However, he was required by the bank to sign a suretyship agreement
to secure the repayment of the loan. The loan was never paid, and the bank obtained a
judgment against it and Tony, jointly and severally. To enforce the judgment, the sheriff
levied on a farm owned by the conjugal partnership of Tony and his wife Elsa.

a) Is the levy proper?

No. Article 121 [2 and 3] of the Family Code provides, among others, that “the conjugal
partnership shall be liable for all debts and obligations contracted by the husband for the benefit
of the conjugal partnership, and those contracted by the wife, also for the same purpose, in the
cases where she may legally bind the partnership.”

For the conjugal partnership to be liable for a liability that should appertain to the
husband alone, there must be a showing that some advantage accrued to the spouses. Certainly, to
make a conjugal partnership responsible for a liability that should appertain alone to one of the
spouses is to frustrate the objective of the Civil Code to show utmost concern for the solidarity
and well-being of the family as a unit. The husband, therefore, is denied the power to assume
unnecessary and unwarranted risks to the financial stability of the conjugal partnership.

In this case, PNB failed to prove that the conjugal partnership of the Tony and Elsa was
benefited by Tony’s act of executing a suretyship agreement with PNB for and in behalf of his
company. The contract of loan was between the bank and Banzai Corp., solely for the benefit of
the latter. No presumption can be inferred from the fact that when Tony entered into an
accommodation agreement or a contract of surety, the conjugal partnership would thereby be
benefited. The bank was burdened to establish that such benefit redounded to the conjugal
partnership.

b) Suppose Tony is a member of the Board of Directors of Banzai Corp. and is also
one of its top stockholders, and that the shares of stocks of Tony and his family would
appreciate if the corporation could be rehabilitated through the loan obtained or that
Tony’s career would be enhanced should the corporation survive because of the infusion of
fresh capital, would that make a difference in your answer?

No, the above benefits are not the benefits contemplated by law. The benefits must be
those directly resulting from the loan. They cannot merely be a by-product or a spin-off of the
loan itself. This is different from the situation where the husband borrows money or receives
services to be used for his own business or profession. In one case, the Supreme Court declared
that it is such a contract that is within the term “obligation for the benefit of the conjugal
partnership.” Thus:

“If the husband himself is the principal obligor in the contract, i.e., he
directly received the money and services to be used in or for his own business or
his own profession, that contract falls within the term “….obligations for the
benefit of the conjugal partnership.” Here, no actual benefit may be proved. It is
enough that the benefit to the family is apparent at the time of the signing of the
contract. From the very nature of the contract of loan or service, the family
stands to benefit from the loan facility or services to be rendered to the business
or profession of the husband. It is immaterial, if in the end, his business or
profession fails or does not succeed. Simply stated, where the husband contracts
obligations on behalf of the family business, the law presumes, and rightly so,
that such obligation will redound to the benefit of the conjugal partnership.”
(Ching v. Court of Appeals, February 23, 2004)
136. Johnson, an American national, and his wife, Fe, a Filipina, purchased from
Juan a residential lot in Baguio City. The sale was solely financed by Johnson who is an
executive in a multi-national corporation. When Johnson and Fe had a falling out, Fe
immediately sold the property to Joven without her husband’s consent.

a) If Johnson later maintains an action against Fe and Joven for the annulment of
the sale, what would be his strongest argument in bringing such action?

Johnson has no other recourse but to anchor his action on the argument that the sale is
void because it was made without his consent; that in bringing the action, he is merely exercising
the prerogative of a husband in respect to conjugal property.

b) If the case goes on trial, what would be the most likely result of such action?

Judgment against Johnson. Being an alien, Johnson is absolutely prohibited from


acquiring private and public lands in the Philippines. Considering that Fe appeared to be the
designated vendee of the property sold, she acquired sole ownership thereto. This is true even if
Johnson’s claim that he provided the funds for such acquisition is to be sustained. By entering
into such contract knowing that it was illegal, no implied trust was created in his favor; no
reimbursement for his expenses can be allowed; and no declaration can be made that the subject
property was part of the conjugal or community property. In any event, he had and has no
capacity or personality to question the subsequent sale of the property by his wife on the ground
that in so doing, he was merely exercising the prerogative of a husband in respect to conjugal
property. To sustain such an argument would countenance indirect violation of the constitutional
prohibition. If the property were to be declared conjugal, this would accord the alien husband a
substantial interest and right over the land, as he would then have a decisive vote as to its transfer
or disposition. This is a right that the Constitution does not permit him to have. Thus, the validity
of the sale must be upheld. (Matthews v. Taylor, June 22, 2009)

137. H and W are the conjugal owners of a 400-square meter property whereon
they built their family house. Over the objection of W and while she was in Manila seeking
employment, H sold to B the property. Upon her return, W immediately received a demand
from B that she and her children vacate the house and lot. When W refused, B brought the
matter to the barangay lupon. There, an amicable settlement was reached when W promised
to vacate the property. W went back to the barangay captain to question her signature on
the amicable settlement. The barangay captain told her, however, that he could no longer do
anything about the matter.

When W and her children still refused to vacate the house, B filed with the MTC a
motion for execution of the amicable settlement. W in turn filed an action for declaration of
nullity of the sale alleging that the same is conjugal property. B defends that the deed of sale
is not void ab initio but is merely voidable, and that such contract was ratified by W when
she entered into an amicable settlement with him.

Is the sale between H and B void or merely voidable?

The sale is void and not merely voidable. The nullity of such contract of sale is
premised on the absence of Marian’s consent to such sale. To constitute a valid contract, the Civil
Code requires the concurrence of the following elements: 1) cause; 2) object; and 3) consent; the
last element being indubitably absent in the case at bar. The contract properly falls within the
ambit of Article 124 of the Family Code which provides, among others, that the sale of conjugal
property must have the written consent of the other spouse, and in the absence of such written
consent or authority, the disposition or encumbrance of conjugal property is void. However, the
transaction shall be construed as a continuing offer on the part of the consenting spouse and the
third person, and may be perfected as a binding contract upon the acceptance by the other spouse
or authorization by the court before the offer is withdrawn by either or both offerors.

B’s contention that the contract was ratified by W is not well-taken. The deed of sale
executed by H cannot be ratified, even by an “amicable settlement.” The participation by some
barangay officials in the “amicable settlement” cannot validate an invalid act. Moreover, it
cannot be denied that the “amicable settlement” entered into by B and W is a contract. It is a
direct offshoot of the deed of sale. By express provision of law, such a contract is also void.
Article 1422 of the Civil Code provides that a contract which is a result of a previous illegal
contract is also void and inexistent. (Guiang v. Court of Appeals, 291 SCRA 372 [1998])

138. B saw an ad in a newspaper about the sale of a house in Makati City owned by
H and W. After inspecting the property, he made a definite offer to H for its purchase which
was with the knowledge and conformity of W. After some bargaining, B and H came to an
agreement as to the purchase price of P1.5 million to be paid in installments with down
payment of P200,000.00. The following day, B and H met at the latter’s office for the formal
signing of the contract to sell. After B and H signed the contract, B delivered to H a check
representing the down payment of P200,000. Thereafter, B gave the contract to H for the
formal affixing of his wife’s signature. A few days later, B received a telephone call from W
informing him that she and her husband were backing out of the agreement because they
needed “spot cash” for the full amount of the consideration. Because W persisted in not
signing the contract, B then brought an action for specific performance to compel her to
sign the contract to sell or, in the alternative, for the court to approve and authorize the sale
under Article 124 of the Family Code.

 Will the action for specific performance prosper?

No. The law requires that the disposition of a conjugal property by the husband as
administrator in appropriate cases requires the written consent of the wife; otherwise, the
disposition is void. Article 124 of the Family Code expressly provides that “in the event that one
spouse is incapacitated or otherwise unable to participate in the administration of the conjugal
properties, the other spouse may assume sole power of administration. These powers do not
include the powers of disposition or encumbrance which must have the authority of the court or
the written consent of the other spouse. In the absence of such authority or consent, the
disposition or encumbrance is void.”

The subject property is conjugal; hence, for the contract to sell to be effective, the
consent of both husband and wife must concur. Even granting that W actively participated in
negotiating for the sale of the subject property, her written consent to the sale is required by law
for its validity. W may have been aware of the negotiations for the sale of their conjugal property.
However, being merely aware of a transaction is not consent.

b) When is court authorization under Article 124 of the Family Code required?

Court authorization under Article 124 of the Family Code is only resorted to in cases
where the spouse who does not give consent is incapacitated. In this case, B failed to allege and
prove that W was incapacitated to give her consent to the contract to sell. In the absence of such a
showing of the wife’s incapacity, court authorization cannot be sought. (Jader-Manalo v.
Camaisa, 374 SCRA 498 [2002])

139. H and W, husband and wife, are living separately. After two years of
separation, W brings an action for Appointment as Sole Administrator of Conjugal
Partnership Properties, Accounting, Forfeiture, Support and Damages against both H and his
concubine, M. W alleges that H had abandoned her and their children; that H arrogated
unto himself full and exclusive control and administration of the conjugal properties,
spending and using them for his sole gain and benefit to the total exclusion of W and their
children; and that H, after abandoning his family, has maintained an illicit relationship with
M. Does W have a cause of action against M?

The complaint states no cause of action against M. Nowhere in W’s complaint does it
appear that relief is sought against M. W’s causes of action were all against her husband. W’s first
cause of action is for her appointment as administrator of the conjugal partnership from her
marriage to H. M is a complete stranger to this cause of action. Article 128 of the Family Code
refers only to W and H, to the exclusion of all other persons. W’s second cause of action is for
accounting by H. The accounting of conjugal partnership arises from or is an incident of
marriage. M has nothing to do with the marriage between W and H. Hence, no cause of action
exists again M.

W’s third cause of action is for forfeiture of Hs share in the co-owned property
“acquired during his illicit relationship and cohabitation with M” and for the dissolution of the
conjugal partnership of gains between W and H. W’s asserted right to forfeit extends to H’s share
alone. Failure of H to surrender such share, assuming that the trial court find’s in W’s favor,
results in a breach of an obligation to W and gives rise to a cause of action. Such cause of action,
however, pertains to H, not M.

W also sought support in her petition. Support cannot be compelled from a stranger.
Finally, as to the claim of moral damages, W’s claim for moral damages is against H, not M. To
sustain a claim for moral damages, the complaint must have the character of an action for
interference with marital or family relations under the Family Code.

From the foregoing, it is clear that M is neither an indispensable party nor a necessary
party to W’s petition. In the context of her petition, W would be accorded complete relief if H
were ordered to account for his conjugal partnership property with W, give support to W and her
children, turn over his share in the co-ownership with M and dissolve his conjugal partnership
with W. (Relucio v. Lopez, 373 SCRA 578 [2002])
140. H and W, during their marriage, acquired a parcel of land valued at P2
million. When H suffered a stroke, W brought an action for judicial declaration of her
husband’s incapacity and for authority to assume sole powers of administration of their
conjugal properties. She likewise asked the court for authorization to sell the conjugal lot to
help defray the hospitalization and medical expenses of her comatosed husband. After a
summary hearing pursuant to Article 124 in relation to Article 253 of the Family Code, the
court issued an order declaring the incapacity of H to participate in the administration of
the conjugal properties. In the same order, the court also authorized W to assume sole
powers of administration and to sell the lot.

The couple’s eldest son assails the order on the ground that the proper remedy
should have been the appointment of a judicial guardian of his father, not a judicial
declaration of his incapacity to participate in the administration of the conjugal properties.
He asserts that the procedural rules in summary proceedings under Article 253 in relation
to Article 124 of the Family Code are not applicable because the proceedings therein apply
only to situations where a spouse is absent, or separated in fact, or has abandoned the other
or consent is withheld or cannot be obtained. He argues that if a spouse is incapacitated, the
special proceedings on guardianship under the Rules of Court which requires due process,
particularly the need for a notice and hearing, should apply. Is the son correct?

Yes. The situation contemplated under Article 124 of the Family Code is one where the
spouse is absent, or separated in fact or has abandoned the other or consent is withheld or cannot
be obtained. Such rules do not apply to cases where the non-consenting spouse is incapacitated or
is incompetent to give consent. In this case, the trial court found that the husband is incompetent
due to his comatose condition. In such a case, the proper remedy is judicial guardianship
proceedings under Rule 93 of the Rules of Court. (Uy v. Court of Appeals, 346 SCRA [2000])

Even assuming that the rules of summary proceedings under the Family Code may
apply, the law provides that the wife who assumes sole powers of administration has the same
powers and duties as a guardian under the Rules of Court, applying by analogy Article 61 of the
Family Code. Consequently, a spouse who desires to sell property as such administrator must
observe the procedure for the sale of the ward’s estate which is required of judicial guardians
under Rule 95. Not only did the court fail to observe the procedure on guardianship, it did not
also comply with the requirement of the summary proceeding under the Family Code: the court
did not serve notice on the incapacitated spouse and it did not require him to show cause why the
petition should not be granted. Absent an opportunity to be heard, the decision rendered by the
court is void for lack of due process.

(NOTE: There is something wrong with the Supreme Court ruling in Uy v. Court of
Appeals.This is so because under Article 124 of the Family Code, in the event one spouse is
incapacitated or otherwise unable to participate in the administration of the conjugal properties,
the other spouse may assume sole powers of administration. The rules on guardianship apply
only when the spouse who assumed sole powers of administration desires to sell a real property
belonging to the conjugal partnership. There was no need for the Supreme Court to rule that
Article 124 of the Family Code is not applicable. Moreover, the Court failed to realize that there
was no sense in complying with the requirement of notice to the spouse because the spouse whose
consent is to be obtained, as in this case, was in comatose condition)

141. What are the rules for the liquidation of the absolute community of property
or conjugal partnership of gains in case of death of a spouse?

The rules regarding the liquidation of the absolute community or conjugal partnership
are the same. They are as follows:
1. If a special proceeding for the settlement of estate of deceased persons under the
Rules of Court has been instituted after the death of one spouse, the absolute community or
conjugal partnership shall be liquidated in the said proceeding.

2. If no special proceeding for the settlement of estate of the deceased spouse is


instituted, the surviving spouse shall liquidate the absolute community or conjugal partnership
either judiciary or extra-judiciary within one year from the death of the spouse.

3. If no liquidation is made within one year from the death of the deceased spouse, any
disposition or encumbrance involving any community or conjugal property of the terminated
marriage shall be void.

4. Should the surviving spouse contract a subsequent marriage without liquidating the
community property or conjugal partnership, a mandatory regime of complete separation of
property shall govern the property relations of the subsequent marriage. This is to protect the
heirs of the deceased spouse. (Arts. 103 and 130, Family Code)
142. H and W, husband and wife, are the conjugal owners of a one-hectare parcel of
land. Upon the death of H, W immediately sold a 2,000-square meter portion of the conjugal
lot to B. Claiming that they were not consulted, C and D, the children of H and W, brought
an action against B for the annulment of the sale on the ground that it was made without
prior liquidation of the conjugal partnership of their parents and that it is therefore void
under Article 130 of the Family Code. Will the action prosper?
No. Article 130 of the Family Code provides, in part, that if no liquidation of the conjugal
partnership is made within six months from the death of a spouse, any disposition or
encumbrance involving conjugal partnership property of the terminated marriage shall be void.
This provision must be read with Article 493 of the Civil Code which reads: “Each co-owner shall
have the full ownership of his part and of the fruits and benefits pertaining thereto; and he may
therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment,
except when personal rights are involved. But the effect of the alienation or mortgage, with
respect to the co-owners, shall be limited to the portion which may be allotted to him in the
division upon the termination of the co-ownership.”
W, although becoming a co-owner with her children in respect to H’s share in the
conjugal partnership, could not yet assert or claim title to any specific portion of W’s share
without an actual partition of the property being first done either by agreement or by judicial
decree. Until then, all that she had was an ideal or abstract quota in H’s share. Nonetheless, a co-
owner could sell his undivided share; hence, W had the right to freely sell and dispose of her
undivided interest, but not the interest of her co-owners. Consequently, the sale by W as co-owner
without the consent of the other co-owners is not necessarily void, for the rights of the selling co-
owners were thereby effectively transferred, making the buyer, B, as co-owner of W’s share. This
result conforms to the well-established principle that the binding force of a contract must be
recognized as far as it is legally possible to do so. The recourse of co-owners in cases where their
consent were not secured in a sale of the entire property, as well as in the sale merely of the
undivided shares of some of the co-owners is an action for partition under Rule 69 of the Rules of
court. (Heirs of Go v. Go, G.R. No. 157537, September 7, 2011)

143. Albert is the owner of a fishpond which he rented to a couple. When the couple
failed to pay rent, Albert filed suit for payment of their arrears. The wife promptly moved
to dismiss the complaint on the ground that her husband is already dead; therefore, Albert’s
claim must be filed in the proceedings for the settlement of her husband’s estate. May a
creditor sue the surviving spouse for the collection of a debt which is owed by the conjugal
partnership?
No. A creditor cannot sue the surviving spouse of a deceased person in an ordinary
proceeding for the collection of a sum of money chargeable against the conjugal partnership. The
proper remedy is for the creditor to file a claim in the settlement of the estate of the deceased
spouse. This is so because upon the death of one spouse, the powers of administration of the
surviving spouse cease and are passed to the administrator appointed by the court having
jurisdiction over the settlement of estate proceedings. For marriages governed by the rules on
conjugal partnership of gains, an obligation entered into by the spouses is chargeable against their
conjugal partnership and it is the partnership which is primarily bound for its repayment. Thus,
when the spouses are sued for the enforcement of an obligation entered into by them, they are
joined in their capacity as representatives of the conjugal partnership and not as independent
debtors such that the concept of joint or solidary liability, as between them, does not apply.
(Alipio v. Court of Appeals, 341 SCRA 441 [2000])

144. What is the effect of a de facto separation of the husband and wife upon their
absolute community or conjugal partnership?

The de facto separation of the husband and wife has no effect on the absolute
community or conjugal partnership, except that:

1. The spouse who leaves the conjugal home or refuses to live therein without just cause,
shall have no right to be supported;

2. When the consent of one spouse to any transaction of the other is required by law,
judicial authorization shall be necessary;

3. If one spouse without just cause has abandoned the other or fails to comply with his
or her obligations to the family, the aggrieved spouse may petition the court for receivership, for
judicial separation of property or for authority to be the sole administrator of the absolute
community or conjugal partnership. (Art. 100, Nos. 1 and 2; Art. 101; Art. 127, Nos. 1 & 2; Art.
128, Family Code)
145. Henry caught his wife, Wendy, having illicit relations with her office mate. He
then charged both with adultery resulting in their conviction. Subsequently, Henry brought
an action for declaration of nullity of marriage, accusing his wife of psychological
incapacity. At the pre-trial of the annulment case, Henry and Wendy entered into a
compromise agreement in partial settlement of their conjugal partnership, which the court
immediately approved. Henry now assails the compromise agreement on the ground that
the proceedings where it was approved is null and void, there being no appearance of the
Solicitor General or the Public Prosecutor; that Wendy, having been convicted of adultery,
is disqualified from sharing in the conjugal property; and that the compromise agreement is
tantamount to a circumvention of the law prohibiting the guilty spouse from sharing in the
conjugal partnership properties.

Does Henry have legal ground to repudiate the compromise agreement?


No. Under Article 143 of the Family Code, separation of property may be effected
voluntarily or for sufficient cause, subject to judicial approval. The questioned compromise
agreement which was judicially approved is exactly such a separation of property allowed under
the law. This conclusion holds true even if the proceedings for the declaration of nullity of
marriage was still pending. However, this voluntary separation of property is subject to the rights
of all creditors of the conjugal partnership of gains and other persons with pecuniary interest
pursuant to Article 136 of the Family Code.
Henry’s argument that the proceedings where the compromise agreement was approved is
null and void there being no appearance of the Solicitor General or the Provincial Prosecutor is
without basis. The proceedings pertaining to the compromise agreement involved the conjugal
properties of the spouses.
Nor did the settlement amount to a collusion between the parties. The intendment of the
law in requiring the presence of the Public Prosecutor and Solicitor General in all proceedings of
legal separation and annulment or declaration of nullity of marriage is to curtail or prevent any
possibility of collusion between the parties and to see to it that their evidence respecting the case
is not fabricated. Nothing in the compromise agreement touched into the very merits of the case
of declaration of nullity of marriage for the court to be wary of any possible collusion between
the parties.

Finally, the conviction of Wendy of adultery does not disqualify her from entering into
the subject compromise agreement; her conviction for adultery does not carry with it the
accessory of civil interdiction. (Maquilan v. Maquilan, G.R. No. 155409, June 8, 2007)

PROPERTY REGIME OF
UNIONS WITHOUT MARRIAGE
146. Distinguish between Articles 147 and 148 of the Family Code with respect to a)
the unions governed by each article; and b) the rules governing the property relations of the
unions.

Articles 147 and 148 of the Family Code dealing with the property regimes of unions
without marriage may be distinguished as follows:

a) As to unions covered:

Article 147 applies to two relationships. The first is when a man and a woman who are
capacitated to marry each other live exclusively as husband and wife without the benefit of
marriage. The second is when a man and a woman live together under a void marriage where the
parties do not have an existing marriage with other persons. This provision does not cover void
bigamous marriages which fall under Article 148.

Article 148, on the other hand, applies to five kinds of relationships, namely; a)
bigamous marriages; b) adulterous relationships; c) relationships in a state of concubinage; d)
relationships where both man and woman are married to other persons; and e) multiple alliances
of the same man.

b) As to property relations:

Under Article 147, wages and salaries earned by either spouse during the cohabitation
shall be owned by the parties in equal shares and shall be divided equally between them even if
only one party earned such.

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

Under the article, neither party can encumber nor dispose by acts inter vivos his or her
share in the property acquired during the cohabitation and owned in common without the consent
of the other until after the termination of their cohabitation.

If only one party is in good faith in a void marriage falling under the article, the share of
the party in bad faith shall be forfeited in favor of their common children. In case of default or
waiver by any or all of the common children or their descendants, each vacant share shall belong
to the respective surviving descendants. In the absence of descendants, such share shall belong to
the innocent party.

Under Article 148, only properties acquired through the actual, joint contribution of
money, property or industry shall be owned in proportion to the respective contributions of the
parties. Hence, unlike the rule in Article 147, the wages or salaries of one party is his or her
exclusive property.

Another distinction is that the care by one party of the home or spiritual or moral
inspiration provided to the other is not included in the article. However, the same presumption of
equal contribution applies in the absence of proof to the contrary.

If one party is validly married to another, his or her share in the co-owned properties
accrues to the absolute community or conjugal partnership of the existing valid marriage. If the
party in bad faith is not validly married to another, his or her share will be forfeited in the same
manner as provided in Article 147.

147. Arturo, a PNP member, contracted two marriages during his lifetime -- the
first was with Susan, in 1989 and the second, with Tessie, in 1995. Upon the death of
Arturo, both Susan and Tessie filed separate claims for monetary benefits pertaining to
Arturo from various government agencies. Susan was able to collect a total of P146,000,
while Tessie was able to collect a total of P21,000. Aggrieved by the fact that she received a
smaller amount, Tessie brings an action against Susan for the latter to return at least one-
half of the amount she received.

At the trial, two important facts came to light: Tessie had no knowledge of Arturo’s
previous marriage and that she became aware of it only at the funeral; and that the
marriage between Arturo and Susan was solemnized without a marriage license. Who
between Susan and Tessie is entitled to the death benefits pertaining to Arturo?

Susan’s marriage with Arturo is void ab initio for lack of a valid marriage license. The
same is true with respect to the marriage between Arturo and Tessie for lack of a judicial decree
declaring the first marriage a nullity. Considering that the two marriages are void ab initio, the
applicable property regimes would be governed by Articles 147 and 148 of the Family Code.

Article 148 refers to the property regime of bigamous marriages, adulterous


relationships, relationships in a state of concubinage, relationships where both man and woman
are married to other persons, and multiple alliances of the same married man. In this property
regime, the properties acquired by the parties through their actual joint contribution shall belong
to the co-ownership. Wages and salaries earned by each party belong to him or her exclusively.
Considering that the marriage of Tessie and Arturo is a bigamous marriage, having been
solemnized during the subsistence of a previous marriage then presumed to be valid, the
application of Article 148 is in order. The disputed P146,000 clearly consists of remunerations,
incentives and benefits from governmental agencies earned by Arturo as a police officer. Unless
Tessie presents proof to the contrary, it could not be said that she contributed money, property or
industry in the acquisition of these monetary benefits. Hence, they are not owned in common by
Tessie and Arturo, but belong to the deceased alone and Tessie has no right whatever to claim the
same. By intestate succession, said “death benefits” of Arturo shall pass to his legal heirs. And
Tessie, not being the legal wife of Arturo, is not one of them.

As to the property regime of Susan and Arturo, Article 147 governs. This article applies
to unions of parties who are legally capacitated and not barred by any impediment to contract
marriage, but whose marriage is nonetheless void for other reasons, like the absence of a marriage
license. In the absence of proof to the contrary, properties acquired while they lived together shall
be presumed to have been obtained by their joint efforts, work or industry, and shall be owned by
them in equal shares. Consequently, even if the disputed “death benefits” were earned by Arturo
alone as a government employee, Article 147 creates a co-ownership in respect thereto, entitling
Susan to share one-half thereof. As there is no allegation of bad faith in the present case, both
parties of the first marriage are presumed to be in good faith. Thus, one-half of the subject “death
benefits” shall go to Susan as her share and the other half pertaining to Arturo shall pass, by
intestate succession, to his legal heirs, namely; his children of the first marriage and Susan.
(Carino v. Carino, February 2, 2001)

148. H accused his wife, W, of psychological incapacity on account of which he


brought an action for declaration of nullity of marriage on that ground. In due time, the
court rendered a decision nullifying the marriage of the couple by virtue of their mutual
incapacity. The court then directed the former spouses to liquidate their common properties
pursuant to Article 147 of the Family Code, and to partition the “family dwelling” and all
the properties of the former spouses in equal shares.

In addressing specifically the issue on the disposition of the family dwelling, the
lower court declared that the property regime of the former spouses shall be governed by
the rules on co-ownership, and that the provisions on liquidation of the absolute community
and conjugal partnership under Articles 102 and 129 of the Family Code find no
application. Aggrieved by the ruling, H now seeks a partial reconsideration on the
argument that Articles 50, 51 and 52 in relation to Articles 102 and 129 of the Family Code
are applicable. H’s move is expected because all their children have chosen to live with him,
and applying Articles 102 and 129 of the Family Code, the family dwelling will necessarily
be adjudicated to him. Is H’s contention tenable?

No. In a void marriage, regardless of the cause, the property relations of the parties
during the period of cohabitation is governed by the provisions of Article 147 of the Family Code.
Under this provision, a peculiar form of co-ownership arises when a man and a woman who are
capacitated to marry each other, live exclusively with each other as husband and wife without the
benefit of marriage or under a void marriage. This provision presumes that property, including the
family dwelling, in the absence of proof to the contrary, were acquired by the parties through their
joint efforts and will be owned by them in equal shares. A party who did not participate in the
acquisition of property shall still be considered as having contributed thereto jointly if said party’s
efforts considered mainly in the maintenance of the family household.

The rules set up to govern the liquidation of either the absolute community or the
conjugal partnership, the property regimes recognized for valid and voidable marriages, in the
latter case until the marriage is annulled, are irrelevant to the liquidation of the co-ownership that
existed between H and W. The first paragraph of Article 50 of the Family Code, applying
paragraphs (2), (3), (4) and (5) of Article 43 thereof, relates only, by its explicit terms, to valid
and voidable marriages, and exceptionally, to a void marriage under Article 40 of the Family
Code, i.e., the declaration of nullity of a subsequent marriage contracted by a spouse of a prior
void marriage before the latter is judiciary declared void. (Valdez v. RTC of Quezon City, 260
SCRA 221 [1996])

149. H and W were married in 1947. For 19 years, and while his marriage to W was
subsisting, H was living with M with whom he begot two children. H died in 1981. While
living together with M, H bought a house and lot in Baguio City, the price of which was paid
in full from his salaries and earnings as an executive of a pharmaceutical company.
Although M did not contribute a single centavo in the acquisition of the house and lot, the
deed of absolute sale was executed in her favor and the certificate of title covering the
property was issued in her name.

 Who owns the house and lot?

The property belongs to the conjugal partnership of H and W pursuant to the provisions
of Article 148 of the Family Code. Thus, when a common-law couple have a legal impediment to
marry, only the property acquired by them through their actual joint contribution of money,
property or industry shall be owned by them in common and in proportion to their respective
contributions. In the problem presented, only H contributed to the acquisition to the property.
Such being the case, the property accrues to his conjugal partnership with his legal spouse, W.

Under the circumstances, the purchase and the subsequent registration of the property in
M’s name was tantamount to a donation by H to M. By express provision of Article 739(1) of the
Civil Code, such donation is void because it was made “between persons who were guilty of
adultery or concubinage at the time of the donation.”

The prohibition against donation between spouses under Article 87 of the Family Code
must likewise apply to donations between persons living together in illicit relation; otherwise, the
latter would be better situated than the former.

b) Does the court have jurisdiction to adjudicate the intestate shares of M’s
children (as illegitimate children of H) in the same action that may be filed by W to recover
the property?

No. Matters relating to the rights of filiation and heirship must be ventilated in the
proper probate or intestate court in a special proceeding instituted precisely for the purpose of
determining such rights. (Agapay v. Palang, 176 SCRA 340 [1997]) Sustaining the appellate court
in Agapay, the Supreme Court held that the status of an illegitimate child who claimed to be an
heir to a decedent’s estate could not be adjudicated in an ordinary civil action which, as in this
case, is for the recovery of property. (Joaquino v. Reyes, 434 SCRA [2004])
150. H brought an action against his wife, W, for declaration of absolute nullity of
marriage under Article 36 of the Family Code. After finding both spouses psychologically
incapacitated, the court subsequently rendered a decision declaring the absolute nullity of
the couple’s marriage. The court also declared in its decision that the corresponding decree
of absolute nullity of marriage shall issue only upon liquidation, partition and distribution
of the absolute community in compliance with Articles 50 and 51 of the Family Code. The
wife assails the latter ruling on the ground that in a void marriage, regardless of its cause,
the property relations of the parties during the period of cohabitation is governed either by
Article 147 or Article 148 of the Family Code. Is the wife’s contention correct?

Yes. In Valdez v. RTC, Branch 102, Quezon City, the Supreme Court elucidated the rule
that in a void marriage, regardless of its cause, the property relations of the parties during the
period of cohabitation is governed either by Article 147 or Article 148 of the Family Code.
For Article 147 of the Family Code to apply, the following elements must be present: a)
The man and the woman must be capacitated to marry each other; b) They live exclusively with
each other as husband and wife; and c) Their union is without the benefit of marriage, or under a
void marriage. All these elements are present in this case and there is no question therefore that
Article 147 of the Family Code applies to the property relations of the spouses.
The ruling of the court that a decree of absolute nullity of marriage shall be issued only
upon compliance with Article 50 and 51 of the Family Code has no basis. This is so because
Section 19(1) of the Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of
Voidable Marriages does not apply to cases governed under Articles 147 and 148 of the Family
Code.

THE FAMILY AND THE FAMILY HOME

151. Abel and Cain are brothers. The former is married to Maria, while the latter, a
widower, is maintaining a common-law relationship with Teodora. Due to a property
dispute, Abel and Maria instituted a possessory action against Cain and Teodora. Citing
Article 151 of the Family Code, Cain and Teodora moved to dismiss the complaint for
failure to state a cause of action because of the absence of an allegation that earnest efforts
toward a compromise between members of the same family had been made and that it was
unsuccessful. Should the court dismiss the complaint?

No. Article 151 of the Family Code does not apply in the above problem because it is
not exclusively between or among family members. The inclusion of Teodora as defendant and
Maria as plaintiff takes the case out of the ambit of Article 151 of the Family Code. Under this
provision, the phrase “members of the same family” refers to the husband and wife, parents and
children, ascendants and descendants, and brothers and sisters, whether of the full or half-blood.
Consequently, Teodora and Maria are considered strangers to the family of Abel and Cain for
purposes of Article 151 of the Family Code. (Hontiveros v. RTC of Iloilo City, Br. 25, 309 SCRA
340 [1999])

152. May a family home be constituted on rented land?

No. From the very definition of a family home enunciated under Article 152 of the
Family Code, it is clear that the land on which the house is erected is an integral part of the family
home. Besides, there is a clear implication both from the definition and the purpose of such
family home as well as from the provisions of the Family Code regulating said home that it is
permanent in character. Now, if a house constructed on rented land, for instance, may be
constituted into a family home, it becomes temporary. It cannot serve the purpose of a family
home.

153. Victor establishes out of conjugal funds a family home in Manila worth
P200,000 and a second family home in Tagaytay City worth P150,000. Victor leases the
family home in Manila to a foreigner and the family home in Tagaytay to a newly-married
couple. Are these two family homes subject to execution on a judgment against Victor’s wife
for non-payment of the purchase price of household appliances?

Yes, the two so-called family homes of Victor may be subjected to execution. Both
abodes are not considered family homes because for purposes of availing the benefits under the
Family Code, there can only be one family home which is defined as the “dwelling house” where
the husband and the wife and their family actually reside and the land on which it is situated.
(Arts. 152 and 161, Family Code)
154. To satisfy a final judgment rendered against H and W, the sheriff levied on a
house and lot constituted by the couple as their family home. Subsequently, the sheriff sold
the property at public auction to the judgment creditor, C, as the winning bidder. After
some discussion, C agreed to allow the couple to remain on the property as lessees and to
vacate the same in two years. A year later, the couple brought an action to annul the public
auction sale on the ground that the same the property sold is their family home and its sale
is void ab initio. Will the action prosper?
No. Even if the subject property is a family home and, thus, should have been exempt
from execution, H and W should have asserted it as a family home and its being exempted from
execution at the time it was levied upon or within a reasonable time thereafter. Failure to do so
would estop the spouses from later claiming the exemption.

It is evident that H and W did not assert their claim of exemption within a reasonable
time. Certainly, reasonable time for purposes of the law on exemption, does not mean a time after
expiration of the one-year period for judgment debtors to redeem the property sold on execution,
otherwise it would render nugatory final bills of sale on execution and defeat the very purpose of
execution – to put an end to litigation. At no other time can the status of a residential house as a
family home be set up and proved and its exemption from execution claimed but before the sale
thereof at public auction. Settled is the rule that the right of exemption is a personal privilege
granted to the judgment debtor and as such, it must be claimed not by the sheriff but by the debtor
himself at the time of the levy or within a reasonable time thereafter. (De Mesa v. Acero, G.R. No.
185064, January 16, 2012)
155. Marcelino died intestate survived by his wife, Perla, and their two sons, Emilio
and Manuel. During their marriage, the couple acquired a parcel of land whereon they built
their family home. Upon the death of Marcelino, Perla and her eldest son, Emilio, formally
advised Manuel of their intention to partition the property and terminate the co-ownership.
Manuel refused on the ground that the property which is a duly constituted family home
cannot be partitioned while a minor beneficiary is still living therein; namely, his minor son,
Abe, who is the grandson of the deceased.
Is Abe a beneficiary of the family home constituted by his grandparents?

To qualify as a beneficiary of a family home, three requisites must concur: 1) they must
be among the relationships enumerated in Article 154 of the Family Code; 2) they live in the
family home; and 3) they are dependent for legal support upon the head of the family.
Moreover, Article 159 of the Family Code provides that the family home shall continue
despite the death of one or both spouses or of the unmarried head of the family for a period of 10
years or for as long as there is a minor beneficiary, and the heirs cannot partition the same unless
the court finds compelling reasons therefor. This rule shall apply regardless of whoever owns the
property or constituted the family home.
As to the first requisite, the beneficiaries of a family home under Article 154 of the
Family Code are: 1) The husband and wife, or an unmarried person who is the head of a family;
and 2) Their parents, ascendants descendants, brothers and sisters, whether the relationship be
legitimate or illegitimate. The term “descendants” contemplates all descendants of the person or
persons who constituted the family home without distinction; hence, it must necessarily include
the grandchild and great grandchildren of the spouses who constituted a family home. Thus, Abe,
who is the grandchild of Marcelino, satisfies the first requisite.

As to the second requisite, minor beneficiaries must be actually living in the family home
to avail of the benefits derived from Article 159 of the Family Code. There is no dispute that Abe,
the son of Manuel, lives in the family home; hence, he satisfies the second requisite.
However, as to the third requisite, Abe cannot demand support from his paternal
grandmother, Perla, if he has parents who are capable of supporting him. The liability for legal
support falls primarily on Abe’s parents, especially his father, Manuel, who is the head of his
immediate family. The law first imposes the obligation of legal support upon the shoulder of
parents, especially the father, and only in their default is the obligation imposed on the
grandparents.
Abe is dependent on legal support not from his grandmother, Perla, but from his father,
Manuel. Thus, despite residing in the family home and his being a descendant of Marcelino, Abe
cannot be considered as beneficiary of the family home contemplated under article 154 of the
Family Code because he did not fulfill the third requisite of being dependent on his grandmother
for legal support. (Patricio v. Dario III, G.R. No. 170829, November 20, 2006)

PATERNITY AND FILIATION

156. What is Republic Act No. 9225?

Republic Act No. 9225 is the law that now allows illegitimate children to use the
surname of their father. It was approved on February 4, 2004, and it has amended Article 176 of
the Family Code. The original version of Article 176 of the Family Code states that illegitimate
children shall use the surname and shall be under the parental authority of their mother, and shall
be entitled to support in conformity with the Family Code. As amended by R.A. 9225, however,
the law now equalizes the rights of legitimate and illegitimate children only insofar as the right to
use the surname of the father is concerned. It must be pointed out, however, that R.A. 9225 uses
the phrase “may use the surname” which presupposes that it is not mandatory for illegitimate
children to carry the surname of their father. They have the option to carry the surname of their
mother or their father considering that the right to carry the surname of their father is only an
exception rather than the general rule. The general rule is that they shall use the surname of their
mother. In fact, their right to use the surname of their father is subject to certain conditions and is
without prejudice to the right of the father to go to court to prove non-filiation during his lifetime.

(NOTE: Under R.A. 9225, illegitimate children need not-anymore go to court to seek
leave to use the surname of their father if their filiation has been expressly recognized by the
father through the record of birth appearing in the civil register, or when an admission in a public
document or private handwritten instrument is made by the father. It is enough that such
recognition is made in those documents. They do not have to establish filiation, for these
documents are already considered as consummated acts of recognition. To still go to court and
establish filiation before they may use the surname of their father would be a mere superfluity.)

157. Teodora died without any ascendant or descendant. She is survived by her
husband, Martin, and by her nephews, Rene and Tito, children of her deceased brother,
Ramon. Martin later adjudicated unto himself, purportedly as sole heir, a parcel of land
belonging to his wife. He subsequently sold the property to Marcela who obtained a
certificate of title in her own name. When Rene and Tito learned about the sale of their
aunt’s property, they immediately brought an action questioning its validity on the ground
that they are entitled to inherit one-half thereof by right of representation. Marcela
defended on the ground that Rene and Tito are not the legitimate children of Teodora’s
brother, Ramon. Judgment for whom?
Judgment for Rene and Tito. The legitimacy of Rene and Tito cannot be properly
controverted in the present action for reconveyance in view of the settled rule that the issue of
legitimacy of a person cannot be attacked collaterally and that there must be an action specifically
filed for that purpose. Granting that Rene and Corazon are not the legitimate children of Ramon,
the fact is that Marcela is not even the proper party to impugn such legitimacy. (Tison v. Court of
Appeals, 276 SCRA 582 [1997])

158. H and his wife, W, are the conjugal owners of a parcel of land. Being childless
by the death of their son, they took into their custody S who was then a one-month old baby
boy. The couple took care of S as their own son to the extent that S lived with them until
they became old.

Upon H’s death, S and W executed a Deed of Partition allocating to themselves in


pro indiviso shares the conjugal property. On the same day, W conveyed to S by way of a
Deed of Absolute Sale the portion allotted to her. Upon W’s death, H’s nephew, T,
maintained an action against S for declaration of nullity of the Extrajudicial Partition and
Deed of Absolute Sale. He alleges that he is entitled to the property as an intestate heir of H.
He further alleges that S is not the legitimate or illegitimate child of W and of his uncle H
for which reason the land should devolve to him by intestate succession. S defends on the
ground that under Article 170 of the Family Code, the action constitutes a collateral attack
on his legitimacy.

a) Does the court have jurisdiction to pass upon S’s legitimacy in the present action
which is one for declaration of nullity of the deed of extrajudicial partition and deed of
absolute sale?

Yes. S’s recourse to Article 170 of the Family Code is not well taken. This legal
provision refers to an action to impugn legitimacy. It is inapplicable to this case because this is
not an action to impugn legitimacy of a child, but an action of T to claim his inheritance as legal
heir of his childless deceased uncle. He does not claim that S is a legitimate child of his uncle H,
but that he is not his uncle’s child at all. Being neither a legally adopted child nor a natural child
of H, S is not a legal heir of the deceased.

Indeed, the court has the power to pass upon S’s legitimacy even if the present case is
one for declaration of nullity of the deed of extrajudicial partition. It is necessary to pass upon the
relationship of S to the deceased spouses H and W for the purpose of determining what legal right
S has in the property subject of the extrajudicial partition.

b) Is the nephew entitled to recover the entire property from S?

No. The parcel of land in question was the conjugal property of the deceased spouses H
and W. When H died intestate, his estate consisted solely of 1/2 pro indiviso of the conjugal
property and the other half belonged to his wife, W.

Applying Article 1001 of the Civil Code, T is entitled to only 1/4 of the entire property,
and S to 3/4. Article 1001 of the Civil Code specifically provides that “should brothers and sisters
or their children survive with the widow or widower, the latter shall be entitled to one-half of the
inheritance and the brothers and sisters or their children to the other half.” Being the widow of H,
W is entitled to 1/2 of the inheritance and T to the other half. In effect, 3/4 pro indiviso is the
share of W as the surviving spouse, i.e., 1/2 as her share of the conjugal property estate and 1/2 of
the remaining 1/2 as heir from her husband’s estate. Consequently, the annulment of the extra-
judicial partition between W and S does not necessarily result in T’s having exclusive right to the
conjugal property. W, during her lifetime, had the right to enjoy and dispose of her property
without other limitations than those established by law, which right she exercised by executing a
deed of absolute sale in favor of S. (Fernandez v. Fernandez, 363 SCRA 811 [2001])

159. H and W, a married couple, own several properties. When H died (W died
earlier), his supposed daughter, D, and his collateral relatives fought over his estate. H’s
relatives contend that D is not the biological daughter of H and W, hence, not entitled to
inherit from H’s estate. D in turn invokes Article 166 of the Family Code which enunciates
the grounds to impugn the legitimacy of a child; Article 170 which provides for the periods
within which the heirs are allowed to impugn the legitimacy of a child. Is D correct in
invoking Articles 166, 170 and 171 of the Family Code in disposing of the claim of H’s heirs?

No. The articles cited by D contemplate a situation where the husband denies as his own
the child of his wife. It does not apply to a case where it is being claimed that the child is neither
the child of the husband nor of the wife. (Benitez-Badua v. Court of Appeals, 299 SCRA 468
[1998])

160. Malou Wang is living separately from her husband, Ramon Tulo. After their
separation, Malou cohabited with Mando Rugas from 1965 up to the latter’s death in 1975.
In 1974, Malou gave birth to Sandy. During the three-day stay of Malou at the hospital,
Mando visited and stayed with her and the new-born baby. All the medical and hospital
expenses, food and clothing of Malou and the baby were paid under the account of Mando.
A few months later, Mando would bring Sandy to his office, introduce him as his son and
had their pictures taken together. On the occasion of his last birthday, he expressly
acknowledged Sandy to be his son in the presence of Fr. Ruiz, Sandy’s godfather, and other
friends. Since his birth, Sandy had been in continuous possession and enjoyment of the
status of a recognized child of Mando by the latter’s direct and overt acts.

After Mando’s death, Malou, as guardian ad litem of Sandy, brought an action to


claim his son’s share in the estate of Mando claiming that her son is the illegitimate child of
the deceased.

Is Sandy the illegitimate child of Mando?

No. Under the Family Code, a child born and conceived during a valid marriage is
presumed to be legitimate. Consequently, Sandy is presumed to be the legitimate child of Malou
with her husband, Ramon. The fact that Malou had been living separately from Ramon at the time
when Sandy was conceived and born is of no moment. While physical impossibility for the
husband to have sexual intercourse with his wife is one of the grounds for impugning the
legitimacy of the child, it bears emphasis that the grounds for impugning the legitimacy of the
child mentioned in Article 166 of the Family Code may only be invoked by the husband, or in
proper cases, his heirs under the conditions set forth under Article 171 also of the Family Code.

Impugning the legitimacy of the child is strictly a personal right of the husband, or in
exceptional cases, his heirs, for the simple reason that he is the one directly confronted with the
scandal and ridicule which the infidelity of his wife produces and he should be the one to decide
whether to conceal that infidelity or expose it in view of the moral and economical interest
involved. It is only in exceptional cases that his heirs are allowed to contest such legitimacy.
Outside of these cases, no one - even his heirs - can impugn legitimacy. If the husband who is
presumed to be the father does not impugn the legitimacy of the child, then the status of the child
is fixed and the latter cannot choose to be the child of his mother’s alleged paramour. Moreover, it
is settled that a child born within a valid marriage is presumed legitimate even though the mother
may have declared against its legitimacy or may have been declared as an adulteress. (Liyao v.
Liyao, 378 SCRA 563 [2002])

161. May a legitimate child impugn his legitimate status?


No. The law itself establishes the legitimacy of a child conceived or born during the
marriage of his parents. The presumption of legitimacy fixes a civil status for the child born in
wedlock, and only the father (Art. 170, Family Code), or in exceptional instances the latter’s heirs
(Art.171, Family Code), can contest in an appropriate action the legitimacy of a child. A child
cannot choose his own filiation. (De Jesus v. Estate of Juan Dizon, October 22, 2001)

162. Henry and Wilma were married in 1964. Their marital union bore two
children whom the couple named Anton and Bon. The birth certificates of the children
identified Henry as their father and their status as legitimate. Henry died in 1990. In a
notarized document in 1991, Juan admitted his illicit relations with Wilma and
acknowledged Anton and Bon as his illegitimate children. After Juan’s death in 1993 and on
the strength of Juan’s notarized acknowledgment, Anton and Bon brought an action for the
partition of Juan’s estate. Will the action prosper?

No. Anton and Bon’s attempt to establish their status as the illegitimate children of Juan
would in effect impugn their legitimate status as children of Henry and Wilma. This cannot be
done because the law itself establishes the legitimacy of children conceived or born during the
marriage of the parents. There is perhaps no presumption of law more firmly established and
founded on sounder morality than children born in wedlock are legitimate (Tison v. Court of
Appeals, 276 SCRA 582 [1997]) This presumption indeed becomes conclusive in the absence of
proof that there is physical impossibility of access between the spouses during the first 120 days
of the 300 days which immediately preceded the birth of the child due to a) the physical
incapacity of the husband to have sexual intercourse with his wife; b) the fact that the husband
and wife are living separately in such a way that sexual intercourse is not possible; or c) serious
illness of the husband which absolutely prevents sexual intercourse. (Art. 166, Family Code)
Considering that Anton and Bon were born during the marriage of their parents, they are therefore
considered the legitimate children of Henry and Wilma.

Moreover, the issue of whether Anton and Bon are indeed the acknowledged illegitimate
children of Juan cannot be aptly adjudicated without an action having been first instituted to
impugn their legitimacy as the children of Henry and Wilma born in lawful wedlock.
Jurisprudence is strongly settled that the paramount declaration of legitimacy by law cannot be
attacked collaterally, one that can only be repudiated or contested in a direct suit specifically
brought for that purpose. Indeed, a child so born in such wedlock shall be considered legitimate
although the mother may have declared against its legitimacy or may have been sentenced as an
adulteress. (Art. 167, Family Code)

163. Two months after the death of her husband, Betsy married her high school
boyfriend, Dante. Seven months later, she gave birth to a baby. In the absence of evidence as
to who the child’s father is, what status does the law give to the child?

The child is presumptively the legitimate child of the second marriage pursuant to
Article 168(2) of the Family Code which provides that a “child born after one hundred eighty
days following the celebration of the subsequent marriage is considered to have been conceived
during such marriage, even though it be born within three hundred days after the termination of
the former marriage.”

164. In 1989, F, a bachelor, started cohabiting with M, an unmarried woman. In


1990, M gave birth to X. Both parents recognized the child. In 1991, F got married to W. In
spite of his marriage, he continued his relationship with M. One year later, in 1992, M gave
birth to a second child, Y. This time, only M recognized the child. In 1993, W died. The
following year, M gave birth to a third child, Z. Again, only M recognized the child. In 1995,
F got married to M. Finally, in 2001, F died intestate leaving considerable properties and
survived only by M, X, Y and Z. How shall the properties be divided?
Before F’s properties can be divided in accordance with the rules of intestate succession,
the status of the three children must be determined first.

X is a legitimated child. All the requisites of legitimation are present in his case. Y, on
the other hand, is illegitimate. This is so because at the time of his conception, F, his father, was
already married to W. Hence, he cannot be considered a legitimated child since one of the
requisites for legitimation - that his parents were not disqualified by any impediment to marry
each other at the time of his conception – is lacking in his case. Z’s case is different. He is a
legitimated child. At the time of his conception, there was no longer any legal impediment to the
marriage of his parents to each other since W, the wife of his father, was already dead. While it is
true that he had not been recognized by F, nevertheless, the recognition of X, a brother of his of
the full-blood, shall be extended to him. It is, therefore, clear that since F is survived by his
widow, M, the two legitimated children, X and Z, and an illegitimate child, Y, the pertinent
provisions of Articles 983, 996 and 999 of the Civil Code with regard to the distribution of the
hereditary estate shall now apply.

165. Gabby, 20, and Maricel, 19, lived together as husband and wife without the
benefit of marriage. Being unemployed, they resided in the house of Gabby’s parents and
derived support from them. When Maricel was seven months pregnant, Gabby was
involved in a vehicular accident causing his instantaneous death. The following month,
Maricel, who continued to live with Gabby’s parents, gave birth to the minor child, William.

Maricel subsequently applied for registration of the child’s birth, using Gabby’s
surname, in support of which she submitted an Affidavit to Use the Surname of the Father
(AUSF), and Joint Affidavit of Acknowledgment executed by Gabby’s father and brother.
Both affidavits attested that during the lifetime of Gabby, he had continuously
acknowledged his yet unborn child, and that his paternity had never been questioned.
Maricel attached to the AUSF a document entitled, “AUTOBIOGRAPHY” which Gabby,
during his lifetime, wrote in his own handwriting, albeit unsigned by him. The pertinent
portion of of the AUTOBIOGRAPHY states: “As of now I have my wife Maricel and she is
now pregnant. We live at the house of my parents and we are happy together. That’s all.”

Is Gabby’s unsigned “Autobiography” sufficient for the child to use his father’s
surname?

Yes. Article 175 of the Family Code, in relation to Article 172(2) thereof, states that
illegitimate children may establish their illegitimate filiation by an admission of legitimate
filiation in a public document or private handwritten instrument and signed by the parent
concerned. That a father who acknowledges paternity of a child through a written instrument
must affix his signature thereon is clearly implied in Article 176 of the Family Code, as amended
by R.A. 9255, which permits an illegitimate child to use the surname of the father through an
admission made in a public document or private handwritten instrument.

In the present case, however, special circumstances exist to hold that Gabby’s
Autobiography, though unsigned by him, substantially satisfies the requirement of the law. First,
Gabby died one full month prior to the child’s birth. Second, the relevant matters in the
Autobiography, unquestionably handwritten by Gabby, correspond to the facts culled from the
testimonial evidence proffered by Maricel. Third, Maricel’s testimony is corroborated by the
Affidavit of Acknowledgment of Gabby’s father and brother whose hereditary rights would be
affected by the registration of the questioned recognition of the child. These circumstances
indicating Gabby’s paternity of the child give life to his statements in his “Autobiography.” (Dela
Cruz v. Gracia, G.R. No. 177728, July 31, 2009)

(NOTE: In Dela Cruz, the Supreme Court laid down the following rules respecting the
requirement of affixing the signature of the acknowledging parent in any private handwritten
instrument wherein an admission of filiation of a legitimate or illegitimate child is made: 1)
Where the private handwritten instrument is the lone piece of evidence submitted to prove
filiation, there should be strict compliance with the requirement that the same must be signed by
the acknowledging parent; and 2) Where the private handwritten instrument is accompanied by
other relevant and competent evidence. It suffices that the claim of filiation therein be shown to
have been made and handwritten by the acknowledging parent as it is merely corroborative of
such other evidence)

166. Abe and Lorna, both 14 years old, eloped. A daughter, Nicole, was born to
them when they were already 16 years old. When they reached the age of 19, they
contracted marriage with the consent of their parents. Is the child legitimated by the
marriage of her parents?

Yes. Pursuant to R.A. 9858 which was signed into law by Pres. Gloria Macapagal-
Arroyo on December 20, 2009, children born to parents below marrying age may now be
legitimated. R.A. 9858 amended Article 177 of the Family Code such that if the child were born
to parents disqualified to marry each other simply because either or both of them were below 18
years of age, the child may now be legitimated by the marriage of his parents. Article 177 of the
Family Code, as amended by R.A. 9858 now reads: “Children conceived and born outside of
wedlock of parents who, at the time of the conception of the former, were not disqualified by any
impediment to marry each other, or were so disqualified only because either or both of them were
below eighteen (18) years of age, may be legitimated.”

167. Romeo and Juliet, both eligible to marry each other, cohabited as husband and
wife without the benefit of marriage. Inasmuch as Juliet was then pregnant, Romeo went to
Manila to find work. There, he met Mara whom he immediately married. A month later,
Juliet gave birth to Sharon, afterwhich, Mara died. The death of Mara prompted Romeo to
reunite with Juliet and proposed marriage. Juliet accepted. Is Sharon legitimated by the
marriage of her parents?

Yes. It is clear from the problem that although Sharon was conceived and born outside
of wedlock of her parents, she was conceived at the time when her parents, Romeo and Juliet,
were not disqualified by any impediment to marry each other. The reckoning point is the period
of conception of the child, not his birth, and the subsequent valid marriage of the parents.

ADOPTION
168. Sandra was 15 years old when she was made pregnant by Conrad. Conrad did
not marry Sandra. Sandra later gave birth to a son named Andy. When Andy was already
10 years old, Sandra met Ramon, a 25-year old bachelor. They fell in love and got married.
A year after their marriage:

a) May Sandra alone adopt Andy to improve his status?

Pursuant to R.A. No. 8552, otherwise known as the Domestic Adoption Act, Sandra
alone may adopt Andy but with the consent of Ramon. As a general rule, a husband and wife are
required to adopt jointly. However, a spouse is allowed to adopt alone his or her illegitimate child
with the consent of his or her spouse.

b) May Ramon alone adopt Andy?


No. The Domestic Adoption Act specifically provides that the husband and wife shall
jointly adopt, except if one spouse seeks to adopt the legitimate child of the other; or if one
spouse seeks to adopt his or her own illegitimate child; or if the spouses are legally separated
from each other. Ramon does not fall under any of these exceptions.

c) May Sandra and Ramon adopt Andy jointly?

Yes, they may adopt Andy jointly. Under our law, when husband and wife adopt jointly,
both of them must be qualified to adopt. The fact that Ramon is not 16 years older than Andy is
no longer a disqualification under R.A. No. 8552. Under the Family Code, the 16-year difference
in age between the adoptee and the adopter is not required when the adopter is the spouse of the
illegitimate parent of the adoptee. Hence, when the adopter is the spouse of the illegitimate parent
of the adoptee as in the case of Sandra, the Family Code required Ramon to be 16 years older
than Andy. The Family Code, however, has already been amended by R.A. No. 8552. Under this
law, the 16-year age difference may be waived when the adopter is the spouse of the adoptee’s
parents without any qualification.

d) In any event, is the consent of Conrad necessary?

No. The consent of the biological parents is required because the termination of their
parental authority is a necessary consequence of adoption. However, in case of an illegitimate
child, the Family Code does not give the illegitimate father parental authority over the
illegitimate child even though he recognized the child. Under the Family Code, parental authority
is given exclusively to the illegitimate mother. Not having any parental authority to be affected by
a decree of adoption, it follows that the consent of the illegitimate father is not necessary.

169. Ruth was an unmarried woman when a friend entrusted to her the care of an
abandoned minor child. Eager to have a child of her own, she registered the child to make it
appear that she is the child’s mother. Ruth reared and cared for the child as if she were her
own. She sent the child to exclusive schools, doted on her, and used her surname in all the
scholastic records of the child. When Sarah was ten years old, Ruth married George, an
American citizen. Ruth later decided to adopt the child by availing of the amnesty given
under the law to those individuals who simulated the birth of a child. With the consent of
George, Ruth filed the petition for adoption.

a) Is Ruth allowed to adopt the child without being joined by her husband?

No, she cannot. It is undisputed that, at the time the petition for adoption was filed, Ruth
is already a married person. She filed the petition by herself, without being joined by her
husband. The Domestic Adoption Act specifically provides that the husband and wife shall jointly
adopt, except if one spouse seeks to adopt the legitimate child of the other; or if one spouse seeks
to adopt his or her own illegitimate child; or if the spouses are legally separated from each other.
Ruth does not fall under any of these exceptions. First, the child to be adopted is not the
legitimate child of Ruth or of her husband George. Second, the child is not the illegitimate child
of Ruth. And third, Ruth and George are not legally separated.

b) Are Ruth and George allowed to file the petition jointly?

No. Under Section 7, Article III of the Domestic Adoption Act, an alien is qualified to
adopt a Filipino child only if a) he is a former Filipino citizen who seeks to adopt a relative within the
fourth civil degree of consanguity; b) he seeks to adopt the legitimate or illegitimate child of his Filipino
spouse; and c) he is married to a Filipino citizen and seeks to adopt jointly with his spouse a relative within
the fourth civil degree of consanguity or affinity of the Filipino spouse.
In the present case, the child to be adopted is not a relative within the fourth degree of
consanguinity or affinity of Ruth or of George. Neither is the child the legitimate or illegitimate
child of Ruth. While Ruth is qualified to adopt, George is not. And even if Ruth is qualified, she
still cannot file the petition without being joined by her husband.

c) Suppose George filed for divorce during the adoption proceedings, will that
make any difference in your answer?

No. The filing of a case for dissolution of the marriage relation between Ruth and
George is of no moment. It is not equivalent to a decree of dissolution of marriage. Until and
unless there is a judicial decree for the dissolution of the marriage between Ruth and George, the
marriage still subsists. That being the case, joint adoption by the husband the wife is required. To
repeat: since at the time the petition for adoption was filed, Ruth was still married to George; joint
adoption is therefore mandatory. (In Re: Petition for adoption of Michelle P. Lim, G.R. No.
168992-93, May 21, 2009)

When may a decree of adoption be challenged?

A decree of adoption may be challenged by any interested party before the same
becomes final and executory. (Sayson v. Court of Appeals, 205 SCRA 321)

170. May a decree of adoption be challenged collaterally?

No. As declared by the Supreme Court in Sayson v. Court of Appeals, 205 SCRA 321, a
person cannot question the decree of adoption of an adopted child in an action for partition of the
estate of the adopting parent. The decree of adoption can only be challenged in a direct action
filed for the purpose.

171. Is an adopted child entitled to inherit by representation from the parents of


his adopting parent?

An adopted child has no right to represent the adopting parent in the distribution of the
estate of the latter’s parents because the relationship created by adoption is purely personal
between the adopting parent and the adopted child and does not extend to the blood relatives of
either party. (Sayson v. Court of Appeals, 205 SCRA 321)

172. If the wife adopts her own illegitimate child with the consent of her husband,
whose surname should the child use?

The adopted child should use the maiden surname of the wife to avoid confusion. Mere
consent by the husband does not make him an adopting parent of the child. (Johnston v. Republic,
7 SCRA 1040)

173. May the adopted child, with the consent of the adopting parents, adopt the
surname of his natural parent/s?

Yes, Change of name does not affect one’s existing family relations, in the rights and
duties owing therefrom, in one’s legal capacity, civil status or citizenship; what is altered is only
the name. (Yu v. Republic, 17 SCRA 253; Republic vs. Court of Appeals, 209 SCRA 189)

174. What is Republic Act No. 8552?

Republic Act No. 8552 is otherwise known as the Domestic Adoption Act of 1998.
175. What is meant by a “child legally available for adoption”?

A “child legally available for adoption” refers to a child who has been voluntarily or
involuntarily committed to the DSWD or to a duly licensed and accredited child-placing or child-
caring agency, freed of the parental authority of his/her biological parent(s) or guardians or
adopter(s) in case of rescission of adoption. (Sec. 3 (b), R.A. No. 8552)

176. Who may adopt under the Domestic Adoption Act?

The following persons may adopt under the Domestic Adoption Act of 1998:

1. Any Filipino citizen a) of legal age; b) in full possession of full civil capacity and
legal rights; c) of good moral character; d) has not been convicted of any crime involving moral
turpitude; e) emotionally and psychologically capable of caring for children; f) at least 16 years
older than the adoptee; and g) who is in a position to support and care for his/her children in
keeping with the means of the family. The requirement of 16-year age difference between the
adopter and the adoptee may be waived when the adopter is the biological parent of the adoptee,
or is the spouse of the adoptee’s parent (Sec. 7 (a), ibid.)

2. Any alien possessing the same qualifications as above-stated for Filipino nationals;
provided, a) his/her country has diplomatic relations with the Republic of the Philippines; b)
he/she has been living in the Philippines for at least three continuous years prior to the filing of
the application for adoption and maintains such residence until the adoption decree is entered; c)
he/she has been certified by his/her diplomatic or consular office or any appropriate government
agency that he/she has the legal capacity to adopt on his/her own country; support in his/her own
country; and (d) his/her government allows the adoptee to enter his/her country as his/her adopted
son/daughter (Sec. 7(b), ibid.)

3. The guardian with respect to the ward after the termination of the guardianship and
clearance of his/her financial accountabilities (Sec. 7(c), ibid.)

177. The Domestic Adoption Act requires that before an alien can adopt in the
Philippines, he must have resided in the Philippines for at least three continuous years prior
to the filing of the application for adoption and maintains such residence until the adoption
decree is entered. Are there exceptions to this requirement?

Yes there are. They are as follows: 1) The alien is a former Filipino citizen who seeks to
adopt a relative within the fourth civil degree of consanguinity; 2) The alien seeks to adopt the
legitimate or illegitimate child of his or her Filipino spouse; and 3) The alien is married to a
Filipino citizen and seeks to adopt jointly with his or her spouse a relative within the fourth civil
degree of consanguinity or affinity of the Filipino spouse. (Sec. 7(c), (i), (ii), (iii), ibid.)

178. Is the rule requiring joint adoption by the husband and wife absolute?

The rule is not absolute. The following are the exceptions: 1) One spouse seeks to adopt
the legitimate child of the other spouse; 2) One spouse seeks to adopt his or her own illegitimate
child with the consent of the other spouse; and 3) The spouses are legally separated.

179. Who may be adopted under the Domestic Adoption Act?

The following may be adopted under the Domestic Adoption Act of 1998: 1) Any person
below 18 years of age who has been administratively or judicially declared available for adoption;
2) The legitimate son/daughter of one spouse by the other spouse; 3) An illegitimate son/daughter
of the adopter to improve his/her status to that of legitimacy; 4) A person of legal age, if prior to
the adoption he has been consistently considered and treated by the adopter(s) as his/her own
child since minority; 5) A child whose adoption has been previously rescinded; or 6) A child
whose biological or adoptive parent(s) has died; provided, that no proceeding shall be initiated
within six months from the time of death of said parent(s) (Sec.8, ibid.)

180. Whose consent is necessary to the adoption of a “legally available child”?

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

181. What are the grounds for rescission of adoption?

A decree of adoption may be rescinded, at the instance of the adoptee, on the following
grounds: a) Repeated physical and verbal maltreatment by the adopters despite having undergone
counseling: b) Attempt on the life of the adoptee; c) Sexual assault or violence; or d)
Abandonment and failure to comply with paternal obligations.

182. Under the Domestic Adoption Act, the adoption may be rescinded at the
instance of the adoptee on legal grounds. May the adopter also rescind the adoption?

No. The law has withdrawn from the adopter the right to rescind the adoption. So that,
now, adoption, being in the best interest of the child, is not subject to rescission by the adopter.
The remedy of the adopter is to disinherit the adoptee for causes provided for in Article 919 of the
Civil Code. (2nd par., Sec. 19, ibid; Lahom v. Sibulo, July 14,2003)

PARENTAL AUTHORITY

183. In an action for legal separation instituted by H against his wife, W, one of the
issues raised is the custody of two minor children who are now 9 and 10 years old,
respectively, but who were below seven years old when the action was commenced. In
resolving the issue of custody, the court is confronted with the interviews conducted by the
court social worker and a child psychologist on the children who manifested their desire to
remain under the custody of their father.
How should the court resolve the matter?
The court should award custody of the minor children to the parent chosen by them;
namely, their father. It would be error for the court

to resolve the question of custody over the children through an automatic and blind application of
the age proviso under Article 213 of the Family Code that no mother shall be separated from her
child under seven years of age unless the court finds compelling reasons therefor. By awarding
custody to the mother, the court would be unduly swayed by an abstract presumption of law
rather an appreciation of relevant facts and the law which should apply to those facts. The task of
choosing the parent to whom custody shall be awarded is not a ministerial function to be
determined by a simple determination of the age of a minor child. Whether a child is under or
over seven years of age, the paramount criterion must always be the child’s interests.
In the present case, both children are now over seven years of age. The choice of the
children of the parent with whom they prefer to stay is clear, and ought to be treated with
paramount importance. From all indications, the father is a fit person, thus meeting the
requirements found in the first paragraph of Article 213 of the Family Code. The presumption
under the second paragraph of the article no longer applies as the children are over seven years of
age. (Espiritu v. Court of Appeals, G.R. No. 115640, March 15, 1995)

184. Joel and Sheryl gave their two-year old daughter, Samantha, to the custody of
Bernardo and Patricia, a rich but childless couple. Bernardo and Patricia showered
Samantha with love and affection, doted on her immensely, and brought her up as their own
child. Samantha calls them Mama and Papa, while she calls her parents Mommy and
Daddy. When Samantha was five years old, her biological parents tried to reclaim her from
her Mama and Papa to no avail. In the ensuing custody battle, Samantha’s biological
parents won.
In implementing the decision, the sheriff tried to take away Samantha from her
Mama and Papa, but Samantha refused. Samantha then wrote a letter to the judge begging
him to recall the writ of execution because she prefers to stay with her Mama and Papa. She
writes that if she would be forced to live with her parents, she would kill herself or run away
from home. The court social worker later confirmed the child’s threats.
Given the finality and immutability of the decision restoring the custody of
Samantha to her real parents, should the court still enforce the decision?
The manifestation of Samantha that she would kill herself or run away from home if she
should be taken from her Mama and Papa and be forced to live with her real parents is a
circumstance that would make the execution of the judgment inequitable, unfair, and unjust, if not
illegal. In the custody of a minor child, the child’s welfare is paramount. Since, in this case, the
very life and existence of the minor is at stake and the child is at an age where she can exercise an
intelligent choice, the courts can do no less than respect, enforce, and give meaning and substance
to that choice and uphold her right to live in an atmosphere conducive to her physical, moral and
intellectual development. In other words, the child’s best interest can override procedural rules
and the parental right of her parents to her custody. (Luna v. Intermediate Appellate Court, G.R.
No. 68374, June 18, 1985)

CUSTODY AND SUPPORT OF CHILDREN

185. Ali and Sabrina were married in 1988 under Islamic rites. Sabrina was a
Catholic who became a Muslim by conversion four months before her marriage. Due to
frequent quarrels, the couple parted ways. Sabrina brought her daughter, Aliyah, with her
to her parents’ house. A few months later, Sabrina converted back to the Catholic faith. Not
long after, Ali filed with the Shari’a District Court an action to obtain custody of his
daughter. He claims that on various occasions, Sabrina was seen in Manila with different
men at odd hours, and that she would wear short skirts, sleeveless blouses and bathing suits,
such clothing being detestable under Islamic law.

Is Sabrina, a Christian who converted to Islam before her marriage to a Muslim


and converted back to Catholicism upon their separation, still bound by the moral laws of
Islam in the determination of her fitness to be the custodian of her children?

No. The standard in the determination of Sabrina’s fitness to be the custodian of her
children is not restricted to Muslim law. The Family Code shall be taken into consideration in
deciding whether a non-Muslim woman as in the case of Sabrina is incompetent. What
determines Sabrina’s capacity is the standard laid down by the Family Code now that she is no
longer a Muslim woman. Indeed, what determines the fitness of any parent is the ability to see the
physical, educational, social and moral welfare of the children, and the ability to give them a
healthy environment as well as physical and financial support taking into consideration the
respective resources and moral situations of the parents.

Article 211 of the Family Code provides that the father and mother shall jointly exercise
parental authority over the persons of their common children. Either parent may lose parental
authority over the child only for a valid reason. In cases where both parties cannot have custody
because of their voluntary separation, the court has to take into consideration the circumstances
that would lead it to decide which parent can better take care of the children. Although there is a
need for the children to have a father and mother, Sabrina has more capacity and time to see to
the children’s needs. Ali is a businessman whose work requires that he go abroad or be in
different places most of the time. Under the law, the custody of the minor children, absent a
compelling reason to the contrary, is given to the mother. However, the award of custody to
Sabrina does not deprive Ali of parental authority. Thus, Ali is entitled to visitorial rights as his
constitutionally-protected natural and primary right. (Bondagjy v. Bondagjy, 371 SCRA 642
[2001])

186. In 1989, Dinah gave birth to Faith, her illegitimate daughter with Edgar.
Dinah was then a nursing student while Edgar was a licensed physician. They cohabited for
a time and lived with Edgar’s parents where the infant, Faith, was a welcome addition to
the family. A year after the birth of Faith, Dinah left for the United States where she
found work as a registered nurse. Faith was left in the care of Edgar and his parents. Edgar
filed for guardianship of Faith. There being no opposition to the petition, the court rendered
judgment appointing Edgar as his daughter’s legal guardian.

Dinah learned of the judgment through her relatives. Accordingly, she brought a
petition for relief from judgment which the court granted. Pending resolution of Edgar’s
motion for reconsideration, Dinah presented a motion to obtain temporary custody of Faith.
Pending termination of the guardianship proceedings, who between Edgar and Dinah is
entitled to the custody of Faith, if the latter is below seven years old?

Unless there are compelling reasons to deprive her of the custody of her child who is
below seven years of age, Dinah is entitled to the temporary custody of her minor child pending
termination of the guardianship proceedings. The law is clear on this point. Insofar as illegitimate
children are concerned, such as Faith, Article 176 of the Family Code provides that illegitimate
children shall be under the parental authority of their mother. Likewise, Article 213 of the Family
Code provides that “no child under seven years of age shall be separated from the mother, unless
the court finds compelling reasons to order otherwise.” It will be observed that in both provisions,
a strong bias is created in favor of the mother. This is especially evident in Article 213 where it
may be said that the law presumes that the mother is the best custodian. Since Edgar failed to
adduce evidence to show compelling reason to deprive Dinah of custody of Faith, she is legally
entitled to the custody of Faith pending termination of the guardianship proceedings. (Tonog v.
Court of Appeals, 376 SCRA 523 [2002])

(NOTE: In Tonog, Faith had already exceeded the statutory bar of seven years at the
time when the question of her temporary custody reached the Supreme Court. Consequently,
Faith’s preference and opinion must first be sought in the choice of which parents should have the
custody over her person. In Tonog, the Supreme Court awarded temporary custody to the father
while the proceedings for guardianship before the trial court have not yet been terminated. The
Supreme Court justified the award of temporary custody to the father on the ground that “the
child should not be wrenched from her familiar surroundings, and thrust into a strange
environment away from the people and places to which she had apparently formed an
attachment”)

187. H and W are a married couple with one child. Upon the death of H, W
entrusted the custody of her child to her mother-in-law to assuage the latter’s feelings for
the death of her son. Subsequently, W migrated to the United States after her marriage to
an American national. When she returned to the Philippines, she tried to get back her child
but her mother-in-law resisted. Accordingly, the mother-in-law refused to return the child to
W accusing her of having abandoned her child. W filed for custody in court. Judgment for
whom?

Judgment for W. it is basic principle that parental authority and parental responsibility
are inalienable and may not be transferred and renounced except in cases authorized by law. The
right attached to parental authority being personal, the law allows a waiver only in cases of
guardianship, adoption and surrender to a children’s home or an orphan institution. When a parent
entrusts the custody of a minor to another, such as a friend or godfather, even in a document, what
is given is merely temporary custody and does not constitute a renunciation of parental authority.
Even if a definite renunciation is manifest, the law still disallows the same. The right of parents to
the custody of their minor children is one of the natural rights incident to parenthood, a right
supported by law and sound public policy. (Sagala-Eslao v. Court of Appeals, 266 SCRA 317)

188. Brenda, in representation of her minor daughter, instituted an action for


support against Manuel before the RTC of Manila. Manuel defended by denying paternity
over the child, by virtue of which Brenda and Manuel submitted a joint motion to dismiss
with prejudice. The following year, Brenda instituted another complaint for support against
Manuel, this time with the RTC of Caloocan City. This time, Manuel presented a motion to
dismiss on the ground of res judicata, i.e., that the case is already barred by the prior
judgment in the first case. Decide.

Motion denied. Article 301 of the Civil Code, the law in point, provides that the right to
receive support cannot be renounced nor can it be transmitted to a third person. To allow
renunciation or transmission or compensation of the family right of a person to support is
virtually to allow either suicide or conversion of the recipient to a public burden. This is contrary
to public policy. Furthermore, Article 2035 of the Civil Code provides that future support cannot
be the subject of a compromise. Hence, the manifestation of the mother in the first case, which
acknowledged that it would be futile to pursue the complaint for support in view of Manuel’s
denial of paternity, amounted to renunciation as it severed the vinculum that gives the minor child
the right to claim support from her putative father. (De Asis v. Court of Appeals, 303 SCRA 176
[1999])

189. May the right to receive support be levied upon on attachment or execution?

No. Under Article 205 of the Family Code, the right to receive support as well any
money or property obtained as such support shall not be levied upon on attachment or execution.
However, supports in arrears are not covered by the provision considering that the need for
support was already attended to in the past, notwithstanding failure to receive payments of
support. In case of contractual support or that given by will, the excess in amount beyond that
required for legal support shall be subject to levy on attachment or execution.
SUMMARY JUDICIAL PROCEEDINGS IN THE
FAMILY LAW
190. Yolanda met Cyrus at a garments factory in Laguna where both were working.
The two eventually got married. When the company closed down, Cyrus went to Taiwan to
seek employment. Yolanda claims that from that time, she had not received any
communication from her husband, notwithstanding efforts to locate him. She asserts that
she had asked the relatives of her husband regarding the latter’s whereabouts to no avail.
After nine years of waiting, Yolanda obtained from the court a judgment declaring
her husband’s presumptive death. The Office of the Solicitor General disagrees. It contends
that Yolanda had failed to exert earnest efforts to locate Cyrus and thus failed to prove her
well-founded belief that he was already dead. The OSG now question the ruling through a
Notice of Appeal. Should the appeal be given due course?

No. The decision of the lower court granting Yolanda’s petition for declaration of
presumptive death of her absent husband under Article 41 of the Family Code is immediately
final and executory upon notice to the parties, by express provision of Article 247 of the same
Code. The decision is therefore not subject to ordinary appeal, and the attempt to question it
through a Notice of Appeal is unavailing.

In sum, under Article 41 of the Family Code, the losing party in a summary proceeding
for the declaration of presumptive death may file a petition for certiorari with the Court of
Appeals on the ground that, in rendering judgment thereon, the trial court committed grave abuse
of discretion amounting to lack of jurisdiction. From the decision of the Court of Appeals, the
aggrieved party may elevate the matter to the Supreme Court via a petition for review on
certiorari under Rule 45 of the Rules of Court. (Republic v. Granada, G.R. No. 187512, June 13,
2012)

(NOTE: In Granada, the Supreme Court agreed with the Government’s argument that
Yolanda did not exert earnest efforts to locate her absent husband. Nevertheless, the Supreme
Court affirmed the dismissal of the Government’s appeal on the theory that the ruling on the issue
of whether Yolanda was able to prove her “well-founded belief” that her absent spouse was
already dead prior to her filing of the petition to declare him presumptively dead is already final
and can no longer be reversed)

PROPERTY
CLASSIFICATION OF PROPERTY
191. What is the test to determine whether a property is immovable or movable?
The ultimate test to determine whether a property is movable or immovable is to find out
whether such property falls within the enumeration in Article 415 of the Civil Code or not. If it
does, it is immovable; if it does not, it is movable.

(NOTE: The properties enumerated in Article 415 of the Civil Code are immovable 1)
by nature, such as those mentioned in Nos. 1 (except buildings and constructions adhered to the
soil) and 8; or 2) by incorporation, or those which are attached permanently to an immovable in
such a manner as to form an integral part thereof, such as those mentioned in Nos.1 (buildings
and constructions adhered to the soil), 2, 3, and 4; or 3) by destination, or those which are placed
permanently or for perfection of said immovable, such as those mentioned in Nos. 4, 5, 6, 7, and
9; or 4) by analogy, or those which are considered immovable by operation of law, such as those
mentioned in No. 10)

192. D obtains a loan from a bank and executes a real estate mortgage over his
property situated in Bulacan. The loan is never paid. Shortly thereafter, the bank forecloses
the mortgage, and the property is sold at auction to the bank as the highest bidder. In the
meantime, the debtor who was still in possession of the land, constructed a warehouse on the
foreclosed property. Upon expiration of the redemption period, the bank sells the land to
Juan. The sale is later amended to include the warehouse constructed by D. Debtor then
brings an action to annul the sale of the warehouse before the RTC of Quezon City, where
he resides. The bank defends on improper venue asserting that the warehouse is real
property under the Civil Code and that therefore, the action should have been filed in
Bulacan. Should the warehouse be considered real property or personal property?

The warehouse which is a construction adhered to the soil is an immovable property


under Article 415(1) of the Civil Code; hence; the proper venue of any case to recover ownership
of the same, which is what the purpose of the complaint to annul the sale amount to, should be the
place where the property is located, or the RTC of Bulacan.

193. Sheryl constructed a house on a rented property owned by Froilan. To enable


her to finish the construction, she mortgaged the house to a bank to guarantee payment of a
loan in the amount of P300,000. By mutual agreement, she executed a chattel mortgage on
the house in favor of the bank. Is the chattel mortgage valid and enforceable?

Yes, on the basis of estoppel because of the mutual agreement between the mortgagor
and the mortgagee who are bound thereby although there should be no prejudice to third persons.
This is an exception to the rule that a building is an immovable property. Whether constructed on
one’s own land or on land belonging to another, such as in the instant case, from the viewpoint of
the law and third persons, the building is an immovable property by incorporation within the
meaning of Article 415 of the Civil Code. (Navarro v. Pineda, 9 SCRA 631)

194. P filed an action against D for the recovery of a debt. Upon proper application
of P, the court subsequently issued a writ directing the sheriff to seize and deliver D’s
machineries and equipments to P upon payment of the necessary fees and expenses.
Accordingly, the sheriff seized one machine at Ds factory, and gives word that he would
return in the next few days for the other machines. D in turn filed a motion for an order to
defer enforcement of the writ. D asserts that the machineries still to be seized are
immovables under Article 415 of the Civil Code; and that to give effect to its agreement with
P regarding their treatment of the machineries as personal properties would prejudice
innocent third persons. Is D entitled to a special protective order?

No. The machines that were the subject of the writ of replevin were placed by D in the
factory built on its own land. Indisputably, they were essential and principal elements of D’s
business or industry. Hence, although each of them was movable or personal property on its own,
all of them have become immobilized by destination because they are essential and principal
elements in the industry. (Mindanao Bus Co. vs. City Assessor and Treasurer, 66 SCRA 197
[1962]) In that sense, D is correct in arguing that the machines are real, not personal, property
pursuant to Article 415(5) of the Civil Code.

However, the machines are proper subjects of a writ of replevin. This is so because
contracting parties may validly stipulate that a real property be considered as personal. After
agreeing to such stipulation, they are consequently estopped from claiming otherwise. In Tumalad
v. Vicencio, 41 SCRA 143 [1971], the Supreme Court upheld the intention of the parties to treat a
house as a personal property because it had been made the subject of a chattel mortgage.
Applying Tumalad, the Supreme Court in Makati Leasing and Finance Corporation v. Wearever
Textile Mills, 122 SCRA 296 [1983] also held that the machinery used in a factory and essential to
the industry, as in the present case, was a proper subject of a writ of replevin because it was
treated as personal property in a contract.

In the present case, the agreement between P and D clearly provides that the machines
are to be considered as personal property. Clearly then, D is estopped from denying the
characterization of the subject machines as personal property. Under the circumstances, they are
proper subjects of a writ of replevin. (Serg’s Products, Inc. v. PCI Leasing and Finance, Inc. 338
SCRA 499 [2000])

195. What are the essential requisites in order that machineries can be classified as
immovable properties within the meaning of Article 415 of the Civil Code?

In order that machineries can be classified as immovable properties within the meaning
of No. 5 of Article 415 of the Civil Code, it is essential that the following requisites must concur:
1) The machinery must be placed by the owner of the tenement; 2) An industry or works must be
carried on in the tenement; 3) The machinery must be intended for such industry or works;
and 4) The machinery must tend directly to meet the needs of such industry or works. (Davao
Sawmill v. Castillo, 61 Phil. 709)

196. A’s land is bounded on the South by the sea and on the East by a river. Both
sides have grown by accretion. What should A do to obtain a certificate of title to the
enlarged areas?

A cannot do anything with respect to the accretion on the south by the sea. He has no
right over it. Such accretion is property of public dominion. (Art. 420, Civil Code) As such, it is
outside the commerce of man. Therefore, it cannot be appropriated; neither can it be acquired by
prescription.

However, as far as the accretion on the east by the river is concerned, assuming that all
the requisites of alluvium under the Civil Code (Art. 457, Civil Code) are present, A is now ipso
jure the owner of such accretion. In order that he can acquire a certificate of title (or an
amendment thereof), he should now comply with all the requirements of the law (Act No. 496) in
order that there will be judicial confirmation of his title over the accretion.

OWNERSHIP
197. Explain the doctrine of self-help in civil law.

The doctrine of self-help in civil law is the right to counter, in certain cases, force with
force. It is enunciated under Article 429 of the Civil Code and it can be exercised by the owner
only at the time of actual or threatened dispossession. When possession has already been lost, the
owner must resort to judicial process for recovery of the property.

198. Arthur owns a parcel of land. He wants to develop the property but found it to
be occupied by several persons who had been farming the land for 15 to 20 years already.
After a demand to vacate, Arthur enters the property, destroys the barbed wire fence and
bulldozes the fruit-bearing trees and crops thereon. Arthur invokes the doctrine of self-help.
Is he justified in invoking the doctrine of self-help?

No. Arthur’s justification is unavailing because the doctrine of self-help can only be
exercised in times of actual or threatened dispossession, which is absent in the case at bar. It is a
settled rule that when possession has already been lost, the owner must resort to judicial process
for the recovery of the property. (German Mgmt. &Services, Inc. v. Court of Appeals, 177 SCRA
495 [1989])

199. What is a hidden treasure?

By hidden treasure is understood, for legal purposes, any hidden and unknown deposit
of money, jewelry, or other precious objects, the lawful ownership of which does not appear. (Art.
439, Civil Code)

200. Solomon found a hidden treasure on David’s property. How shall the treasure
be divided if Solomon is a usufructuary of the land?

If Solomon is a usufructuary of the land and he himself discovered the hidden treasure,
he is entitled to one-half thereof. This is because with respect to the hidden treasure which is
found on the land held in usufruct, the usufructary is considered as a stranger. (Art. 566, Civil
Code) However, if another person discovers the hidden treasure, one-half goes to the finder and
the other half goes to the naked owner. The usufructuary in such case is not entitled to anything.

201. What is meant by accession discreta and accession continua?

Accession discreta is a right pertaining to the owner of a thing over everything which is
produced thereby. Accession continua, on the other hand, is a right pertaining to the owner of a
thing over everything which is attached or incorporated thereto. (Art. 440, Civil Code)

202. Is the rule on accession discreta absolute?

The rule is not absolute. The following are the instances when the owner has no right to
the fruits of his property: 1) If the thing is in the possession of a possessor in good faith, in which
case such possessor is entitled to the fruits; 2) If the thing is subject to a usufruct, in which case
the usufructuary is entitled to the fruits; 3) If the thing is leased, in which case the lessee is
entitled to the fruits of the thing leased, although such lessee must pay to the owner rentals which
are in the nature of civil fruits; and 4) If the thing is in the possession of an antichretic creditor, in
which case such creditor is entitled to the fruits with the obligation of applying them to the
interest and principal. ((Arts. 544, 566, 1654, 2132, Civil Code)
203. Yolanda purchased a property adjacent to Zenaida’s. After a relocation survey,
Yolanda discovered that a 30-square meter portion of his lot is encroached upon by
Zenaida’s house. Zenaida refused to vacate the encroached portion despite verbal and
written demands; hence, Yolanda brings an ejectment case against Zenaida. Zenaida
defends that under Article 448 of the Civil Code, she has the pre-emptive right to purchase
the portion encroached upon. Is Zenaida correct?

No. Article 448 of the Civil Code is unequivocal that the option to sell the land on
which another builds, plants or sows in good faith, belongs to the landowner. This advantage in
Article 448 of the Civil Code is accorded the landowner because “his right is older, and by the
principle of accession, he is entitled to the ownership of the accessory thing.” (Benitez v. Court of
Appeals, 266 SCRA 242 [1997])

204. A, B and C are the registered owners of adjoining lots. Lot 1 is registered in
the name of A; Lot 2 is registered in the name of B; and Lot 3 is registered in the name of C.
On Lot 2, which is adjacent to Lot 1, B constructed his house. On Lot 3 which is adjacent to
Lot 2, C built his house. B constructed his house in 1983, while C, in 1982.

In 1985, A decided to construct his house on Lot 1. During the construction, he


discovered that the adjoining house of B encroaches on the entire length of the eastern side
of his property. In a relocation survey, the surveyor found that Lot 1 of A lost approximately
25 square meters on its eastern boundary; that Lot 2 of B, although found to have
encroached on Lot 1, did not lose nor gain any area; that Lot 2 lost some 25 square meters
which, however, were gained by Lot 3 of C on its western boundary. In short, Lots 1, 2 and
3 moved westward to the eastern boundary of Lot No.1.

What are the rights and obligation of the parties?

B constructed his house in 1983, and he built it in the belief that it was entirely within
the boundaries of his land (Lot 2). In short, he had no knowledge that he encroached on A’s
property. He is therefore deemed to be a builder in good faith until the time A informed him of his
encroachment on the latter’s property. C, on the other hand, built his house on his lot (Lot 3)
before A and B. There is no evidence that C was aware that when he built his house he knew that
a portion thereof encroached on B’s adjoining lot. Good faith is always presumed, and upon him
who alleges bad faith on the part of the possessor rests the burden of proof.

All the parties are presumed to have acted in good faith. Their rights must therefore be
determined in accordance with the appropriate provisions of the Civil Code. Consequently, A, as
owner of Lot 1, may choose to purchase the improvements made by B on his land, or sell to B
the subject portion. If buying the improvement is impractical as it may render B’s house useless,
then A may sell to B that portion of Lot 1 on which the latter’s improvement stands. If B is
unwilling or unable to buy the lot, then he must vacate the land. Until he vacates, he must pay
rent to A. A, however, cannot compel B to buy the land if its value is considerably more than the
value of the portion of his house constructed thereon. If the value of the land is much more than
B’s improvement, then B must pay reasonable rent. If A and B do not agree on the terms of the
lease, they may go to court to fix the same.

In the event that A elects to sell to B the subject portion of his lot, the price must be
fixed at the prevailing market value at the time of payment, not at the time of taking. This is a
case of an owner who has been paying real estate taxes on his land but has been deprived of the
use of a portion of this land for years. It is but fair and just to fix compensation at the time of
payment.

Article 448 and the same conditions above-stated also apply to B as owner and
possessor of his lot and C as builder of the improvement that encroached on a portion of B’s land
(Ballatan v. Court of Appeals, 304 SCRA 34 [1999])

205. Donald owns a parcel of registered land which adjoins that of Samuel. Donald
builds a house on his lot. Unknown to Donald, a portion of his house is built on Samuel’s
property. After the construction, Donald sells his lot to Zoilo.

a) Is Donald a builder in good faith under Article 448 of the Civil Code?

Yes, Donald can be considered a builder in good faith even if his lot is covered by a
Torrens Title. Good faith is a state of mind. Unless one is versed in the science of surveying, no
one can determine the precise extent or location of his property by merely examining his paper
title.

b) Is Zoilo, the buyer, entitled to avail of the benefits under Article 448?

Yes. Upon delivery of the property to him, Zoilo acquired ownership of the property and
he is deemed to have stepped into the shoes of the seller, Donald, in regard to all the rights of
ownership, including the right to compel Samuel, the owner of the lot encroached upon, to
exercise either of the two options after payment of proper indemnity or to sell the portion
encroached upon.

c) Can Samuel demand the removal of the encroaching structures?

Samuel, the lot owner, cannot demand the removal of the encroaching structures. Such
right is available only if and when he chooses to compel the builder to buy the land at a
reasonable price but the latter fails to pay it. (Technogas Phil. v. Court of Appeals, 268 SCRA 5
[1997])

(NOTE: if Samuel appropriates the improvements, the builder has the right to retain the
lot until he is paid of his necessary and useful expenses. He is not even required to pay rentals in
the meantime)

206. Vito promised to donate to Luca a parcel of land. Relying on Vito’s promise,
Luca builds a house of strong materials on the land. When Vito died, his son Michael
inherits the property. Shortly thereafter, Michael institutes an action against Luca to
recover possession of the property. Luca defends by claiming that he must first be
reimbursed of the value of his improvements, he being a builder in good faith. Is Luca
correct?

No. The mere promise to donate the property to Luca does not make him a builder in
good faith of the house. This is so because at the time when the improvement was built, such
promise was not yet fulfilled. It was a mere expectancy of ownership that may or may not be
realized. If at all, Luca is a mere possessor by tolerance. A person whose occupation of a realty by
sheer tolerance of its owner is not a possessor in good faith; hence, not entitled to the value of the
improvements built thereon. (Padua-Hilario v. Court of Appeals)

207. What is alluvium?

Alluvium is the soil deposited or added to the lands adjoining the banks of rivers, and
gradually received as an effect of the current of the waters. By law, the accretion is owned by the
owner of the estate fronting the riverbank. (Art. 457, Civil Code)

208. What is avulsion?


Avulsion is the process whereby the current of a river, creek or torrent segregates from
an estate on its bank a known portion of land and transfers it to another estate. (Art. 459, Civil
Code)

209. Why is avulsion sometimes called “delayed accession?”

Avulsion is sometimes referred to as “delayed accession” in the sense that if the owner
abandons the detached land, or fails to remove the same within two years, the land to which it has
been attached acquires ownership thereof. (Art. 459, Civil Code)

210. Gloria Ferrer is the owner of a parcel of land situated in Aringay, La Union.
This parcel of land adjoins the bank of a river. On the south of the parcel land is a strip of
land which Gloria vigorously claims as hers by virtue of accretion. Magdalena Domondon,
on the other hand, equally asserts ownership over the said parcel of the land on account of
her long occupation and by virtue of the title issued to her by the Director of Lands.
Who between the rival claimants is entitled to the land?

Being the owner of the adjacent land, Gloria Ferrer is the owner of the land in dispute by
virtue of accretion, she being the riparian owner. The free patent granted by the Director of Lands
in favor of Magdalena Domondon is a complete nullity. The Director of Lands has no authority to
grant a free patent over land that has passed to private ownership and which has thereby ceased to
be a public land. (Ferrer v. Bautista, 231, SCRA 257.)

211. What is adjunction?

Adjunction is the process by virtue of which two movable things belonging to different
owners are united in such a way that they form a single object. (Art. 466, Civil Code)

212. What are the rules in adjunction?

Adjunction is governed by the following rules:

1) If the two things can be separated without injury, their respective owners may demand
their separation. (Art. 469, par. 1, Civil Code)

2) If the two things can be separated without injury, and both owners had acted in good
faith, the owner of the principal thing acquires the accessory, indemnifying the owner of such
accessory for its value. (Art. 446, Civil Code) Nevertheless, if the accessory is much more
precious than the principal thing, the owner may demand its separation, even though the principal
thing may suffer some injury. (Art. 469, par 2, Civil Code)

3) If the owner of the accessory thing has made the incorporation in bad faith, he loses
the thing incorporated and shall have the obligation to indemnify the owner of the principal thing
for the damages which the latter may have suffered. (Art. 470, Civil Code)

4) If the owner who has acted in bad faith is the owner of the principal thing, the owner
of the accessory thing may choose between the former paying him its value or that his accessory
thing be separated, even though it will cause damage or injury to the principal thing. Moreover,
the owner of the principal thing shall be liable for damages. (Art. 470, Civil Code)

5) If both owners had acted in bad faith, their respective rights shall be determined as
though both had acted in good faith. (Art. 470, Civil Code)
CO-OWNERSHIP

213. What are the rights of a co-owner?

A co-owner has the following rights: a) use the thing owned in common; b) substitute
another in his enjoyment of the thing, except when personal rights are involved; c) share in the
benefits in proportion to his share in the co-ownership; d) alienate, assign or encumber his
undivided share; e) exempt himself from necessary expenses or taxes by renouncing so much of
his interest in the co-ownership corresponding to his share in the expenses and taxes.

214. Roy, Sam, and Ben are co-owners of a parcel of land. Unknown to his co-
owners, Roy sold a specific portion of the co-owned property to Barry, who immediately
takes possession and builds a house thereon. Per deed of sale executed by Roy, the portion
sold to Barry is to be taken from the undivided share of Roy in the community property.

Years later, Barry sold his portion to Rene. Meanwhile, Roy, Sam and Ben sold the
entire co-owned property to Ernie who thereafter caused the reconstitution of the certificate
of title of his sellers, by which title the entire property was transferred to him. Rene later
instituted an action against Ernie for partition and reconveyance, claiming that he owns a
portion of the land which was erroneously included in Ernie’s certificate of title. The lower
court dismissed the action on the ground that while Roy could alienate his pro indiviso share
in the land, he could not validly sell an undivided portion thereof by metes and bounds.

a) Is the sale by a co-owner of a specific portion of a community property valid?

Yes. The mere fact that Roy transferred a definite portion of the co-owned property by
metes and bounds to Barry does not per se render the sale a nullity. There can be no doubt that
the transaction entered into by Roy and Barry could be legally recognized in its entirely since the
object of the sale did not even exceed the ideal share held by Roy in the co-ownership. As matter
of fact, the deed of sale executed by Roy and Barry stipulated that the portion of the land sold
would be taken from the undivided interest of Roy, which the latter could validly transfer in
whole or in part even without the consent of the co-owners. Roy’s right to sell a part of his
undivided interest in the co-owned property is absolute in accordance with the well-settled
doctrine that a co-owner has full ownership of his pro indiviso share and has the right to alienate,
assign and mortgage it, and substitute another person in its enjoyment. (Del Campo v. Court of
Appeals, 351 SCRA 1 (2001)

b) What is the legal effect of a sale of the entire co-owned property made by one co-
owner?

Based on the principle that “no one can give what he does not have,” a co-owner could
not legally sell the shares pertaining to the other co-owners since a co-owner cannot alienate more
than his share in the co-ownership. Even if a co-owner sells the whole property as his, the sale
will affect only his own share but not those of the other co-owners who did not consent thereto.
Since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-
owner will only transfer the rights of said co-owner to the buyer, thereby making the buyer a co-
owner of the property. (Del Campo v. Court of Appeals, 351 SCRA 1 [2001]).

215. A, B and C are co-owners of a parcel of land. A sells his share to D.

a) What are the rights of co-owners B and C with respect to the sale?
Either B or C or both of have the right to redeem the share of A in proportion to their
interest. (Arts. 1619 and 1620, Civil Code)
b) Suppose neither B nor C exercises the right of redemption, and later B sells his
share to E, may D exercise the right of redemption?

Yes. Being already a co-owner, D can exercise the right of legal redemption if B sells
his share to E. The law does not limit the exercise of the right of legal redemption to the original
co-owners. The reason behind the rule holds true with an original co-owner as with a subsequent
co-owner. (Viola v. Tecson, 49 Phil. 808)
c) May B exercise the right of redemption if A instead sells his share to C?
No. The law is clear that the right of legal redemption may be exercised only if the
share of a co-owner is alienated to a third person by onerous title. (Art. 1620, Civil Code) The
rationale behind the right of legal redemption among co-owners is to reduce the number of co-
owners and avoid entry of strangers into the co-ownership. If the alienation is in favor of a co-
owner, the number of co-owners is already reduced and no stranger has entered the co-ownership.
The law prefers single proprietorship to co-ownership as in the latter property is not as much
developed and improved as in single proprietorship.
d) Suppose A donates his share to D, a stranger, may the other co-owners exercise
the right of legal redemption?
No. The right of legal redemption may be exercised only if a share of a co-owner is
alienated to a third person by onerous title. (Art. 1620, Civil Code) Since donation is not a
transfer by onerous title, it is readily apparent that the other co-owners cannot exercise the right
of redemption.
216. Bitoy, Caloy, Ditoy and Empoy are co-owners of a parcel of land. Without the
knowledge of his co-owners, Empoy sold to Fondoy the entire property by virtue of a public
instrument entitled, “Extrajudicial Settlement and Simultaneous Sale.” When Empoy’s co-
owners learned of the sale, they commenced an action to annul it on the ground that neither
Empoy, the co-owner seller nor Fondoy, the buyer, had given them any written notice of the
sale.

a) Is the sale by Empoy to Fondoy of the co-owned property valid?

The sale is valid only with respect to Empoy’s one-fourth share of the property. As early
as 1923, the Supreme Court had already ruled that even if a co-owner sells the whole property as
his, the sale will affect only his own share but not those of the other co-owners who did not
consent to the sale [Punzalan v. Boom Liat, 44 Phil. 320 (1923)] This is because under the law,
the sale or other disposition affects only his undivided share and the transferee gets only what
would corresponds to his grantor in the partition of the thing owned in common. (Ramirez v.
Bautista, 14 Phil. 528 [1909]) Consequently, by virtue of the sale made by Empoy, which is valid
with respect to his proportionate share, the buyer thereby became a co-owner of the disputed
parcel to the extent of participation of the seller co-owner since the sale produced the effect of
substituting the buyer in the enjoyment thereof.

In the instant case, Fondoy thus acquired only the rights pertaining to the seller Empoy,
which is only one-fourth undivided share of the subject lot.

b) Is the sale to Fondoy subject to legal redemption by the other co-owners? Are the
co-owners entitled to redeem the property based on its prevailing market value?
Yes, the sale is subject to the right of legal redemption by the other co-owners following
Article 1088 of the Civil Code. Considering that Empoy did not give written notice of the sale to
his co-owners, the period for legal redemption had not yet lapsed; and the redemption price
should be one-fourth of the purchase price paid by Fondoy for the lot.

The redemption price should be one-fourth of the actual purchase price, not of the
prevailing market value of the property. Thus, Article 1088 of the Civil Code provides that
“should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of
the co-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of
the sale, provided they do so within the period of one month from the time they were notified in
writing of the sale by the vendor. (Republic v. Heirs of Dignos-Sorono, G.R. No. 171571, March
24, 2008)

217. X, Y, and Z are co-owners of a parcel of land. In 1985, they sold the land to A
with a right to repurchase. Only X exercised the right of redemption for which he obtained
a title to the property. Is the co-ownership terminated when X repurchased the property?

No. The redemption of the land by X did not terminate the co-ownership nor did it give
him the title to the entire land subject of the co-ownership. (Paulmitan v. Court of Appeals SCRA
[1992]) The right of repurchase may be exercised by a co-owner with respect to his share. When
X acquired the property by repurchasing it, he merely acquired the right to be reimbursed for the
amount equivalent to the shares of his co-owners Y and Z. (Adille v. Court of Appeals, 157 SCRA
445 [1988]) Furthermore, the co-ownership is not terminated by the redemption of the land by X,
redemption not being a mode of terminating a co-ownership. (Mariano v. Court of Appeals, 222
SCRA 736 [1993])

218. Is an existing mortgage constituted on a parcel of land a bar to its partition?

The existence of a real estate mortgage on a parcel of land is not a bar to its partition by
the co-owners. As a matter of fact, the partition of a real property by the co-owners does not
operate to extinguish the mortgage constituted thereon. Under Article 2126 of the Civil Code, a
mortgage directly and immediately subjects the property upon which it is imposed on whoever
the possessor may be, to the fulfillment of the obligation for whose security it is constituted.
(Paulino v. Court of Appeals, 223 SCRA 732 [1993]) Furthermore, Article 494 of the Civil Code
provides that no co-owner shall be obliged to remain in the co-ownership. Each co-owner may
demand at any time the partition of the thing owned in common, insofar as his share is concerned.

219. Is oral partition of a co-owned property allowed?

Yes. There is no law that requires partition among the co-owners be in writing to be valid.
The requirement of Section 1, Rule 75 of the Rules Court that partition be put in a public
document and registered with the Registry of Property has for its purpose the protection of
creditors and at the same time the protection of the co-owners themselves against tardy claims.
(vda. De Reyes v. Court of Appeals, 199 SCRA 646 [1991])
220. Is partition of real property covered by the Statute of Frauds?

An oral agreement for the partition of a property in co-ownership is valid and enforceable
upon the parties. The Statute of Frauds has no operation in this kind of agreement because
partition is not a conveyance of property but simply a segregation and designation of the part of
the property which belong to the co-owners. (vda. De Espina v. Abaya, 196 SCRA 312 [1991])

221. When is partition of a co-owned property not allowed?

A co-owner may demand partition of the property owned in common at any time, except
in the following cases: 1) if by agreement among the co-owners, for a period not exceeding ten
years, partition is prohibited; 2) when partition is prohibited by the donor or testator, for a period
not exceeding 20 years, from whom the property came; 3) when partition is prohibited by law; 4)
when physical partition would render the property unserviceable; and 5) when the legal nature of
the common property does not allow partition.

222. Arnel, Billy and Chito are co-owners of a parcel of land. Arnel registers the
property under his name. What is the effect of such registration?

Arnel never acquired ownership of the land. Registration of a parcel of land subject of co-
ownership in the name of one co-owner is not repudiation of the co-ownership for purposes of
prescription. (Ceniza v. Court of Appeals, 181 SCRA 552 [1990]) Under Article 494(5) of the
Civil Code, no prescription shall run in favor of a co-owner or a co-heir so long as he expressly or
impliedly recognizes the co-ownership. The registration merely created a trust in favor of his co-
owners.

223. What is meant by condominium?

According to the Condominium Act (R.A. 4726), a condominium is an interest in real


property consisting of a separate interest in a unit in a residential, industrial, or commercial
building and an undivided interest in the land on which it is located and in other common areas of
the building. A condominium may include, in addition to the foregoing, a separate interest in the
other portions of such real property.

224. Manuel engaged Nestor to build a residential condominium building on his


titled property. To finance the construction, Manuel obtained a loan from Odilon, secured
by a mortgage on the condominium project. The loan was never paid. Manuel thus entered
into an agreement with Odilon in whose favor he conveyed all his rights and interests in the
realty project. In the same agreement, Manuel and Nestor recognized Nestor’s contractor’s
lien as a result of which Odilon agreed to assign to him three bedroom units to come from
the condominium project.

Subsequently, Odilon entered into a lease agreement with Microsystems which


converted the condominium into a computer school. Because the conversion included the
bedroom units assigned to him, Nestor brought an action against Odilon before the HLURB
for delivery of his condominium certificate of title. Odilon defends on the ground that
HLURB has no jurisdiction over the case because Nestor is not a “condominium buyer”
within the purview of P.D. 957, the Condominium Law.

Is Nestor a “condominium buyer” within the purview of P.D. 957?

Yes. A transaction to “buy” and “purchase” under P.D. 957 is defined as “any contract to
buy, purchase, or otherwise acquire for a valuable consideration x x x a condominium unit in a
condominium project.” The term “buyer” is not limited to those who enter into contract of sale.
Its concept is broad enough as to include those who “acquire for valuable consideration a
condominium unit.” Thus, a buyer of said unit seeking to enforce the performance of an
obligation arising from such transaction, or claiming damages therefrom, may bring an action
with the HULRB.

In the instant case, Nestor is a buyer within the contemplation of P.D. 957. He acquired
the three condominium units as they were assigned to him by Manuel in payment for his
indebtedness as contractor’s fees. Clearly, this acquisition of the units was for a valuable
consideration. (AMA Computer College. Inc. v. Factora, 378 SCRA 121 [2002])

POSSESSION

225. As the term is used in the Civil Code, what is meant by “just title?”

As used in the Civil Code, the term “just title” has two different meanings.

In the Chapter on Possession, “just title” means a true and valid title sufficient to transfer
ownership, i.e., the transferor himself is the owner of the thing sold or transferred.

In the Chapter on Prescription, however, “just title” means a colorable title or a title
where, although there was a mode of transferring ownership, the transfer is defective because the
transferor is not the owner.

226. May the true owner of a movable property recover possession of property from
the present possessor? If so, is there a need to reimburse the possessor?

The true owner of a movable property may recover possession of his property without
reimbursement from a possessor in bad faith or even from a possessor in good faith if said owner
had lost the property or been unlawfully deprived of it, the acquisition being from a private
person.
The owner may also recover possession of his movable property but should reimburse the
possessor if such possessor acquired the property in good faith at a public sale.

However, the owner can no longer recover possession of his movable property, even if he
offers to reimburse, whether or not he had lost his property or had been unlawfully deprived of it,
if the possessor had acquired the property in good faith by purchase from a merchant’s store, or in
fairs, or markets in accordance with the Code of Commerce and Special Laws (Art. 1505, Civil
Code and Arts. 85, 86 Code of Commerce); or if the owner is precluded from denying the seller’s
authority for value and a holder of a negotiable document of title to the goods. (Art. 1517, Civil
Code)

227. What is meant by “unlawfully deprived” in Article 559 of the Civil Code?

The phrase “unlawfully deprived” under Article 559 of the Civil Code extends to all cases
where there has been no valid transmission of ownership, including a depositary or a lessee who
has sold the same. (Ledesma v. Court of Appeals, September 1, 1992)
228. S sold his car to B for P250,000, the price to be paid only after the car is
registered in the name of B. After the execution of the sale document, S and B then
proceeded to the LTO where the registration of the car in B’s was made. When S asked for
payment, B told him that he was P40,000 short, and informed him that he would get it from
his mother. Upon entering the house, B told S to wait in the sala while he asked his mother
for the money. In the meanwhile, on the pretext that he had to show his mother the
registration papers of the car, S gave them to B who thereupon entered the supposed room
of his mother, ostensibly to show her papers. That was the last time S saw B or his car.
Meantime, B succeeded in selling the car to P who bought the same in good faith and for
value.

Is S entitled to recover the car from P?


Yes. By explicit mandate of Article 559 of the Civil Code, a person who has lost a
movable or has been unduly deprived thereof, may recover it from the person in possession of the
same. True, P is a purchaser of the car in good faith and for value. True also that there is a
common law principle that where one of two innocent parties must suffer by a fraud perpetrated
by another, the law imposes the loss upon the party who, by misplaced confidence, has enabled
the fraud to be committed. Nevertheless, this principle cannot be applied to this case which is
covered by an express provision of the Civil Code. Between a common law principle and a
statutory provision, the latter must prevail. (Aznar v. Yapdiangco, 13 SCRA 486)
229. Teresa entrusted to Marivic a diamond ring to be sold on commission basis.
Instead of selling the ring, however, Marivic pledged it to a pawnshop. Can Teresa recover
the ring from the pawnshop? Can the pawnshop insist that Marivic’s loan be paid first?

Teresa can recover the ring from the pawnshop. The Civil Code is explicit. The legitimate
owner who had lost the thing or who had been unlawfully deprived thereof can recover it even
from a possessor in good faith. (Art. 559, Civil Code)
Moreover, the pawnshop cannot even insist on reimbursement of the amount for which
the thing was pledged. In the first place, the contract of pledge is void because the pledgee
(Marivic) is not the owner of the thing pledged, neither has she been authorized to pledge it.
Consequently, one essential requisite for the validity of pledge is lacking. (Art. 2085, Civil Code)
In the second place, because of enormous profits, pawnshop operators must necessarily assume
the corresponding risks. The thing pledged might have been robbed, stolen, or embezzled. Hence,
the pawnshop cannot insist on reimbursement of the amount for which the thing was pledged.
(Dizon v. Suntay, 47 SCRA 1160 [1972])

USUFRUCT

230. What is meant by usufruct? What are its requisites?


Usufruct is a real right by virtue of which a person is given the right to enjoy the property
of another with the obligation of preserving its form and substance, unless the title constituting it
or the law provides otherwise. (Art. 552, Civil Code)
There are two requisites of usufruct -- the essential and the accidental. The essential
requisite is the right to enjoy the property of another; while the accidental requisite is the
obligation of preserving the form and substance of the property. The latter is accidental because
the title constituting it or the law may otherwise provide as in the case of an abnormal usufruct.
231. What is an abnormal usufruct?
An abnormal usufruct is one where the usufructuary does not have the obligation of
preserving the form and substance of the property which is the object of the usufruct.
232. What are the obligations of a usufructuary?

A usufructuary has the following obligations:


 At the commencement of the usufruct, a usufructaury is obliged to: a) make an
inventory of the property; and b) give security. (Art. 583, Civil Code)

 During the pendency of the usufruct, a usufructuary is obliged to: a) take care of the
thing with the diligence of a good father of a family; (b) make ordinary repairs on the property; c)
notify the owner in case there is an urgent need for extraordinary repairs on the property; d) pay
the annual charges and taxes on the property and those considered as liens on the fruits; e) notify
the owner of any act of a third person that may be prejudicial to the ownership of the property;
and f) pay the expenses, costs, and liabilities in suits with regard to the usufruct. (Arts. 589, 592,
593, 596, 601 and 602, Civil Code)

 At the termination of the usufruct, a usufructuary is obliged to deliver the thing to


the owner, without prejudice to the right of retention pertaining to him or his heirs for taxes and
extraordinary expenses which should be reimbursed. (Art. 612, Civil Code)
233. Is the usufructuary entitled to reimbursement of expenses which he might have
incurred on the property given in usufruct?
The usufructuary shall have the right to demand reimbursement from the owner of all
necessary expenses which he might have incurred for the preservation of the property in usufruct.
(Art. 546, Civil Code) This right, however, is not available to him with regard to useful and
ornamental expenses, but he may remove the improvements provided that it is possible to do so
without damage to the property. (Art. 579, Civil Code) In addition, he may set off such
improvements against any damage to the same. (Art. 580, Civil Code)

234. Albert and Bernard are childhood friends. Because of their friendship, Albert
gave to Bernard in usufruct a parcel of land to last up to the time their high school teacher,
Mrs. Aguada, reaches the age of 70. Mrs. Aguada died at the age of 65. Is the usufruct
extinguished?

No. Under Article 606 of the Civil Code, a usufruct granted for a time that may elapse
before a third person attains a certain age shall subsist for the number of years specified even if
the third person should die before the period expires, unless such usufruct has been granted only
in consideration of the existence of such person. If the document constituting Bernard as a
usufructuary does not state that it will end the moment Mrs. Aguada is dead, then it will continue.

EASEMENT

235. Can there be an easement over another easement? An easement over a


usufruct? A usufruct over an easement?

As to the first question: Yes, there can be an easement over another easement. Article 629
of the Civil Code provides that the owner of the servient estate must abstain from anything that
will render the use of the easement more inconvenient to the owner of the dominant estate. This is
a negative easement which requires the owner of the servient estate not to impair in any manner
whatsoever the use of the easement (such as a right of way).

As to the second question: No, there cannot be an easement over a usufruct, but there can
be an easement over a property held in usufruct.

As to the third question: No, there cannot be a usufruct over an easement, but a usufruct
may be established in a property burdened by an easement.

236. Why is a negative easement acquirable by prescription despite its being non-
apparent?

Generally, negative easements cannot be acquired by prescription because they are non-
apparent. Still, the very existence of Article 621 of the Civil Code (insofar as it relates to
negative easements), prove that in certain cases, and for purposes of prescription, there are
negative easements that may indeed be considered “apparent,” not because there are visible signs
of their existence but because of the making of a notarial prohibition. The notarial prohibition
makes apparent what really is non-apparent.

237. What is the effect of the sale of the dominant estate with respect to the
easement constituted thereon?

The sale of the dominant estate does not extinguish the easement. (Tanedo v. Bernad, 165,
SCRA 86 [1988]) Article 631 of the Civil Code provides for the modes of extinguishing an
easement. Sale of the dominant estate is not one of them. Furthermore, Article 624 of the Civil
Code provides that there must be a statement in the title of conveyance of either the dominant
estate or the servient estate abolishing or extinguishing an easement. Hence, despite the sale of
the dominant estate, the use of the servient estate is continued by operation of law.
238. When can an owner of an estate claim a compulsory right of way?
Under Articles 649 and 650 of the Civil Code, the owner of an estate may claim a
compulsory easement of right of way only after he or she has established the existence of the
following requisites: a) the estate is surrounded by other immovables and is without an adequate
outlet to a public highway; b) proper indemnity is paid: c) the isolation is not due to the
proprietor’s own acts; and d) the right of way claimed is at a point least prejudicial to the servient
estate and, insofar as consistent with the law, where the distance from the dominant estate to a
public highway may be the shortest.

239. X granted Y a road right of way. At that time, Y was using a cart and a
carabao to transport his products from his farm to the market. Ten years later, Y asked for
a widening of the easement as he has resorted to the use of a jeep to transport his products.
Can Y successfully demand a wider easement?

Yes, because the width of an easement of right of way shall be that which is sufficient for
the needs of the dominant estate and may, accordingly, be changed from time to time. (Art. 651,
Civil Code) The needs of the dominant estate determine the width of the passage. (Sta. Maria v.
Court of Appeals, 285 SCRA 351 [1998])
240. Vic is the owner of a house and lot where he and his family have been residing
since 1981. Rey, on the other hand, is the owner of the adjacent vacant lot. Vic and his
family had been using Rey’s lot as their access to the nearest public road. Rey later sold his
lot to Tom who immediately started to enclose the property with a concrete fence, Vic
objected to the enclosure and sought to stop it. He argues that the closure of the lot will
make it more burdensome for him and his family to reach the nearest public road because
the alternate path is much longer, circuitous and inconvenient; that from the public road,
they have to pass by a narrow alley, turn right to a private road, then enter a vacant lot, and
turn right again to exit from the vacant lot until they reach their property. Is Vic entitled to
demand a compulsory easement of right of way over Tom’s property?
No. To be entitled to a compulsory easement of right of way, the conditions provided under
Articles 649 and 650 of the Civil Code must be established. These are: 1) that the dominant
estate is surrounded by other estates and has no adequate outlet to a public highway; 2) that
proper indemnity has been paid; 3) that the isolation was not due to the acts of the proprietor of
the dominant estate; and 4) that the right of way claimed is at a point least prejudicial to the
servient estate and, insofar as consistent with the law, where the distance from the dominant
estate to a public highway may be the shortest. The burden of proving the existence of these
requisites lies in the owner of the dominant estate.
In the present case, the first element is clearly absent because an outlet already exists. This
outlet, though circuitous and longer in distance than the one being claimed, is already sufficient
for the needs of the dominant estate. Admittedly, the proposed right of way over Tom’s property
is the most convenient and the more direct route to the public road. However, it is not enough that
the easement be where the way is shortest. It is more important that it be where it will cause the
least prejudice to the servient estate. In order to justify the imposition of an easement of right of
way, there must be real, not fictitious or artificial, necessity for it. Mere inconvenience for the
dominant estate is not what is required by law as the basis for setting up a compulsory easement.
Even in the face of necessity, if it can be satisfied without imposing the easement, the same
should not be imposed (Cristobal v. Court of Appeals, 291 SCRA 122 [1998])
242. Lito is the owner of a parcel of land which he purchased from Manuel. Adjacent
to Lito’s property is the property of Oswald which the latter purchased from Nestor. At the
time when Lito bought the property, there was already a small house on its southeastern
portion occupying one meter of the two-meter easement of right of way which Manuel had
previously granted to Nestor in a Contract of Easement of Right of Way. Oswald now
wants to enforce the contract of easement against Lito, and for the removal of the small
house obstructing the entry of his motor vehicles. Lito objects. He asserts that the existence
of the right of way was not annotated in his title and that the easement granted by Manuel
to Nestor could not be enforced against him. Is Lito bound by the easement of right of way?
Yes. Although originally constituted by Manuel and Nestor as a voluntary easement, the
subject easement of right of way is in truth both a voluntary easement (easement by grant) and a
legal easement (easement by necessity). A legal easement is one mandated by law, constituted for
public use or for private interest, and becomes a continuing property right. As a compulsory
easement, it is inseparable from the estate to which it belongs, as provided for in Article 617 of
the Civil Code. The essential requisites for an easement to be compulsory are: 1) the dominant
estate is surrounded by other immovables and has no adequate outlet to a public highway; 2)
proper indemnity has been paid; 3) the isolation was not due to the acts of the proprietor of the
dominant estate; 4) the right of way claimed is at a point least prejudicial to the servient estate;
and 5) to the extent consistent with the foregoing rule, where the distance from the dominant
estate to a public highway may be the shortest.
The small house occupying one meter of the two-meter-wide easement obstructs the entry
of Oswald’s motor vehicles. One meter is insufficient for the needs of Oswald. It is well-settled
that the needs of the dominant estate determine the width of the easement. Conformably then,
Lito ought to demolish whatever edifice obstructs the easement in view of the needs of Oswald’s
estate. (Villanueva v. Velasco, 346 SCRA 99 [2000])
243. May an existing easement of right of way be extinguished by the opening of an
adequate outlet to a public highway?

An easement of right of way provided for in a contract of sale is a voluntary easement. As


such, it cannot be extinguished by the opening of an adequate outlet to a public highway. The
opening of an adequate outlet can extinguish a legal or compulsory easement but not a voluntary
easement. (La Vista Association v. Court of Appeals, 278 SCRA 498 [1997])
244. Bong built a house on his lot up to the boundary line. In the presence of Cesar,
the latter being the owner of the adjoining property, Bong opened several windows on his
house with a direct view over Cesar’s property. Twelve years later, Cesar himself started to
build a house on his own lot also right up to the boundary line. Bong objects to the
construction. When the construction did not stop, he brings an action against Cesar to stop
the latter from building up to the boundary line. He asserts that Cesar cannot build a house
less than two meters from the boundary line because he had already acquired an easement
of light and view by prescription. Will the action prosper?
The action will not prosper because Bong has not yet acquired an easement of light and
view by prescription. It is clear that Bong opened the windows in the walls of his own building
affording a direct view over the lot of Cesar right on the boundary line without observing the 2-
meter distance required by law. (Art. 670, Civil Code) The presence of Cesar when Bong opened
the windows does not affect the right of Cesar to close or demand the closure of the windows, as
even a stipulation permitting the making of an opening at less distances prescribed by law is void.
(Art. 673, Civil Code)
Moreover, even if Bong had observed the two-meter distance rule, the windows having
been made in his own wall and the easement of light and view being negative, prescription
thereof may be acquired only by computing the prescriptive period from the day Bong forbade
Cesar by notarial demand from obstructing the opening (Arts. 621, 668, Civil Code) and Cesar
desisted, which are absent in this case. Had the opening been made in a party wall, the
prescriptive period would run from the making of the opening (Art. 668, Civil Code), which is
not the situation in this case.

245. What is an easement of aqueduct? Does the existence of an easement of right of


way necessarily include the easement of aqueduct?
An easement of aqueduct is the right to make water flow thru intervening estates in order
that one may make use of said waters. The existence of the easement of right of way does not
necessarily include the easement of aqueduct. Consequently, the right to dig trenches and to lay
pipelines for the conducting of water is not included in a contract granting a right of way (the
rights given merely those of ingress and egress to and from the lot involved).

ACQUISITION OF OWNERSHIP

246. While walking along Session Road in Baguio City, Ajax found a purse containing
P5,000. How can he become the owner of the P5,000?

If Ajax knows the owner of the purse, there is no way by which he can become the owner
of the P5,000 because under the law, he must return the purse, including its contents, to the
owner. If the owner is unknown, Ajax shall immediately deposit the movable with the mayor of
the place where the purse was found. There shall then be a public announcement of the finding
for two consecutive weeks. Six months from the publication having elapsed without the owner
having appeared, the thing found shall be awarded to Ajax, after reimbursement of the expenses.
(Art. 719, Civil Code) Should the owner appear in time, he shall be obliged to pay Ajax , as a
reward, 1/10 of the amount found. (Art. 720, Civil Code)

DONATION

247. Distinguish between donations inter vivos and donation mortis causa.

These two kinds of donation may be distinguished from each other as follows: 1) A
donation inter vivos takes effect during the lifetime of the donor, while a donation mortis causa
takes effect only upon the death of the donor; 2) In inter vivos, title or ownership is conveyed to
the donee before the death of the donor; in mortis causa, such title is conveyed to the donee only
upon the death of the donor; 3) In inter vivos, the donation is valid if the donor should survive the
donee; it is void in mortis causa; 4) In inter vivos, the donation is irrevocable during the donor’s
lifetime; in mortis causa, it is always revocable; 5) If it is inter vivos, it must comply with the
formalities prescribed by Articles 748 and 749 of the Civil Code; if it is mortis causa, it must
always comply with the formalities prescribed by law for the execution of wills.
248. What is the distinctive standard that characterizes a donation as inter vivos and
not mortis causa?

The express irrevocability of a donation is the distinctive standard that characterizes a


donation as inter vivos and not mortis causa.
249. Rommel and Susan are husband and wife. They have neither ascendants nor
descendants. Rommel died. While the conjugal partnership was under judicial
administration and pending liquidation, Susan donated all her share in her husband’s estate
to her friend Fidela. Susan died. The dispute arose when Susan’s collateral heirs brought an
action against Fidela to set aside the donation on the ground that it is void, as it is a
donation of future property. Will the action prosper?
No. The donation is valid because it is not a donation of future property but a donation of
present rights. Upon the death of Rommel, the rights to the succession are transmitted from the
moment of his death (Art. 777, Civil Code) to his heirs, including his widow, Susan, who is not
only a legal heir but also a compulsory heir. (Arts. 887 and 995, Civil Code) Succession itself is a
mode of acquiring ownership. (Art. 912, Civil Code) The property rights and obligations of
Rommel to the extent of the value of the inheritance were transmitted to his heirs, including his
widow, Susan, through his death. (Art. 774, Civil Code) The donation, therefore, is one of present
properly, not future, and is valid.
250. Manuel donated to the Bureau of Public Schools of Zamboanga City a half-
hectare parcel of land on condition that the property should be used exclusively for school
purposes only. The donation, which was authenticated by a notary public, was accepted by
the Schools District Supervisor pursuant to a notarized Affidavit of Confirmation of
Donation executed and signed by him.
Through a fundraising campaign, the Bureau of Public Schools of Zamboanga City
constructed a school building on the donated property. However, the budget appropriated
by the government for the construction of a new school building on the donated property
could not be released because of the requirement that the new school building be built upon
a one-hectare land. To remedy the situation, the Schools District Supervisor then exchanged
the donated property with a much bigger lot owned by Nestor. The exchange thus paved the
way for the construction of a new school building on the new site and the school building
previously erected on the donated property was dismantled and transferred to the new
location. Claiming that the transfer of the school site was made without his consent, Manuel
brought an action to recover the donated property.
 What are the different kinds of donations under the law?

According to purpose or cause, a donation may be categorized as: a) pure or simple; b)


remuneratory or compensatory; c) conditional or modal; and d) onerous. Unlike the other forms
of donations, the validity of and the rights and obligations of the parties in an onerous donation is
completely governed not by the law on donations but by the law on contracts. An onerous
donation is that which imposes upon the donee a reciprocal obligation or, to be more precise, this
is the kind of donation made for a valuable consideration, the cost of which is equal to or more
than the thing donated.
b) Is Manuel’s donation onerous?
The donation involved in the present controversy is one which is onerous since there is a
burden imposed upon the donee - to build a school on the donated property.

c) Was there a valid acceptance of the donation?


Yes, there was a valid acceptance of the donation. The acceptance was made through an
Affidavit of Confirmation of Donation. Also, a school building was immediately constructed after
the donation was executed. Manuel had knowledge of the existence of the school building erected
on the donated property through a fundraising activity. It was when the school building was being
dismantled and transferred to a new site that Manuel came to know about the exchange. The
actual knowledge by Manuel of the construction and existence of the school building fulfilled the
legal requirement that the acceptance of the donation by the donee be communicated to the donor.
d) Did the donee violate the condition that the donated property be used exclusively
for school purposes only?
No. The condition in the donation was not in any way violated when the lot donated was
exchanged with another one. The purpose for the donation remains the same, which is for the
establishment of a school. The exclusivity of the purpose was not altered or affected. In fact, the
exchange of the lot for a much bigger one was in furtherance and enhancement of the purpose of
the donation. The acquisition of the bigger lot paved the way for the construction of the new
school building which could not be accommodated by the limited area of the donated property.
(Republic v. Silim, 356 SCRA 1 [2001])
251. On July 27, 1997, Pedro mailed in Manila a letter to his brother Jose, a resident
of Iloilo City, offering to donate a sports car which the latter had long been wanting to buy
from the former. On August 5, 1997, Jose called Pedro by cellular phone to thank him for
his generosity and to inform him that he was sending by mail his letter of acceptance. Pedro
never received that letter because it was never mailed. On August 14, 1997, Pedro received a
telegram from Iloilo informing him that Jose had been killed in a road accident the day
before, August 13, 1997.
a) Is there a perfected donation?

There is no perfected donation. Under Article 748 of the Civil Code, the donation of a
movable may be made orally or in writing. If the value of the personal property donated exceeds
five thousand pesos, the donation and the acceptance shall be made in writing. Assuming that the
value of the thing donated, a sports car, exceeds P5,000, then the donation and the acceptance of
Jose must be made in writing. In this instance, the acceptance of Jose was not in writing;
therefore, the donation is void. Upon the other hand, assuming that the sports car costs less than
P5,000, then the donation may be made orally, but the simultaneous delivery of the car is needed
and there being none, the donation was never perfected.
b) Will your answer be the same if Jose did mail his acceptance letter but it was
received by Pedro in Manila days after Jose’s death?
Yes, the answer will be the same. If Jose’ mail containing his acceptance of the donation
was received by Pedro days after Jose’s death, then the donation is still void because under
Article 734 of the Civil Code, the donation is perfected the moment the donor knows of the
acceptance by the donee. The death of Jose before Pedro could receive the acceptance indicates
that the donation was never perfected. Under Article 746 of the Civil Code, acceptance must be
made during the lifetime of both the donor and the donee.
252. If a donation is to take effect after the donor’s death, does it necessarily follow
that it is in the nature of a donation mortis causa and should therefore follow the forms and
solemnities of wills?
No. Even if the donor says that the donation is to take effect after his death, where from the
body of the instrument of donation it is to be gathered that the main consideration of the donation
is not the death of the donor but rather the services rendered to him by the donee or his affection
for the latter, then the donation should be considered as inter vivos. The condition that the
donation is to take effect only after the death of the donor should be interpreted to mean that the
possession and enjoyment of the fruits of the property donated should take place only after the
donor’s death. (Vita v. Montanano, 194 SCRA 180 [1991])

253. X donated to Y a parcel of land which is embodied in a document entitled “Deed


of Donation Inter Vivos.” There is, however, a provision in the deed that the “donee shall
not sell or encumber the property within ten years after the death of the donor.” The
Register of Deeds subsequently cancelled the donor’s title and, in its place, issued a new one
in the name of the donee. That notwithstanding, X retained the owner’s duplicate copy of
the new title, as well as the property itself. Is the donation inter vivos or mortis causa?
The donation is mortis causa and not inter vivos. As such, it must comply with the
formalities of a will, and since it had not, the donation is void and could not effectively serve as
basis for the cancellation of the donor’s certificate of title and the issuance in its place of another
certificate of title in the name of the donee.
In the instant case, nothing of any consequence was transferred by the deed of donation to
Y, the ostensible donee. He did not get possession of the property donated. He did not acquire
the right to the fruits thereof, or any other right of dominion over the property. More importantly,
he did not acquire the right to dispose of the property -- this would accrue to him only after ten
years from the donor’s death. Indeed, he never even laid hands on the certificate of title to the
same. He was therefore simply a “paper owner” of the donated property. All these
circumstances, including the explicit provision of the deed of donation reserving the exercise of
rights of ownership to the donor and prohibiting the sale or encumbrance of the property until ten
10 years after his death – ineluctably lead to the conclusion that the donation in question is a
donation mortis causa, contemplating a transfer of ownership to the donee after the donor’s death.

254. Donor donated to Donee a parcel of land subject to a condition. When Donee
failed to comply with the condition, Donor sold the land to Buyer. Is the sale an act of
revocation of the donation?
No. The act of selling the property donated cannot be considered as a valid act of
revocation of the donation because a formal action in court to revoke the donation must be filed
by the donor pursuant to Article 764 of the Civil Code which speaks of an action that has a
prescriptive period of four years from non-compliance with the condition stated in the donation.
The rule that there can be automatic revocation without the benefit of a court action does not
apply in this case because the subject donation is devoid of any provision providing for automatic
revocation in the event of non-compliance with the condition set forth therein. Thus, a court
action is necessary to be filed within four years from the non-compliance with the condition
violated. (Magat v. Court of Appeals, February 1, 2002)
255. In 1975, Martha donated to her sons, Art, Ben and Cal a parcel of land subject to
the following conditions: a) the donation shall be irrevocable; b) the property donated shall
remain in the possession of the donor during her lifetime; c) the property shall not be sold
or mortgaged during the lifetime of the donor; and d) the donation shall take effect only
upon the donor’s death. The donees accepted the donation in the same public instrument.
Two years later, or in 1977, Martha sold the land to her eldest son, Art, who was one of
the donees in the donation. Accordingly, Martha sold the lot to Art in her honest belief that
the donation was mortis causa and not inter vivos. The sale resulted in the issuance of a
certificate of title in the name of Art. In 1985, Ben and Cal brought an action for the
annulment of the sale and reconveyance of property. Art defends on the ground of
prescription. He contends that more than four years have passed since the sale and
registration of the property and issuance of his title. He insists that an action for
reconveyance of property on the ground of fraud must be filed within four years from the
discovery of the fraud which is from the date of registration of the sale in 1977; and that the
same prescriptive period also applies to an action predicated on a trust relationship that is
rooted on fraud or breach of trust.
a) Is the donation inter vivos or mortis causa?

The donation is inter vivos. The express irrevocability of the donation is the distinctive
standard that identifies the donation as inter vivos. The other provisions which seemingly make
the donation mortis causa do not go against the irrevocable character of the subject donation.
The provisions which state that the donation will only take effect upon the death of the donor and
the prohibition to alienate, encumber, dispose or sell the property donated are provisions which
should be harmonized with its irrevocability. Suffice it to say that these provisions are only
necessary assurances that during the donor’s lifetime, the latter would still enjoy the right of
possession over the property; but his naked title has been passed on to the donees; and that upon
the donor’s death, the donees would get all the right to use and possess the same.
Another indication that the donation is inter vivos is the acceptance of the donation by the
donees. An acceptance is a mark that the donation is inter vivos. On the other hand, donations
mortis causa, being in the form of a will, are not required to be accepted by the donees during the
donor’s lifetime.
b) Has the action prescribed?

The action has not yet prescribed. When one’s property is registered in another’s name
without the former’s consent, an implied trust is created by law in favor of the true owner. Article
1144 of the Civil Code provides for a ten-year prescriptive period from the time the right of
action accrues in case of a) a written contract; b) an obligation created by law; and c) a judgment.
Thus, an action for reconveyance prescribes in ten years from the issuance of the title. It is only
when fraud has been committed that the action will be barred after four years.

However, the four-year prescriptive period is not applicable to the case at bar because there
is no fraud in this case. The records do not show that Martha, the donor, and Art, the donee, ever
intended to defraud Ben and Cal with respect to the sale and ownership of the subject property.
On the other hand, the sale was grounded upon their honest but erroneous interpretation of the
deed of donation that it is mortis causa, not inter vivos, and that the donor still had the right to sell
or dispose of the donated property and to revoke the donation. There being no fraud, the trust
relationship between the donor and the donees, including the buyer Art, the action for
recoveyance prescribes in ten years. Considering that the certificate of title in the name of Art
covering the subject property was issued only in 1977, the filing of the action in 1985 was well
within the ten-year prescriptive period.

c) Is the sale to Art a valid act of revocation of the donation?


The sale of the property to Art cannot be considered as a valid act of revocation of the deed
of donation because a formal complaint to revoke the donation must be filed pursuant to Article
764 of the Civil Code which speaks of an action that has a prescriptive period of four years from
the non-compliance with the condition stated in the deed of donation. The rule that there can be
automatic revocation without benefit of a court action does not apply to the case at bar because
the subject deed of donation is devoid of any provision providing for automatic revocation in the
event of non-compliance of the condition violated. (Austria-Magat v. Court of Appeals 375
[2002])
256. Conchita executed in favor of Nicolas a document denominated, “Deed of
Donation Inter Vivos” involving a parcel of land. The deed of donation contains a provision
that it becomes effective only upon the death of the donor, and that in the event the donee
should die before the donor, the donation shall be deemed automatically rescinded and of no
further force and effect.

After Conchita’s death, her heirs immediately instituted an action seeking the
annulment of the donation. They contend that the donation is mortis causa and not inter
vivos and therefore void for failure to comply with the formalities of wills.
Is the donation inter vivos or mortis causa?
The donation is mortis causa. In a donation mortis causa, the right of disposition is not
transferred to the donee while the donor is still alive. In determining whether a donation is one of
mortis causa, the following characteristics must be taken into account: a) it conveys no title or
ownership to the transferee before the death of the transferor, or what amounts to the same thing;
b) the transferor should retain the full or naked ownership and control of the property while alive;
c) before his death, the transfer should be revocable by the transferor at will; and d) the transferor
should be void if the transferor should survive the transferee.
In the present case, the nature of the donation as mortis causa is confirmed by the fact that
the donation does not contain any clear provision that intends to pass proprietary rights to Nicolas
prior to Conchita’s death. The phrase “to become effective upon the death of the donor” admits of
no other interpretation but that Conchita did not transfer the ownership of the property to Nicolas
during her lifetime. Considering that the disputed donation is a donation mortis causa, the same
partakes of the nature of testamentary provisions and as such, must be executed in accordance
with the requisites on solemnities of wills and testaments under the Civil Code. (Maglasang v.
Heirs of Cabatingan, G. R. No. 131953, June 5, 2002)
257. H and W are the conjugal owners of a parcel of unregistered land. In 1973, they
executed in favor of M, out their love and affection for the latter, a deed of donation inter
vivos covering their property. The deed of donation contains two conditions: a) that the
donors shall continue to enjoy the fruits of the land during their lifetime; and b) that the
donee cannot sell the land during the lifetime of the donors without their prior consent and
approval. After accepting the donation in the same instrument of donation, M caused the
transfer of the tax declarations of the properties in her name and paid the corresponding
land taxes. Five years later, the couple executed a document revoking the donation on the
ground that their intention was for the donation to take effect upon their death.
a) Is the donation mortis causa or inter vivos?

The donation is inter vivos. First, the granting clause shows that H and W donated the
properties to M out their love and affection for the latter. This is a mark of a donation inter vivos.
Second, the reservation of a lifetime usufruct indicated that the donors intended to transfer the
naked ownership of the properties to the donee. What was the need for such reservation if the
donors remained as the owners of the properties? Lastly, the donee accepted the donation. An
acceptance clause is a mark that the donation is inter vivos. Acceptance is a requirement for a
donation inter vivos. A donation mortis causa, being in the form of a will, is not required to be
accepted by the donee during the donor’s lifetime.
b) What is the legal effect of the condition that the donee cannot dispose of the
properties without the prior consent of the donors?
The condition does not in any way diminish the ownership of the donee over the properties.
The reserved right of the donors to give consent was merely intended to protect their usufructuary
interest. In Alejandro v. Geraldez, 78 SCRA 245 [1977], the Supreme Court emphatically ruled
that a limitation on the right to sell during the donor’s lifetime implies that ownership had passed
to the donees and the donation is already effective during the donor’s lifetime.

c) Is the revocation valid?


The revocation is not valid. A valid donation, once accepted, becomes irrevocable, except
on account of officiousness, failure by the donee to comply with the charges imposed in the
donation, or ingratitude. The donors did not invoke any of these reasons in their deed of
revocation. They simply stated that their intention was to convey the properties mortis causa.
Moreover, the supposed revocation had no legal effect inasmuch as the donors did not institute an
action to revoke the donation in accordance with Article 769 of the Civil Code. (Gestopa v. Court
of Appeals, 342 SCRA 105 [2000])
258. Carmen executed in favor of Violy a document denominated as “Deed of
Donation Inter Vivos” involving a parcel of land. The deed of donation consists of two
pages. The first page contains the donation itself, and is signed at the bottom portion by
Carmen as donor, by Violy as donee, and by two instrumental witnesses. The second page
contains the acknowledgment portion, which states merely that Carmen personally
appeared before the notary public and acknowledged that the donation is her free and
voluntary act and deed. Appearing on the left-hand margin of the second page were the
signatures of Carmen and one of the witnesses, and on the right-hand margin the signatures
of Violy and the other witness.
After Carmen’s death, her heirs instituted an action assailing the validity of the
donation. They argue that the deed of donation, although signed by both Catalina and Violy,
was acknowledged before a notary public only by the donor.
Is the donation valid?
Yes. It is undisputed that the second page of the assailed deed donation, on which the
acknowledgment appears, was signed by the donor and one witness on the left-hand margin, and
by the donee and the other witness on the right-hand margin. Surely, the requirement under
Section 112, paragraph 2 of P.D. 1529 that the contacting parties and their witnesses should sign
on the left hand margin of the document is not absolute. The intendment of the law merely is to
ensure that each and every page of the instrument is authenticated by the parties. The requirement
is designed to avoid the falsification of the contract after the same has already been duly executed
by the parties.

Simply put, the specification of the location of the signature is merely directory. The fact
that one of the parties signs on the wrong side of the page does not invalidate the document. The
purpose of authenticating the page is served, and the requirement of the law is deemed
substantially complied with.
In the same vein, the lack of an acknowledgment by the donee before the notary public
does not also render the donation null and void. The instrument should be treated in its entirety. It
cannot be considered a private document in part and a public document in another part. The fact
that it was acknowledged before a notary public converts the deed of donation in its entirety a
public instrument. The fact that the donee was not mentioned by the notary public in the
acknowledgment is of no moment. To be sure, it is the conveyance that should be acknowledged
as a free and voluntary act. In any event, the donee signed on the second page, which contains the
acknowledgment only. Her acceptance, which is explicitly set forth on the first page of the
notarized deed of donation was made in a public instrument. (Quilala v. Alcantara, 371 SCRA 311
[2001])
259. What is an inofficious donation?

An inofficious donation is one that impairs or prejudices the legitime or successsional


rights of compulsory heirs. There are two kinds:
a) Those referred to in Art. 760 of the Civil Code (where the donor at the time of the
donation either had no children or thought he had no more) Here the value of the estate of the
donor to be considered is its value at the time of the birth, appearance, or adoption of a child. The
action to reduce this kind of inofficious donation prescribes after four years from the birth of the
first child, or from legitimation, recognition, or adoption, or from judicial declaration of filiation,
or from the time information is received regarding the existence of a child believed to be dead.
This action cannot be renounced, and is transmissible to the heirs of the donor.
b) Those referred to in Arts. 771 and 752 (where the donor had at least one child already at
the time he made the donation). Here the value of the estate of the donor to be considered is its
value at the time of death of the donor. The action to reduce this kind of donation prescribes in
five years after the donor’s death under Article 1149 of the Civil Code.
260. Pedro has no child. In 1990, he gave a donation of P10,000 to his friend. At the
time of the donation, Pedro had P100,000. Therefore, after the donation, he had P90.000. In
1993, Pedro adopted a minor child. At the time he made the adoption, he had only P5,000.
Should the donation be reduced? If so, by how much? Why? Within what period?
Since Pedro had only P5,000 left at the time of the adoption, his total estate at the time was
P15, 000 (P5,000 plus P10,000 given as donation). Since the legitime of the adopted child is one-
half of the estate (P7,500) it follows that the free portion is also only P7,500. Therefore, the
donation of P10,000 must be reduced by P2,500. The action must be filed within four years from
1993, the date when the adoption was made.
261. What are the two kinds of revocable donations?

The two kinds of revocable donations are as follows:


a) Failure of donee to comply with any of the conditions imposed by the donor. The action
to revoke prescribes after four years from the non-compliance with the condition, and may be
transmitted to the heirs of the donor, and maybe exercised against the donee’s heirs. (Art. 764,
Civil Code)
b) Acts of ingratitude committed by the donee. (Art. 765, Civil Code)

262. May the heirs of the donor sue the heirs of the donee for revocation of the
donation if there is a violation of any restriction in the deed of donation?
Yes. Under Article 764 of the Civil Code, the donor or his heirs have the personality to
question the violation of any restriction in the deed of donation. Consequently, the right to revoke
may be transmitted to the heirs of the donor and may be exercised against the heirs of the donee,
and the action prescribes after four years from the violation of the condition.
263. Can the donor impose upon the donee the condition that the property shall not
be alienated within a period of 100 years or otherwise the property shall revert to the
donor’s estate?
No. The restriction is patently unreasonable and constitutes an undue restriction on the
right of the donee to dispose of the property donated, which right is an indispensable attribute of
ownership. Such a prohibition against alienation, in order to be valid, must not be perpetual or
for an unreasonable period of time.

WILLS AND SUCCESSION

264. When is succession to the estate of a deceased person transmitted?


The right to the succession is transmitted from the moment of the death of the decedent
(Art. 777, Civil Code) thru testamentary, intestate, or mixed succession (Art. 778, Civil Code)
265. Seller and Buyer enter into a contract of sale of a parcel of land. Despite Buyer’s
full payment of the purchase price, however, Seller refuses to execute the proper deed of
sale. Buyer then sues for specific performance. Seller defends on the ground that the
property forms part of his father’s estate, in respect of which a petition for probate is
pending in court, and that consequently, the contract of sale is void because it was not
approved by the probate court. Both Seller and Buyer were aware of the pending probate
proceedings at the time of the execution of the contract of sale. Should the motion to dismiss
be granted?

Motion denied. The rule is settled that hereditary rights are vested in the heir or heirs from
the moment of the decedent’s death. (Art. 777, Civil Code) In the instant case, Seller became the
owner of his hereditary share the moment his father died. Thus, the lack of judicial approval does
not invalidate the contract of sale because S has the substantive right to sell the whole or part of
his share in the estate of his late father. Furthermore, the rule is settled that the sale made by an
heir of his share in the inheritance, subject to the pending administration, in no wise stands in the
way of such administration (Opulencia v. Court of Appeals, 293 SCRA 385 [1998])

266. Donor executes a document denominated as “Deed of Donation Inter Vivos”


covering a parcel of land. The Deed of Donation is signed by two witnesses and contains the
following provision:

“That, for and in consideration of the love and affection of the


DONOR for the DONEE, the latter being adopted and having been
brought up by the DONOR, transfer and convey, BY WAY OF
DONATION, unto the DONEE the property above-described, to become
effective upon the death of the DONOR, but in the event that the DONEE
should die before the DONOR, the present donation shall be deemed
rescinded and of no further force and effect; Provided, that at any time
during the lifetime of the DONOR or anyone of them who should survive,
they could use, encumber or even dispose of the parcel of land herein
donated.”
Is the donation inter vivos or mortis causa?

The donation is mortis causa for the following reasons:

1) It conveys no title or ownership to the donee before the death of the donor because the
latter retains the full or naked ownership and control of the property while alive;

2) Before the death of the donor, the transfer is revocable by the donor at will; and

3) The transfer is void if the donor should survive the donee.

The phrase in the Deed of Donation “to become effective upon the death of the DONOR”
admits of no other interpretation than to mean that Donor did not intend to transfer the ownership
of the property to Donee during the donor’s lifetime. Furthermore, the statement in the Deed of
Donation reading “anytime during the lifetime of the DONOR or anyone of them who should
survive, they could use, encumber or even dispose of any or even all the parcels of land herein
donated” means that Donor retained ownership of the lot and reserved in him the right to
dispose it. For the right to dispose of a thing without other limitations than those established by
law is an attribute of ownership. The phrase in the Deed of Donation “or anyone of them who
should survive” is out of sync. For the Deed of Donation clearly stated that it would take effect
upon the death of the donor; hence, said phrase could only have referred to the donor.

The donation being then mortis causa, the formalities of a will should have been
observed but they were not; hence the same is void. Being void, it transmits no right to the donee.

267. Is there a need to state in the attestation clause of a notarial will that the person
delegated by the testator to sign in his behalf did so in the presence of the testator?

No. A statement in the attestation clause of a notarial will that the person delegated by the
testator to sign in his behalf did so in the presence of the testator is not essential for the validity of
said will. It is enough that it be proved in court that this was what happened.

268. The attestation clause of a will reads: “x x x and he (the testator) signed at the
bottom of the aforesaid will in our presence and we at his request did the same in his presence
and in that of each other as witnesses to the will, and lastly, the testator, as well as we, as
witnesses, signed in the same manner on the left margin of each sheet.” Is the attestation
clause sufficient?

The attestation clause is sufficient because the words “in the same manner” mean nothing
but that the testator and the witnesses signed on the left margin of each sheet of the will “in the
same manner” in which they signed at the bottom thereof, that is, the testator in the presence of
the witnesses and the latter in the presence of the testator and of each other (Fernandez v. Vergel
de Dios 46 Phil. 922 [1936)

269. Juan executed a will in Filipino consisting of two pages. The first page contains
the disposition of his estate, while the second page contains the attestation clause worded as
follows:
PATUNAY NG MGA SAKSI

Ang kasulatang ito, na binubuo ng ____ dahon pati ang huling


dahong ito, na ipinapahayag sa amin ni Juan dela Cruz,
tagapagpamana, na siya nyang Huling Habilin, ngayong Ika-10 ng
Agosto 2010, ay nilagdaan ng nasabing tagapagpamana sa ilalim ng
kasulatang nabanggit at sa kaliwang panig ng lahat at bawa’t dahon, sa
harap ng lahat at bawat isa sa amin, at kami namang mga saksi ay
lumagda sa harap ng nasabing tagapagpamana at sa harap ng lahat at
bawa’t isa sa amin, sa ilalim ng nasabing kasulatan at sa kaliwang panig
ng lahat at bawa’t dahon ng kasulatang ito.

The validity of the will is assailed on the ground that the attestation clause does not
contain the number of pages on which the will is written. Is the defect fatal?

Yes. The law declares that one of the essential facts which must be stated in the
attestation clause is the number of pages upon which the will is written. The omission of such a
fact goes into the very essence of the attestation clause itself; in other words, the defect is
substantial or essential. It is, of course, true that Art. 809 of the Civil Code provides that “in the
absence of bad faith, forgery, or fraud, or undue or improper pressure or influence, defects or
imperfections in the form of attestation or in the language used therein shall not render the will
invalid if it is proved that the will was in fact executed and attested in substantial compliance with
all of the requirements of Art. 805.” But it is clear from the language of the article itself that this
rule, which is sometimes known as the “doctrine of liberal interpretation,” is applicable only to
two kinds of defects of attestation clauses – first, defects and imperfections in the form of the
attestation; and second, defects and imperfections in the language used therein. It is evident that
the defect or imperfection of the attestation clause of the will of Juan is neither a defect in the
form nor in the language used therein. Consequently, the defect is fatal to the validity of the will.

270. Article 805 of the Civil Code specifically provides that the attestation clause is a
requirement separate from the subscription of the will and the affixing of signatures on the
left-hand margins of the pages of the will. Distinguish one from the other.

Article 805 of the Civil Code particularly segregates the requirement that the instrumental
witnesses sign each page of the will from the requisite that the will be attested and subscribed by
the instrumental witnesses. The respective intents behind these two classes of signatures are
distinct from each other. The signatures on the left hand corner of every page signify, among
others, that the witnesses are aware that the page they are signing forms part of the will. On the
other hand, the signatures to the attestation clause establish that the witnesses are referring to the
statements contained in the attestation clause itself. Indeed, the attestation clause is separate and
apart from the disposition of the will. An unsigned attestation clause results in an unattested will.
Even if the instrumental witnesses signed the left-hand margin of the page containing the
unsigned attestation clause, such signatures cannot demonstrate these witnesses’ undertaking in
the clause, since the signatures that do appear on the page were directed towards a wholly
different avowal.

271. Who is required to sign the attestation clause?

Under Article 805 of the Civil Code, it is the witnesses, and not the testator, who are
required to state the number of pages used upon which the will is written; the fact that the testator
had signed the will and every page thereof; and that they witnessed and signed the will and all the
pages thereof in the presence of the testator and of one another. The only proof in the will that
the witnesses have stated these elemental facts would be their signatures on the attestation clause.
(Aluad v. Aluad, G.R. No. 176943. October 17, 2008)

272. Is it necessary that the notary public be present when the testator executes his
will?

There is no requirement under the law that the notary public be present at the execution of
the will; his presence is required only for the acknowledgment.

273. Is the notary public required to read the will, or to know the contents thereof,
before he notarizes the same?

The notary public is not required, not even allowed, to read the will or to know the
contents thereof, unless the testator permits him to do so. The only instance when the notarty
public is required to read the will is in the case contemplated by Article 808 of the Civil Code --
regarding a blind testator.

274. May the notary public be an instrumental witness in a last will and testament?

No. The notary public before whom the will is acknowledged cannot be considered as the
third instrumental witness since he cannot acknowledge before himself his having witnessed and
signed the will. If the third witness were the notary public himself, he would have to acknowledge
his having signed the will in front of himself. This cannot be done because he cannot split his
personality into two so that one will appear before the other to acknowledge his participation in
the making of the will. Furthermore, the function of the notary public is, among others, to guard
against illegal or immoral arrangements. This function would be defeated if the notary public is
one of the instrumental witness. (Cruz v. Villasenor, 54 SCRA 31 [1973])

275. In the execution of a holographic will, may the mechanical act of drafting the
will be left to someone other than the testator?

Yes. The mechanical act of drafting a holographic will may be left to someone other than
the testator, as long as the testator himself copies the draft in his own handwriting, dates it, and
signs it.

276. How many witnesses are necessary for the probate of a holographic will?

In the probate of a holographic will, it shall be necessary that at least one witness who
knows the handwriting and signature of the testator explicitly declare that the will and the
signature are in the handwriting of the testator. If the will is contested, at least three of such
witnesses shall be required.

In the absence of any competent witness referred to in the preceding paragraph, expert
testimony may be resorted to. (Art. 811, Civil Code)

277. If a holographic will is contested, is the requirement under Article 811 of the
Civil Code that at least three witnesses explicitly declare that the signature in the will is the
genuine signature of the testator mandatory or permissive?
The requirement is mandatory because of the use of the word “shall” in Article 811 of the
Civil Code. Laws are enacted to achieve the intended goal and to guide against an evil or mischief
that it aims to prevent. In the instant problem, the goal to achieve is to give effect to the wishes
of the testator and the evil to be prevented is the possibility that unscrupulous individuals will
employ means to defeat the wishes of the testator. (Codoy v. Calugay, 312 SCRA 333 [1999])

278. The probate of a will is opposed on the ground that the testator was, at the time
of the execution of the will, extremely ill, in an advanced stage of tuberculosis complicated
with severe intermittent attacks of asthma; that he was too sick to rise unaided from his
bed; that the needed assistance even to raise himself to a sitting position; and that during
the paroxysms of asthma he could not speak. Given these physical conditions of the testator,
should his will be admitted to probate?

Yes. The physical weakness of the testator in no way establishes his mental incapacity or
lack of testamentary capacity. Testamentary capacity is the capacity to comprehend the nature of
the transaction in which the testator is engaged at the time, to recollect the property to be disposed
of, and the persons who would naturally be supposed to have claims upon the testator.

279. What are joint wills? Are they valid in the Philippines?

Joint wills are those which contain in one instrument the will of two or more persons
jointly signed by them. They are void under Article 818 of the Civil Code.

Moreover, joint wills executed by Filipinos in a foreign country shall not be valid in the
Philippines, even though authorized by the laws of the country where they may have been
executed. (Art. 819, Civil Code)

280. What are the basic principles in the institution of heirs?

The following are the basic principles in the institution of heirs: 1) Equality: Heirs who
are instituted without a designation of share inherit in equal parts; 2) Individuality: Heirs who
are collectively instituted are deemed individually instituted, unless the contrary intention appears
3) Simultaneity: When several heirs are instituted, they are instituted simultaneously and not
successively. (Arts. 846, 847, 849, Civil Code)

281. Juan executes a document in his own handwriting denominated as “Kasulatan


sa Pag-aalis ng Mana.” The pertinent portion of the document reads as follows:

“Ako, si Juan Tutri, Filipino, may asawa, naninirahan sa 465-A


Flores St., Ermita, Manila, at nagtataglay ng maliwanag na pag iisip
at disposisyon, ay tahasan at hayagang inaalisan ko ng lahat at
anumang mana ang panganay kong anak na si Alfredo dahil siya ay
naging lapastangan sa akin at ilang beses s’yang nagsalita ng masama
sa harapan ko at kapatid niya na si Virginia na labis kong ikinasama
ng loob ko.”

Alfredo opposes the admission of the will on the ground that it does not contain any
disposition of estate and therefore does not meet the definition of a will under Article 783 of
the Civil Code. Alfredo maintains that the will only shows an alleged act of disinheritance
by Juan of his son, Alfredo, and nothing else; that all other compulsory heirs were not
named nor instituted as heirs, legatees or devisees, hence; there is preterition which would
result to intestacy.

a) Is the document a valid holographic will?

The document is a valid holographic will. A holographic will, as provided under Article
810 of the Civil Code, must be entirely written, dated, and signed by the hand of the testator
himself. It is subject to no other form, and may be made in or out of the Philippines, and need not
be witnessed. An intent to dispose mortis causa can be clearly deduced from the terms of the
instrument, and while it does not make an affirmative disposition of the testator’s property, the
disinheritance results in the disposition of the property of the testator in favor of those who would
succeed in the absence of Alfredo.

It is a fundamental principle that the intent or the will of the testator, expressed in the
form and within the limits prescribed by law, must be recognized as the supreme law in
succession. Accordingly, the document, even if captioned as Kasulatan sa Pag-aalis ng Mana,
was intended by Juan to be his last testamentary act and was executed by him in accordance with
law in the form of a holographic will. Unless the will is probated, the disinheritance of Alfredo
cannot be given effect.

b) Is there a valid disinheritance of Alfredo?

Yes. For disinheritance to be valid, Article 916 of the Civil Code requires that the same
must be effected through a will wherein the legal cause therefore shall be specified. With regard
to the reason for disinheritance that was stated by Juan in his document, the same can be
considered a form of maltreatment of Juan by his son, Alfredo, and that the matter presents a
sufficient cause for the disinheritance of a child or descendant under Article 919 of the Civil
Code.

c) Is there preterition of compulsory heirs in the will?

No. Juan’s holographic will was his last expression to bequeath his entire estate to all his
compulsory heirs, with the sole exception of Alfredo. Also, Juan did not institute an heir to the
exclusion of his other compulsory heirs. The mere mention of the name Virginia, Juan’s daughter,
did not operate to institute her as a universal heir. Her name was included plainly as a witness to
thealteration between Juan and his son, Alfredo.

Considering that the document is Juan’s holographic will, and that the law favors testacy
over intestacy, the probate of the will cannot be dispensed with. Thus, unless the will is probated,
the rights of a person to dispose of his property may be rendered nugatory. (Seangio v. Reyes, 508
SCRA 177 [2006])

282. The testator’s Last Will and Testament contains the following disposition: “I
hereby institute as my heir my brother Juan who is in prison for having killed my political
enemy.” The testator himself had nothing to do with the crime, which is the sole
responsibility of his brother, Juan. Is the institution valid?

The institution is valid. The mere statement of a cause contrary to law will not invalidate
a will nor invalidate an institution, so long as it does not appear in the will that such illegal cause
is the only motivating factor for the institution. The principle underlying the rule on the statement
of a false cause under Article 850 of the Civil Code should also apply in the case of an illegal
cause, if the true cause is the generosity of the testator, and the disposition is essentially based on
the affection of the testator, the mere statement of an illegal cause should not impair the
institution. But if it clearly appears from the will itself that the testator’s only reason for making
the disposition is the illegal cause, then the disposition should be void.

283. Uncle institutes Nephew as his sole heir “so that upon my death and after the
probate of this will he will receive the properties composing my hereditary estate, that he
may enjoy them with God’s blessing and my own.” Uncle’s will provides that should
Nephew die, “I order that my whole estate shall pass unimpaired to his surviving children in
so far as it is legally possible.” Uncle’s will further provides that “Should Nephew die after
me while his children are still in their minority, the estate shall be administered by the
persons named herein.”

Is this a simple substitution or a fideicommissary substitution?

The substitution is a fideicommissary substitution. The will contemplates the enjoyment


of the estate by the heir instituted during his lifetime, with the only proviso that he should not
dispose of it because its transmission is limited to his children, and it is provided that the whole of
it should pass to them unimpaired. It also contemplates the survivorship of the heir. All the
requisites of a fideicommissary substitution are present.

284. What is preterition? What are its effects?

Preterition or pretermission is the omission, whether intentional or not, of a compulsory


heir in the direct line in the inheritance of a person.

Preterition of a compulsory heir annuls the institution of heirs, but legacies and devices
shall be valid insofar as they are not inofficious. (Art. 854, Civil Code)

285. Mrs. Santos, a widow, has three children; namely, Benny, Chito and David. Her
entire estate is valued at P1 million. She executes a Last Will and Testament instituting
Benny and Chito as her universal heirs and gives a legacy of P100,000 to her friend, Ellen.
How should the estate of Mrs. Santos be divided upon her death?

Under the factual circumstances of the problem, there was preterition of David. Hence,
the institution of Benny and Chito is annulled but the legacy of P100,000 to Ellen shall be
respected for not being inofficious. The remaining P900,000 will be divided equally among
Benny, Chito and David.

Benny - P300, 000

Chito - P300, 000

David - P300, 000

Ellen - P100,000

286. Arthur died in 1990. In his will, he instituted his legitimate son, Bert, as his sole
heir. He omitted his spouse, Celia, his illegitimate child, Dario, and his adoptive daughter,
Evelyn. In 1988, however, Arthur donated to Evelyn a parcel of land valued at P200,000 and
gave Dario P100,000 for the payment of his debt. The residue of Arthur’s estate at the time
of his death is P900,000. Distribute Arthur’s estate.

Although there is no question that Dario is a compulsory heir in the direct line, the facts
show, however, that he had received a donation inter vivos of P100,000 from the testator. The
same thing can be said as regards Evelyn. Under the Domestic Adoption Act of 1998 (R.A. 8552),
in legal or intestate succession, the adoptee shall have reciprocal rights of succession without
distinction from legitimate filiation. In the case under consideration, Evelyn already received a
donation inter vivos of a parcel of land valued P200,000.

The essence of preterition is that the omitted heir must be totally deprived impliedly of
his legitime. Here, there is no total deprivation. With respect to Celia, her omission will not result
in preterition since a wife is not a compulsory heir in the direct line. However, such omission will
result in a partial annulment of the institution of heir to the extent that the legitime of the wife is
prejudiced.

To determine the legitime of the compulsory heirs, we must collate the value of the
property donated (P200,000 + P100,000 = P300,000) to the net estate (P900,000). The result is
P1.2 million. The legitime of Bert and Evelyn is ½ of the estate or P600,000 (P300,000 each).
With respect to Dario, his legitime is ½ of the individual shares of Bert and Evelyn or P150,000.
Evelyn can still demand P100,000 while Dario can still ask P50,000 to complete their legitimes.
(Art. 906, Civil Code) Celia is entitled to her share amounting to P300,000 which is equal to the
shares of Bert and Evelyn.

287. Distinguish between modal institution and substitution of heirs.

A modal institution of an heir is made for a certain purpose or cause; (Arts. 871 and 882,
Civil Code) while substitution is the appointment of another heir so that he may enter into the
inheritance in default of the heir originally instituted. (Art. 857, Civil Code)

288. By virtue of a codicil appended to his will, Florante devised to Laura a tract of
sugar land, with the obligation on the part of Laura or her heirs to deliver to Maria Clara a
specified volume of sugar per harvest during Maria Clara’s lifetime. It is also stated in the
codicil that in the event the obligation is not fulfilled, Maria Clara should immediately seize
the property from Laura or the latter’s heirs and turn it over to Florante’s compulsory
heirs. Laura failed to fulfill the obligation under the codicil. Maria now brings an action
against Laura for the reversion of the tract of land. Does Maria Clara have a cause of action
against Laura?

Yes. This is a case of a testamentary disposition subject to a mode and the will itself
provides for the consequence if the mode is not complied with. To enforce the mode, the will
itself gives Maria Clara the right to compel the return of the property to the heirs of Florante.
(Rabadilla v. Coscoluella, 334 SCRA [2000])

289. Margarita died with a will. She left no compulsory heirs and, consequently, was
completely free to dispose of her properties, without regard to legitimes. One of the clauses
in her will perpetually prohibits the sale or alienation or mortgage by her legatees or
devisees of the properties specified therein. Is the clause valid?

The perpetual prohibition is valid only for 20 years. The trust stipulated in Margarita’s
will perpetually prohibiting the sale or alienation or mortgage of the properties violated Articles
867 and 870 of the Civil Code. Paragraph 4, Article 1013 of the same code which specifically
allows a perpetual trust is inapplicable. Suffice it to state that the article is among the Civil Code
provisions on intestate succession, specifically on the State inheriting from a decedent, in default
of persons entitled to succeed. Under this article, the allowance for a permanent trust, approved
by a court of law, covers property inherited by the State by virtue of intestate succession. The
article does not cure a void testamentary provision which did not institute an heir. Accordingly,
the article cannot be applied to dispose of herein decedent’s properties.

In the instant case, Margarita’s estate cannot be subjected indefinitely to a trust because
the ownership thereof would then effectively remain with her even in the afterlife. (Orendain v.
Estate of Rodriguez, June 30, 2009)

290. If the testator imposes upon the instituted heir the absolute condition not to
contract a first or subsequent marriage, is the condition valid?

An absolute condition not to contract a first or subsequent marriage shall be considered as


not written, unless such condition has been imposed on the widow or widower by the deceased
spouse or by the latter’s ascendants or descendants (Art. 874, Civil Code)

291. Husband institutes Wife as his universal heir on condition that when Wife
becomes a widow, she must never remarry. Two years after Husband’s death, Wife
remarries. Is Wife entitled to inherit from Husband’s estate?

Insofar as the legitime is concerned, Wife is legally entitled to inherit it because of the
rule that no condition can be imposed on the legitime. As to the free portion, Wife loses it by her
remarriage since the absolute condition disallowing her remarriage was imposed by the deceased
husband. Therefore, her remarriage makes her lose the free portion. (Art. 874, Civil Code)

292. H institutes her widowed sister as one of his heirs on condition that the latter
will not get married again. Suppose H dies and his sister has remarried, is she entitled to the
inheritance?

Yes, because the condition is deemed not written. The rule under Art. 874 of the Civil
Code is that an absolute condition not to contract a first or subsequent marriage shall be
considered as not written unless such condition has been imposed on the widow or widower by
the deceased spouse, or by the latter’s ascendants or descendants. The condition that the sister
shall not remarry for her to get the inheritance is void because it is contrary to good morality and
public policy.

293. What is meant by disposicion captatoria?

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

294. What is the effect of an impossible condition in a will? Is the rule the same in
civil obligations?

When attached to a testamentary disposition, an impossible condition shall be considered as


not imposed and shall in no manner prejudice the heir, legatee or devise, even if the testator
should otherwise provide (Art. 873, Civil Code) However, when it is attached to a civil obligation
in such manner that such obligation shall depend upon the fulfillment of such condition for its
perfection, the very existence of said obligation is affected; according to the law, it is annulled.
(Art. 1183, Civil Code)

295. What is meant by reserva troncal?

Reserva troncal is a system of reserva by virtue of which an ascendant who inherits from
his descendant property which the latter may have acquired by gratuitous title from another
ascendant, or a brother or a sister, is obliged to reserve such property as he may have acquired by
operation of law for the benefit of relatives who are within the third degree and who belong to the
line from which said property came. (Art. 981, Civil Code)

296. What are the personal elements of reserva troncal?

There are four persons involved in reserva troncal: a) the ascendant or brother or sister
from whom the property came (called the origin); b) the descendant who acquired the property
gratuitously (called the propositus); c) the ascendant who in turn acquired the property from the
descendant by operation of law (called the reservoir or reservista); and d) the relatives within the
third degree belonging to the line from which the property came (called the reservatarios).

297. What are some of the rules in reserva troncal?

The following are some of the special rules in reserva troncal: a) The propositus must be
a legitimate descendant (or legitimate half-brother or half-sister) of the origin of the property; b)
The reservista has the power to alienate or encumber the reservable real property, but subject to
the reserva, that is, the reservatario can get the real property from the transferee as soon as
ownership is transferred to such reservatario, without prejudice to the Land Registration Act and
the Mortage Law; and c) In reseva troncal, the reservatario inherits the reservable property from
the propositus, not from the reservista.

298. In reserva troncal, is a relative by affinity of the origin of the property entitled
to the reservable property?

No. Relationship will not be sufficient to establish one’s right as a reservatario. There
must be a double relation of consanguinity, i.e., the reservatario should be related by blood not
only to the descendant but also to the ascendant, or brother or sister from whom the property
came. Only then can he be considered as belonging to the line from whence the property came.

299. Suppose several persons qualify as reservatarios, in whose favor should the
reserved property be adjudicated?

The rules of intestate succession shall apply; i.e., the nearer relative excludes the farther
relative. (Art. 962, par. 1, Civil Code) This is so because Article 891 of the Civil Code merely
determines the group to whom the reserved property should go. It does not determine the rights of
such relatives.

300. Chiquito died leaving an estate valued at P10 million. His widow, Chichay, gave
birth to a child four months after his death, but the child died five hours after birth. Two
days after the child’s death, Chichay also died because she had suffered from difficult
childbirth. The estate of Chiquito is now being claimed by his parents and Chichay’s
parents. Who is entitled to Chiquito’s estate?

Half of Chiquito’s estate will go to the parents of Chichay as their inheritance from the
latter, while the other half will be inherited by Chiquito’s parents as reservatarios of the reserved
property which Chichay inherited from her child.

When Chiquito died, his heirs were his wife and the unborn baby child. The unborn child
is entitled to inherit because the inheritance was favorable to it and it was born alive later though
it lived only for five hours. Chichay inherited half of the estate while the unborn child inherited
the other half. When the child died, it was survived by its mother, Chichay. As the only heir,
Chichay inherited, by operation of law, the estate of the child consisting of its P5 million
inheritance from Chiquito’s estate. In the hands of Chichay, what she inherited from her child was
subject to reserva troncal for the benefit of relatives of the child within the third degree of
consanguinity and who belong to the family of Chiquito, the line where the property came from.

When Chichay died, she was survived by her parents as her only heirs. Her parents will
inherit her estate consisting of the P5 million she inherited from Chiquito. The other P5 million
she inherited from her child will be delivered to the parents of Chiquito as beneficiaries of the
reserved property.

301. Upon the death of Father, he left to Son a parcel of land. Subsequently, Son died
without any issue, and Mother inherits the property. Mother now seeks to register the
property in her own name on the ground that she owns it. Brother, a brother of Father and
uncle of Son, opposes the registration on the ground that the property is reservable under
Article 891 of the Civil Code. Should the property be registered in the name of Mother?

Yes, but the right to reservation in Brother’s favor must be recorded on the title. The
ascendant (such as Mother) who inherits from a descendant (such as Son), whether by the latter’s
wish or by operation of law, acquires the inheritance by virtue of a title perfectly transferring
absolute ownership. All the attributes of the rights of ownership belong to Mother exclusively:
use, enjoyment, disposal, and recovery. Article 891 of the Civil Code on reserva troncal says
nothing more than the ascendant must make the reservation.

302. Among the properties in the estate of P, who died intestate and without issue,
were a farm, which came from his father, F, and a house, which was donated to him by his
grandfather, G, F’s father. In the partition of P’s inheritance, the house was allotted to F and
the farm to M, P’s mother. Upon the death of F and M, who were simultaneously killed in a
car accident, the farm was claimed by G and H, the latter being a child of F and M born
after P’s death, while the house was claimed also by G and H and I, the latter being a child
of M by a prior marriage. Who owns the farm and the house?

As to the house, this property was acquired by P from his grandfather, G, and was
transmitted by P to F, his father. There is no reserva troncal because there is no change of line.
Hence, when F died, H alone, as F’s heir, is entitled to inherit the house.

With respect to the farm, the property originally came from F, the father of P, and from P
it went to his mother, M. There is a change of line from the paternal to the maternal line. The farm
is therefore reservable property and must be acquired by the relatives of P within the third degree
and belonging to the paternal line. P has two relatives who can qualify to inherit the farm;
namely, G, P’s grandfather, and H, P’s brother. G alone will inherit the farm because in intestacy,
the direct line exclude the collateral line. Hence, G, the grandfather, should exclude H, the brother
of P.

303. Outline the procedure for the distribution of the hereditary estate of the
decedent in testamentary succession.

There are seven distinct steps in the distribution of the hereditary estate of the decedent in
testamentary succession. They are: 1)The determination of the value of the estate at the time of
the testator’s death; 2) The determination of all deductible debts and charges which are
chargeable to the testator’s estate; 3)The determination of the net hereditary estate by deducting
all the debts and charges from the value of the estate; 4)The collation or addition of the value of
all donations inter vivos to the net value of the estate; 5)The determination of the amount of the
legitime from the total thus found in accordance with the rules established in Article 888 to
Article 903 of the Civil Code; 6) Imputation of the value of the donation inter vivos against the
legitime of the donee, if made to a compulsory heir, or against the free portion, if made to a
stranger; and finally, 7) Distribution of the net estate in accordance with the will of the testator.

304. The testator has three legitimate children, A, B and C; a wife, W; a legitimate
father, F; and illegitimate children, D and E. A is a handicapped child, and the testator
wants to leave him as much of his estate as he can legally do under the law. Assume that the
testator left a net estate of P1.2 million, how much can the testator in his will freely dispose
of to A?

The survivors shall be entitled to the following legitimes:

A, B and C: one-half of the estate which they shall divide in equal shares. Since the net
value of the estate is P1.2 million, each of them shall, therefore, be entitled to P200,000.

W: she is entitled to receive a legitime equal to that of a legitimate child; therefore, she is
entitled to receive P200,000.

F: he is excluded by the legitimate children of the testator; and

D and E: one-half the legitime of each of the legitimate children, or P100,000 each.

Thus, the disposable free portion is P200,000. If the testator so desires, he can leave this
disposable portion to his son, A. (Arts. 888, 892, 897 and 898, Civil Code; Art. 176, Family
Code)

305. The testator left a gross estate worth P300,000. He was survived by his widow,
W; three legitimate children, A, B and C; and an illegitimate child, D. In his will, the
testator bequeathed P5,000 to a friend, leaving the remainder of his estate to his widow, and
children, legitimate as well as illegitimate. Divide the testator’s estate among the persons
entitled thereto.

The testator’s estate is to be distributed as follows:

A, B and C: one-half of the estate which they shall divide in equal shares. Since the net
value of the estate is P300,000, each of them shall, therefore, be entitled to P50,000.
W: she is entitled to receive a legitime equal to that of a legitimate child; therefore, she is
entitled to receive P50,000.

D: one-half the legitime of each of the legitimate children, or P25,000.

F: he is entitled to the legacy of P5,000, the same not being inofficious.

Thus, the disposable free portion is P70,000 which shall be divided equally among the
children, legitimate as well as illegitimate, and the widow, it having been left to them without
designation of the shares. (Arts. 846, 888, 892, 897 and 898, Civil Code; Art. 176, Family Code)

306. The value of T’s estate at the time of his death is P400,000. However, the
claims against his estate based on obligations incurred by him during his lifetime amounted
to P120,000. He had also made two donations – P60,000 to his eldest legitimate child, A, in
1980 and P20,000 to a friend, F, in 1985. In his will, he instituted his wife, W, his three
legitimate children, A, B, and C, and his illegitimate child, D, as heirs. There is also a
proviso that the entire disposable portion of his estate shall be given to W. Distribute T’s
estate.

First, deduct the debts amounting to P120,000 from the value of T’s estate. The result is
P280,000. To this remainder, collate or add the two donations (P60,000 to A and P20,000 to F).
The result is P360, 000. It is from this amount that the legitime of W, A, B, C and D shall be
determined. The legitime of A, B and C is ½ of P360,000 or P180, 000, or P60,000 each; the
legitime of D is ½ of the legitime of each of the legitimate children, or P30,000; and the legitime
of W is equal to that of each of the legitimate children, or P60,000. The disposable portion is,
therefore, P90, 000. Since the donation of P60,000 to A is a donation made to a compulsory heir,
it shall be imputed against his legitime. There is neither a balance nor an excess. Hence, it is
presumed that T in making the donation merely advanced said legitime to him. The donation of
P20,000 to F, on the other hand, shall be imputed against the disposable portion of P90,000. There
is a balance of P70,000. This balance shall be given to W in accordance with the testator’s will.
Thus, the estate of P280, 000 shall be divided as follows:

A none
B P 60, 000
C P 60,000
D P 30, 000
W P 130, 000
P 280,000

307. Pedro donated to his nephew, Antonio, a house and lot valued at P1 million.
When Pedro died 20 years later, he was by then financially exhausted because of his and his
wife’s medical and hospitalization expenses. Benigno, Pedro’s only surviving heir, now seeks
to recover the donated property on the ground that it impairs his legitime. The donated
property is now valued at P10 million. Is Benigno entitled to seek a reduction of the
donation?

The action, insofar as it seeks to reduce the donation, will prosper because Benigno’s
legitime is impaired. His legitime is half of the estate of Pedro. However, under the Civil Code,
what is collated to the estate is the value of the donation at the time it was given and not the very
property donated. Hence, Benigno is not entitled to half of the property, but only to half of its
value of P500,000 which Antonio may pay in cash.

308. Amy is the only daughter of Henry with his deceased wife, Winda. Carlota, on
the other hand, is the illegitimate daughter of Henry with his common-law wife, Mimi.
When Henry was confined in a hospital, he confided to his daughter, Amy, that the
certificate of title of his remaining property is in the possession of his daughter, Carlota.
After Henry’s death, Amy immediately inquired from her half-sister, Carlota, about their
father’s certificate of title. To Amy’s dismay, Carlota informed Amy that their father had
already sold the land to her. Upon investigation, Amy found out that Henry had executed in
favor of her half-sister a “Kasulatan sa Ganap na Bilihan” whereby for P25,000, Henry sold
his only property to Carlota. Amy then brought an action to annul the sale. At the trial, she
presented evidence that her half-sister did not have any source of income at the time when
she allegedly purchased the property and that the sale was simulated. Will the action
prosper?

Yes. Since there was no cause or consideration for the sale, the same was a simulation
and hence, null and void. But even granting that the sale was not simulated, it still violated the
Civil Code (Arts 886-888) provisions insofar as the transaction affected Amy’s legitime.
Obviously, the sale was Henry’s way to transfer his only property to his illegitimate daughter,
Carlota, at the expense of his legitimate daughter, Amy. The sale was executed to prevent Amy
from claiming her legitime and rightful share in said property. Before his death, Henry had a
change of heart and informed his daughter about the title to the property. If indeed the parcel of
land involved was the only property of Henry, the sale in fact would deprive Amy of her share in
her father’s estate. By law, she is entitled to half of the estate of the estate of her father as his only
legitimate child. (Francisco v. Alfonso, 354 SCRA 112 [2001])

309. What is meant by ineffective disinheritance? What are its effects?

Imperfect or ineffective disinheritance refers to a disinheritance without a specification of


the cause, or for a cause the truth of which, if contradicted, is not proved, or which is not one of
those recognized by law. (Art. 918, Civil Code)

If a compulsory heir is ineffectively disinherited, the institution of heirs is annulled, but


only insofar as it may prejudice the person disinherited, that is, insofar as the legitime of said her
is impaired. The legacies and devises and other testamentary dispositions shall be valid to such
extent as will not impair the legitime. (Art. 918, Civil Code)

(NOTE: if the free portion has not been disposed of, the ineffectively disinherited heir
gets not only his legitime, but also his intestate share of the free portion. This is because he, too,
is an intestate heir)

310. Testator T had two legitimate children, B and C. In his will, he instituted his
son, C, and a friend, F, as his universal heirs; he gave a legacy of P10,000 to another friend,
G; and he expressly disinherited his other son, B, without specifying the reason therefor.
Assuming that T’s estate is worth P100,000 upon his death, how will it be distributed?

The disinheritance of B is defective or imperfect because there was no specification of


the cause as required by law. However, the institution of heirs will only be partially annulled
insofar as it may prejudice his legitime. (Art. 918, Civil Code) Therefore, B will still be entitled to
his legitime of P25,000 from T’s estate of P100,000; while C is entitled to the same amount as his
own legitime.

The legacy to G is valid because it can easily be contained in the free portion of P50,000.
Therefore, G will be entitled to such legacy, thereby leaving a disposable free portion of P40,000.
Since T had instituted his son, C, and his friend, F, as heirs without designation of shares, they
shall divide equally such amount, or at P20,000 each.

Consequently, the estate of P100,000 will be distributed as follows:

B - P25,000 as compulsory heir

C - P25,000 as compulsory heir


P20,000 as instituted heir

F - P20,000 as instituted heir

G - P10,000 as legatee

311. Manuel’s only living relatives are his brothers, Nestor and Oswald. Manuel
executed a notarial will providing as follows: “I institute my brother Nestor as my sole and
universal heir; and I am disinheriting my brother, Oswald, because he refused to support
me when I had nothing.” If Manuel dies, is Oswald entitled to inherit from Manuel on the
ground that his disinheritance is ineffective because Manuel failed to prove that he in fact
refused to support the testator?

Oswald is not entitled to share in the inheritance because he is only a brother of the
testator, Manuel, and, therefore, not a compulsory heir of Manuel. (Art. 887, Civil Code)

There was even no need on the part of Manuel to disinherit his brother, Oswald. This is so
because only compulsory heirs may be disinherited. (Art. 915, Civil Code) Having been appointed
sole and universal heir, Nestor succeeds to the entire estate. Failure to prove a ground of
disinheritance is immaterial in this case because there is no disinheritance of a brother to consider.

312. When representation is proper, what is the extent of the representative’s


inheritance?

It depends. In testate succession, the right of representation covers only the legitime (Art.
856, 1035, Civil Code) In intestate succession, however, it covers the entire share of the person
represented. The whole descend to the representative by the rules of intestate succession.

(NOTE: The right of representation, when proper, is given both to legitimate and
illegitimate descendants of illegitimate children (Arts. 902, Civil Code). Whether succession is
testate or intestate, illegitimate descendants of legitimate children cannot inherit by right of
representation because of the barrier under Art. 992 of the Civil Code)

313. Can an illegitimate person represent?

It depends. If the person to be represented is a legitimate person, then it is indispensable


that the representative must also be legitimate. In this case, the illegitimate person cannot
represent because of the barrier between members of the legitimate family and those of the
illegitimate family. (Art. 992, Civil Code). If the person to be represented is illegitimate, then it is
immaterial whether the representative is legitimate or illegitimate. (Art. 902, Civil Code)

314. A died in 1999. Before his death, he left a notarial will instituting his five sons,
B, C, D, E and F as his sole heirs. B died in 1997 in a vehicular accident. He left two
children, G and H. C, who has been convicted of an attempt against the life of A, has a son I.
D was disinherited for a cause not recognized by law. He is the father of J, K, L and M. E
repudiated his inheritance because his father never accepted his wife. They have two
children, N and O. The net value of A’s hereditary estate is P1 million. Distribute the estate.

Since B predeceased the testator, his legitimate children G and H shall represent him in
the succession. The same is true in the case of C, since he is incapacitated to inherit from his
father because of an act of unworthiness. His legitimate child, I, shall represent him in the
succession. Also, J, K, L and M shall inherit by right of representation because their father, D,
was disinherited. However, it is different in the case of E. An heir who repudiates his inheritance
cannot be represented. (Art 977, Civil Code) The legitime of D shall be distributed in accordance
with the rules on intestate succession, while his share as a voluntary heir shall accrue to his co-
heirs, B, C, D, E, and F. But B is already dead, C is incapacitated, and D was disinherited. The
only living and capacitated heir is F. Thus:

F 100,000 as compulsory heir


100,000 as voluntary heir
100,000 by right of accretion from B
100,000 by right of accretion from C
100,000 by right of accretion from D
100,000 by right of accretion from E
25,000 as legal heir

G 50,000 by right of representation


12,500 as legal heir

H 50,000 by right of representation


12,000 as legal heir

I 100,000 by right of representation


25,000 as legal heir

J 25,000 by right of representation


6, 250 as legal heir

K 25,000 by right of representation


6,250 as legal heir

L 25,000 by right of representation


6,250 as legal heir

M 25,000 by right of representation


6,250 as legal heir
315. Testator left an estate worth P30,000 with two legitimate children surviving, A
and B. The testator in his will institutes as his sole heirs his children, A and B, and his friend
F. Upon the testator’s death, B repudiates his share in the inheritance. How shall the estate
be distributed?

The legitime in this case is one-half of the estate or P15,000. Upon B’s repudiation of his
share, the entire legitime will go to A in his own right. The institution of heirs affects only the free
portion, which under the will should be divided into three equal parts if all succeeded, or P5,000
each. But upon the repudiation by B, his share accrues to A and F, who will therefore each get
P5,000 in their own right under the terms of the will, and P2,500 by accretion (share of B divided
into two), or a total of P7,500. In the final distribution, therefore, A will get a total of P22,500 and
F will have P7,500 (Art. 1021, Civil Code)

316. What are some of the important rules in intestate succession?

The following are some of the important rules in intestate succession:

1. Principle of preference of lines: Relatives of the decedent in the direct descending line
exclude those in the ascending and collateral lines, while relatives of the decedent in the
ascending line exclude those in the collateral line. Therefore, collateral relatives of the decedent
inherit only in the absence of descendants or ascendants of the deceased.

(NOTE: If deceased is legitimate, the principle of preference of lines is not absolute in the
sense that legitimate parents are excluded only by legitimate children of the deceased. On the
other hand, if the deceased is illegitimate, the principle becomes absolute in the sense that
illegitimate parents are excluded by descendants of the deceased, whether legitimate or
illegitimate)

2. Principle of proximity: Relatives of the decedent nearest in degree exclude the more
remote ones, saving the right of representation when it properly takes place. This is because by
virtue of representation, the farther relative becomes just as near. (par. 1, Art. 962, Civil Code)

3. Principle of concurrence of compulsory heirs: All compulsory heirs are intestate heirs.
As a rule, they are never excluded from the inheritance. Not all intestate heirs are compulsory
heirs, as in the case of collateral relatives who inherit only in the absence of descendants or
ascendants of the deceased, whether legitimate or illegitimate.

4. Principle of representation: The right of representation takes place in the direct


descending line, but never in the ascending line. In the collateral line, the right of representation
takes place only in favor of children of brothers and sisters, whether of the full or half-blood. (Art.
972, Civil Code)

5. Grandchildren always inherit by right of representation, provided representation is


proper. (Art. 982, Civil Code) Whenever all children of the deceased repudiate the inheritance, the
grandchildren inherit in their own right, for here representation is no longer proper. (Art. 969,
Civil Code)

6. Nephews and nieces of the deceased inherit either in their own right or by right of
representation. They inherit in their own right only if they do not concur with an uncle or an aunt;
they inherit by right of representation when they inherit with an uncle or an aunt.
7. An illegitimate child has no right to inherit ab intestato from the legitimate relatives of
his father or mother; neither shall such relatives inherit from the illegitimate child. This is the so-
called “iron curtain” rule in succession -- the barrier between the legitimate and illegitimate
families of the deceased.

8. Should brothers and sisters of the full-blood survive together with brothers and sisters
of the half-blood, the former shall be entitled to a share double that of the latter. (Art. 1006, Civil
Code)

9. Should there be more than one ascendant of equal degree belonging to the same line,
they shall divide the inheritance per capita; should there be of different lines but of equal degree,
one-half shall go to the paternal and the other half to the maternal ascendants. In each line the
division shall be made per capita. (Art. 987, par 2, Civil Code)

10. A renouncer can represent, but cannot be represented. (Arts. 976 and 977, Civil
Code)

317. When is accretion proper?

There is no accretion insofar as the legitime is concerned. Accretion, if it takes place,


concerns only the free disposal of the testator. (par. 1, Art. 1021, Civil Code) Should the part
repudiated be the legitime, the other compulsory heirs shall succeed to it in their own right and
not by right of representation. (Art. 1921, par. 2, Civil Code) In intestate succession, accretion is
proper only in cases of repudiation and incapacity of an heir, but not in case when an heir
predeceases the decedent. In such a case, the other intestate heirs inherit the share of the deceased
heir in their own right.

318. T executed a will instituting his three legitimate children, A, B and C as his sole
heirs -- A, to inherit ½ of the free portion; B, ¼ of the free portion; and C, ¼ of the free
portion. However, B and C were both killed in an accident days before the testator’s death.
The testator died a few days later without changing his will. B is survived by his legitimate
children, D, E, F, and G; while C is survived by his legitimate children, H and I. The net
remainder of the estate is P48,000. How shall the estate be divided among the heirs?

If the instituted heirs - A, B and C - were living at the time of T’s death and they could all
inherit, the division of the inheritance would have been as follows:

A P 8,000 as compulsory heir


P12,000 as voluntary heir

B P 8,000 as compulsory heir


P 6,000 as voluntary heir

C P 8,000 as compulsory heir


P 6,000 as voluntary heir

However, the shares which would have passed to B and C are now vacant because they
died ahead of the testator. Under the law, therefore, D, E, F and G shall now represent their father,
B, but only with respect to the legitime of P8,000. The P6,000 which would have passed to B as a
voluntary heir shall accrue to A. (Arts. 1015 and 1016, Civil Code) This is so because there is no
right to represent a voluntary heir. H and I shall also represent their father, C, but only with
respect to the legitime of P8,000. The P6,000 which would have passed to C as voluntary heir
shall also accrue to A. (Arts. 1015 and 1016, Civil Code) This is so because there is no right to
represent a voluntary heir. Consequently, the division shall be as follows:

A P 8,000 as compulsory heir


P12,000 as voluntary heir
P12,000 by right of accretion

D P 2,000 by right of representation


E P 2,000 by right of representation
F P 2,000 by right of representation
G P 2,000 by right of representation

H P 4,000 by right of representation


I P 4,000 by right of representation

319. Pedro and Maria, both capacitated to marry each other, cohabited as husband
and wife without the benefit of marriage. Their union bore a daughter, Donita. Pedro was
not the first and only man in Maria’s life. Before him was Ramon with whom Maria had a
son, Luis. Like her relationship with Pedro, Maria was never married to Ramon.

Donita died intestate, survived by a) her half-brother, Luis and b) Manuel, an


illegitimate child of Norberto, the latter being a child begotten from her father’s lawful
marriage to Juana.

a) Is Luis an intestate heir of Donita?

Yes. The law prohibits reciprocal succession between illegitimate children and legitimate
children of the same parent, even though there is unquestionably a tie of blood between them. It
seems that to allow an illegitimate child to succeed ab intestato from another illegitimate child
begotten of the same parent, would be allowing the illegitimate child greater rights than a
legitimate child. Notwithstanding this, however, succession should be allowed, even when the
illegitimate brother and sister are only of the half-blood. The reason impelling the prohibition on
reciprocal succession between legitimate and illegitimate families does not apply to the case
under consideration. That prohibition has for its basis the difference in category between
illegitimate and legitimate relatives. There is no such difference when all the children are
illegitimate children of the same parent, even if begotten with different persons. They all stand on
the same footing before the law, just like legitimate children of half-blood relation.

b) Is Manuel entitled to inherit intestate from Donita?

No. Article 992 of the Civil Code prohibits reciprocal succession between illegitimate
children and legitimate children of the same parent, even though there is unquestionably a tie of
blood between them. While it is true that the right of representation in the collateral line takes
place in favor of nephews and nieces of the deceased, such right does not apply to Manuel
because he is to represent Norberto who is himself disqualified to inherit from Donita. (Delgado
Vda. De De la Rosa v. Heirs of Damian, 480 SCRA 334 [2006])

320. May a married woman repudiate her inheritance without the consent of her
husband?

Yes. (Art. 1047, Civil Code)


321. A last will and testament contains a provision that it shall not be presented
before the courts for probate. Is the provision valid?

The provision is not valid. Such provision cannot deprive the courts of the authority to
determine whether the will is duly executed or not. The parties interested in one way or another in
a case are not the ones who would confer or deprive the jurisdiction of the courts. The
presentation of the will before the courts is required by the law so that it may be determined
whether it was validly executed. If so, the estate will be distributed according o its terms in so far
as conformable to law; and if it is not validly executed, the estate will be distributed as in
intestacy.

322. The husband files a petition to admit to probate the will of his wife. The will is
admitted to probate. Suppose the will is a falsified will, and later the husband is prosecuted
for forgery, will the criminal action lie?

No. The probate of a will is considered as conclusive as to its due execution and validity,
and is also conclusive that the testator was of sound and disposing mind at the time when he
executed the will and was not acting under duress, menace, fraud, or undue influence, and that
the will is genuine and not a forgery. The will in question having been probated by a competent
court, the law will not admit any proof to overthrow the legal presumption that it is genuine and
not a forgery. Criminal action will not lie against the forger of a will that has been duly admitted
to probate (Mercado v. Santos, 66 Phil. 215 [1938])

323. May a probate court rule on the intrinsic validity of a will?

In general, a probate court cannot rule on the intrinsic validity of a will because it is a
court of limited jurisdiction. It can only determine questions as to extrinsic validity of the will.
The exceptions to this rule are: a) when the parties agree to submit the issue to the probate court
and no third person is prejudiced thereby; and b) when upon the face of the will, the same is
intrinsically void.

324. What are the issues to be resolved in the probate of a will?

In probate proceedings, the probate court is limited only to the resolution of the following
issues: 1) whether the instrument submitted is, indeed, the decedent’s last will and testament; 2)
whether said will was executed in accordance with the formalities prescribed by law; 3) whether
the decedent had the necessary testamentary capacity at the time the will was executed; and 4)
whether the execution of the will and its signing were the voluntary acts of the decedent. (Ajero v.
Court of Appeals, 236 SCRA 488 [1994])

325. In testamentary succession, what are the different combinations of survival and
concurrence of compulsory heirs and the amount of their legitimes?

In testamentary succession, the different combinations of survival and concurrence of


compulsory heirs and the amount of their legitimes are as follows:

1. Legitimate children: 1/2 of the estate, in equal portions, whether they survive alone or
with concurring compulsory heirs. (Art. 888, Civil Code)

2. One legitimate child and the surviving spouse: legitimate children, 1/2 of the estate;
the surviving spouse, 1/4 of the estate. (Arts. 888 and 892, par. 1, Civil Code)

3. Legitimate children and the surviving spouse: legitimate children, in equal portions,
1/2 of the estate; the surviving spouse, a share equal to that of each child. (Arts. 888 and 892, par.
2, Civil Code)

4. Legitimate children and illegitimate children: legitimate children, in equal portions,


1/2 of the estate; each illegitimate child, 1/2 the share of each legitimate child (Art. 888, Civil
Code; Art. 176, Family Code; Art. 892, par 1, Civil Code)

5. One legitimate child, illegitimate children and the surviving spouse: legitimate child,
1/2 of the estate; each illegitimate child, 1/2 the share of each legitimate child; the surviving
spouse, 1/4 of the estate. (Art. 888, Civil Code; Art. 176, Family Code; Art. 892, par. 1, Civil
Code)

(NOTE: The surviving spouse and the illegitimate children get their legitimes from the
free portion, the share of the surviving spouse having preference over those of the illegitimate
children, whose share may suffer reduction pro rata because there is no preference among
themselves. [Art 895, Civil Code)

6. Legitimate children, illegitimate children and the surviving spouse: legitimate children,
in equal portions, 1/2 of the estate; illegitimate children, 1/2 the share of each legitimate child;
surviving spouse, share equal to that of a legitimate child (Arts. 892, par. 2 and 898, Civil Code
Art. 176, Family Code)

7. Legitimate parents: 1/2 of the estate, whether they survive alone or with concurring
compulsory heirs. (Art. 898, Civil Code)

8. Legitimate parents and illegitimate children: legitimate parents, 1/2 of the estate;
illegitimate children, in equal shares, 1/4 of the estate (Arts. 889 and 896, Civil Code)

9. Legitimate parents and surviving spouse: legitimate parents, 1/2 of the estate;
surviving spouse, 1/4 of the estate (Arts. 889 and 893, Civil Code)

10. Legitimate parents, illegitimate children and the surviving spouse: legitimate parents,
1/2 of the estate; illegitimate children, in equal shares, 1/4 of the estate; surviving spouse, 1/8 of
the estate (Arts. 889, 896 and 899, Civil Code)

11. Illegitimate children alone: 1/2 of the estate (Art. 901, Civil Code) to be divided
equally among themselves.

12. Illegitimate children and the surviving spouse: illegitimate children, in equal portions,
1/3 of the estate; surviving spouse, 1/3 of the estate (Art. 894, Civil Code)

13. Surviving spouse alone: 1/2 of the estate; 1/3 if marriage is in articulo mortis and
deceased spouse dies within three months after marriage; or 1/2 if, despite marriage in articulo
mortis and death of the spouse within three months after marriage, the deceased and the
surviving spouse have been living as husband and wife for more than five years (Art. 900, Civil
Code)
14. Illegitimate parents alone: 1/2 of the estate (Art. 903, Civil Code)

15. Illegitimate parents and children of any class: illegitimate parents, none (Art. 903,
Civil Code); children (legitimate and/or illegitimate), apply Nos. 1, 4 and 11 as the case may be.

16. Illegitimate parents and surviving spouse: illegitimate parents, 1/4 of the estate;
surviving spouse, 1/4 of the estate (Art. 903, Civil Code)

326. In intestate succession, what are the different combinations of survival and
concurrence of intestate heirs and the amount of their intestate shares?

In intestate succession, the different combinations of survival and concurrence of


intestate of heirs and the amount of their intestate shares are as follows:

1. Legitimate children: entire estate to be divided in equal shares as there are legitimate
children. (Art. 980, Civil Code)

2. One legitimate child and the surviving spouse: legitimate child, 1/2 of the estate;
surviving spouse, 1/2 of the estate. (Arts. 888 and 996, Civil Code)

(NOTE: If there is only one legitimate child concurring with the surviving spouse, and
there are no other relatives, both will get equal intestate shares, in accordance with the clear
intent of the law to consider the spouse as a child. After all, the plural word “children” as used in
Article 996 of the Civil Code must be deemed to include the singular word “child”)

3. Two or more legitimate children and the surviving spouse: consider the surviving
spouse as a legitimate child and divide the estate by the total number (Art. 996, Civil Code)

4. Legitimate children and illegitimate children: estate to be divided in proportion of two


shares for each legitimate child and one share for each illegitimate child; provided legitimes of
legitimate children are not impaired. (Arts. 983 and 985, Civil Code)

(NOTE: The shares of the illegitimate children should be taken only from the free
portion, otherwise, the legitimate of legitimate children would be prejudiced if there were so
many illegitimate children.)

5. One legitimate child, illegitimate children and the surviving spouse: legitimate child,
1/2 of the estate (Art.888, Civil Code); surviving spouse, 1/4 of the estate; each illegitimate child,
1/2 the share of the legitimate child. If there be any left, distribute the remainder according to the
ratio of two shares for the legitimate child, two shares for the surviving spouse, and one share for
each illegitimate child (applying by analogy Arts. 892, par. 1, and 895, par. 3, Civil Code)

6. Two or more legitimate children, illegitimate children and the surviving spouse: divide
the estate according to the ratio of two shares for each legitimate child; two shares for the
surviving spouse; and one share for each illegitimate child. (Art. 999, Civil Code)

7. Legitimate parents alone: entire estate (Art. 985, Civil Code)

8. Legitimate parents and illegitimate children: legitimate parents, 1/2 of the estate;
illegitimate children, in equal shares, 1/2 of the estate (Art. 991, Civil Code)
9. Legitimate parents and the surviving spouse: legitimate parents, 1/2 of the estate; the
surviving spouse, 1/2 of the estate (Art. 997, Civil Code)

10. Legitimate parents, illegitimate children and the surviving spouse: legitimate parents,
1/2 of the estate; illegitimate children, in equal shares, 1/4 of the estate; surviving spouse, 1/4 of
the estate (Arts. 896 and 1000, Civil Code)

11. Illegitimate children alone: entire estate (Art. 988, Civil Code)

12. Illegitimate children and the surviving spouse: illegitimate children, in equal portions,
1/2 of the estate, the surviving spouse, 1/2 of the estate (Art. 998, Civil Code)

13. Surviving spouse alone: entire estate (Art. 995, Civil Code)

14. Illegitimate parents alone: entire estate (Art. 993, Civil Code)

(NOTE: illegitimate parents inherit ab intestato only in default of legitimate or


illegitimate descendants of the deceased)

15. Illegitimate parents and children of any class: illegitimate parents, none (Art. 993,
Civil Code); children (legitimate and/or illegitimate), apply Nos. 1 (for legitimate children), 6 (for
both legitimate and illegitimate children), and 11 (for illegitimate children) as the case may be.

16. Illegitimate parents and the surviving spouse: illegitimate parents, 1/2 of the estate;
surviving spouse, 1/2 of the estate.

(NOTE: While Article 997 of the Civil Code provides for the share of the surviving
spouse concurring with legitimate parents of the decedent (where the former gets one-half of the
intestate estate, and the latter get the other half), there is no article providing for the share in
intestacy of the surviving spouse when concurring with illegitimate parents of the deceased. In
spite of this omission, however, the surviving spouse should in such case get one-half of the
estate, and the other half should go to the illegitimate parents. If that is the share of the surviving
spouse concurring with illegitimate parents, certainly such share cannot be less when he/she
concurs with illegitimate parents. In other words, if the legitimate parents get only one-half of
the estate when concurring with the surviving spouse of the decedent, the illegitimate parents,
who should have less rights, cannot be entitled to more than one-half in the same situation)

17. Brothers, sisters, nephews, and nieces: entire estate. (Art. 1003, Civil Code)

18. Surviving spouse and brothers, sisters, nephew and nieces: surviving spouse, 1/2 of
the estate; brothers and sisters, nephews and nieces, in equal shares (except representation if
proper), 1/2 of the estate (Art. 1001, Civil Code)

19. Collateral relatives (up to 5th degree): entire estate (Art. 1010, Civil Code)

20. State: entire estate (Art. 1011, Civil Code)


LAND REGISTRATION

327. What is the concept of the Torrens system of land registration?

The Torrens system of land registration does not create or vest title to land. It merely
confirms and records title already existing and vested. It was not established as a means for the
acquisition of title to private land. It is intended merely to confirm and register the title which one
may already have on the land. Where the applicant possesses no title or ownership over the land,
he cannot acquire one under the Torrens system of land registration. (Torela v. Torela, 93 SCRA
931 [1979]) Once a certificate of title is registered, the owner of the land might rest secure,
without the necessity of waiting in the portals of the court, or sitting in the mirador de su casa, to
avoid the possibility of losing his land. (Legarda v. Saleeby, 31 Phil. 590 [1915])

328. What are the basic laws in the Philippines governing the registration of lands
under the Torrens system?

The following are the basic laws in the Philippines governing the registration of lands
under the Torrens system:

a) ACT NO. 496, otherwise known as the LAND REGISTRATION ACT. This law took
effect on February 1, 1903, and introduced for the first time the Torrens system of land
registration in the Philippines. The nature of the proceedings under this law is in the main
judicial, but voluntary because landowners whose holdings have not come within the operation of
the Torrens system are under no obligation to bring them within.

b) ACT NO. 2259, otherwise known as the CADASTRAL ACT. This law, which took
effect on February 11, 1913, and was enacted primarily to put some pressure on landowners to
bring their unregistered lands within the operation of the Torrens system. The proceedings under
this law is also judicial, but compulsory with respect to landowners whose holdings are affected
by the cadastral survey. Unlike in the case of an ordinary land registration proceeding under the
Land Registration Act, where the owners may apply for registration of their titles whenever they
find it convenient, under the Cadastral Act, the government initiates the cadastral survey,
followed by a cadastral proceeding in court for the settlement and adjudication of the property
involved. Here the government files the petition for the registration of the lands affected by the
cadastral survey, while the private claimants file their answers to assert their claims or lose them
if they should fail.

c) COMMONWEALTH ACT NO. 141, otherwise known as the PUBLIC LAND ACT.
This law took effect on December 1, 1936, and constitutes a compilation of all pre-existing laws
relative to lands of the public domain. This law was intended to bring lands which are to be
segregated from the mass of public lands within the operation of the Torrens system. Under this
law, the land registration proceeding may either be judicial or administrative. It is judicial when it
involves the confirmation of imperfect and incomplete titles (Secs. 48 and 51, C.A. No. 141) It is
administrative when it involves certain concessions such as a homestead patent, a sales patent, a
lease patent, a free patent or other special patents.

d) PRESIDENTIAL DECREE NO. 1529, otherwise known as the PROPERTY


REGISTRATION DECREE. This law took effect on June 11, 1978, and codified the various laws
relative to registration of property, and further strengthened the Torrens system of land
registration.

329. What are the essential characteristics of a decree of registration and a


certificate of title issued under the Torrens system of land registration?

The following are the essential characteristics of a decree of registration and a certificate
of title issued under the Torrens system of land registration:

1. A decree of registration or the corresponding certificate of title binds the land, quiets
title thereto and shall be conclusive against all persons, including the government, and it may not
be reopened by reason of absence, minority or other disability of any person affected thereby.
(Secs. 31 and 32, P.D. No. 1529)

2. After one year from its entry or even earlier in cases where title to the land has been
transferred to an innocent purchaser for value, the decree becomes final and incontrovertible.
(Sec. 32, P.D. No. 1529)

3. A Torrens title issued pursuant to a homestead patent, free patent, or sales patent under
the Public Land Act has the same force and effect as a Torrens title. (Payopayo v. Manipon, 39
SCRA 763 [1971])

4. No title to registered land in derogation of the title of the registered owner shall be
acquired by prescription or adverse possession. (Sec. 47, P.D. No. 1529) However, the registered
owner may be barred from invoking the imprescriptibility of his title by virtue of the equitable
principle of laches. (Heirs of Batiog-Lacamen v. Heirs of Laruan, 65 SCRA 605 [1975]; Golloy v.
Court of appeals, 173 SCRA 26 [1989])

5. Torrens titles are not subject to collateral attack. It cannot be altered, modified, or
cancelled except in a direct proceeding in accordance with law. (Sec. 108, P.D. No. 1529)

6. Registered lands cannot be the subject of any subsequent registration proceeding. Once
registered under the Torrens system, the land may not again be the subject of any subsequent
registration proceedings. Any decree or title issued in consequence of the latter is null and void.
The earlier certificate must prevail. (Sec. 108, P.D. No. 1529)

7. The operative act that conveys or affects a registered land is the act of registration
insofar as third persons are concerned. (DBP v. Acting Register of Deeds of Nueva Ecija, 162
SCRA 450 [1988])

330. In 1945, Abe declared for tax purposes a parcel of public land. In 1992, he sold
the land to Rey who occupied it and planted thereon mahogany, coconut and narra trees in
addition to existing coconut trees which were 50 to 60 years old. The following year, Rey
filed an application for original registration of the land under the provisions of P.D. 1529
based on his open, continuous, exclusive and adverse possession of more than 30 years,
personally and through his predecessor-in-interest. The State opposes the application on the
ground that the land applied for was declared to be alienable and disposable only in 1980.
The State maintains that there is a need for the government’s prior release of the land from
the public domain before it can be considered alienable or disposable within the meaning of
P.D. 1529. The State contends that because the land was declared alienable and disposable
only in 1980, Rey could not have maintained a bona fide claim of ownership since June 12,
1945, as required by Section 14(1) of P.D. 1529, because prior to 1980, the land was not yet
alienable or disposable. Is the State’s opposition tenable?

The State’s opposition is not tenable. Sec. 14 of P.D. 1529, governing original land
registration proceedings, provides in part:

“SECTION 14. Who may apply. The following persons may file in
the proper Court of First instance an application for registration of title to
land, whether personally or through their duly authorized representatives:

(1) Those who by themselves or through their predecessors-in-


interest have been in open, continuous, exclusive and notorious possession
and occupation of alienable and disposable lands of the public domain
under a bona fide claim of ownership since June 12 1945, or earlier.”

There are three obvious requisites for the filing of an application for registration of title
under Section 14(1) of .P.D 1529: a) that the property in question is alienable and disposable land
of the public domain; b) that the applicants by themselves or through their predecessors-in-
interest have been in open, continuous, exclusive, and notorious possession and occupation, and;
c) that such possession is under a bona fide claim of ownership since June 12, 1945 or earlier.

The State’s interpretation that the alienable and disposable character of the land should
have already been established since June 12, 1945 or earlier, is not borne out by the plain
meaning of Section 14(1) of P.D. 1529. The phrase “Since June 12, 1945” as used in the
provision, qualifies its antecedent phrase “under a bona fide claim of ownership.” Generally
speaking, qualifying words restrict or modify only the words or phrases to which they are
immediately associated, and not those distantly or remotely located.

The State’s view that all lands of the public domain which were not declared alienable or
disposable before June 12, 1945, would not be susceptible to original registration, no matter the
length of unchallenged possession by the occupant, would result in absurdity. Since interpretation
renders Section 14(1) of P.D. 1529 virtually inoperative and even precludes the government from
giving its effect even as it later decides to reclassify public agricultural lands as alienable and
disposable. The unreasonableness of the situation would even be aggravated considering that
before June 12, 1945, the Philippines was not yet even considered an independent state.

Instead, the more reasonable interpretation of Section 14(1) is that it merely requires the
property sought to be registered as already alienable and disposable at the time the application for
registration of title is filed. If the state, at the time the application is made, has not yet deemed it
proper to release the property for alienation or disposition, the presumption is that the government
is still reserving the right to utilize the property; hence, the need to preserve its ownership in the
State irrespective of the length of adverse possession, even if in good faith. However, if the
property has already been classified as alienable and disposable, as it is in this case, then there is
already an intention on the part of the State to abdicate its exclusive prerogative over the property.
(Republic v. Court of Appeals, 448 SCRA 442 [2005])

331. Alembong declared for tax purposes an alienable and disposable public land in
1958. She planted the property with palay, sayote, coffee, guyabano, and other fruit-bearing
trees. When she died, his son Fredo inherited the property. In 1997, Fredo commenced an
application for registration of the land under the provisions of P.D. 1529 based on his
continued, uninterrupted, open, public and adverse possession of more than 30 years,
personally and through his predecessors-in-interest. In dismissing the application, the court
declares that the petition should not have been filed under P.D. 1529 but under the Public
Land Act (C.A. 141), particularly Section 48 thereof, where possession and occupation
should start on June 12, 1945 or earlier. Fredo claims otherwise. He contends that the
applicable provision is Section 44 of the Public Land Act, as amended by Republic Act 6940,
which provides only for a 30-year prescriptive period. Should the appeal be given due
course?

No. Section 44 of the Public Land Act, as amended by R.A. 6940, which provides for a
prescriptive period of 30 years of possession, applies only to applications for free patents which is
an administrative legalization. In the case at bar, Fredo filed his application before the court, so it
is a judicial application for confirmation of an imperfect or incomplete title over the subject
property covered by Section 48(b) of the Public Land Act. Said section requires for judicial
confirmation of an imperfect or incomplete title for the continuous possession of an alienable
public land since June 12, 1945, or earlier. Fredo failed to comply with this requirement because
his possession and that of his predecessor-in-interest started only in 1958. (Del Rosario v.
Republic, October 22, 2004)

332. Abner is the registered owner of a parcel of land. Notwithstanding the existence
of Abner’s certificate of title, however, the land was still included in a public land
subdivision survey conducted by the Bureau of Lands, for which free patents and original
certificates of titles were issued to qualified applicants. Accordingly, Abner brought an
action for cancellation of the titles. He claims that the Bureau of Lands had no more control
over the property which has long ceased to be part of the public domain and had already
become his private property. The Bureau of Lands, on the other hand, claims that since the
action is for the cancellation of original certificates of title which were issued through
administrative legalization or free patent application, it is only the State, through the
Solicitor General or his duly authorized representative, who can institute the reversion
proceedings under Section 101 of the Public Land Act. Is the contention of the Bureau of
Lands tenable?

No. The legal dispute here does not involve an action for reversion of land to the public
domain but one for the cancellation of null and void free patents over a private land. An ordinary
civil action for declaration of nullity of free patents and certificates of title is not the same as an
action for reversion. The difference between them lies in the allegations as to the character of the
ownership of the realty whose title is sought to be nullified. In an action for reversion, the
pertinent allegations in the complaint would admit State ownership of the dispute land. In an
action for cancellation of free patents, the nullity arises from the fact that the land is beyond the
jurisdiction of the Bureau of Lands to bestow, and whatever patent or certificate of title obtained
therefrom is consequently void.

In this case, Abner claims ownership over the land in question pursuant to his certificate
of title. This can only mean that the free patents and OCT s subsequently issued to the applicants
were null and void because the subject lands were already private lands and could not have been
validly disposed of by the government. Abner is therefore the proper party to question the titles of
the persons in whose favor the titles were issued. This is so because he stands to be benefited or
injured by whatever the court may decree. (Tancuntian, et.al. v. Gempesaw, et.al., October 18,
2004)

333. H and W are the parents of S. Upon the death of his mother, S instituted an
action against his father for the partition of his mother’s estate. The father countersues for
reconveyance of several parcels of land which are registered solely in his son’s name. The
father claims that the lots are owned by the conjugal regime but were registered in his son’s
name as a trustee because at that time, his son was then the only Filipino citizen in the
family. Meantime, to protect the interest of the conjugal regime during the pendency of the
partition case, the father causes the annotation of notice lis pendens on the titles of the lots
which are registered in his son’s name. The son objects on the ground that the notices
amount to a collateral attack on his titles obtained more than 20 years ago. He argues that
his sole ownership as shown in the titles would be improperly assailed in the partition case
and that it should be done through a separate action. Should the notice lis pendens be
cancelled?

No. There is no dispute that a Torrens certificate of title cannot be collaterally attacked.
This rule, however, is not material to the instant case. The annotation of a notice lis pendens does
not in any case amount nor can it be considered as equivalent to a collateral attack on the
certificate of title of a parcel of land. What cannot be collaterally attacked is the certificate of title
and not the title. The certificate referred to is that document issued by the Register of Deeds
known as the Transfer Certificate of Title. By title, the law refers to ownership which is
represented by the document. S apparently confuses certificate of title with title. Placing a parcel
of land under the mantle of the Torrens system does not mean that ownership thereof can no
longer be disputed. Ownership is one thing, registration is another. (Lee Tek Sheng v. Court of
Appeals, 292, SCRA 554 [1998])

334. When two certificates of title are issued to different persons covering the same
parcel of land in whole or in part, which title must prevail?

When two certificates of title are issued to different persons covering the same land in
whole or in part, the earlier in date must prevail, and, in case of successive registration where
more than one certificate is issued over the land, the persons holding a prior certificate is entitled
to the land as against a person who relies on a subsequent certificate. (Margolles v. Court of
Appeals, 230 SCRA 97, [1994])

335. Records show that Pedro filed a homestead application over a parcel of
agricultural land in 1937. In 1941, the DENR approved the homestead application, and
issued to Pedro a patent and the corresponding certificate of title to the land. Decades later,
or in 1980, the Bureau of Forestry issued a certification that the area covered by Pedro’s
certificate of title was a forest zone from 1941 to 1960, and that the land became alienable
and disposable only in 1961. On the basis of this certification, the Solicitor General
instituted an action for the reversion of the land to the public domain. Pedro defends on the
ground of prescription. Decide.

It is clear that at the time when the homestead patent was issued to Pedro in 1941, the
land was still part of the public domain. Hence, the title issued to him is considered void. It is a
settled rule that forest lands or forest reserves or timber lands are not capable of private
appropriation and possession thereof, however long, cannot convert them into private property.

Insofar as the timeliness of the action of the government is concerned, it is basic that
prescription does not run against the State. Public lands fraudulently included in patents or
certificates of title may be recovered by the State in accordance with Section 101 of the Public
Land Act.

The subsequent release of the subject property as alienable and disposable did not cure
any defect in the issuance of the homestead patent nor did it validate the grant. The hard fact
remains that at the time of the issuance of the homestead patent and the title, the land was not yet
released as alienable and disposable public land. (Reyes v. Court of Appeals, 295 SCRA 296
[1998])

336. May an owner of registered land seek the annulment of a transfer thereof on
the ground of fraud?

Yes, but without prejudice to the rights of any innocent purchaser for value with a
certificate of title. This is because every person dealing with registered land may safely rely on
the correctness of the certificate of title issued therefor and the law will in no way oblige him to
go beyond the certificate to determine the condition of the property. (Obsequio v. Court of
Appeals, 320 SCRA 550 [1994])

The right of the innocent purchaser for value must be respected even if the seller obtained
his title through fraud. It is settled that a forged deed can legally be the root of a valid title when
an innocent purchaser for value intervenes. The remedy of the original owner (the person
prejudiced) is to bring an action for damages against those who caused or employed fraud, and if
the latter are insolvent, an action against the Treasurer of the Philippines may be filed for the
recovery of damages against the State Assurance Fund.

(NOTE: The basic rule is that after the lapse of one year, a decree of registration is no
longer open to review or attack although its issuance is attached with actual fraud. This does not
mean, however, that the aggrieved party is without a remedy in law. If the property has not yet
passed to an innocent purchaser for value, an action for reconveyance is still available. (Javier v.
Court of Appeals, 231 SCRA 498[1994])

337. Is the use of a false affidavit of loss in a reconstitution case constitutive of


extrinsic fraud justifying the invalidation of the final judgment in the reconstitution case?

No. The use of a false affidavit of loss in a reconstitution case is similar to the use during
trial of forged instrument or perjured testimony. In the leading case of Palanca v. Republic, 24
SCRA [1968], the Supreme Court held that the use of a forged instrument constituted only
intrinsic fraud for while it perhaps prevented a fair and just determination of a case, the use of
such instrument or testimony did not prevent the adverse party from presenting his case fully and
fairly.

But a judgment otherwise final may be annulled not only on the ground of extrinsic fraud
but also because of lack of jurisdiction of the court which rendered it. Thus, if a certificate of title
has not been lost but is in fact in the possession of another person, the reconstituted title is void
and the court rendering the decision has not acquired jurisdiction. Consequently, the decision may
be attacked any time. (Demetrio v. Court of Appeals, 238 SCRA 158 [1994])

338. Does an action for reconveyance of a parcel of land based on implied or


constructive trust prescribe?

An action for reconveyance of a parcel of land based on implied or constructive trust


prescribes in ten years, the point of reference being the date of registration of the deed or the date
of issuance of the certificate of title over the property. However, this rule applies only when the
plaintiff or the person enforcing the trust is not in possession of the property. Since if a person
claiming to be the owner thereof is in active possession of the property, the right to seek
reconveyance which in effect seeks to quit title to the property does not prescribe. (vda. De
Cabrera v. Court of Appeals, 267 SCRA 339 [1997])

339. S sold to B an unregistered parcel of land in 1932. B immediately took


possession of the land and introduced improvements thereon. Despite the sale, however, S
obtained in 1937 a certificate of title over the land pursuant to a decree of registration
issued by a land registration court in a cadastral proceeding initiated by S himself. In 1975,
B filed an action against S for the reconveyance of the land on the ground that S committed
fraud in causing the land to be registered in his name. S contends that the action had
already prescribed and is already barred by laches. Has the action prescribed?

B’s right to bring the action to recover ownership of the dispute land had already
prescribed and is barred by laches. The law is clear on this point. The remedy of a landowner
whose property has been wrongfully and erroneously registered in another’s name is to bring an
action in the ordinary courts of justice for reconveyance. Under the law, however, an action for
reconveyance based on an implied or constructive trust prescribes in ten years from the issuance
of the Torrens title over the property.

In the instant case, B slept on his right for 38 years counted from the time the certificate
of title was issued to S in 1937 until he filed his action for reconveyance in 1975. B’s right to
bring such action was barred by laches as he took no step towards that direction reasonably after
the title to the property was issued under the Torrens system. (Manangan v. Court of Appeals, 308
SCRA 139 [1999])

(NOTE: The decision in Manangan is contrary to the ruling in Heirs of Olviga v. Court
of Appeals, 227 SCRA [1993]. In Manangan and Olviga, the parties claiming ownership were in
actual possession of the subject properties. In Olviga, the Supreme Court held that the rule in
which an action for reconveyance of a parcel of land based on an implied trust prescribes in ten
years applies only when the plaintiff is not in possession of the property, and that if the person
claiming to be the owner thereof is in actual possession, the right to seek reconveyance, which in
effect seeks to quiet title to the property, does not prescribe. In Manangan, however, the plaintiff is
in actual possession of the disputed land but the Supreme Court declared that his right to seek
reconveyance had already prescribed because of his failure to file the action within the ten-year
prescriptive period. It is respectfully submitted that the ruling in Olviga is more in accord with the
law)

340. Plaintiff v. Defendant for reconveyance of a parcel of land. Plaintiff alleges that
sometime in 1977, through fraud and illegal scheme, his land was titled in the name of
Defendant in 1975, and that after discovery of the fraud, he demanded from Defendant to
reconvey the land to him, but Defendant refused. Defendant moves to dismiss the complaint
on the ground of prescription and laches. How should the court resolve Defendant’s
motion?

Motion granted because the action had already prescribed and is already barred by laches.
Defendant obtained the Torrens title on the land in question in 1975. Such title became
indefeasible one year after its issuance. Even assuming that the title was procured by fraud, the
action for reconveyance had already prescribed because the case was filed 24 years after the
discovery of the fraud. An action for reconveyance of real property resulting from fraud may be
barred by the statute of limitations, which requires that the action must be commenced within four
years from the discovery of the fraud, and in case of registered land, such discovery is deemed to
have taken place from the date of the registration of the title. The registration constitutes notice to
the whole word. (Veracruz v. Dumat-ol, 307 SCRA 198 [1999])

341. What are the rules on redemption of extra-judicially foreclosed properties


acquired pursuant to a free or a homestead patent?

The rules on redemption of extra-judicially foreclosed properties acquired pursuant to a


free patent or a homestead patent are as follows:

1) if the land is mortgaged to a rural bank under Republic Act 720, the mortgagor may
redeem the property within two years from the date of foreclosure or from the registration of the
Sheriff’s certificate of sale. If the mortgagor fails to exercise such right (redemption), he or his
heirs may still repurchase the property within five years from the expiration of the 2-year
redemption period pursuant to Section 119 of the Public Land Act (Commonwealth Act No. 141).

2) if the land is mortgaged to parties other than rural banks, the mortgagor may redeem
the property within one year from the registration of the certificate of sale pursuant to Act No.
3135. If he fails to do so, he or his heirs may still repurchase the property within five years from
the expiration of the redemption period also pursuant to Section 119 of the Public Land Act. (Sta.
Ignacia Rural Bank v. Court of Appeals, 230 SCRA 513 [1994])

342. Plaintiff filed in 1981 a complaint against Defendant for sum of money. In 1994,
the court rendered judgment against Defendant ordering him to pay Plaintiff the amount
owed. To satisfy the judgment, a parcel of land declared for tax purposes in the name of
Defendant was sold at public auction in 1996 to Plaintiff as the highest bidder. Upon
Defendant’s failure to redeem, a final deed of conveyance was executed in 1998, transferring
and conveying the property to Plaintiff. As a result, Plaintiff obtained in his name a tax
declaration.

Unknown to Plaintiff, Defendant applied for a free patent on the land. The
application was approved in 2003 and the patent and title issued in 2010. Defendant now
files an action to declare the nullity of the auction sale and to quiet title over the land.
Defendant invokes the provisions of Section 118 of the Public Land Act which prohibits the
alienation of lands acquired by homestead or free patent within five years from issuance of
the patent. Will the action prosper?

No. The judgment obligation of Defendant arose in 1994. The properties were levied and
sold at public auction with Plaintiff as the highest bidder in 1996. In 1998, the final deed of
conveyance ceding the subject property to Plaintiff was issued after Defendant failed to redeem
the property within the reglementary period. Defendant’s application for free patent was approved
only in 2003 and the free patent was issued only in 2010.

The sequence of events leads to the inescapable conclusion that even before the
application for homestead had been approved, Defendant was no longer the owner of the land.
The deed of conveyance issued in 1998 finally transferred the property to Plaintiff. As of that
date, Defendant did not actually have anymore right over the land. The prohibition under Section
118 of the Public Land Act does not apply since it is clear that the judgment debt and the
execution sale took place prior to the approval of the application for free patent. As declared by
the Supreme Court in Amper v. Presiding judge, 112 SCRA 327 [1982], the date when the
prohibition against alienation of lands acquired by homestead or free patents commences is “the
date of the approval of the application” and the prohibition embraces the entire five-year “from
and after the date of issuance of the patent or grant.” As stated in Beniga v. Bugas, 35 SCRA 111
[1970], the provision would make no sense if the prohibition starting “from the date of the
approval of the application” would have no termination date. Consequently, the specific period of
five years within which the alienation or encumbrance of a homestead is restricted starts to be
computed from the date of the issuance of the patent. “But the prohibition of alienation
commences from the date the application is approved, whichever comes earlier. (Taneo, Jr. v.
Court of Appeals, 304 SCRA 308 [1999])

343. Is an adverse claim annotated at the back of a Torrens title automatically


cancelled upon the lapse of the 30-day effectivity period?

No. After the lapse of said period, the annotation of an adverse claim may be cancelled
upon filing of a verified petition by an interested party.

345. What is the distinction between intrinsic and extrinsic fraud?

Fraud is regarded as intrinsic where the fraudulent act pertains to an issue involved in the
original action, or where the acts constituting the fraud were or could have been litigated therein.
It is regarded as extrinsic where it prevents a party from having a trial or from presenting his
entire case to the court, or where it operated upon matters pertaining not to the judgment itself but
to the manner in which it is procured; so that there is not a fair submission of the controversy.
Extrinsic fraud is also known as actual fraud. The distinction is important because only actual or
extrinsic fraud has been accepted as a ground for a judgment (in a land registration case or any
case for that matter) to be annulled (Heirs of Manuel Roxas v. Court of Appeals, 270 SCRA 309
[1997])

346. Who, as between buyers of unregistered lands, is the rightful owner: the first
buyer in a prior sale but was unrecorded, or the second buyer who purchased the land in an
execution sale whose transfer was registered in the Register of Deeds?

Under Act No. 3344, registration of instruments involving unregistered lands is “without
prejudice to a third party with a better right.” This phrase means that mere registration of the sale
in one’s favor does not give him any right over the land if the vendor was not anymore the owner
of the land, having previously sold the same to somebody else, even if the earlier sale was
unrecorded.

(NOTE: Article 1544 of the Civil Code on double sales has no application to unregistered
lands)

347. Petitioner files an application for registration of title to a parcel of land. This is
opposed by Oppositor who claims to be in actual possession of the land. The Director of
Lands also opposes the action and prays that the land be declared as a public land. Before
the date of the initial hearing, however, Petitioner files an ex-parte motion withdrawing his
application which the court granted. With the application withdrawn, Oppositor and the
Director of Lands became the only contending parties in the registration case.

On the date set for initial hearing, Oppositor appears in court and prays that he be
allowed to present evidence to prove his title over the land. The trial court denies the
request on the ground that no further proceedings in the land registration case could be
pursued because the conflicting interests therein involved ceased to exist with the
withdrawal of Petitioner’s application. Is the denial of Oppositor’s motion to prove his title
over the land proper?

No. Under Section 37 of the Land Registration Act (Act No. 496), as amended by Act
3621, the withdrawal of Petitioner’s application does not terminate the registration proceeding
when there is an adverse claim. The opposition filed by the Director of Lands is, for all intents
and purposes, a conflicting interest as against that of the applicant or of the oppositor, asserting a
claim over the land sought to be registered. Consequently, the withdrawal by either Petitioner or
Oppositor from the case does not ipso facto obliterate the conflicting interests in the case. Neither
is the case terminated because under Section 37 of the Land Registration Act, the trial court is
required to resolve the claims of the remaining parties, the withdrawal of the application by the
applicant and/or the oppositor notwithstanding. (Director of Lands v. Court of Appeals, 303 SCRA
495 [1999])

PRESCRIPTION
348. Distinguish prescription and laches.

While prescription is concerned with the fact of delay, laches deals with the effect of
unreasonable delay. (Mapa III v. Guzon, 77 SCRA 387)

349. What is laches?

Laches is failure or neglect, for an unreasonable and unexplainable length of time, to do


that which, by exercising due diligence, could or should have been done earlier. It is negligence
or omission to assert a right within a reasonable time, warranting a presumption that the party
entitled thereto either has abandoned it or declined to assert it. (Cristobal v. Melchor, 78 SCRA
175)

350. Debtor signed a promissory note in 1973 binding himself to pay Creditor the
amount of P20,000. Despite his knowledge that the debt had already prescribed, Debtor still
signed in 1998 another promissory note acknowledging his old debt and promised to pay it
within six months. When sued for non-payment of the second note, Debtor interposed the
defense that there was no valuable consideration when he signed the second note because
the old debt had already prescribed. Is Debtor’s contention tenable?

No. Because Debtor knew that the debt had already prescribed when he acknowledged
the existence of the old debt, and promised to pay it, there was an implied renunciation of the
prescription. (Art. 1112, Civil Code) Debtor, therefore, has a civil obligation to pay the value of
the second note.

351. Suppose Debtor voluntarily paid the old debt despite his knowledge that the
debt had already prescribed, is he allowed to recover what he paid?

No. Debtor’s voluntary payment of the debt despite his knowledge that the debt had
already prescribed does not entitle him to recover. His payment constitutes a natural obligation
under Article 1423 of the Civil Code.

352. Suppose Debtor did not know of the prescription when he paid the debt, will he
be allowed to recover this time?

Yes, because there was no renunciation of the prescription. He can still recover on the
basis of solutio indebiti.

353. In an action for collection of sum of money, plaintiff and defendant entered into
a compromise agreement duly approved by the court. Twelve years later, plaintiff sought to
cite defendant in contempt of court for alleged violation of the terms of the judgment by
compromise. May this be done?

No, for in effect what plaintiff wanted was to enforce a judgment that had prescribed thru
the institution of contempt proceedings. Article 1144 of the Civil Code expressly provides that an
action upon a judgment prescribes in ten years. In the instant case, more than ten years had passed
when plaintiff instituted the contempt proceedings. (Olego v. Rebueno, October 29, 1975)

354. X claims ownership of a parcel of land by virtue of a deed of donation propter


nuptias from his parents and also because he had been in open, continuous, notorious,
adverse and actual possession of the property from the time it was donated to him. The
court later declared void the donation for failure to comply with the formalities prescribed
by law. Even so, the court held that the property belongs to X by virtue of acquisitive
prescription. Is the court correct in declaring that X has acquired ownership of the donated
property by acquisitive prescription even if the donation was earlier declared void?

Yes. Prescription in general is a mode of acquiring (or losing) ownership of a property


and other real rights through the lapse of time in the manner and under the conditions of laid
down by law; namely, that the possession should be in the concept of owner and that such
possession be public, peaceful, uninterrupted, and adverse. Even assuming that the donation
propter nuptias is void for failure to comply with the formal requisites, it could still constitute a
legal basis for adverse possession. With a clear and convincing evidence of possession, a private
document of donation may serve as a basis for a claim of ownership. (Heirs of Maningding v.
Court of Appeals, 276 SCRA 601 [1997])

355. In 1980, C loaned to D the sum of P100,000 with interest at the rate of 25% per
annum for a term of two years. To guarantee payment, D pledged some pieces of jewelry. In
1991, or 11 years after the loan was obtained, D brought an action to recover the pledged
items, upon payment of his loan and interest. C contends that the action had already
prescribed because the period of prescription must be computed from the date of the
contract of loan (1980) because from that date D could already have recovered the pledged
items by paying the amount of the loan with interest.

Is C’s contention meritorious?

C’s contention is not meritorious because the action has not yet prescribed. There being
no circumstance to show that the period in the contract of loan was for the benefit of either party,
it must be presumed to be for the benefit of both. And it must be so, for this is a case of loan, with
interest, wherein the terms benefits D by the use of the money loaned and C, by the interest. This
being so ,D had no right to pay the loan before the lapse of two years, without the consent of C,
because such a payment in advance would have deprived the latter of the benefit of the stipulated
interest. It follows that the action to recover the thing pledged accrued only from the date of
maturity of the loan, or in 1982. Consequently, the 10-year period of prescription on written
contracts, such as the one involved in the problem, has not yet expired when the action was
brought.

356. In 1936, Carlos donated all his rights and interests over a 165-hectare parcel of
land in favor of the Commonwealth of the Philippines. The Deed of Donation states as
consideration the donor’s desire to contribute to the formation of the National Defense of
the Philippines. The donation contains a provision that the land donated shall be used
exclusively for military purposes and that when the Commonwealth of the Philippines no
longer needs the land for military purposes, the land shall automatically revert to the donor
or his heirs.

Upon declaration of independence on July 4, 1946, the Commonwealth of the


Philippines passed out of existence. It was replaced by the existing Republic of the
Philippines, which took over the subject land and turned portions of it over to the Air
Transportation Office (ATO) which has since utilized the land as a domestic airport, with
some portions rented to the Philippine Airlines, and other portions rented to other agencies,
for uses which clearly are not military in nature.

In 1970, Carlos filed an action against the Government for reconveyance of the
donated land for violation of the express condition imposed by him as donor. The
Government defends on the ground of prescription. Has the action prescribed?

Yes. Applying Article 1144(1) of the Civil Code on prescription of actions based on a
written contract, Carlos should have instituted the action for reconveyance within ten years from
the time the condition in the deed of donation was violated. The earliest date Carlos knew of the
violation of the condition was on July 4, 1946, when the Republic, as successor of the
Commonwealth of the Philippines, took over the properties and diverted the property to uses
other than that imposed by Carlos. The cause of action of Carlos has clearly prescribed, having
instituted the action only in 1970, or 24 years after the condition was violated. (vda. de Delgado
v. Court of Appeals, 363 SCRA 758 [2001} )

357. In 1976, A sold to B a parcel of registered land on the installment plan. B in


turn had an oral agreement with C that the latter would pay half of the price, and thus own
half of the land. C paid his share to B, and was given in 1976 receipts acknowledging the
payment. In 1977, A executed a formal deed of sale in favor of B, who immediately built a
house on the lot. C took possession of the other half, and built improvements thereon.
When C asked for a separate title, B refused. In 1988, C filed a complaint to compel B to
execute a formal deed of sale in his favor. After due proceedings, the court dismissed the
case on the ground that the action, being an action to enforce a written contract, had
already prescribed, and should have been brought within 10 years from 1976 under Article
1144 of the Civil Code. Has the action prescribed?

No. The error of the court is that it considered the issuance of the receipt in 1976 as the
basis of the action. The real basis of the action is C’s ownership (and possession) of the property.
No enforcement of the contract is needed because the property had already been delivered to C,
and ownership thereof had already been transferred by operation of law under Article 1434,
referring to property sold by a person (B), who subsequently becomes the owner thereof. The
action here therefore is one to quiet title, and as C is in possession, the action is imprescriptible.
(Bucton et. al v. Gabar, et.al., January 31, 1974)

358. What are some of the prescriptive periods under our laws?

The following are some of the prescriptive periods under our laws:

 40 days

Redhibitory action based on defects of animals (Art. 1577, Civil Code)

 6 months

Action for reduction of price or breach of sale of real estate (Arts. 1543 and 1539, Civil
Code)
Action for reduction of price against hidden defects of thing sold (Art. 1571, Civil Code)

 1 year
Action to impugn child’s legitimacy if husband resides in the same place (Art. 170,
paragraph 1, Family Code)
Action for revocation of donation for acts of ingratitude (Art. 769, Civil Code)
Action for forcible entry or unlawful detainer (Art. 1147, Civil Code)
Action for defamation (Art. 1147, Civil Code)
Action for rescission or for damages if immovable sold is encumbered with non-apparent
burden (Art. 1560, Civil Code)
Action for warranty of solvency in assignment of credits (Art. 1629, Civil Code)
Action for loss or damage to goods under COGSA

 2 years
Action to impugn child’s legitimacy if husband is in the Philippines but not residing in
the same place (Art. 170, par. 2. Family Code)

 3 years
Action to impugn child’s legitimacy if husband is abroad or outside the Philippines
(Art.170, par. 2 Family Code)
 4 years
Action for revocation or reduction of donation based on supervening birth, reappearance
of a child or adoption (Art. 763, Civil Code)
Action for revocation of donation on non-fulfillment of condition (Art. 764, Civil Code)
Action for recovery of movable (replevin) if possessor is in good faith (Art. 1132, Civil
Code)
Action upon an injury to rights of plaintiff (Art. 1146, Civil Code)
Action upon a quasi-delict (Art. 1146, Civil Code)
Action for rescission of rescissible contracts (Art. 1389, Civil Code)
Action to annul voidable contracts on the ground of vitiated consent (Art. 1391, Civil
Code)
Action for rescission of partition of decedent’s estate on account of lesion (Art. 1100,
Civil Code)

 5 years
Action for legal separation (Art. 57, Family Code)
Action for annulment of marriage, except on the ground of insanity (Art. 47, Family
Code)
Action to claim legitimacy or illegitimacy if child dies during minority or in a state of
insanity (Art. 173, Family Code)
Action to impugn legitimacy (Art. 182, Family Code)
Action for declaration of incapacity of an heir (Art. 1040, Civil Code)
Action for warranty of solvency of debtor if credit is assigned to a co-heir during partition
(Art. 1095, Civil Code)
All other actions whose periods are not fixed by law (Art. 1149, Civil Code)

 6 years
Action upon an oral contract (Art. 1145, Civil Code)
Action upon a quasi-contract (Art. 1146, Civil Code)
 8 years
Action for recovery of movable (replevin) if possessor is in bad faith (Art. 1132, par 2.
and Art. 1140, Civil Code)

 10 years
Action for recovery of possession of immovables (accion publiciana) if real right is lost
(Arts. 555 and 1134, Civil Code)
Action for recovery of ownership of immovables (accion reivindicatoria) if in good faith
(Art. 1134, Civil Code)
Action upon a mortgage contract (Art. 1142, Civil Code)
Action upon a written contract (Art. 1144, Civil Code)
Action upon an obligation created by law (Art. 1144, Civil Code)
Action upon a judgment to enforce warranty against eviction in partition (Art. 1094, Civil
Code)

 30 years
Action for recovery of ownership of immovables (accion reivindicatoria), if in bad faith
(Art. 1141, Civil Code)
 Lifetime
Action for annulment of marriage based on insanity (Art. 47, par. 2, Family Code)
Action for declaration of nullity of marriage (Art. 39, Family Code)
Action to claim legitimacy (lifetime of child) (Art. 173, Family Code)
Action to claim illegitimacy (lifetime of child; If by other means, only during lifetime of
parent) (Art. 175, par. 2, Family Code)
Action for legal support
Action for reduction of donation due to failure of donor to reserve property for his
support and support of others (during lifetime of donor or relatives) (Art.
750, Civil Code)

 No prescription
Action to declare a contract as inexistent or void.
Action to recover movable possessed thru a crime (no prescription in favor of offender)
Action to demand a right of way under Article 649, Civil Code
Action to demand partition in co-ownership or to enforce an express trust
Action to probate a will
Action to enforce a moral right (P.D. 49)
Action to recover possession of registered land under Land Registration Act by registered
owner or hereditary successors.

OBLIGATIONS AND CONTRACTS


359. Distinguish between civil and natural obligations.

Civil and natural obligations may be distinguished as follows: 1) civil obligations derive
their binding force from positive law; natural obligations derive their binding effect from equity
and natural justice; and b) civil obligations can be enforced by court action or by the coercive
power of public authority; the fulfillment of natural obligations cannot be compelled by court
action but depends exclusively upon the good conscience of the debtor.

360. Give the concept of a quasi-contract. Distinguish it from the other sources of
obligations.

A quasi-contract is a juridical relation which arises from certain lawful, voluntary, and
unilateral acts, for the payment of indemnity to the end that no one may be unjustly enriched or
benefited at the expense of another. (Art. 2142, Civil Code)

The act giving rise to a quasi-contract must be lawful, thereby distinguishing it from
crime in which the act or omission is unlawful; it must be voluntary, thus differentiating it from a
quasi-delict, which is based on fault or negligence or mere lack of foresight; and it must be
unilateral, to distinguish it from contracts in which there are two parties who come to an
agreement.

361. Debtor signs a promissory note binding himself to pay Creditor a sum of
money, and in case of non-payment, to render free service as a servant. Is the obligation
valid?

The obligation to pay is valid and cannot be questioned but the undertaking to render
services as a servant for free is contrary to law and morals, for here, slavery would result. If,
however, the “free” services will be rendered in satisfaction of the debt, the stipulation can be
given effect, for here the services will not really be gratuitous. Even in this case, however,
specific performance of the service will not be a proper remedy for non-compliance because it
will amount to involuntary servitude. Instead, an action for damages for payment of the debt
should be brought. (De los Reyes v. Alejado, 16 Phil. 299)

362. While sitting on his front porch, Abe watched three men paint a fence on his
property. The men later learned that they had made a mistake. The fence they were to have
painted was in the next block, in the property of Rey. Is Abe obliged to pay the painters? If
so, what would be the basis of his liability?

By his toleration of the trespassers and by his failure to protest, Abe is obliged to pay the
painters the reasonable value of the work done and the materials used. The basis of his liability
would be his implied acceptance of the offer of the painters to paint his fence. In other words, the
basis of Abe’s liability is his implied contract with the painters.

(NOTE: it is error to say that Abe is liable because of the benefit bestowed; or that his
liability is grounded on the existence of a quasi-contract; or that he is obliged to pay the painters
to prevent unjust enrichment. This is so because of the existence of an implied contract between
Abe and the painters)

363. Suppose Abe had not been at home, and he did not discover that the fence had
been painted until he returned in the evening, is Abe liable? If so, what would be the basis of
his liability?

Abe would not be obliged in this situation. He did not learn of the benefits bestowed until
after they had been completed. There had been no communication of the offer of the painters and
no express or implied acceptance by Abe of the work done. Neither is Abe liable to the painters
under a quasi-contract. This is so because there was neither a case of solutio indebiti or
negotiorum gestio in the instant case.
364. Homer obtains a loan from Accord Finance to purchase a car. In consideration
thereof, he signs a promissory note to pay the loan in monthly installments and executes a
chattel mortgage over the car. In consequence of Homer’s failure to pay the monthly
installments, Accord institutes a collection suit with prayer for a writ of replevin.
Accordingly, Accord recovered possession of the car.

Without filing an answer, Homer successfully negotiated with Accord for the
reduction of his outstanding loan. Thereafter, he delivered to Accord a manager’s check
corresponding to the amount agreed upon. Despite payment of the negotiated amount,
however, the car was not released to Homer because of his refusal to sign the joint motion
for the dismissal of the case filed by Accord against him. Homer claims that he need not sign
the joint motion because he has not yet filed his answer. Accord insists, however, that the
joint motion is a standard practice to effect a compromise and to preclude the future filing
of claims, counterclaims or suits for damages. Is Homer entitled to recover damages from
Accord Finance?

No. The refusal referred to in Article 1170 of the Civil Code is the deliberate and
intentional evasion of the normal fulfillment of an obligation. The joint motion to dismiss was for
the benefit of Homer, as the case filed by Accord against him would be dismissed with prejudice.
The whole point of the parties entering into the compromise agreement was in order that Homer
would pay his outstanding loan and in return, Accord would return the car and drop the collection
case. The joint motion was but a natural consequence of the compromise agreement which simply
stated that Homer had fully settled his obligation; hence, the dismissal of the case. Accord’s act of
requiring Homer to sign the motion to dismiss cannot be said to be a deliberate attempt on the
part of Accord to renege on the proposed compromise agreement. Moreover, it is well to note that
in case of breach of contract, moral damages may only be awarded when the breach was attended
by fraud or bad faith. The law presumes good faith. Homer failed to overcome this presumption.
In fact, the act of Accord in reducing Homer’s outstanding obligation is indicative of its good
faith and sincere desire to settle the case. Necessarily, the claim for exemplary damages must also
fail. In no way may the conduct of Accord be characterized as “wanton, fraudulent, reckless,
oppressive or malevolent,” (International Corporate Bank v. Gueco, 351 SCRA 516 [2001])

365. X leased to Y a ten-wheeler cargo truck on a monthly basis. The truck was later
burned by unidentified persons when it was parked unattended due to a mechanical
trouble. X had the truck repaired for which he spent a considerable amount. Thereafter, he
brought an action against Y to recover the cost of repairs and unpaid rentals. Y disclaims
liability on the ground that the burning of the truck was due to a fortuitous event. Decide.

For a fortuitous event to exempt one from liability, it is necessary that one has committed
no negligence or misconduct that may have occasioned the loss. An act of God cannot be invoked
to protect a person who has failed to take steps to forestall the possible adverse consequences of
such a loss. One’s negligence may have concurred with an act of God in producing the damage
and injury to another. When the effect is found to be partly the result of a person’s participation --
whether by active intervention, neglect or failure to act -- the whole occurrence is humanized and
removed from the rules applicable to acts of God.

In the present case, Y failed to exercise reasonable care and caution that an ordinary
prudent person would have used in the same situation. Y fell short of ordinary diligence in
safeguarding the leased truck against the accident, which could have been avoided in the first
place. (Mindex Resources Development v. Morillo, G. R No. 138123, March 12, 2002)

366. Lulu pawned several pieces of jewelry with Alajera Pawnshop to secure
payment of a loan. Two weeks later, armed men entered the pawnshop and took away
whatever cash and jewelry found inside the pawnshop, including the jewelry pawned by
Lulu. Lulu now demands payment of the value of her pawned items. The pawnshop
disclaims liability on the ground of fortuitous event.

a) Is robbery a fortuitous event?

Robbery per se, just like carnapping, is not a fortuitous event. It does not foreclose the
possibility of negligence on the part of the party charged. In Co v. Court of Appeals, 291 SCRA
111 [1998], the Supreme Court held: “It is not a defense for a repair shop of motor vehicles to
escape liability simply because the damage or loss of a thing lawfully placed in its possession was
due to carnapping. Carnapping per se cannot be considered as a fortuitous event. The fact that a
thing was unlawfully and forcefully taken from another’s rightful possession, as in cases of
carnapping, does not automatically give rise to a fortuitous event. To be considered as such,
carnapping entails more than the mere forceful taking of another’s property. It must be proved
and established that the event was an act of God or was done solely by third parties and that
neither the claimant nor the person alleged to be negligent has any participation. In accordance
with the Rules of Evidence, the burden of proving that the loss was due to a fortuitous event rests
on him who invokes it -- which in this case is the private respondent.”

b) Is the pawnshop liable for the loss of Lulu’s pawned items?

Yes. It is a settled rule that in order for a fortuitous event to exempt one from liability, it is
necessary that one has committed no negligence or misconduct that may have occasioned the
loss. In the instant case, the pawnshop failed to show that it was free from any negligence by
which the loss of the pawned jewelry may have been occasioned.

Article 2123 of the Civil Code provides that with regard to pawnshops and other
establishments which are engaged in making loans secured by pledges, the special laws and
regulations concerning them shall be observed, and subsidiarily, the provisions on pledge,
mortgage and antichresis. The provision on pledge, particularly Article 2099 of the Civil Code,
provides that the creditor shall take care of the thing with the diligence of a good father of a
family. This means that the pawnshop must take care of the pawns the way a prudent person
would as to his own property.

In the case presented, the pawnshop was guilty of negligence in the operation of its
pawnshop business. Evidently, no sufficient precaution and vigilance were adopted by the
pawnshop to protect its establishment from unlawful intrusion. There was no clear showing that
there was any security guard at all. Or, if there was one, that he had sufficient training in securing
a pawnshop. Further, there is no showing that the alleged security guard exercised all that was
necessary to prevent any untoward incident or to ensure that no suspicious individuals were
allowed to enter the premises. In fact, it is even doubtful that there was a security guard, since it is
quite impossible that he would not have noticed that the robbers were armed. (Sicam v. Jorge, 529
SCRA 443 [2007])

367. Teddy is the disbursing officer of a beach project of the Philippine Tourism
Authority in Cavite. In the morning of July 1, which was a Friday, he went to Manila to
encash a check covering the wages of the employees and the operating expenses of the
project. For some reason, the processing of the check by the bank was delayed and was
completed at about 3 p.m. Nevertheless, he decided to encash the check because the project
employees would be waiting for their pay the following day, a Saturday; otherwise, the
workers would have to wait until July 5 which is a Monday, to receive their wages. At that
time, he had two choices: 1) return to Ternate, Cavite that same afternoon and arrive there
early evening; or 2) take the money with him to his house in Marilao, Bulacan, thinking it
was the safer one. He chose the second option. Thus, a little past 3 p.m., he took a passenger
jeep bound for Bulacan. While the jeep was along EDSA, the jeep was held up and the
money kept by Teddy was taken, and the robbers jumped out of the jeep and ran. Teddy
chased the robbers and caught up with one of them who was subsequently charged with
robbery and pleaded guilty. The other robber who held the stolen money escaped.
Subsequently, the Commission on Audit found Teddy negligent because he had not brought
the cash proceeds of the checks to his office in Ternate, Cavite for safekeeping which is the
normal procedure in the handling of funds. Was Teddy negligent?

In Hernandez v. Chairman, Commission on Audit, 179 SCRA 39 [1989], it was held that
Teddy was not negligent in deciding to encash the check and bringing it home to Marilao,
Bulacan instead of Ternate, Cavite due to the lateness of the hour for the following reasons: 1) he
was moved by unselfish motive for his co-employees to collect their wages and salaries the
following day, a Saturday, a non – working day, because to encash the check on July 5, the next
working day after July 1, would have caused discomfort to laborers who were dependent on their
wages for sustenance; and 2) that choosing Marilao as a safer destination, being nearer, and in
view of the comparative hazards in the trips to the two places, said decision seemed logical at that
time. The fact that robbers attacked him in broad daylight and in the presence of other passengers
could not be said to be a result of his imprudence and negligence.

(NOTE: Unlike in Sicam where the robbery took place at the pawnshop establishment
which was under the control of the owner, the robbery in Hernandez took place in a public utility
jeepney. In Sicam, the pawnshop owner had the means to screen the persons who were allowed
entrance to the premises and to protect itself from unlawful intrusion)

368. Maria received from Dona Nena a pendant with diamonds to be sold on
commission basis. Maria failed to return the diamond pendant because of a robbery
committed upon her while she was on her way home from Dona Nena’s house. The incident
became the subject of a criminal case for robbery filed against several persons. Dona Nena
subsequently brought an action against Maria for recovery of the pendant or its value.
Maria sets up the defense that the robbery extinguished her obligation. Decide.

The factual backdrop of the above problem is identical to Austria v. Court of Appeals, 39
SCRA 527, [1971]. Under the circumstances prevailing at the time when the Supreme Court
promulgated its decision in Austria in 1971, the City of Manila and its suburbs had a high
incidence of crimes against persons and property that rendered travel after nightfall a matter to be
sedulously avoided; the conduct of Maria in returning alone to her house in the evening carrying
jewelry of considerable value would have been negligence per se and would not exempt her from
responsibility in the case of robbery. However, Maria was found not liable for negligence since
the robbery happened ten years previously, i.e., in 1961 when criminality had not reached the
level of incidence obtaining in 1971.

369. Martha, a government employee, boarded the LRT from Sen. Puyat Avenue to
Monumento to catch up with a 3 p.m. meeting in Caloocan. On board the LRT, her handbag
was slashed and the contents were stolen by an unidentified person. Among those stolen
were her wallet and the government–issued cellular phone. She then reported the incident to
the police authorities; however, the thief was not located, and the cellular phone was not
recovered. She also reported the loss to her superior, and she requested that she be freed
from accountability for the cellular phone. Her request was denied on the ground that she
lacked the diligence required in the custody of government property and was ordered to pay
the purchase value of the cellular phone. Is Martha liable for the loss of the cellular phone?

No. Riding the LRT cannot per se be denounced as a negligent act more so because
Martha’s mode of transit was influenced by time and monetary considerations; that she boarded
the LRT to be able to arrive in Caloocan in time for her 3 p.m. meeting; that any prudent and
rational person under similar circumstances can reasonably be expected to do the same; that
possession of a cellular phone should not hinder one from boarding the LRT as Martha did
considering that whether she rode in a jeep or bus, the risk of theft would have also been present;
that because of her relatively low position and pay, she was not expected to have her own vehicle
or ride a taxi cab; she did not have a government assigned vehicle; that placing the cellular phone
in a bag away from covetous eyes and holding on to the bag as she did is ordinarily sufficient care
of a cellular phone while traveling on board the LRT. (Cruz v. Gangan, 395 SCRA 711 [2003])

370. What are the instances when the debtor is liable even for a fortuitous event?

The following are the instances when the law (Civil Code) provides for liability of the
debtor even if due to a fortuitous event:

a) Art. 552, par. 2 – a possessor in bad faith shall be liable for the deterioration or loss of
the thing possessed in every case, even if caused by a fortuitous event.

b) Art. 1165, par. 3- if the obligor delays, or has promised to deliver the same thing to
two or more persons who do not have the same interest, he shall be responsible for fortuitous
event until he has effected delivery.

c) Art. 1268 - when the debt of a thing certain proceeds from a criminal offense, the
debtor shall not be exempted from the payments of its price, whatever may be the cause of the
loss.

d) Art. 1942 – the bailee is liable for the loss of the thing loaned, even if it should be
through a fortuitous event in the following cases: (1) if he devotes the thing to any purpose
different from that for which it has been loaned; 2) if he keeps it longer than the period stipulated,
or after the accomplishment of the use for which the commodatum has been constituted; 3) if the
thing loaned has been delivered with appraisal of its value, unless there is a stipulation exempting
the bailee from responsibility in case of a fortuitous event; (4) if he lends or leases the thing to a
third person, who is not a member of his household; and 5) if, being able to save either the thing
borrowed or his own thing, he chose to save the latter.

e) Art. 1979- the depositary is liable for the loss of the thing deposited even if due to a
fortuitous event in the following cases: 1) if it is so stipulated; 2) if he uses the thing without the
depositor’s permission; (3) if he delays its return; and 4) if he allows others to use it, even though
he himself may have been authorized to use the same.

f) Art. 2147 - the officious manager shall be liable for the loss or destruction of the
property or business of another in certain cases.

g) Art. 2148 - liability for loss of the thing even if due to a fortuitous event due to
incompetence.

h) Art. 2159, par, 2 - in case of solutio indebiti and payee in bad faith.

371. Abe and Tessie engaged the services of Video Artists for the video coverage of
their forthcoming wedding. On the appointed date and time, the video company’s crew
arrived at the residence of the bride and there recorded her pre-departure activities before
leaving for the church where the wedding ceremonies were to be held. Thereafter, the crew
proceeded to the church and recorded the ceremonies. They then went to the hotel where
the wedding reception followed. A few days later, Video Artists informed Abe and Tessie that
the videotape coverage of their wedding celebration was damaged due to a mechanical
defect in their equipment. The video company then disclaimed liability on the ground of
fortuitous event. Decide.

In order that a fortuitous event may exempt the video company from liability, it is
necessary that it be free from negligence. (Lasam v. Smith, 45 Phil. 657 [1924]) The record
shows, however, that the alleged malfunctioning of the videotape recorder occurred at the
beginning of the video coverage at the residence of the bride. The video crew miserably failed to
detect the defect in the videotape recorder and that they discovered the same rather too late after
the wedding.

The video company cannot even seek refuge under Article 2180 of the Civil Code by
claiming that it exercised due care in the selection and supervision of its employees in their
respective trades. That defense, as provided in the last paragraph of Article 2180 of the Civil
Code, may be availed of only where the liability arises from culpa aquiliana and not from culpa
contractual such as in the case at bar. (Herbosa vs. Court of Appeals, 374 SCRA 578 [2002])

372. A telephone company and an electric cooperative entered into a Service


Contract Agreement containing the following terms and conditions: a) the telephone
company is allowed to use the electric posts of the electric cooperative for the installment of
its telephone and cable wires; b) the telephone company is obliged to install and allow the
electric cooperative the free use of ten telephone lines; and c) the contract “shall be for as
long as the telephone company has need for the electric posts and shall terminate only if the
electric cooperative is forced to stop or abandon its operations as a public service and it
becomes necessary to remove the electric posts. Is the contact subject to a potestative
condition?

No. The condition that the contract shall be effective for as long as the telephone
company has need for the electric posts is decidedly a potestative condition because it is
dependent upon the sole will of the telephone company. However, the condition that such contract
may be terminated if the electric cooperative is forced to stop or abandon its operations is a casual
condition which depends on chance, hazard, or the will of third persons. In sum, the contract
between the telephone company and the electric cooperative is subject to a mixed condition , that
is, a condition dependent partly on the will of a party and partly on chance, hazard, or the will of
a third person, which do not invalidate a contract (Naga Telephone Company, Inc. v. Court of
Appeals, 230 SCRA 351[1994])

373. S sells to B a parcel of land. Their notarized contract of sale contains a


provision that “the seller warrants that he will defend the buyer’s title to and peaceful
possession of the property.” There are lessees in the property at the time of the sale. Buyer
now wants to cancel the contract because of the seller’s failure to eject the lessees. He claims
that he cannot use the property because of the seller’s failure to eject the lessees. He
contends that the provision where the seller “warrants” to defend his title to and peaceful
possession of the property partakes of the nature of a condition.

a) Is the buyer’s claim tenable?

The buyer’s claim is not tenable. The buyer failed to appreciate the difference between a
condition and a warranty and the consequences of such distinction. The failure of the seller to
eject the lessees from the lot in question and to deliver actual and physical possession thereof to
the buyer cannot be considered a substantial breach for two reasons: First, such “failure” was not
stipulated in the contract as a condition -- whether resolutory or suspensive; and second, its
effects and consequences were not specified either. The stipulation adverted to by the buyer does
not impose a condition or an obligation on the part of the seller to eject the lessees from the lot.
Said stipulation pertains merely to the usual warranty against eviction, and not a condition that
was not met. Had the parties intended to impose on the seller the obligation to eject the tenants
from the thing sold, the same should have been expressly provided for in the contract. For
example, the contract may provide that if the lessees are not ejected with a certain period, the
contract can be rescinded. Regrettably, no such provision was stipulated upon by the parties.

b) Is the seller liable for breach of warranty against eviction?

There was no breach of warranty against eviction. The buyer was not deprived of his title.
The presence of lessees does not even constitute an encumbrance on the land nor does it deprive
the buyer of its control thereof. (Power Commercial and Industrial Corp. v. Court of Appeals, 274
SCRA 597 [1997])

374. X leased to Y a building for 15 years. Y occupied the building and made
payments of rentals for about three years, after which no rentals were paid. X required Y to
return the leased property if he cannot pay the rents. Pursuant to this demand, Y vacated
the property with notice to X. X later brought an action to recover the rentals that should
have been paid under the lease contract for the unexpired term of 12 years. Is Y liable?

No. Under Article 1191 of the Civil Code, X was permitted to elect between the two
remedies of resolution or specific performance, with damages in either case. He is not entitled to
pursue both of the inconsistent remedies. In this case, X clearly elected to resolve or rescind the
lease contract.

In the common case of the resolution or rescission of a contract of sale for failure of the
purchaser to pay the stipulated price, the seller is entitled to be restored to the possession of the
thing sold, if it has already been delivered. But he cannot have both the thing sold and the price
which was agreed to be paid, for the resolution or rescission of the contract has the effect of
destroying the obligation to pay the price. Similarly, in the case of the resolution of a contract of
lease, the lessor is entitled to be restored to the possession of the leased premises, but he cannot
have both the possession of the leased premises for the remainder of the term and the rent which
the other party was contracted to pay. The termination of the lease has the effect of destroying the
obligation to pay for the future.

375. S sells to B a parcel of land for the total sum of P2 million. Their sale agreement
contains the following terms and conditions: 1) B shall pay P600,000 as down payment; 2)
the balance of P1.4 million shall be paid in four quarterly installments of P250,000; 3) that
upon full payment of the purchase price, S shall execute a deed of absolute sale in B’s favor;
and 4) that upon the signing of the agreement, B shall take possession of the property.

As agreed upon, B took possession of the property after the signing of the sale
document. To answer for his balance of P1.4 million, he issued four post-dated checks
payable to S in the amount of P250,000 each. The checks bounced. B promised to replace
the checks but failed to do so. S then brought an action to rescind the sale and to recover the
property. S contends that B’s failure to completely pay the purchase price is a substantial
breach of the obligation which entitles him to rescind under Article 1191 of the Civil Code.
B defends by invoking Article 1389 of the Civil Code that where specific performance is
available as a remedy, rescission may not be resorted to.

a) Distinguish between the remedy of rescission under Article 1191 of the Civil Code
and the remedy of rescission under Article 1383 thereof.

Rescission of reciprocal obligations under Article 1191 of the Civil Code should be
distinguished from rescission of contracts under Article 1383. Although both presupposes and
both require mutual restitution when proper, they are not entirely identical.

While Article 1191 uses the term “rescission,” the proper term really is “resolution.”
Resolution is a principal action which is based on the breach of a party of his obligation, while
rescission under Article 1383 is a subsidiary action limited to cases of rescission for lesion under
Article 1381 of the Civil Code.

b) Is seller entitled to rescind the sale?

Yes. Obviously, the contract entered into by the parties in the case at bar does not fall
under any of those mentioned by Article 1381. Consequently, Article 1381 is inapplicable.

A reading of the agreement entered into by S and B shows that it is in the nature of a
contract to sell, as distinguished from a contract of sale. In a contract of sale, the title to the
property passes to the vendee upon the delivery of the thing sold; while in a contract to sell,
ownership is, by agreement, reserved in the vendor and is not to pass to the vendee until full
payment of the purchase price. In a contract to sell, the payment of the purchase price is a positive
suspensive condition, the failure of which is not a breach, casual or serious, but a situation that
prevents the obligation of the vendor to convey title from acquiring an obligatory force.

In the instant case, S bound himself to deliver a deed of absolute sale and clean title
covering the parcel of land upon full payment by B of the purchase price of P2 million. This
promise to sell was subject to the fulfillment of the suspensive condition that B will pay in full
the purchase price. B, however, failed to complete payment of the purchase price. The non-
fulfillment of the condition of full payment rendered the contract to sell ineffective and without
force and effect. Failure of B to pay, in this instance, is not even a breach but merely an event
which prevents S’s obligation to convey title from acquiring binding force. Hence, the agreement
of the parties may be set aside, but not because of a breach on the part of B to complete payment
of the purchase price. Rather, his failure to do so brought about a situation which prevented the
obligation of S to convey title from acquiring force (Ong v. Court of Appeals, 310 SCRA 1
[1999])

376. S sold to B in 1985 a parcel of land for P1 million. Their Contract of


Conditional Sale provides that Bart shall pay P100,000 as down payment and the balance to
be paid in 60 days after the squatters on the property have been removed. Their contract
stipulates that if the squatters are not removed within six months from the execution of the
contract, the P100,000 down payment shall be returned by S to B.

S filed an ejectment action against the squatters, but in spite of the decision in his
favor, the squatters would not leave. Subsequently, S offered to return the P100,000 down
payment to B on the ground that he is unable to remove the squatters on the property. B
refused; instead, he demanded that S execute a deed of absolute sale of the property in his
favor, at which time he will pay the balance of the purchase price. Meanwhile, the value of
the land had appreciated considerably. S now seeks to rescind the sale and consign the
P100,000 in court. Will the action prosper?

The action will not prosper. The action for rescission may be brought only by the
aggrieved party to the contract. Since it was S who failed to comply with his conditional
obligation, he is not the aggrieved party who may file the action for rescission but B. However, B
is not opting to rescind the contract but has chosen to waive S’s compliance with the condition
which he can do under Article 1545 of the Civil Code.

377. Ferdie leased to Ninoy a building, the latter to pay P20,000 monthly, including
light and water bills. The contract stipulates that non-payment of the rent would
automatically cancel the contract, but otherwise Ninoy could stay on indefinitely. After five
years, Ferdie tried to eject Ninoy because he planned to tear down the building and put up
another. Can Ferdie eject Ninoy?

Yes, he can. Ninoy, the lessee, cannot successfully set up the defense that under the
contract of lease, he can continue occupying the building so long as he faithfully fulfills his
obligation of paying the rentals. It is clear that under this stipulation, the continuance of the
fulfillment of the contract would then depend solely and exclusively upon his uncontrolled choice
between continuing paying the rentals or not, completely depriving the owner of all say on the
matter. If this defense is allowed, so long as the lessee elected to continue the lease by continuing
the payment of the rentals, the owner would never be able to discontinue it; conversely, although
the owner should desire the lease to continue, the lessee could effectively thwart his purpose by
the simple expedient of stopping payment of rentals. Clearly, the condition is a purely potestative
one rendering the same void. (Encarnacion v. Baldemar, 77 Phil. 470)

378. What is an alternative obligation?

An alternative obligation is one where out of two or more prestations which are due, the
performance of one is already sufficient compliance with the obligation. (Art. 1199, par. 1, Civil
Code)

379. X obtains a loan from Y. They agree that upon maturity of the loan, X will give
Y either the sum owed or a particular house and lot. Is the stipulation a pactum
commissorium?

No. The stipulation is in fact valid because it is simply an alternative obligation, which is
expressly allowed by the law. The agreement to convey the house and lot in the event of X’s
failure to pay the debt in money at its maturity does not constitute pactum commissiorium. It is
not an attempt to permit the creditor Y to declare a forfeiture of the security upon the failure of
the debtor to pay the debt at maturity. It simply provided that if the debt is not paid in money, it
shall be paid in another specific way by the transfer of the property at a valuation.

380. Debtor obtained from Creditor a loan payable in two years. To guarantee
payment of the loan, Debtor mortgaged his uninsured house to Creditor. Three months
after the loan was given, Debtor’s house was gutted by fire of accidental origin. Thereupon,
Creditor demanded immediate payment from Debtor. Debtor defends on the ground that
the period for payment has not yet arrived. Is debtor’s contention tenable?
No. Under Article 1198 of the Civil Code, the debtor shall lose every right to make use of
the period when the securities disappear through a fortuitous event. Debtor has to give a
satisfactory substitute collateral for him to enjoy anew the period given to him for the payment of
his loan.

381. What is a facultative obligation?

A facultative obligation is one where only one prestation has been agreed upon but the
obligor may render another in substitution. (Art. 1206, par. 1, Civil Code)

382. Distinguish between alternative and facultative obligations.

Alternative obligation and facultative obligations may be distinguished as follows:

1) In an alternative obligation, various things are due, but the giving of one is already
sufficient compliance with the obligation. In a facultative obligation, only one thing is principally
due, and it is that one which is generally given, but the substitute may be given to render payment
or fulfillment easy.

2) If one of the presentations in an alternative obligation is illegal and the other


prestations are valid, the obligation remains. In a facultative obligation, if the principal obligation
is void, there is no longer any need of giving the substitute.

3) In an alternative obligation, if it is impossible to give all except one, that last one must
still be given. In a facultative obligation, if it is impossible to give the principal, the substitute
does not have to be given, and if it is impossible to give the substitute, the principal must still be
given.

383. A and B sign a promissory note binding themselves to pay C jointly and
severally the amount of P30,000. For non-payment of the debt, C sues both debtors for sum
of money. After due proceedings, judgment is rendered whereby A and B were ordered to
pay C their loan. For one reason or another, however, the judgment did not state whether
the liability of the defendants is joint or solidary. C then asked for execution on the
properties of A for the whole obligation. In the contract, liability was solidary but in the
judgment, nothing was said about the nature of the obligation.

How shall the judgment obligation be considered: joint or solidary?

The judgment obligation should be considered merely as a joint one; hence, C can get the
properties of A corresponding to his proportionate share in the judgment debt. The judgment did
not state that the obligation was solidary, so none of the defendants may be required to pay for the
whole obligation.

384. May a sodidary creditor assign his right under the obligation?

Under Article 1213 of the Civil Code, a solidary creditor cannot assign his right without
the consent of the others. This is so because a solidary obligation implies mutual agency and
mutual confidence. Should the assignee or substitute do acts which would prejudice the others,
there is no doubt that the right of the other creditors would be endangered, hence, the necessity of
their consent.

385. What is the basis of payment of an obligation in case of extraordinary inflation


or deflation?

In case of extraordinary inflation or deflation of the currency stipulated should supervene,


the value of the currency at the time of the establishment of the obligation shall be the basis of
payment, unless there is an agreement to the contrary. (Art. 1250, Civil Code)

386. When does extraordinary inflation exist?

Extraordinary inflation exists when there is a decrease or increase in the purchasing


power of the Philippine currency which is unusual or beyond the common fluctuation in the value
of said currency, and such increase or decrease could not have been reasonably foreseen or was
manifestly beyond the contemplation of the parties at the time of the establishment of the
obligation. (Hubonhoa v. Court of Appeals, December 14, 1999)

387. When are the effects of extraordinary inflation applicable?

The effects of extraordinary inflation are applicable only when there is an official
declaration to that effect by competent authorities. (Lantion v. NLRC, 181 SCRA 513)

388. X leased to Y in 1968 a parcel of land. Their contract of lease provides that the
lease shall run for a period of 20 years and that Y shall pay a rental of P2.50 per square
meter per month for the first ten years of the lease and P3.00 per square meter per month
for the next ten years. Based on their stipulation, the monthly rental was fixed at P3,500 for
the first ten years, and at P4,200 for the succeeding ten years of the lease.

In 1983, or five years before the expiration of the lease, X asked Y to adjust the
amount of rentals on the allegation that the country was at that time experiencing
extraordinary inflation. Y refused the request. X then brought an action for the payment of
adjusted rentals based on his claim that since the execution of the contract of lease in 1968,
an extraordinary inflation had supervened resulting from the deterioration of worldwide
economic conditions, a circumstance that was not foreseen by the parties at the time they
entered into the contract. At the trial, X established that the inflation rate in 1968 was only
2.06%; then it soared to 34.51% in 1974, and in 1983, it reached a high of 50.34%. Is X
entitled to a favorable judgment?

No. The supervening of extraordinary inflation is never assumed. (Sangrador v.


Villarama, 168 SCRA 215 [1988]) The party alleging it must lay down the factual basis for the
application of Article 1250 of the Civil Code. Extraordinary inflation exists only when there is a
decrease or increase in the purchasing power of the Philippine currency which is unusual or
beyond the common fluctuation in the value of said currency, and such increase or decrease could
not have been reasonably foreseen or was manifestly beyond the contemplation of the parties at
the time of the establishment of the obligation.(Hubonhoa v. Court of Appeals 320 SCRA 625
[1999] )
While there was a decline in the purchasing power of the Philippine currency from the
period 1968 to 1983, such cannot be considered as extraordinary; rather, it is a normal erosion of
the value of the Philippine peso which is characteristic of most currencies. “Erosion” is indeed an
accurate description of the trend in the value of the peso in the past three to four decades.
Unfortunate as this trend may be, it is certainly distinct from the phenomenon contemplated by
Article 1250. Moreover, the Supreme Court has held that the effects of extraordinary inflation are
not to be applied without an official declaration thereof by competent authorities. (Singson v.
Caltex (Philippines), Inc., 342 SCRA 91 [2000])

389. In May 1990, Hector leased to Rene a parcel of land for six years. The contract
contains an option to buy clause. Under the option, Rene has the exclusive and irrevocable
right to buy the property within the lifetime of the contract, that is, until May 1996. Two
months before the contract is set to expire, Rene informed Hector of his willingness to
purchase the property under the option to buy clause. Because Hector refused to sign a deed
of sale unless Rene delivers the money to pay for the property, Rene brought an action in
April 1996 with the Lupong Tagapamayapa asking that he be allowed to purchase the leased
property under the option to buy clause. During the barangay proceedings, Rene presented
a bank certification that arrangements were being made to allow him to borrow funds to
enable him to meet his obligations under the option contract. Failing to reach an agreement
at the barangay, Rene then brought an action for specific performance against Hector, and
deposits with the court a cashier’s check corresponding to the purchase price of the
property. Hector defends on the ground that he cannot be compelled to sell the disputed
property by virtue of the non-fulfillment of the obligation under the option contact. He
contends that Rene incurred in delay when he did not deliver the purchase price or consign
it in the court on or before the expiration of the contract of lease in May 1996.

a) Is Rene required to consign the purchase price in court?

No. Obligations under an option to buy are reciprocal obligations. (Nietes v. Court of
Appeals, 46 SCRA 654 [1972]) The performance of one obligation is conditioned on the
simultaneous fulfillment of the other obligation. (Vermen Realty Devt. Corp. v. Court of Appeals,
224 SCRA 519 [1993]) In other words, in an option to buy, the payment of the purchase price by
the creditor is contingent upon the execution and delivery of a deed of sale by the debtor. In this
case, when Rene opted to buy the property, his obligation was to advise Hector of his decision
and his readiness to pay the price. He was not yet obliged to make actual payment. Only upon
Hector’s actual execution and delivery of the deed of sale was he required to pay. In Nietes vs.
Court of Appeals, 46 SCA 654 [1972], the Supreme Court held that notice of the creditor’s
decision to exercise his option to buy need not be coupled with actual payment of the price, so
long as this is delivered to the owner of the property upon performance of his part of the
agreement. Consequently, since the obligation was not yet due, consignation in court of the
purchase price was not yet required.

Moreover, it is axiomatic that where no debt is due and owing, consignation is not proper.
Therefore, Hector’s contention that Rene failed to comply with his obligation under the option to
buy because he failed to actually deliver the purchase price or consign it in court before the
contract expired and before they executed a deed of sale, has no leg to stand on.

b) Did Rene incur delay when he did not pay the purchase price or consign it in
court before the expiration of the contract of lease with option to buy?

No. In reciprocal obligations, neither party incurs in delay if the other does not comply or
is not ready to comply in a proper manner with what is incumbent upon him. Only from the
moment one of the parties fulfills his obligation does delay by the other begins. (Legaspi v. Court
of Appeals, 142 SCRA 82 [1986])

In this case, Rene had already communicated to Hector his intention to buy the property
and he was at the time undertaking to meet his obligation before the expiration of the contract in
May 1996. However, Hector refused to execute the deed of sale and it was Hector’s demand to
Rene to first deliver the money before he would execute the sale document which prompted Rene
to file a complaint before the barangay. Moreover, the issuance by Rene of the cashier’s check at
the time when he filed the complaint bolsters his claim that he was then ready to pay the price.
(Bacus v. Court of Appeals, 371 SCRA 295 [2001])

390. D borrowed from C P5,000 payable in one year. When C was abroad, C’s 16-
year old son borrowed P2,500 from D for his school tuition. However, the son spent the
money on a cellular phone. When the debt to C fell due, D tendered only P2,500 claiming
compensation on the P2,500 borrowed by C’s son.

a) Is D entitled to claim partial legal compensation?

D cannot claim partial legal compensation. This is so because under Articles 1278 and
1279 of the Civil Code, in order that there will be a valid and effective compensation, it is
essential that there must be two parties who in their own right are principal creditors and principal
debtors of each other. In the instant case, C cannot be considered as a party to the act of his son in
borrowing P2,500 from D. Consequently, he did not become a principal debtor of D; neither did
D become a principal creditor of C. Therefore, there can be no partial compensation of the P5,000
borrowed by D from C.

b) Would your answer be the same if C’s son actually used the money for his school
tuition?

There would be no difference in my answer. The fact that C’s son actually used the
P2,500 for his school tuition did not make C a party to the contract between his son and D.
Therefore, C is not the principal debtor of D and D is not the principal creditor of C with respect
to the subject amount.

391. Arturo owes Bernabe P100,000. Bernabe in turn owes Arturo P20,000. Both
debts are already due. Later, Bernabe assigns the P100,000 credit to Carlito without the
knowledge of Arturo. This assignment was made on July 1. On July 15, a P25,000 debt of
Bernabe in favor of Arturo matured. Arturo learned of the assignment on August 1. On
August 23, a P15,000 debt of Bernabe in favor of Arturo matured. Later, Carlito asks
Arturo to pay his debt. How much can Carlito successfully collect from Arturo?

Carlito can collect only P55,000 because Arturo can set up the defense of partial
compensation of the P20,000 and P25,000 debts which matured and were therefore already
compensable prior to his knowledge of the assignment. But Arturo cannot set up the last debt of
P15,000 for partial compensation because this matured only after he knew of the assignment.
(par. 3, Art. 1285, Civil Code)

392. A received from B several pieces of jewelry with the agreement that she will sell
them on commission basis. A failed to remit the proceeds of the sale to B despite repeated
demands. Thereupon, B brought the matter to the Barangay Lupon. At the Lupon, A and B
executed an agreement denominated as Kasunduan sa Bayaran, whereby A promised to pay
the amount of P3,000 per month to B to answer for the value of the jewelry she received. A
failed to comply with the Kasunduan. Benita then filed a criminal complaint for estafa. A
now claims that the execution of the Kasunduan constitutes a novation of her criminal
liability. Is she correct?

No. It is well-settled that the following requisites must be present for novation to take
place: 1) a previous valid obligation; 2) agreement of all the parties to the new contact; 3)
extinguishment of the old contact; and 4) validity of the new one. (Velasquez v. Court of Appeals,
309 SCRA 539 [1999]) Novation is never presumed, and the animus novandi, whether totally or
partially, must appear by express agreement of the parties, or by their acts that are too clear and
unequivocal to be mistaken. The test of incompatibility is whether or not the two obligations can
stand together, each one having its independent existence. If they cannot, they are incompatible
and the latter obligation novates the first. Corollarily, changes that breed incompatibility must be
essential in nature and not merely accidental. The incompatibility must take place in any of the
essential elements of the obligation, such as its object, cause or principal conditions thereof,
otherwise, the change would be merely modificatory in nature and insufficient to extinguish the
original obligation. (Quinto v. People, 350 SCRA 708 [1999])

The execution of the Kasunduan sa Bayaran does not constitute a novation of the original
agreement between A and B. The Kasunduan did not change the object or principal condition of
the contract between them. The change in the manner of payment of A’s obligation did not render
the Kasunduan incompatible with the original agreement, and hence, did not extinguish A’s
liability to remit the proceeds of the sale of the jewelry or to return the same to B. According to
the Supreme Court, “an obligation to pay a sum of money is not novated in a new instrument
wherein the old is ratified, by changing only the terms of payment and adding other obligations
not incompatible with the old one, or wherein the old contract is merely supplemented by the new
one.” In any case, novation is not one of the grounds prescribed by the Revised Penal Code for
the extinguishment of criminal liability. (Ocampo-Paule v. Court of Appeals, February 4, 2002)

393. Henry died intestate survived by his widow, Winda, and his legitimate children,
Xeres, Yantoc, and Zorro. In the settlement of Henry’s estate, Winda and her children
executed a Deed of Partition by virtue of which each of them received a share in Henry’s
estate consisting of several parcels of lands. In their partition agreement, Winda and her
children were assigned individual parcels of land as their respective shares in the
inheritance. A day after the execution of the partition agreement, Winda and her children
executed a Memorandum of Agreement by virtue of which they agreed to divide equally
among themselves the proceeds of the sale of the lots that were assigned to each of them. Is
the Deed of Partition novated by the Memorandum of Agreement?

No. The Memorandum of Agreement fell short of producing a novation because it does
not express a clear intent to dissolve the old obligation as a consideration for the emergence of a
new one. Likewise, there is no showing that the Deed of Partition and the Memorandum of
Agreement are materially and substantially incompatible with each other. Indeed, the Deed of
Partition granted title to the lots to Winda and her children to whom they were assigned, and the
Memorandum of Agreement created an obligation on the part of Winda to share with the other co-
owners the proceeds of the sale of such lots. There is no incompatibility between these two
contracts; hence, no novation.

(NOTE: Novation, as a mode of extinguishing an obligation, requires the concurrence of


the following: 1) there is a previous valid obligation; 2) the parties concerned agree to a new
contract; 3) the old contract is extinguished; and 4) there is a valid new contract. Novation may
be express or implied. In order that an obligation may be extinguished by another which
substitutes the same, it is imperative that it be so declared in unequivocal terms (express), or that
the old and the new obligations be on every point incompatible with each other (implied) (Cruz v.
Court of Appeals, 293 SCRA 239[1998])

394. C delivers to D several pieces of jewelry to be sold on commission basis. Despite


the lapse of the period agreed upon, D fails to return the jewelry items to C. When sued for
estafa, D claims that her agreement with C is deemed novated when the latter agreed to be
paid directly by the buyers of the jewelry items and on installment basis. She adds that her
liability is merely civil in nature. Is there a novation of the parties’ agreement? If so, is D’s
criminal liability extinguished?

The acceptance by C of partial payments tendered by D’s buyers does not evince the
intention of C to have their agreement novated. It was simply necessitated by the fact that, at the
time, D had substantial accounts payable to C. Thus, to obviate the situation where C would end
up with nothing, she was forced to receive the tender of the buyers. It is thus easy to see why C’s
acceptance of the buyers’ payment on installment basis cannot be construed as a case of either
expromision or delegacion sufficient to justify the attendance of extinctive novation. Not too
uncommon is when a stranger to a contract agrees to assume an obligation; and while this may
have the effect of adding to the number of persons liable, it does not necessarily imply the
extinguishment of the liability of the first debtor. Neither would the fact alone that the creditor
(such as C) receives guaranty or accepts payments from a third person who has agreed to assume
the obligation, constitute an extinctive novation, absent an agreement that the first debtor shall be
released from responsibility.

Granting that there was such novation, the criminal liability for estafa committed by D is
then not affected by the subsequent novation of the contract, for it is a public offense which must
be prosecuted and punished by the State. (Quinto v. People, 305 SCRA 708 [1999])

395. In which of the following fact situations would a court most likely find that an
implied contract existed?

 Dr. Dumagaling a licensed physician, sees an unconscious pedestrian


lying bleeding on the shoulder of the highway. Dr. Dumagaling stops his
car, gets out, and renders emergency medical care to the injured
pedestrian.

 Mr. Juan Tutri, an octogenarian, asks her favorite niece, Malou Wang, a
CPA, to fill out and file his income tax return. Mr. Juan Tutri’s only
income is from his monthly pension from SSS and interest on a bank
account. It takes Malou five minutes to complete the form, takes a taxi,
and goes to personally files the return at the BIR.

 Zandro, a contractor, has a contract to paint Rane’s house. Zandro


mistakes the house of Rane’s neighbor, Anton, for Rane’s house. As
Zandro paints Anton’s house, Anton stands by watching until the job is
done.

 Jong, a homeowner, has already paid his realty property tax. A clerk in
the treasurer’s office mistakenly sends Jong a bill that should have gone
to Jong’s neighbor, Mandy. Being a good citizen and thinking that the
treasurer’s office would not have sent him the bill if he did not owe the
money, Jong pays the bill.

The court would most likely find that an implied contract existed in (c). An implied
contract is a contract formed by manifestations of the parties other than oral or written language,
i.e., by conduct. In this case, Zandro, by beginning to paint Anton’s house, has made an offer by
his conduct because a reasonable person would conclude that the services were offered with the
expectation of compensation rather than gratuitously. Zandro’s offer has been accepted by Anton
even though the latter said nothing.

The situation in (a) does not give rise to an implied contract because the pedestrian has
not manifested his consent to the offer made by Dr. Dumagaling (in contrast to a patient who goes
to Dr. Dumagaling’s office and submits to treatment by him). Dr. Dumagaling is not without a
remedy, however, if he wants compensation for his services. The court may permit Dr.
Dumagaling to recover the value of his services under a quasi-contract. A quasi-contract is not
really a contract at all; rather, it is a legal fiction designed to avoid injustice by preventing unjust
enrichment of one party to the detriment of another. Here, Dr. Dumagaling conferred a benefit on
the pedestrian and the law will presume that the pedestrian would have requested the emergency
medical care had he been able to do so, and will allow Dr. Dumagaling to recover reasonable
compensation for his services.

The situation in (b) is inaccurate. The conduct of Juan Trutri and Malou Wang does not
appear from an objective standard to manifest contractual intent because of the close family
relationship of the parties and the minor burden on Malou Wang to render her services. Courts
generally will not presume that a contractual relationship was intended under these
circumstances.

The situation in (d) is likewise incorrect for the same reason as (a). Without some conduct
on the part of Mandy, such as knowingly accepting the offered benefits in silence, a court will not
find the manifestation of mutual consent necessary for an implied contract.

396. A contract of lease contains the following provision: “That the term of the lease
shall be 20 years and may be renewed for a like term at the option of the lessee.” Lessor now
claims that the stipulation is void for being violative of the principle of mutuality of
contracts under Article 1308 of the Civil Code.

a) Is the clause “may be renewed for a like term at the option of the lessee” violative of
the principle of mutuality of contracts?

The fact that the lessee’s option to renew the lease is binding only on the lessor and can
be exercised only by the lessee does not render such option void for lack of mutuality. After all,
the lessor is free to give or not to give the option to the lessee. And while the lessee has a right to
elect whether to continue with the lease or not, once he exercises his option to continue and the
lessor accepts, both parties are thereafter bound by the new lease agreement. Their rights and
obligations become mutually fixed, and the lessee is entitled to retain possession of the property
for the duration of the new lease, and the lessor may hold him liable for the rent therefor.
Mutuality obtains in such a contract and equality exists between the lessor and the lessee since
they remain with the same faculties in respect to fulfillment.

b) How shall the clause be interpreted or applied?

The clause “may be renewed for a like term at the option of the lessee” means that the
exercise by the lessee of his option resulted in the automatic extension of the contract of lease
under the same terms and conditions prevailing in the original contact of lease; i.e., for 20 years,
the phrase “for a like term” referring to the period of the lease. If the renewed contract were still
subject to mutual agreement by the lessor and the lessee, then the option – which is an integral
part of the consideration for the contract -- would be rendered worthless. For then, the lessor
could easily defeat the lessee’s right by simply imposing unreasonable and onerous conditions to
prevent the parties from reaching an agreement. (Allied Bank Corp. v. Court of Appeals, 284
SCRA 357 [1998])

397. D obtains from a bank a loan of P1 million payable in five years. He signs a
promissory note containing a provision that the rate of interest charged on the obligation
shall be subject to such increase within the rates allowed by law, as the bank’s Board of
Directors may prescribe for its debtors. Is the stipulation valid?

No. The unilateral determination and imposition of increased interest rates by the bank is
violative of the principal of mutuality of contracts ordained in Article 1308 of the Civil Code. As
held in Philippine National Bank v. Court of Appeals, 238 SCRA 20 [1994], it is basic that there
can be no contract in the true sense on the absence of the element of agreement, or of mutual
assent of the parties. If this assent is wanting on the part of one who contacts, his act has no more
efficacy than if it had been done under duress or by a person of unsound mind. Similarly, contract
changes must be made with the consent of the contracting parties. The minds of all the parties
must meet as to the proposed modifications, especially when it affects an important aspect of the
agreement. In the case of loan contracts, it cannot be gainsaid that the rate of interest is always a
vital component, for it can make or break a capital venture. (Mendoza v. Court of Appeals, 359
SCRA 438 [2001])

398. What are the so-called innominate contracts?

The following are termed innominate contracts: 1) do ut des – I give that you may give;
(2) do ut facias –I give that you may do; 3) facio ut des –I do that you may give; and 4) facio ut
facias –I do that you may do.

399. X leased to Y a building. Their lease agreement contains the following terms: a)
the lease shall be for a period of ten years; b) the lessee shall not assign the lease to third
persons without the prior consent of the lessor; c) lessor shall have the right to sell the
leased premises during the period of the lease; and d) in the event that the lessor decides to
sell the leased premises, the lessee has the first option to purchase the property. On the
second year of the lease, the lessor informed the lessee of his desire to sell the property.
Being then sickly, the lessee assigned his right of first option under the lease contract to his
son. Does the son have the right to exercise his father’s right of first option under the lease
contract?

No, because the assignment has no legal basis. Article 1311 of the Civil Code is too clear
to be misinterpreted. It provides that “contracts take effect only between the parties, their assigns
and heirs except in cases where the rights and obligations arising from the contract are not
transmissible by their nature or by stipulation or by provision of law.”

In the case at bar, the lease contract between the lessor and the lessee clearly reveals the
intent of the parties to limit their lease relationship to themselves alone. It cannot be denied that
the right of first option to buy the leased property given to the lessee in case of its sale is but part
of the bigger right to lease said property from the lessor. The option was given to the lessee
because he was the lessee of the property. It was a component of the consideration of the lease. If
the lessee is barred by the contract from assigning his right to lease the property to any other
party, he is similarly barred from assigning his first option to buy the leased property to his son.
(Bayangan v. Court of Appeals, 278 SCRA 379 [1997])

400. Which contracts are required to be in the prescribed form to be valid?

The following contracts are required to be in the form prescribed by law to be valid: a) if
the value of the personal property donated exceeds P5,000, the donation and the acceptance shall
be made in writing ; otherwise, the donation is void; b) donation of an immovable, regardless of
value, must be in a public instrument; c) a contract of partnership is void whenever property is
contributed thereto, if an inventory of said property is not made, signed by the parties, and
attached to a public instrument; d) sale of piece of land through an agent; e) antichresis; and f)
stipulation to pay interest. (Arts. 748, 1773, 1874, 2134 and 1956, Civil Code)

401. Lebron leased to Kobe a building for a period of 10 years. Lebron has
repeatedly assured Kobe that if he should decide to sell the building, he will give Kobe the
right of first refusal. On the 6th year of the lease, Lebron informed Kobe thru a letter that he
was willing to sell to the latter the building for P5 million. Kobe offered to buy the building
for P4.5 million. Lebron did not reply. One week later, Kobe received a letter from MJ
informing him that the building had been sold to him by Lebron for P5 million, and that he
will not renew Kobe’s lease when it expires.

a) Did Lebron violate Kobe’s right of first refusal?

No. The right of first refusal is not based on a contract but is predicated on the provisions
of human relations and, therefore, its violation is predicted on a quasi-delict. Moreover, the
lessee’s right of first refusal does not go so far as to give him the power to dictate on the lessor
the price at which the latter should sell his property. Upon the facts given, the lessor had
sufficiently complied with his commitment to give the lessee a right of first refusal when he
offered to sell the property to the lessee for P5 million, which was the same price he got in selling
it to MJ. He certainly had the right to treat the lessee’s counter-offer of a lesser amount as a
rejection of his offer to sell at P5 million. Thus, he was free to find another buyer upon receipt of
such counter-offer.

b) Suppose Lebron gave Kobe an option to purchase instead of a right of first


refusal, will your answer be the same?

Yes, the answer will be the same. An option must be supported by a consideration
separate and distinct from the purchase price. In this case, there was no separate consideration.
Therefore, the option may be withdrawn by Lebron at anytime.

402. Lessor has repeatedly assured Lessee that if he should decide to sell the
building, he will give Lessee the pre-emptive right to buy the leased property. Conformably
with their verbal agreement, Lessor offered to sell to Lessee the building for P2 million, but
the latter counter-offered to buy it at the lesser price of P1 million. Lessee later learned that
a buyer had already purchased the property from Lessor for P800,000. He discovered that
the sale had already been consummated when Lessor offered to sell it to him. Lessee thus
offered to reimburse the buyer the purchase price of P800,000 plus an additional P200,000
to complete his earlier offer of P1 million. When the offer was refused, Lessee brought an
action for rescission of the sale. After due proceedings, however, the court dismissed the
complaint on the ground that “the right of redemption on which the complaint is based is
merely an oral one and as such, is unenforceable under the law.”

a) Is the right of first refusal governed by the Statute of Frauds?

No. A right of first refusal is not among those listed as unenforceable under the Statute of
Frauds. The application of Article 1403, par. 2(e) of the Civil Code presupposes the existence of a
perfected contract of sale of real property. It is a contractual grant, not of the sale of the real
property involved but of the right of first refusal over the property sought to be sold. The right of
first refusal need not be written to be enforceable and may be proved by oral evidence. (Rosencor
Development Corporation v. Inquing, 354 SCRA 119 [2001])

b) Is a contract of sale which is entered into in violation of a third party’s right of


first refusal subject to rescission in order that the third party can exercise the right?

Yes. The prevailing doctrine is that a contract of sale entered in violation of a right of first
refusal of another person, while valid, is rescissible. There is, however, a circumstance which
prevents the application of this doctrine in the instant case. In a number of cases, the Supreme
Court ordered the rescission of contacts of sale made in violation of a right of first refusal
precisely because the vendees therein could not have acted in good faith as they were aware or
should have been aware of the right of first refusal granted to another person by the vendors
therein. The rationale for this is found in the provisions of the Civil Code on rescissible contacts.
Under Article 1381, par. 3 of the Civil Code, a contract validly agreed upon may be rescinded if it
is “undertaken in fraud of creditors when the latter cannot in any manner collect the claim due
them.” Moreover, under Article 1385, rescission shall not take place “when the things which are
the object of the contract are legally in the possession of third persons who did not act in bad
faith.”

It must be borne in mind that, unlike the cases earlier decided by the Supreme Court, the
right of first refusal involved in the instant case was an oral one given to Lessee by Lessor. There
is no evidence to hold that the buyer acted in bad faith in entering into the deed of sale over the
disputed property with Lessor. Lessee failed to present any evidence that prior to the sale of the
property, the buyer was aware or had notice of the oral right of first refusal. (Rosencor
Development Corporation v. Inquing, 354 SCRA 119 [2001])

403. S is the owner of two adjoining properties identified as Lots 1 and 2. S sold Lot
1 to B. However, when the certificate of title to the property was delivered to the notary
public for the preparation of the document of sale, what was delivered was the certificate of
title for Lot 2. Thus, what was made to appear in the document of sale was the sale of Lot 2,
instead of Lot 1.

May the buyer file an action for reformation of the document of sale?

Yes. An action for reformation of instrument under Article 1359 of the Civil Code may
prosper only upon the concurrence of the following requisites: 1) there must have been a meeting
of the minds of the parties to the contract; 2) the instrument does not express the true intention of
the parties; and 3) the failure of the instrument to express the true intention of the parties is due to
mistake, fraud, inequitable conduct, or accident. All theses requisites are present in this case.
Hence, reformation is proper. (Sarming v. Dy, G.R. No. 1333643, June 6, 2002)

404. What is meant by contra preferentem?

The ambiguity in a contract is to be taken contra preferentem, that is, construed against
the party who caused the ambiguity who could have avoided it by the exercise of a little more
care.

QUESTIONS 1-2 are based on the following fact situation:

405. Maria died, leaving her nephew, Ramon, as her sole heir. Among the items
inherited by Ramon were some old oil paintings that had been stored in Maria’s attic for a
number of years. Ramon knew nothing about art and had no place to put them in his house.
He placed an ad in the paper offering to sell the paintings “at a price to be mutually agreed
upon.” Nicole, a buyer for an art gallery, responded to the ad and examined the paintings.
From the signature and the style, Nicole recognized that the artist was Botong Francisco, a
renowned Filipino portrait artist. Ramon and Nicole agreed upon a price and executed a
contract.

1. Which of the following facts, if true, would give Ramon the best basis for avoiding
the contract with Nicole?

 Ramon told Nicole that Maria had dabbled in painting when she was younger
and had undoubtedly painted them herself.
 Ramon did not know that Nicole was a buyer for an art gallery and was very
familiar with the works of renowned Filipino artists.

 Ramon told Nicole that he wanted to get rid of the paintings as soon as possible
because he was angry at his aunt for giving away most of her possessions to her
friend just before she died.

 Nicole falsely told Ramon that the paintings were to be used to furnish Nicole’s
newly-constructed vacation house in Tagaytay City.

The statement in (a) would enable Ramon to annul the contract on the ground of mistake
if Nicole was aware that Ramon was mistaken about the identity of the artist. Under the facts in
this choice, Nicole knows that Ramon is mistaken about the identity of the artist, which mistake
refers to the substance of the thing which is the object of the contract. (Art. 1311, Civil Code)

The statement in (b) is wrong because the fact that one of the parties to the contract has
superior knowledge about the subject matter of the contract does not by itself justify annulment,
even if the other party is unaware of that fact. Nicole’s knowledge or lack of it was not the
principal cause on which the contract was made and was not relied on by Ramon in making the
sale.

The statement in (c) is wrong because the fact that Ramon was angry when he agreed to
the contract is not a ground for annulment of a contract under the law. Regardless of Ramon’s
state of mind, there was a meeting of the minds between the parties.

The statement in (d) is incorrect because Nicole’s misrepresentations to Ramon as to how


she will use the paintings does not appear to go to the substance of the thing which is the subject
matter of the contract or to have been relied on by Ramon. Hence, the misrepresentation is not
significant enough to serve as a ground for annulling the contract.

2. Which of the following facts, if true, would give Nicole the best basis for annulling
the contract with Ramon?

 Several of the paintings cracked when they were being transported by Nicole
because they were brittle with age.

 The day after the purchase, a respected art historian announced in a press
release that several of Botong Francisco paintings were actually done by his
students, causing the value of all Botong Francisco’s paintings to decline.

 Because of some experimental pigments that the artist had used, the colors
began to fade rapidly as soon as the paintings were exposed to light; within a few
days, virtually all of the colors had faded away.

 The gallery for which Nicole had procured the paintings was destroyed by a fire
shortly after the contract was executed.

The circumstances of (c) offer the best ground for annulling the contract based on mutual
mistake. When both parties entering into a contract are mistaken about facts relating to the
agreement, the contract may be voidable by the adversely affected party if the latter did not
assume the risk or contingency of mistake. Here, both parties believed that the paintings would be
suitable for viewing and had no reason to suspect that their color would fade away when exposed
to light. Despite Nicole’s superior knowledge of the subject matter of the contract, it is doubtful
that she would be deemed to have assumed the risk or contingency of what occurred to the
paintings. (Art. 1311, Civil Code)

The circumstances in (a) are not that strong as basis for annulment. Even assuming that
both parties mistakenly believed that the paintings were not too fragile to be transported, that risk
is more likely to be assumed by Nicole.

The circumstances in (b) suggest only that Nicole have made a mistake as to the value of
the paintings, but since Ramon knew nothing about the identity of the artist, the mistake is
unilateral and Nicole cannot annul on this ground.

Choice (d) is incorrect because the circumstances do not satisfy the requirements for
annulment. Under Article 1351 of the Civil Code, the particular motives of the parties in entering
into the contract are different from the cause thereof. Here, it is doubtful that the motive for
which Nicole made the contract was rendered inexistent by the destruction of the gallery, and
there is no indication that Ramon was aware of Nicole’s true purpose or motive in entering into
the contract.

406. The Statute of Frauds:

 Mandates that both parties sign the written contract evidencing their
agreement.

 Applies to all contracts under which payment of P500 or more must be


performed.

 Has no requirement that all terms and provisions of the parties’ agreement be
reduced in one document.

 Sets forth the elements of fraud as applicable to inducing another party to enter
into a contractual relationship.

The statement in (c) is correct. The Statute of Frauds has no requirement that the parties’
agreement be reduced to one document. The Statute of Frauds requires the essential terms of
certain contracts to be evidenced by a writing to be enforceable. Any writing will suffice as long
as it contains every essential term of the parties’ agreement. The writing need not be a single
document. (Art. 1403 par. 2, Civil Code)

The statement in (a) is incorrect because the Statute of Frauds requires only that the party
to be charged sign the note or memorandum evidencing the existence of their oral agreement. The
signature requirement of the Statute of Frauds is met if the writing contains the signature of the
party to be charged or that of his agent.

The statement in (b) is incorrect because the P500 threshold under the Statute of Frauds is
relevant only to contracts for the sale of goods. Thus, for example, a contract for services is not
within the Statute, even if the consideration is P500 or more , as long as it can be performed
within a year from the making thereof.

The statement in (d) is wrong because the Statute of Frauds contains no such provisions.
As already stated, the Statute of Frauds requires certain agreements to be evidenced by a writing
signed by the parties to be bound. Despite its name, the Statute does not set forth the element of
fraud as applicable to contractual relationships.

407. Anthony and Cleopatra agreed that Anthony would lease office space to
Cleopatra for three years at a fixed rent. Before she took possession of the premises,
Cleopatra learned of a much more advantageous opportunity and established her office
elsewhere. To force Cleopatra to perform, Anthony brought an action to enforce the
agreement. What is Cleopatra’s strongest argument?

The Statute of Frauds is Cleopatra’s strongest argument because it is a defense to the


enforcement of three-year leases not reduced to writing. To be enforceable, the Statute of Frauds
requires certain agreements to be evidenced by a writing signed by the party to be charged,
including agreements creating an interest in land. Leases for more than one year are therefore
generally covered by the Statute of Frauds. Because the agreement between Anthony and
Cleopatra is for a three-year lease, the Statute of Frauds is Cleopatra’s strongest defense to the
enforcement of the agreement. (Art. 1403, par. 2 (e), Civil Code)

408. A friend called Peter by long distance telephone from Tarlac City to say that he
must have a new tire for his car to get back home to Baguio City. Over the telephone, Peter
said to the owner of the car repair shop, “Give him the tire and I will pay for it.” Is Peter’s
oral promise enforceable?

Yes. Peter’s promise was not one of guarantee, but one in which he made himself directly
and primarily responsible for the amount of credit extended. Thus, Peter made his own contract
with the repair shop owner, as he was not guaranteeing his friend’s obligation. Peter’s oral
promise is binding on him. This is not a case of a special promise to answer for the debt, default
or miscarriage of another which the law requisites to be in writing to be enforceable.

409. Divino obtains an agricultural loan of P350,000 from a rural bank. The loan is
secured by a real estate mortgage on a house and lot owned by Divino. For failure of Divino
to pay the loan when it matured, the bank foreclosed the mortgage and bought the
foreclosed properties at the auction sale. Divino failed to redeem the properties within the
one-year redemption period prompting the bank to consolidate its ownership over the house
and lot. Divino subsequently brought an action to nullify the mortgage as well as the
foreclosure sale. Divino alleges in his complaint that the loan and mortgage contracts were
made to appear as several sugar crop loans not exceeding P50,000 each – even if they were
not – just so the bank could grant and approve the same pursuant to the Rural Banks Act.
In short, Divino argues that the sugar crop loans were merely simulated contracts and,
therefore, without any force and effect.

a) What are the two kinds of relatively simulated contracts?

There are two juridical acts involved in relative simulation, the ostensible act and the
hidden act. The ostensible act is the contract that the parties pretend to have executed while the
hidden act is the true agreement between the parties. To determine the enforceability of the actual
agreement between the parties, it is important to discern whether the concealed or hidden act is
lawful and the essential requisites of a valid contract are present.

b) Are the loan contracts obtained by Divino valid?

The loan contracts are void. Given the factual antecedents of this case, it is obvious that
the sugar crop loans were relatively simulated contracts and that both parties intended to be
bound thereby. In this case, the juridical act which binds the parties are the loan and mortgage
contracts, i.e., Divino’s procurement of a loan from the bank. Although these loan and mortgage
contracts were concealed and made to appear as sugar crop loans to make them fall within the
purview of the Rural Banks Act, all the essential requisites of a contract were present. However,
the purpose thereof is illicit, intended to circumvent the Rural Banks Act requirement in the
procurement of loans. Consequently, while the parties intended to be bound thereby, the
agreement is void and inexistent under Article 1409 of the Civil Code.

c) If the loan contracts are void, is Divino entitled to repurchase the properties?

Applying the pari delicto doctrine, Divino is not entitled to repurchase the properties. In
arguing that the loan and mortgage contracts are null and void. Divino would impute all fault
therefore to the bank. Yet, Divino’s averments evince an obvious knowledge and voluntariness on
his part to enter into the simulated contracts. Consequently, the fault for the nullity of the contract
does not lie at the bank’s feet alone, but at Divino’s as well. Accordingly, neither party can
maintain an action against the other, as provided in Article 1412 of the Civil Code.

Moreover, Divino did not come to court with clean hands. He admitted that he never
planted sugarcane on any property, much less on the mortgaged property. Yet, he eagerly accepted
the proceeds of the simulated sugar crop loans. Divino readily participated in the ploy to
circumvent the law and offered no objection when their original loan of P350, 000 was divided
into small separate loans not exceeding P50,000 each. Clearly, Divino and the bank are in pari
delicto, and neither should be accorded affirmative relief as against the other. (Villegas v. Rural
Bank of Tanjay, Inc.)

410. When the defect of a void contract consists in the illegality of the cause or object
of the contract, and both parties are at fault or in pari delicto, the law refuses them every
remedy and leaves them where they are. This rule which is embodied in Article 1411 of the
Civil Code is what is commonly known as the principle of in pari delicto. What are the
exceptions to this principle?
1. Payment of usurious interest. In such case, the law allows the debtor to recover the
interest paid in excess of that allowed by the usury laws, with interest thereon from the date of
payment. (Art. 1413, Civil Code)

2. Payment of money or delivery of property for an illegal purpose, where the party who
paid or delivered repudiates the contract before the purpose has been accomplished, or before any
damage has been caused to a third person. In such case, the courts may allow such party to
recover what he has paid or delivered, if the public interest will thus be subserved. (Art. 1414,
Civil Code)

3. Payment of money or delivery of property by an incapacitated person . In such case,


the courts may allow such person to recover what he has paid or delivered, if the interest of
justice so demands. (Art. 1415, Civil Code)

4. Agreement or contract which is not illegal per se but is merely prohibited by law, and
the prohibition is designed for the protection of the plaintiff. In such case, such plaintiff, if public
policy is thereby enhanced, may recover what he has paid or delivered. (Art. 1416, Civil Code)

5. Payment of any amount in excess of the maximum price of any article or commodity
fixed by law. In such case, the buyer may recover the excess. (Art. 1417, Civil Code)

6. Contract whereby a laborer undertakes to work longer than the maximum number of
hours fixed by law. In such case, the laborer may demand for overtime pay. (Art. 1418, Civil
Code)

7. Contract whereby a laborer accepts a wage lower than the minimum wage fixed by
law. In such case, the laborer may demand for the deficiency. (Art. 1419, Civil Code)

SALES
411. Buyer made a written offer to Seller regarding the purchase of the latter’s
property. When the first offer of P500,000 was rejected, Buyer made a second offer which is
likewise rejected. Undaunted, Buyer made a third written offer for P600,000 with a check
for P100,000 as earnest money. The last written offer contains the handwritten annotation
“received original (9-4-89)” beside the signature of Seller. Is there a perfected contract of
sale between Seller and Buyer?

No. It is fundamental principle that before a contract of sale can be valid, the following
elements must be present: a) consent of the contracting parties; b) determine subject-matter; and
c) price certain in money or its equivalent. Until the contract of sale is perfected, it cannot, as an
independent source of obligation, serve as a binding juridical relation between the parties.

The annotation in the third written offer amounts neither to a written nor an implied
acceptance by Seller of Buyer’s offer. Such annotation is merely a memorandum of the receipt by
Seller of Buyer’s offer. The requisites of a valid contract of sale are lacking in said receipt and
therefore the sale is neither valid nor enforceable (Jovan Land v. Court of Appeals, 268 SCRA 160
[1997])

412. Maria gave Clara the exclusive right to sell her brand of maong pants in Davao
City, the price of which is to be paid within 60 days from delivery, and promising to pay
Clara a commission of 20% on all sales. After delivery of the merchandise to Clara but
before the latter could sell any of them, Clara’s store in Davao City was completely burned
without her fault, together with all of Maria’s pants. Must Clara pay Maria for the pants?

Yes. The contact between Maria and Clara is a sale and not an agency to sell. This is so
because the price is payable by Clara within 60 days from delivery even if she is unable to resell
it. If Clara were an agent, she is not bound to pay the price and, under Article 1504 of the Civil
Code, the thing perishes with the owner. Hence, Clara must still pay the price.

413. What is the “mirror doctrine” in the law on sales?

The “mirror doctrine” in the law on sales is a principle in law which states that a
purchaser of a property cannot close his eyes to facts which should put a reasonable man on his
guard and claim that he acted in good faith under the belief that there was no defect on the
vendor’s title. Such refusal to believe in the strong possibility of a defect on the vendor’s title will
not make him an innocent purchaser for value (should such title later prove to be defective), if
circumstances are such that a reasonably prudent man would have taken the necessary precaution
if in the same situation (Embrado v. Court of Appeals, 233 SCRA 333[1994])

414. Distinguish between a contract of sale and a contract to sell.

A contract of sale and a contract to sell are distinguished as follows: 1) In a contact of


sale, the non-payment of the purchase price is a resolutory condition, that is, the contract of sale
may such occurrence put an end to a transaction that once upon a time existed; in a contract to
sell, the payment in full of the price is a positive suspensive condition. Hence, if the price is not
paid, it is as if the obligation of the seller to deliver and to transfer ownership never became
effective and binding; 2) In a contract of sale, title over the property generally passes to the buyer
upon delivery; in a contract to sell, ownership is retained by the seller, regardless of delivery and
is not to pass until full payment of the price; 3) In a contract of sale, after delivery has been made,
the seller has lost ownership and cannot recover it unless the contract is resolved or rescinded; in
a contract to sell, since the seller retains ownership despite delivery, he is enforcing, not
rescinding, the contract if he seeks to oust the buyer for failure to pay.

415. In a contract to sell, is it necessary for the vendor to refund what the vendee
paid under the contract?

Yes, the partial payment made by the buyer must be returned to him, there being no
provision regarding forfeiture of payments made in any of the documents executed by the parties.
Such action is but just and equitable under the premises. If it were otherwise, there will be unjust
enrichment on the part of the seller at the expense of the buyer. (Orden v. Aurea, G.R. No. 172733
August 20, 2008)

416. What is a sale by sample?

A sale by sample is one where a specimen is exhibited to serve as the standard of quality
with the understanding that the product to be delivered would correspond with the specimen or
sample and creates an implied warranty that the goods would be free from any defect which is not
apparent on reasonable inspection of the sample.

417. What is a sale by description?

A sale by description is one where the buyer has not seen the article sold and relies on the
description given to him by the seller and creates a warranty that the goods will conform to the
description by the seller.

418. What is a “made to order” sale?

A “made to order” sale is one where the goods manufactured and sold are according to
the specifications provided by the buyer as to the measurement, material, design, and qualify of
the goods to be manufactured.

419. After inspecting the furniture on display at Amy’s furniture shop, Beth ordered
a dining set worth P60,000. Beth made known to Amy her specifications of the set as to
material, design, and measurement to which Amy agreed. Before leaving, Beth made a
deposit of P10,000 and another deposit of P20,000 the following week. The following month,
Amy delivered the set to Beth. When Beth saw the delivered item, she rejected it for poor
craftsmanship. She then requested a refund of her deposits. Amy refused. Beth later
instituted an action to rescind the sale under Article 1481 of the Civil Code. She contends
that the assailed transaction is a sale by sample and not “made to order.” Is Beth correct?

No. The sale of the dining set in this case is not a sale by sample. Sale by sample does not
include an agreement to manufacture goods to correspond with a pattern. Here the set was
manufactured according to the specifications provided by the buyer. Beth did not order the exact
replica of the furniture displayed in Amy’s shop but made her own specifications on the material,
design and measurement of the furniture she ordered. Neither is the transaction a sale by
description. Beth did not rely on any description made by Amy when she ordered the furniture.
The transaction is actually a perfected contact of sale. For Beth to be entitled to rescind it, she
must prove that there was a breach on Amy’s part. This she failed to do. (Mendoza v. David,
October 22, 2004)

420. Seller sells to Buyer a parcel of land pursuant to an agreement denominated as


“Conditional Sale of Registered Land.” The sale agreement contains the following
stipulations: a) Buyer shall pay the total price of P2 million; b) Buyer shall pay a down
payment of P300,000 upon the signing of the contract; c) Buyer shall pay the balance of P1.8
million upon presentation by Seller of a transfer certificate of title in his name and delivery
of a registerable document of sale in Buyer’s favor within 20 months from the signing of the
contract; d) the retained balance of the purchase price would earn interest at 17% interest
per annum payable to Seller; and e) Buyer would have absolute and unconditional
possession of the lot as well as the right to introduce improvements thereon. Is the sale
absolute or conditional?
Although denominated as a conditional sale, the contract between the vendor and the
vendee is one of absolute sale. A deed of sale is absolute in nature although denominated as a
“conditional sale” absent a stipulation reserving title in the vendor until payment of the purchase
price or a stipulation allowing the vendor the right to unilaterally rescind the contract in case of
non-payment.

In the instant case, ownership of the lot passed to the vendee both by constructive and
actual delivery. Constructive delivery was accomplished upon the execution of the contract
without any reservation of title on the part of the vendor, while actual delivery was made when
the vendee took unconditional possession of the lot and introduced valuable improvements
thereon. (Babasa v. Court of Appeals, 290 SCRA 532 [1998])

421. Vendor sells to Vendee a parcel of land. Upon Vendee’s death, his children
assumed his rights and obligations under the contract and paid in full the selling price of the
lot from their own funds. After full payment of the purchase price, however, Vendor
erroneously executed a deed of absolute sale in Vendee’s name who is already dead, instead
of his children who assumed his rights and obligations in the contract. Due to the error, the
Register of Deeds issued a certificate of title in Vendee’s name instead of his children. The
heirs of Vendee subsequently brought an action for the cancellation or correction of their
father’s title and the issuance of a new certificate of title in their names and to reflect in said
title their distributive shares. After due proceedings, the court dismissed the action on the
ground that it pertains more to the partition of Vendee’s estate which will in effect transfer
ownership of title of the property to his children as compulsory heirs. The court thus
declared that Section 108 of P.D. 1529 (which calls for summary proceedings) does not
apply. Is there a valid ground to appeal the court’s ruling?

Yes. Section 108 of P.D. 1529 is clearly available as a remedy to correct the erroneous
issuance of the certificate of title in the name of Vendee. It is undisputed that Vendee died
without having completed the installments on the property. His heirs then took over the contract
to sell, assumed his obligation thereunder by paying the selling price of the lot from their own
funds, and completed the payment. Thus, the ownership of the lot had not been vested in Vendee
during his lifetime.

Indeed, Vendor could not have transferred the title over the lot, through a deed of absolute
sale, to Vendee considering that the latter is already dead. When Vendor executed the deed of sale,
the deceased Vendee had no more civil personality or juridical capacity. His juridical capacity,
which is the fitness to be the subject of legal relations, was lost through death.

Having stepped into the shoes of their father Vendee upon his death with respect to the
contract to sell, and being the ones who continued the installment payments of the selling price
from their own funds until its full payment, the children of Vendee necessarily became the owners
of the subject lot in whose favor the deed of sale should have been executed by Vendor. (Dawson
v. Register of Deeds, 295 SCRA 733[1998])

(NOTE: In a contract to sell, the title over the subject property vests in the vendee only
upon full payment of the consideration. Where the installments agreed upon have not been
completely paid upon the death of the original vendee and the certificate of title was erroneously
issued in his name, his heirs, who assumed his obligation and completed the payment, can resort
to the summary proceedings under Section 108 of P.D. 1529 to correct the manifest mistake)

422. Is it necessary that the seller be the owner of the thing sold?

A seller need not be the owner of the thing sold at the time of the perfection of the sale. It
is sufficient only that he is the owner at the time the object is delivered; otherwise, he may be
held liable for breach of warranty against eviction.

(NOTE: Sale of a parcel of land by a non-owner who cannot deliver the thing sold is null
and void under Article 1409 of the Civil Code because it contemplates an impossible service.
(Nool v. Court of Appeals, 276 SCRA 149 [1997])

423. S sells to B a 500-square meter portion of the second floor of a building which
is yet to be constructed. Is there a perfected contract of sale?

Yes. Being consensual in nature, the contract of sale was perfected by mere consent
when S and B agreed on the subject matter and the price. The perfection of the sale is not negated
by the fact that the property subject of the sale was not yet in existence at the time they entered
into the contract. This is so because the ownership by the seller of the thing sold at the time of
the perfection of the contract of sale is not an element of its perfection. A perfected contract of
sale cannot be challenged on the ground of non-ownership on the part of the seller at the time of
its perfection. What the law requires is that the seller has the right to transfer ownership at the
time the thing is delivered to the buyer. Perfection per se does not transfer ownership. What
transfers ownership is the actual or constructive delivery of the thing sold to the buyer. (Arra
Realty Corp. v. Guarantee Devt. Corp. and Insurance Agency, September 20, 2004)

424. What is emptio rei sperati? Emptio spei? What is their effect in a contract of
sale?

Emptio rei sperati is the sale of an expected thing; while emptio spei is the sale of the
hope itself. (Art. 1461, Civil Code) If the expected thing in emptio rei sperati does not
materialize, the sale is not effective. In emptio spei, it does not matter whether the expected thing
materialized or not; what is important is that the hope itself validly existed.

(NOTE: While there can be no donation of a future property under Art. 751 of the Civil
Code, there can be a valid sale of a future property)

425. What is meant by “policitacion”?

“Policitacion” is a unilateral promise to buy or to sell a determine thing which is not


accepted. This produces no juridical effect, and creates no legal bond. This is a mere offer, and
has not yet been converted into a contract.

426. S owns a parcel of land which he is selling for P20 million. B, a car dealer, is
interested in buying the property for his car sales company. After several failed negotiations,
B gave S an “earnest-deposit” money of P1 million on condition that he will be given the
exclusive option to purchase the property within 60 days to be refunded in case of failure of
the parties to negotiate on the terms and conditions of the sale of the property. S accepted
the “earnest-deposit” money. Despite several attempts, the parties failed to agree on the
terms and conditions of the sale within the stipulated 60-day period. S thus returned to B
the amount of P1 million given as “earnest-deposit.” B refused to accept the money;
instead, he brings an action for specific performance against S. Will the action prosper?

No. B did not give the amount of P1 million as “earnest money” as provided for by
Article 1482 of the Civil Code. He presented the amount merely as a deposit of what would
eventually become the earnest money or down payment should a contract of sale be made by
them. The amount was thus given not as a part of the purchase price and as proof of the perfection
of the contract of sale but only as a guarantee that B would not back out of the sale. B in fact
described the amount as “earnest-deposit.”

The P1 million “earnest-deposit” could not have been given as earnest money
contemplated in Article 1482 of the Civil Code because, at the time when S accepted the earnest-
deposit money, their contract had not yet been perfected. This is evident from the conditions
attached by B when he paid the “earnest-deposit” money: 1) that he be given the exclusive option
to purchase the property within 60 days from receipt of the “earnest-deposit” money; and (2) that
during the option period, the parties would negotiate the terms and conditions of the purchase.

The first condition sufficiently shows that a sale was never perfected. Acceptance of this
condition did not give rise to a perfected sale but merely to an option or an accepted unilateral
promise on the part B to buy the property within 60 days from the date of acceptance of the offer.
Such option giving B the exclusive right to buy the property within the period agreed upon is
separate and distinct from the contract of sale which the parties may enter into. Moreover, there
is no showing of any consideration for the option. Lacking any proof of such consideration, the
option is unenforceable.

Another proof of the absence of a perfected sale is the second condition that, during the
option period, the parties would negotiate the terms and conditions of the sale. In the present case,
the parties never got past the negotiation stage. (San Miguel Properties Philippines, Inc. v.
Huang, 336 SCRA 737 [2000])

427. What is an earnest money? What are its purposes?

An earnest money (arras) has a dual purpose: a) it is considered as part of the purchase
price; and b) as proof of perfection of a contract of sale.

428. In the absence of stipulation, may the seller of real estate keep the earnest
money to answer for damages in the event that the sale fails due to the fault of the
prospective buyer?

In the absence of a specific stipulation, the seller is not allowed to keep the earnest money
in the event that the sale fails due to the fault of the prospective buyer. Under Article 1482 of the
Civil Code, whenever earnest money is given in a contract of sale, it shall be considered as part of
the purchase price and as proof of the perfection of the contract. By its very nature, an earnest
money is an advance payment which must be deducted from the purchase price. Hence, the
parties could not have intended that the earnest money or advance payment would be forfeited
when the buyer should fail to pay the balance of the price, especially in the absence of a clear and
express agreement thereon. Moreover, to allow the forfeiture of the earnest money or advance
payment in favor of the seller would amount to unjust enrichment of the seller at the expense of
the buyer (Goldenrod, Inc. v. Court of Appeals, 299 SCRA 141 [1998])

429. S owns a parcel of land. Out of friendship, he promised to sell the property to B
for P2 million. She tells B that the price is to be paid anytime within a three-year period
provided that B constructs on the property a house of strong materials and pays a nominal
monthly rental in the meantime while the price has not been tendered. B accepted S’s
conditions and promised in turn to pay the price within the three-year period given to him.

B occupied the land and paid nominal rentals thereon. He even constructed a house
of strong materials on the lot. Two years later, while B has not yet paid the purchase price, S
conveyed ownership of the land to his son. Subsequently, prior to the end of the end of the
three-year period, B tendered to S the purchase price. But S refused and told him that the
land had already been conveyed to her son. S’s refusal to honor her commitment prompted
M to bring an action for specific performance. Will the action proper?

No. S’s promise to sell was not binding upon her in view of the absence of any
consideration distinct from the stipulated price. This is the principle laid down by the second
paragraph of Article 1479 of the Civil Code which provides: “An accepted unilateral promise to
buy or to sell a determinate thing for a price certain is binding upon the promissory only if the
promise is supported by a consideration distinct from the price.”

The option money serves as an assurance for the seller that there is a considerable degree
of certainly that the buyer will buy. It also serves as an assurance for the buyer that he can freely
make up his mind without fear that somebody else might buy the thing. Since B did not give
option money, S can dispose of the land without any liability for damages. After all, during the
time she conveyed the land to her son, she had no assurance that B will eventually buy it.
(Montilla v. Court of Appeals, 161 SCRA 167)

430. What are some of the basic rules in transactions on sale or return?

The following are some of the basic in rules in transactions on sale or return.

1) In a transaction on sale or return, the buyer becomes the owner of the thing sold upon
delivery, but he may revest the ownership to the seller by returning the thing within the time
fixed in the contract; or if no time has been fixed, within a reasonable time. (Art. 1501, Civil
Code)

2) The buyer can return the thing even if he finds nothing wrong with the quality of the
thing sold. The discretion to return is with the buyer.

3) If the thing is lost in the possession of the buyer, he bears the loss because upon
delivery to him of the thing, he became the owner thereof.

431. What are some of the basic rules in a sale on approval or trial or satisfaction?
The following are some of the basic rules in the sale on approval or trial or satisfaction:

1) In a sale on approval or trial or satisfaction, title remains with the seller, although there
has been delivery, unless the sale becomes absolute.

2) The risk of loss remains with the seller, although there has been delivery, if the sale has
not yet become absolute, except: a) if buyer is at fault; and b) if buyer had expressly agreed to
bear the loss.

3) If it is stipulated that a third person must signify approval or satisfaction, such a


provision is valid, but the third person must be in good faith. If refusal to accept is not justified,
seller may still sue.

432. Article 1523 of the Civil Code provides that delivery to the carrier is presumed
to be delivery to the buyer. Is the rule absolute?

No, the rule is not absolute. While Article 1523 of the Civil Code provides that delivery
to the carrier is presumed to be delivery to the buyer, such rule would have no application where
the sale itself specifically called for delivery by the seller to the buyer at the latter’s place of
business. (Mobile Oil Phils., Inc. v. Court of Appeals, 272 SCRA 548 [1997])

433. Pedro sold to Maria, his common-law wife, a parcel of land. Because of the sale,
Maria obtained a certificate of title in her name. Maria later sold the land to Zandro who, at
the time, was not aware of the relationship of Pedro and Maria. Pedro now seeks to recover
the lot from Zandro on the ground that his previous sale of the property to Maria is null
and void. Will the action prosper?

The action will not prosper. Pedro is correct in claiming that the sale to Maria is null and
void because it was a sale between common-law spouses. However, applying Article 1490 of the
Civil Code by analogy, Pedro can no longer recover the land from Zandro because the latter is a
buyer in good faith and for value who had the right to rely on the title of Maria. (Cruz v. court of
Appeals, 281 SCRA 491[1997])

434. M executes a real estate mortgage on his property in favor of S to answer for
any deficiency that may result from the foreclosure of the chattel mortgage constituted over
the car sold on installments by S to B. Assuming there is a deficiency after forecolosure of
the chattel mortgage constituted on the car sold, may S foreclose the real estate mortgage
constituted on M’s land?

No, because in such a case, the third person-mortgagor (M), after paying the deficiency
through foreclosure of the real estate mortgage, has the right of a guarantor who can hold the
vendee (B) liable for the payment made, thus indirectly violating the prohibition under the Recto
Law. (Art. 1484, par. 3, Civil Code)

435. Suppose in the preceding problem S assigns the promissory note to N,


promising the latter that should B defaults in his payment and the chattel mortgage is
foreclosed resulting in a deficiency, the assignor (S) shall answer for the deficiency to the
assignee N. Is this stipulation valid?
Yes, because in such a case, it is no longer the vendee, B, who is held liable but the
vendor, S. There is thus no violation of the Recto Law that if the vendor avails himself of the
right to foreclose, he is prohibited from bringing an action against the purchaser for the unpaid
balance.

436. Pursuant to its car plan program for its top employees, FedEx acquired a 2008
Toyota Altis worth P800,000, and gave it to Juan subject to the following conditions: a) in
consideration of a monthly rental of P10,000, the company leases to Juan the vehicle for his
use; b) Juan will pay lease rental thru salary deduction for a period of five years; c) for the
duration of the lease agreement, all expenses and costs of registration, insurance, repair and
maintenance, fuel and parts replacement shall be for the account of Juan; d) at the end of
the 5-year period, Juan may purchase the car from the company and all monthly rentals
shall be applied to the payment of the purchase price of the car; e) in the event of his
resignation or dismissal from the service, Juan shall return the car to the company in good
running condition.

FedEx later terminated Juan from the service due to redundancy. At the time of his
separation from the service, Juan was able to make payments on the car in the amount of
P300,000 and made no more payments thereafter. As a result, FedEx recovered the car from
Juan by virtue of a writ of replevin issued by the court. What kind of agreement was
entered into by Juan and his former employer?

The agreement between Juan and FedEx was one of sale on installment, not lease. This is
so because of the stipulation in the agreement that all monthly rentals shall be applied to the
payment of the full purchase price of the car. It is clear that the transaction in this case is a lease
in name only. The so-called monthly rentals are in truth monthly amortizations on the price of the
car.

The contract being one of sale on installment, Articles 1484 and 1485 of the Civil Code
will apply. Under Article 1484, the vendor in a sale of personal property on the installment plan
has three remedies against the vendee; namely: a) to demand exact fulfillment of the obligation,
should the vendee fail to pay; b) cancel the sale, should the vendee’s failure to pay cover two or
more installments; and c) foreclose the chattel mortgage on the thing sold, if one has been
constituted. Article 1485, on the other hand, provides that Article 1484 shall be applied to
contracts purporting to be leases of personal property with option to buy, when the lessor has
deprived the lessee of the possession or enjoyment of the thing.

Settled is the rule that the remedies under Article 1484 are alternative, not cumulative.
The exercise of one bars the exercise of the others. This limitation applies to contracts purporting
to be leases of personal property with option to buy by virtue of Article 1485.

In the case at bar, the condition that the lessor has deprived the lessee of the possession or
enjoyment of the thing for the purpose of applying Article 1485 was fulfilled by the recovery of
possession of the car. By virtue of the writ of replevin issued by the court, the deputy sheriff
seized the vehicle, thereby “depriving” Juan of its use. (Elisco Tool Manufacturing Corporation v.
Court of Appeals, 301 SCRA 731 [1999])

437. B bought from S a car on installments subject to the following stipulations: 1) B


shall pay a down payment and the balance shall be paid in 24 equal installments; 2) title to
the car shall remain with the seller until the purchase price has been paid in full; and 3) if
any two installments are not paid when due, the whole principal sum shall become due and
the sale shall be automatically rescinded and all sums paid forfeited and considered as
rentals.

B paid only for seven installments. Consequently, S brought an action for the
rescission of the sale and for the return of the car. After an ex-parte hearing, S repossessed
the car. After trial, the court rescinded the sale and directed B to pay the outstanding
balance of the purchase price of the car. Is there ground for B to appeal the decision?

Yes. In a sale by installments, the seller has three remedies to choose from in case the
buyer fails to pay any installment when due; 1) exact fulfillment of the obligation; 2) cancel the
sale; and 3) foreclose the chattel mortgage on the thing sold if one has been constituted (Art.
1484, Civil Code). If the seller chooses one remedy, he cannot avail himself of the other two. In
this case, S chose the second remedy which was to rescind the sale. This is clear from the fact that
S had taken possession of the car and it took into account the value of the car repossessed when
the seller made a computation of the outstanding balance of B. Having done so, the seller is
barred from exacting payment from B of the price of the car it had already repossessed. (Delta
Motor Sales v. Niu Kim Duan, 213 SCRA 259)

438. Benjie sold his land to Cris who began to possess it. Darwin, a stranger, sold the
same land, unauthorized by anyone, and in his own name to Enrico, who registered the
same in good faith. Who owns the land, Cris or Enrico?

Cris should be considered as the owner even if he did not register the land, because
Enrico, who registered the same, did not buy the land from its lawful owner, but from a complete
stranger totally unconnected with the land. Article 1544 of the Civil Code cannot therefore apply,
it cannot be said that the land had been sold twice by the same person.

439. Angelo sold his land to Banjo. Later, Angelo sold the same land to Crisanto.
Banjo in turn sold the same to Donato, who took possession of the land. Crisanto, a
purchaser in good faith, registered the land in his name. Who is now the owner of the land,
Crisanto or Donato?

Donato is the owner. It is true that Crisanto was in good faith, and it is also true that
Crisanto was the first one to register the land, but Article 1544 of the Civil Code can be applied
only if the two buyers (Crisanto and Donato) had bought the same property from the same person.
Article 1544 indeed does not apply if there are two different sellers, one of whom, when he made
the conveyance, had long before disposed of his rights as owner of the same.

440. Paula, by virtue of a Deed of Sale, sold an unregistered parcel of land to


Bernadette. Upon Paula’s death, her brother, Senando, executed an Extrajudicial settlement
of Paula’s estate wherein he adjudicated exclusively unto himself the lot and simultaneously
sold the same to Carmelita who was unaware of the prior sale.

a) Is the rule on double sale under Article 1544 of the Civil Code applicable to the
problem?

No. Article 1544 of the Civil Code on double sales applies only where the same thing is
sold to different vendees by the same vendor. It does not apply where the same thing is sold to
different vendees by different vendors as in the case at bar.

b) Who between the two buyers is the rightful owner of the lot?

Bernadette is the rightful owner of the property. When Paula sold to Bernadette the
property in question, ownership thereof was transferred to the latter in accordance with Article
1496 of the Civil Code which provides that the ownership of the thing sold is acquired by the
vendee from the moment it is delivered to him in any of the ways specified in Articles 1497 to
1501, or in any other manner signifying an agreement that the possession is transferred from the
vendor to the vendee. Article 1498, in turn, provides that when the sale is made through a public
instrument, the execution thereof shall be equivalent to the delivery of the thing which is the
object of the contract, if from the deed the contrary does not appear or cannot be clearly inferred.
In the problem presented, the Deed of Sale between Paula and Bernadette contains nothing
contrary to intent to transfer ownership.

When Paula died, she no longer owned the lot and, therefore, her brother Senando could
not have inherited it. The “Extrajudicial Settlement by Sole Heir with Simultaneous Sale” did not
thus confer upon Senando ownership of the lot in question; hence, he could not have conveyed it
to Carmelita.

c) Is the issue of Carmelita’s good faith relevant in resolving whether she has a
preferential right to the lot?

The issue of good faith or bad faith is relevant only where the subject of the sale is a
registered land and the purchaser is buying the same from the registered owner whose title to the
land is clean. In such case, the purchaser who relies on the clean title of the registered owner is
protected if he is a purchaser in good faith and for value. (Ong v. Olasiman, 465 SCRA 464
[2006])

441. S sold to B a parcel of land. B was made to believe that the land was an
unregistered land when S sold it to him. Unknown to B, S had earlier obtained a free patent
over the property by virtue of which he was issued a certificate of title. B later sold the land
to C who registered the transaction under Act 3344 which is the law governing registration
of instruments affecting unregistered lands. S also sold the land to D who registered the sale
under the Torrens system. Who now owns the land, C or D?

The controversy involves a double sale. S first sold the lot to B, from whom C, in turn,
derived his right. Then, after the first sale, S sold the same lot to D. The applicable law,
therefore, is Article 1544 of the Civil Code which provides that if immovable property is sold to
different vendees, “ownership shall belong to the person acquiring it who in good faith first
recorded it in the Registry of Property.”

In the instant case, D should be declared as the lawful owner of the lot. If a parcel of land
which is registered under the Torrens system is sold, but the sale is registered not under P.D. 1529
but under Act No. 3344, such sale is not considered registered as the term is used under Article
1544 of the Civil Code. Thus, in the case presented, C’s registration of the sale under Act No.
3344 is not effective for purposes of Article 1544 of the Civil Code. A registration must be done
in the proper registry in order to bind the land.
Under Act No. 3344, registration of instruments affecting unregistered lands is without
prejudice to a third party with a better right. Thus, under Act 3344, the mere registration of a sale
in one’s favor does not give him any right over the land if the vendor was not anymore the owner
of the land because he had previously sold the same to somebody else even if the earlier sale was
unrecorded.

C cannot argue that he was led into believing that the property was unregistered because a
Torrens title serves as notice to the whole world. He cannot also say that the prior registration of
his sale under Act No. 3344 operates as a constructive notice to D that would negate good faith on
D’s part because Act No. 3344 itself provides that registration thereunder would not prejudice
prior rights in good faith. (Abrigo vs. de Vera, June 21, 2004)

442. Mariwasa is a company engaged in the sale of roofing materials to the public.
Through extensive advertisements in media and in its brochures, the company made
representations respecting the durability and sturdiness of its roofing materials installed in
accordance with its particularly described method. Rey purchased these roofing materials.
Deliveries were made by Mariwasa and the materials were installed by its employees. Rey
later brought an action againstMariwasa for damages caused to his residence when its roof
was blown away by a typhoon. Will the action prosper?

The action will prosper. Mariwasa is liable under Article 1546 of the Civil Code (express
warranty) because the company, as seller to the general public, had made affirmations of fact
relating to its advertised product, the natural tendency of which was to induce the buyers, as in
fact it did induce Rey, to purchase the roofing materials, relying thereon.

443. Does the vendee have the right to pay the balance of the purchase price (or the
unpaid installments) in a sale involving realty even after the expiration of the agreed
period?

Yes. Under Article 1592 of the Civil Code, even if the contract of sale stipulates that the
contract shall be deemed automatically cancelled in case of non-payment of the price at the
agreed time, the vendee may still pay even after the expiration of the period as long as no demand
for rescission has been made, either judicially or by a notarial act. If the seller did not rescind and
even accepted late payments, the seller is deemed to have waived his right to rescind. (Heirs of
Pedro Escanlar v. Court of Appeal, 288 SCRA 144 [1998])

However, the provision under Article 1592 does not apply to a contract to sell where
payment is a positive suspensive condition. There is no need for rescission because there can be
no rescission of an obligation which is non-existent. (Pangilinan v. Court of Appeals, 279 SCRA
590 [1997])

(NOTE: The Maceda Law. R.A. 6552, is applicable even to contracts to sell and the
buyer is entitled to a grace period earned by him)

444. S sold to B a parcel of land payable in installments. The deed of conditional sale
contains the following provisions: a) should the vendee fails to pay three successive monthly
installments, the sale shall be considered automatically rescinded without need of judicial
action and all payments made shall be forfeited in favor of the vendor by way of rental for
the use and occupancy of the property; and b) all improvements introduced by the vendee
in the property shall belong to the vendor without any right of reimbursement.

After five years, B has paid the total amount of P2 million, although he admitted
having failed to pay the latest monthly installments due to a financial problem. B later tried
to pay the unpaid installments but S turned him down. S then sent a letter to B informing
the latter that he was enforcing the provision on automatic rescission and automatic
forfeiture stipulated in their deed of conditional sale. The letter also made a formal demand
for B to vacate the property.

a) What is the applicability of the requirement of rescission by suit or by notarial act


under Article 1592 of the Civil Code?

It is well-settled that Article 1592 of the Civil Code requiring demand by suit or by
notarial act in case the vendor of realty wants to rescind applies only to a contract of sale, and not
to a sale on installments or a contract to sell, where title remains with the vendor until full
payment of the price. In a contract to sell, the title over the subject property is transferred to the
vendee only upon full payment of the stipulated consideration. Unlike in a contract of sale, the
title does not pass to the vendee upon the execution of the agreement or the delivery of the thing
sold. In the present case, the deed of conditional sale is of the same nature as a sale on
installment or a contract to sell, which is not covered by Article 1592.

b) Is S entitled to enforce the automatic forfeiture clause in the Deed of Conditional


Sale?

No. The validity of the automatic forfeiture clause in the deed of conditional sale is
conceded. However, S failed to prove the conditions that would warrant the implementation of
this clause. It is clear that S was not justified in refusing to accept the tender of payment made by
B. Had he accepted it, B would have paid his unpaid installments. In other words, there was a
deliberate effort on the part of B to meet his responsibility to pay. The fact is, S refused to
accept B’s payment so he will have a reason to demand the enforcement of the automatic
forfeiture clause. He cannot be rewarded for his own misdeed.

In any event, the rescission of the contract and the forfeiture of the payments already
made could not be effected because the case falls squarely under R.A. 6552, otherwise known as
the Maceda Law. Pursuant to Section 3 of said law, B was entitled to a one-month grace period
for every year of installments paid, which means that he was entitled to a grace period when S
turned down his offer to pay his unpaid installments.

445. A leased to B in 1968 a building for 20 years with a provision in the lease
contract granting B a right of first refusal. In 1975, A sold the property to C who knew
about the lease and agreed to respect it. The sale was later rescinded on complaint of B. As
ordained in the judgment, A was ordered to return to C the purchase price and to allow B to
buy the property for the same amount. The decision became final and executory in 1997.

a) Is C entitled to collect back rentals from B from 1975 (when C bought the
property from A) until 1997 (when the judgment allowing B to buy the property for the
same amount became final)? Stated otherwise, has C acquired ownership of the property
during said period?

No. Rent is a civil fruit that belongs to the owner of the property producing it by right of
accession. Consequently and ordinarily, the rentals that fell due from the time of the perfection of
the sale to C until its rescission by final judgment should belong to the owner of the property
during that period. C never acquired ownership of the property during said period.

By a contract of sale, “one of the contracting parties obligates himself to transfer


ownership of and to deliver a determinate thing and the other to pay thereof a price certain in
money or its equivalent.” (Art. 1458, Civil Code) Ownership of the thing sold is a real right,
which the buyer acquires only upon delivery of the thing to him “in any of the ways specified in
Articles 1497 to 1501, or in any other manner signifying an agreement that the possession is
transferred from the vendor to the vendee.” (Art. 1496, Civil Code). This right is transferred not
merely by contract, but also by tradition or delivery. And there is said to be delivery of the
vendee” when the thing sold “is placed in the control and possession of the vendee.” Thus, it has
been held that while the execution of a public instrument of sale is recognized by law as
equivalent to the delivery of the thing sold, such constructive or symbolic delivery, being merely
presumptive, is deemed negated by the failure of the vendee to take actual possession of the land
sold.

In the Law on Sales, delivery may either be actual or constructive, but both forms of
delivery contemplate “the absolute giving up of the control and custody of the property on the
part of the vendor, and the assumption of the same by the vendee.”

From the peculiar facts of this case, it is clear that C never took actual control and
possession of the property sold, in view of B’s timely objection to the sale and the continued
actual possession of the property. The objection took the form of a court action impugning the
sale which was rescinded by a judgment rendered by the court. It has been held that the execution
of a contract of sale as a form of constructive delivery is a legal fiction. It holds true only when
there is no impediment that may prevent the passing of the property from the hands of the vendor
into those of the vendee. When there is such impediment, “fiction yields to reality – the delivery
has not been effected.”

Hence, B’s opposition to the transfer of the property by way of sale to C was a legally
sufficient impediment that effectively prevented the passing of the property into the latter’s hands.

The execution of a public instrument gives rise, therefore, only to a prima facie
presumption of delivery. Such presumption is destroyed when the instrument itself expresses or
implies that delivery was not intended; or when y other means it is shown that such delivery was
not effected, because a third person was actually in possession of the thing. In the latter case, the
sale cannot be considered consummated.

b) Is not a rescissible contract valid until rescinded?

At bottom, it may be conceded that, theoretically, a rescissible contract is valid until


rescinded. However, this general principle is not decisive to the issue of whether C acquired the
right to collect rentals. What is decisive is the civil law rule that ownership is acquired, not by
mere agreement, but by tradition or delivery. Under the factual environment of this controversy, C
was never put in actual and effective control or possession of the property because of B’s timely
objection. In short, the sale to C may have been valid from inception, but it was judicially
rescinded before it could be consummated. C never acquired ownership, not because the sale was
void, but because the sale was not consummated by a legally effective delivery of the property
sold. (Equatorial Realty Dev’t., Inc. v. Mayfair Theater, Inc., 370 SCRA 56 [2001])

446. Seller sells to Buyer a parcel of land under a notarized deed of sale. On the
same day and along with the execution of the deed of sale, the parties executed a separate
instrument, denominated as “Right of Repurchase” granting Seller the right to repurchase
the lot within ten years. Seller later offered to redeem but Buyer refused. Is Seller entitled to
compel Buyer to resell the lot on the basis of the “Right to Repurchase”?

No. The transaction between the parties was not a sale with right to repurchase, hence,
Seller cannot avail of the right of conventional redemption. The right of repurchase is not a right
granted the vendor by the vendee in a subsequent instrument, but is a right reserved by the vendor
in the same instrument of sale as one of the stipulations of the contract. Once the instrument of
absolute sale is executed, the vendor can no longer reserve the right to repurchase, but some other
right like an option to buy. (Vasquez v. Court of Appeals, 198 SCRA 102 [1991])

447. Samson sold to Delilah a house and lot for P5 million. Although Delilah paid
only P4.5 million -- the balance to be paid within six months -- title to the property was
transferred to Delilah who immediately took possession thereof. After six months, Delilah
was still unable to pay the balance. After weeks of negotiations, Samson and Delilah
executed a deed of sale with right to repurchase within one year, with a stipulation that
should Delilah, as seller, fail to redeem the property, absolute title should be vested in
Samson, as buyer. The consideration for the sale was P 1 million. Despite the execution of
the deed, however, Delilah remained in possession of the property. When the period of
redemption lapsed with Delilah failing to redeem the property, Samson files an action to
consolidate his ownership over the property. Will the action prosper?

The action will not prosper. The contract between Samson, as buyer and Delilah, as
seller, was not a sale with right to repurchase but an equitable mortgage. Under Article 1602 of
the Civil Code, a contract is presumed to be an equitable mortgage when, among others, the price
of a sale with right to repurchase is unusually inadequate and when the vendor remains in
possession as a lessee or otherwise. In this case, Samson paid only P1 million for a property
which is worth P5 million just six months earlier. Also, Delilah, the vendor, remained in
possession of the property. The contract being an equitable mortgage, ownership cannot be
consolidated in Samson upon failure of Delilah to redeem the property since such would be a
pactum commissorium. The mortgagee, Samson, should first foreclose the mortgage if he wishes
to secure a title to the mortgaged property. (Ching Sen Ben v. Court of Appeals, 314 SCRA 762
[1990])

448. What is the effect of partial payment of the price and entry into the land by the
buyer in a case of oral sale of land?

A vendee in an oral contract of sale of land who made partial payment thereof, took
possession of the land, and made valuable improvements thereon, is entitled to bring as suit to
clear his title against the vendor who had refused to transfer title to him. It is not necessary that
the vendee has an absolute title, an equitable title being sufficient to clothe him with personality
to bring an action to quiet title. For, while the action is denominated as one for specific
performance, it is in effect an action to quiet title. (Pingol, et al. v. Court of Appeals, 226 SCRA
118 [1993])

449. Seller and Buyer enter into an “Option to Purchase,” whereby Seller promised
to sell to Buyer a piece of land within two years. Buyer offered to pay on several occasions,
but Seller refused. Buyer files an action for specific performance. Seller contends that the
option is only a unilateral promise to sell and is unsupported by consideration distinct from
the price, thus, void. Is Seller’s contention correct?

Seller’s contention is not correct. Once a unilateral promise to sell, even if unsupported
by any consideration is accepted, it results in a perfected contract of sale. Article 1324 of the Civil
Code applies.

450. Husband and Wife mortgaged to a bank a parcel of land. When the couple
failed to pay their loan, the bank foreclosed the mortgage, bought the property at public
auction, and consolidated its ownership over the property when the couple failed to redeem.
Meanwhile, the couple sold the property to A upon the condition that the couple may
redeem the property at anytime when they the money. The sale was made after the bank
had already consolidated its title on the land. When A came to know about the foreclosure
sale, he subsequently bought the land from the bank resulting in the issuance of a certificate
of title in his name. The problem arose when the couple asked A to resell the property to
them. Is A liable to resell the property to them?

No. A contract to repurchase arising out of a contract of sale where the seller did not have
any title to the property “sold” is not valid. Since nothing was sold, there is also nothing to
repurchase. One “repurchases” only what he had previously sold. In other words, the right to
repurchase presupposes a valid contract of sale between the same parties. Undisputedly, A
acquired title to the property from the bank, and not from H and W. The subsequent agreement
between the spouses and A is actually an accepted unilateral promise to sell. Article 1479 of the
Civil Code provides that “an accepted unilateral promise to buy or sell a determinate thing for a
price certain is binding upon the promissor if the promise is supported by a consideration distinct
from the price. In the present case, the alleged written contract of repurchase (between A and the
couple) is bereft of any consideration distinct from the price. As an independent contract, it
cannot bind A.

Moreover, the right of repurchase is not a right granted the vendor by the vendee in a
subsequent instrument, but is a right to be reserved by the vendor in the same instrument of sale
as one of the stipulations of the contract. Once the instrument of absolute sale is executed, the
vendor can no longer reserve the right to repurchase, and any right thereafter granted the vendor
by the vendee in a separate instrument is not a right of repurchase but some other right like the
option to buy in the instant case. (Nool v. Court of Appeals, 267 SCRA 149 [1997])

451. In an action for Reformation of Instrument, P alleges that his contract with D
denominated as “Deed of Sale with Right to Repurchase” is in reality an equitable
mortgage. After trial in due course, the court declared the transaction to be a true pacto de
retro sale, not an equitable mortgage. After exhausting all appellate remedies, P now claims
that since the transaction is declared as a true pacto de retro sale, he is still entitled to
repurchase the property pursuant to the third paragraph of Article 1606 of the Civil Code
which provides that “the vendor may still exercise the right to repurchase within thirty days
from the time final judgment was rendered in a civil action on the basis that the contract
was a true sale with right to repurchase.”

May the vendor in a sale judicially declared as a pacto de retro sale exercise the right
of repurchase under Article 1606, third paragraph, of the Civil Code, after he has taken the
earlier position that the same is an equitable mortgage?

No. At the outset, it must be stressed that it has been the consistent claim of P that his
transaction with D was an equitable mortgage and not a pacto de retro sale with option to buy.
Even after the lower court declared the transaction to be a pacto de retro sale, P still maintained
that the transaction was an equitable mortgage. Seeing the chance to turn the decision in his favor,
however, P abandoned his theory that the transaction was an equitable mortgage and adopted the
finding of the courts that it was in fact a pacto de retro sale. P now insists that he is entitled to
exercise the right to repurchase pursuant to the third paragraph of Article 1606 of the Civil Code,
which provides: “however, the vendor may still exercise the right to repurchase within thirty days
from the time final judgment was rendered in a civil action on the basis that the contract was a
true with right to repurchase.” Under the undisputed facts of this case, this cannot be done.

In the parallel case of vda. De Macoy v. Court of Appeals, 206 SCRA 244 [1992], the
petitioners therein raised the defense that the contract was not a sale with right to repurchase but
an equitable mortgage. They further argued as an alternative defense that even assuming the
transaction to be a pacto de retro sale, they can nevertheless repurchase the property by virtue of
Article 1606, third paragraph, of the Civil Code. The Supreme Court held in vda. De Macoy that
said provision was inapplicable, thus:

“The application of the third paragraph of Article 1606 is predicated upon


the bona fides of the vendor a retro. It must appear that there was a belief on his
part, founded on facts attendant upon the execution of the sale with pacto de
retro, honestly and sincerely entertained, that the agreement was in reality a
mortgage, one not intended to affect the title to the property ostensibly sold, but
merely to give it as security for a loan or other obligation. In that event, if the
matter of the real nature of the contract is submitted for judicial resolution, the
application of the rule is proper; that the vendor a retro be allowed to repurchase
the property sold within 30 days from rendition of final judgment declaring the
contract to be a true sale with right to repurchase. Conversely, if it should appear
that the parties’ agreement was really one of sale -- transferring ownership to the
vendee, but accompanied by a reservation to the vendor of the right to repurchase
the property -- and there are no circumstances that may reasonably be accepted as
generating some honest doubt as to the parties’ intention, the proviso is
inapplicable. The reason is quite obvious. If the rule were otherwise, it would be
within the power of every vendor a retro to set at naught a pacto de retro sale, or
resurrect an expired right of repurchase, by simply instituting an action to reform
the contract -- known to him in truth as a sale with pacto de retro -- into an
equitable mortgage. As postulated by the petitioner, ‘to allow herein private
respondent to repurchase the property by applying said paragraph x x x to the
case at bar despite the fact that the stipulated redemption period had already long
expired when they instituted the present action, would in effect alter or modify
the stipulation in the contract as to the definite and specific limitation of the
period for repurchase hereby not simply increasing but in reality resuscitating the
expired right to repurchase’ x x x and likewise the already terminated and
extinguished obligation to resell by herein petitioner. The rule would thus be
made a tool to spawn, protect and even reward fraud and bad faith, a situation
surely never contemplated or intended by the law.”

In the case at bar, the subject transaction was truly a pacto de retro sale; and that none of
the circumstances under Article 1602 of the Civil Code exists to warrant a conclusion that the
transaction was an equitable mortgage. If P really believed that the transaction was indeed an
equitable mortgage, as a sign of good faith, he should have, at the very least, consigned with the
trial court the amount representing his alleged loan, on or before the expiration of the right to
repurchase. Clearly, therefore, the declaration of the transaction as a pacto de retro sale will not,
under the circumstances, entitle P to the right of repurchase set forth under the third paragraph of
Article 1606 of the Civil Code. (Abilla and Dizon v. Gobonseng, Jr. and Ong, 374 SCRA 51
[2002])

452. What is the applicability of the Maceda and Recto laws in the law on sales?
Give the most important features of each law.

The Maceda Law or R.A. 6552 is applicable only to the sale of immovable property on
installments. The most important features of this law are:
1) After having paid installments for at least two years, the buyer is entitled to a
mandatory grace period of one month for every year of installments paid, to pay the unpaid
installments without interest.

If the contact is cancelled, the seller shall refund to the buyer the cash surrender value
equivalent to fifty percent (50%) of the total payments made, and after five years of installments,
an additional five percent (5%) every year but not to exceed ninety percent (90%) of the total
payments made.

2) In case the installments paid were less than two years, the seller shall give the buyer a
grace period of not less than 60 days. If the buyer fails to pay the installments due at the
expiration of the grace period, the seller may cancel the contract after 30 days from receipt by the
buyer of the notice of cancellation or demand for rescission by notarial act.

The Recto Law enunciated under Article 1484 of the Civil Code refers to the sale of
movables payable in installments and limiting the right of the seller, in case of default by the
buyer, to one of three remedies:

a) Exact fulfillment;

b) Cancel the sale if two or more installments have not been paid; and

c) Foreclose the chattel mortgage on the thing sold, also in case of default of two or more
installments, with no further action against the purchaser.

453. Buyer bought on installment a residential subdivision lot from Seller, but after
the 5th year, was unable to make further installments. Can Seller cancel the sale
unilaterally, or must he go to court to obtain rescission? Is Buyer entitlted to a refund?

Yes, the seller can cancel the sale unilaterally. He need not go to court to obtain
rescission, provided that the actual cancellation of the contract of sale shall take place after thirty
days from receipt by the buyer of the notice of cancellation or the demand for rescission of the
contract by a notarial act and upon full payment of the cash surrender value to the buyer. (Sec. 3
(b), R.A. No. 8552)
Buyer shall be entitled to the cash surrender value which is fifty percent (50%) of the
total payment made buy him to the seller. (Ibid.)

454. Ali leased to Ben a parcel of land. Their lease agreement includes a stipulation
granting Ben the “first option or priority” to purchase the leased property in case Ali decides
to sell it. Ben subsequently assigned all his rights and interests in the leased property to
Cocoy. The assignment is with the conformity of Ali. Ali later sold the leased property to
Ding for P7 million. When Cocoy complained, Ali had the property reconveyed to him by
Ding for the same amount of P7 million. Ali then offered the property to Cocoy for P9
million. Cocoy counter-offered for P7 million which was the same amount paid by Ding in
the first sale. Because Cocoy turned down the P7 million offer, Ali then sold the property
again to Ding for P7 million. Cocoy now sues Ali and Ding for breach of his contract right of
“first option to buy.” Will the action prosper?

Yes. Cocoy’s complaint sufficiently alleges an actionable contractual breach on the part
of the defendants Ali and Ding. It was stipulated in the contract of lease between Ali and Cocoy
that the latter was granted the “first option or priority” to purchase the leased properties in case
Ali decides to sell it. To comply with this obligation, the sale of the property for the amount of P7
million (the price for which the property was finally sold to Ding) should have been first offered
to Cocoy.

The basis of the right of first refusal must be the current offer to sell of the seller or offer
to purchase of any prospective buyer. Only after the grantee fails to exercise said right could the
owner validly offer to sell the property to a third person under the same terms as offered to the
grantee. (Paranaque Kings Enterprise, Inc. v. Court of Appeals, 268 SCRA 727 [1997])

455. Dr. Go is the owner of a residential lot in Quezon City. In 1981, he constructed,
at a cost of P3 million, a residential house on the lot. Five years later, the market value of
the lot already ranged from P2,000 to P5,000 per square meter, while the house was worth
about P10 million. In 1987, Dr. Go borrowed P2.5 million from Engr. Bersamin to finance
his congressional campaign. Dr. Go was required to sign, as a sort of collateral, a deed of
sale whereby he purportedly sold to Engr. Bersamin his house and lot. Despite the “deed of
sale,” Dr. Go remained in possession of the property.

Without the knowledge of Dr. Go, Engr. Bersamin caused the cancellation of the
certificate of title on the lot and had a new Torrens title issued in his name. After the
election, Engr. Bersamin sold the lot and the improvement thereon to Atty. Pe for P2.75
million. When Dr. Go discovered the sale of his house and lot, he immediately brought an
action for reformation of the deed of sale he executed with Engr. Bersamin to the end that
the true intention of the parties therein be expressed. Dr. Go also sought the reconveyance
of the ownership of the property to him.

a) Will the action prosper?


Yes. The deed of sale signed by Dr. Go in Engr. Bersamin’s favor is in reality a mere
equitable mortgage and not an absolute sale in view of the following circumstances:

First, the consideration of the sale of P2.75 million is grossly and unusually inadequate.
The price alone of Dr. Go’s house in 1987 is P10 million, while that of the lot commanded a
price of from P2,000 to P5,000 per square meter when the deed of sale was executed.

Second, despite the alleged deed of sale, Dr. Go has remained in actual and physical
possession of the property up to the time when it was sold to Atty. Pe.

Third, Dr. Go was driven to obtain the loan from Engr. Bersamin “due to an urgent
necessity of obtaining funds,” and he signed the deed of sale knowing that it did not express their
true intention.

b) Is Atty. Pe a buyer in good faith?

No. He was not a buyer in good faith simply because he paid the consideration of the sale
to Engr. Bersamin. Rather, he was a buyer in bad faith because he was fully aware that his seller,
Engr. Bersamin, was not in possession of the property at the time when he purchased it. Atty. Pe
did not deliberately look beyond the title of his seller. Ordinary and simple prudence dictated that
he should have verified the nature of ownership of the seller beyond the title, considering the
amount involved (P2.75 million), the extent of the property, and knowing that the seller was not
in possession of the property sold, and thus, could not have delivered the actual and physical
possession thereof. (Uy v. Court of Appeals, 359 SRCA 263 [2001])

456. Ramon is the owner of a parcel of land. In order to secure a loan, he mortgaged
a portion thereof to a bank which foreclosed the mortgage upon failure of Ramon to pay the
loan. Title was later acquired by the bank which then sold the land to Pablo. Ramon, on the
other hand, sold the unmortgaged portion to Juan. Can Pablo claim the right of legal
redemption?

The exercise of the right of legal redemption presupposes the existence of co-ownership
at the time the conveyance is made by a co-owner and when it is demanded by the other co-
owners. Considering that Pablo was not a co-owner of Ramon of the portion sold at the time of
the conveyance to Juan, the right of legal redemption cannot be exercised. (Uy v. Court of
Appeals, 246 SCRA 703 [1995])

457. Nagtitinda sold to Nagbibili a house and lot for P5 million. Of the stipulated
purchase price, Nagbibili paid only P4 million but promised to pay the balance of P1 million
within six months. Without the balance having been paid, title was transferred to Nagbibili
who immediately took possession of the property. When Nagbibili failed to pay the balance
within six months, he and Nagtitinda executed a deed of sale with right to repurchase, with a
stipulation that should Nagbibili fail to redeem the property within one year, absolute title
shall be vested in Nagtitinda. The consideration for the latter sale was P1 million. Despite
the sale, however, Nagbibili remained in possession of the property. When the period of
redemption lapsed, Nagbibili failing to redeem the property, Nagtitinda then brought an
action to consolidate ownership over the property.

What remedy does Nagbibili have to prevent Nagtitinda from consolidating


ownership over the property?

Nagbibili’s remedy is to file an action for reformation of the instrument purporting to be a


deed of sale with right to repurchase. (Art. 1605, Civil Code) The contract between Nagbibili and
Nagtitinda was not a sale with a right of repurchase but an equitable mortgage. Under Article
1602 of the Civil Code, a contract is presumed to be an equitable mortgage when, among others,
the price of a sale with right to repurchase is unusually inadequate and when the vendor remains
in possession as a lessee or otherwise. In this case, Nagtitinda paid only P1 million for a property
which was worth P5 million just six months earlier. Also, Nagbibili, the vendor, remained in
possession of the property. The contract being an equitable mortgage, ownership cannot be
consolidated in Nagtitinda upon failure of Nagbibili to redeem the property since such would be a
pactum commissorium. The mortgagee, Nagtitinda, should first foreclose the mortgage if he
wishes to secure a title to the mortgaged property.

458. Erap sold to Gloria a parcel of land. In their instrument of sale, Erap was
granted the right to repurchase the property within six months from execution of the sale.
When Erap failed to repurchase the property within the stipulated period, Gloria
immediately filed a petition for consolidation of ownership over the property. The court
rendered judgment allowing consolidation of ownership of the property in favor of Gloria,
but gave Erap 30 days from receipt of the decision within which to redeem the property
pursuant to Articles 1606 and 1607 of the Civil Code.

a) Is there an ambiguity in the decision of the court?

There is no ambiguity at all in the decision of the court that warrants clarification. If at
all, the ambiguity is merely ostensible. At first blush, the disposal portion of the decision
declaring the consolidation of ownership of the property in Gloria, on one hand, and granting
Erap 30 days to repurchase the property, on the other hand, appears inconsistent. However, the
dispositive portion also makes reference to Article 1606 of the Civil Code, the third paragraph of
which provides that “the vendor may still exercise the right to repurchase within thirty days from
the time final judgment was rendered in a civil action on the basis that the contract was a true sale
with right to repurchase.” Taken together, it becomes obvious that the consolidation of the
property in Gloria’s name is subject to the suspensive condition of Erap’s failure to repurchase
within the 30-day period.

b) Is it error for the court to grant Erap the right to repurchase the property within
30 days from receipt of the decision?

Yes. By express provision, Article 1606 of the Civil Code grants the vendor a retro 30
days “from the time final judgment was rendered,” not from the defendant’s receipt of the
decision. The Supreme Court has construed “final judgment” to mean one that has become final
and executory. (Agan v. Heirs of Nueva, 418 SCRA 421 [2003])

(NOTE: In Agan, the Supreme Court agreed with the finding of the trial court that the
contract entered into by the parties was one of sale with a right to repurchase, and not one of
equitable mortgage. This ruling should not be confused with the ruling in Felicen, Sr. v. Orias,
et.al., 156 SCRA 586 [1987] where the Supreme Court refused to apply the 3rd paragraph of
Article 1606 of the Civil Code because the vendor a retro acted in bad faith when he assailed the
pacto de retro sale. In Agan, the trial court made no finding that the vendor a retro acted in bad
faith when he raised the defense that the pacto de retro sale was an equitable mortgage)

459. Malou is on the verge of being prosecuted for violation of B.P. 22 because of the
rubber checks that she issued to Riza amounting to P4.4 million. To stave off her impending
prosecution, Malou solicited the help of her relative, Zinia. In particular, she requested
Zinia to cede to Riza her lot as settlement of the value of the rubber checks. After much
discussion, Zinia agreed to execute a fictitious deed of sale in Riza’s favor with right to
repurchase covering the lot subject to the following conditions: a) the amount to be stated
in the document is P4.4 million with interest thereon at 5% per month; b) the property
will be repurchased within six months; c) although it would appear in the document that
Zinia is the vendor, it would be Malou who will provide the money for the redemption of the
property; and d) title to the property will be delivered to Riza but the sale will not be
recorded in the Register of Deeds.

To assure Zinia that Malou will redeem the properties, Malou issued to Zinia two
post-dated checks. One check was for P4.4 million supposedly for the selling price of the
property and the other was for P420,000 corresponding to the interest for six months. With
Zinia’s consent, Malou then prepared the “Deed of Sale with Right to Repurchase” and
after it was notarized, it was given to Riza together with the title of the property. As agreed
upon, Riza did not register the transaction with the Register of Deeds.

When Zinia presented the two checks for payment, they were dishonored for having
been drawn against a closed account. When Malou was nowhere to be found, Zinia
immediately filed an action to annul the sale pacto de retro. She contends that the sale is void
for lack of consideration because no money changed hands when she signed it and the
checks which were issued for the redemption of the properties have been dishonored for
having been drawn against a closed account. Is the pacto de retro sale without a valuable
consideration?

The pacto de retro sale has a valuable consideration. In preparing and executing the deed
of sale with right of repurchase and in delivering to Riza the land title, Zinia actually
accommodated Malou so she would not be charged criminally by Riza. It is plain therefore that
consideration existed at the time of the execution of the deed of sale with right of repurchase. It is
not only Zinia’s kindness to Malou, being a relative, but also his receipt of P420,000 from her as
interest for the P4.4 million, which impelled her to execute such contract. While it is true that the
checks were dishonored, there is absolutely no basis for Zinia to file a complaint against Riza to
annul the pacto de retro sale on the ground of lack consideration. Zinia’s cause of action is to file
a criminal action against Malou but not a civil action against Riza to annul the sale.

Moreover, Zinia cannot seek refuge in the equitable maxim that “where one or two
innocent persons must suffer, that person who gave occasion for the damages caused must bear
the consequences.” This is so because she was not an innocent person. As a matter of fact, she
gave occasion for the damage caused by virtue of the deed of sale with right to repurchase which
she prepared and signed. (Mate v. Court of Appeals, 290 SCRA 463 [1998])

460. Maria and her daughters, Angela, Benita and Carlota are co-owners of an
apartment building. Without the knowledge of her other co-owners, Maria sold her 1/4
share in the building to her brother, Dodong. The following month, Angela received from
her uncle, Dodong, a letter informing her about the sale, with a demand that the rental
corresponding to his 1/4 share on the subject property be remitted to him. The letter was
sent with an attached copy of the Deed of Sale. Six months later, Angela brought an action
against Dodong for redemption of the portion sold to him. She contends that the 30-day
period for redemption under Article 1623 of the Civil Code has not begun to run against her
since her mother never informed her about the sale.

Is Dodong’s letter to Angela sufficient compliance with the notice requirement under
Article 1623 of the Civil Code? Is Angela still entitled to redeem the portion sold?

No. Article 1623 of the Civil Code clearly and expressly provides that the 30-day period
of exercising the rights of pre-emption or redemption are to be counted from notice in writing by
the vendor or prospective vendor not from any other person. The reasons for requiring that notice
should be given by the vendor, and not by the vendee, are easily discernible. The vendor of an
undivided interest is in the best position to know who are his co-owners that under the law must
be notified of the sale. Also, the notice by the seller removes all doubts as to the fact of the sale,
its perfection, and its validity, the notice being a reaffirmation thereof, so that the party notified
need not entertain doubt that the seller may still contest the alienation. This assurance would not
exist if the notice should be given by the vendee.

In the case at bar, Angela has not been furnished any written notice of the sale or a copy
thereof by Maria, the vendor. Angela’s right to exercise the legal right of pre-emption or
redemption, given to a co-owner when any one of the other co-owners sells his share in the thing
owned in common to a third person, as provided for in Article 1623 of the Civil Code, has not yet
accrued. (Francisco v. Boiser, 332 SCRA 792 [2000])

461. Pedro is the registered owner of Lot No. 1 which is an agricultural land.
Adjacent to Pedro’s lot is Lot No. 2 with an area of 3,500 square meters owned by Quintin.
Unknown to Pedro, Quintin sold Lot No. 2 to Rustico for the sum of P150,000. Pedro
learned of the sale only when Quintin sold to him Lot No. 2 which is also adjacent to Lot No
1. Forthwith, Pedro sent a letter to Rustico signifying his intention to redeem the lot.
Thereafter, he sent another letter to Rustico tendering payment of the price he paid to
Quintin for Lot No. 2.

a) Is Pedro entitled to redeem the lot?

Yes, because no written notice of the sale was given by Quintin to Pedro which is
required under Article 1623 of the Civil Code. Whenever a piece of rural land not exceeding one
hectare is alienated, the law grants to the adjoining owners a right of redemption, except when the
grantee or buyer does not own any other rural land. (Art. 1621, Civil Code) In order that the right
may arise, the land sought to be redeemed and the adjacent property belonging to the person
exercising the right of redemption must both be rural lands. If both are urban lands, the right
cannot be invoked. (Primary Structures Corp. v. Valencia, 409 SCRA 371 [2003])

b) Suppose Pedro had actual notice of the sale, is he still entitled to redeem the lots?

Yes. In Verdad v. Court of Appeals, 256 SCRA 593 [1996], the Supreme Court succinctly
stated that “the written notice of sale is mandatory. This court has long established the rule that
notwithstanding actual knowledge of a co-owner, the latter is still entitled to a written notice from
the selling co-owner in order to remove all uncertainties about the sale, its terms and conditions,
as well as its efficacy and status.”

462. Damian is engaged in the manufacture and sale of T-shirts, while Urbano is
engaged in the manufacture and sale of plastic toys. Damian and Urbano entered into a
contract whereby the latter would manufacture for the former 20,000 pieces of vinyl frogs at
P7.00 per piece in accordance with the sample approved by Damian. These vinyl frogs were
to be attached to the shirts that Damian would manufacture and sell. Within a month,
Urbano delivered to Damian the 20,000 pieces of vinyl frogs which Damian paid in full. One
year later, Damian returned to Urbano 9,000 pieces of vinyl frogs for being defective.
Damian then demanded from Urbano a refund of the purchase price for the returned goods.
Urbano refused. Is Damian entitled to a refund?

No. The contract between Damian and Urbano stipulated that Urbano would manufacture
upon order of Damian 20,000 pieces of vinyl frogs according to the samples specified and
approved by Damian. Urbano did not ordinarily manufacture these products, but only upon order
of Damian and at the price agreed upon. Clearly, the contract between Urbano and Damian was a
contract for a piece of work. But whether the agreement between Urbano and Damian was one of
a contract of sale or a piece of work, the provisions on warranty against hidden defects in a
contact of sale (Article 1561, Civil Code) shall also apply to a contract for a piece of work.

Article 1567 of the Civil Code provides for the remedies available to the vendee in case
of hidden defects, namely: he may elect between withdrawing from the contract or demanding a
proportionate reduction of the price, with damages in either case.

By returning the 9,000 pieces of vinyl products to Urbano and asking for a return of their
purchase price, Damian was in effect “withdrawing from the contract” as provided in Article
1567 of the Civil Code. The prescriptive period for this kind of action is six months from the
delivery of the thing sold, pursuant to Article 1571 also of the civil Code.

There is no dispute that Urbano delivered the vinyl products to Damian. It is also settled
that the action to recover the purchase price of the goods Damian returned to Urbano was filed
more than nine months from the date of delivery. Damian having filed the action three months
after the six- month period for filling of an action for breach of warranty against hidden defects
stated in Article 1571, the action had prescribed. (Dino v. Court of Appeals, 359 SCRA 91 [2001])

LEASE

463. Pedro leased to Juan a commercial building. The contract expressly prohibits
the assignment of the lease contract or any portion thereof. Juan later subleased a portion
of the premises to a third person. Is Pedro entitled ask for cancellation of the lease contract
for violation of the provision against assignment?

No. Juan, the lessee, did not assign the lease or any portion thereof, to the sub-lessee.
Since the problem does not state that the contract of lease contains a prohibition against sublease,
the sublease is lawful, the rule being that in the absence of an express prohibition a lessee may
sublet the thing leased, in whole or in part, without prejudice to his responsibility to the lessor for
the performance of the contract.

464. May the lessee assign the lease contract to a third person?

No, he may not. Under Article 1649 of the Civil Code, the lessee cannot assign the lease
without the consent of the lessor, unless there is a stipulation to the contrary.

465. Why is the lessee not allowed to assign the lease without the consent of the
lessor?

The lessee cannot assign the lease without the consent of the lessor because an
assignment of the lease constitutes novation (i.e., by substituting the person of the debtor) so the
creditor-lessor must consent. An assignment exists when the lessee makes an absolute transfer of
his interest as lessee, and has thus dissociated himself from the original contract of lease. In such
a case, his personality disappears, and there remains only in the juridical relation two persons: the
lessor and the assignee, who is converted into a lessee. Indeed the rights of the assignee as lessee
are enforceable not against the assignor, but against the lessor.

466. May the lessee sub-lease the leased premises?

Yes. Unlike in assignment, a lessee may generally sub-lease the property in the absence
of express prohibition. This is so because the lessee remains a party to the lease even if he had
already created a sub-lease thereon.

467. Lessor brings an action for unlawful detainer against the lessee and the sub-
lessee. The lessor prevailed. If the lessee appeals and the sub-lessee does not, can execution
issue against the sub-lessee?

No. During the pendency of his appeal, the lessee has a right to occupy the leased
premises; therefore, and in the meanwhile also, the sub-lessee may remain in the leased premises.

468. Gohan leased his house to Goku on condition that the leased premises shall be
used for residential purposes only. Goku subleased the house to Lupin who used it as a
warehouse for fabrics. Upon learning this, Gohan demanded that Lupin stop using the
house as a warehouse, but Lupin ignored the demand. Gohan then filed an action for
ejectment of Lupin, who raised the defense that there is no privity of contract between him
and Gohan, and that he has not been remiss in the payment of rent. Will the action prosper?

Yes, the action will prosper. Under Article 1651 of the Civil Code, the sublessee is bound
to the lessor for all acts which refer to the use and preservation of the thing leased in the manner
stipulated between the lessor and the lessee.
469. In June 1984, A leased to B for five years the ground floor of his 3-storey
building. The lease was to take effect in January 1985 and to expire five years later. As
stipulated, B paid A a sum equivalent to six months of rentals. It appears that before leasing
the premises to B, A had already leased the ground floor to C for a term of ten years from
1980 up to 1990. But in a letter in 1984, C wrote A of his intention to terminate the lease by
the end of 1984. It was this letter that prompted A to enter into a contract of lease with B
for the lease of the premises occupied by C beginning in January 1985, or after the
announced termination of C’s lease in December 1984.

But came December 1984, C failed to vacate. Despite A’s repeated demands, C
refused to vacate the leased premises on the ground that he still has a subsisting lease up to
1990. For failure of A to place B in possession of the leased premises, B commenced judicial
action against A for breach of contract and damages. A disclaims liability and instead
heaped the blame on C against whom he filed a third-party complaint.

a) Is A liable to B for damages?

Yes. Article 1654 of the Civil Code provides that a lessor, like A, is obliged to deliver the
thing which is the object of the contract in such a condition as to render it fit for the use intended.
Failure to do so constitutes a wrong to which A exposes himself to legal action, including being
held liable for damages. The fact that C did not vacate the premises at the time B was supposed to
occupy it cannot exculpate A from his liability of non-performance of his obligation towards B.
When A entered into the second lease contract at the time of the subsistence of the first lease, he
knew that C was still occupying the premises. Thus, A took the risk that if he could not deliver the
premises for whatever reason, he must answer to B for damages.

b) Is C liable to B for damages for his refusal to vacate the leased premises?

No. Assuming arguendo that C’s refusal to leave the leased premises was the proximate
cause of A’s failure to comply with his obligation to B, still the latter, as second lessee, has no
cause of action against the first lessee, C, because there was no privity of contract between them.
(Valgosons Realty, Inc. v. Court of Appeals, 295 SCRA 449 [1998])

470. What is meant by fair rental value?

In Catungal v. Hao, 355 SCRA 29 [2001], which was cited in D.O. Plaza Management
Corp. v. Co-owners Heirs of Andres Atega, 447 SCRA 172 [2004], the Supreme Court defined
fair rental value as the reasonable compensation for the use and occupation of the leased
property. There is no hard and fast rule in determining the reasonableness of the rental charged. In
Manila Bay Club Corp. v. Court of Appeals, 245 SCRA [1995], the Supreme Court considered: a)
the prevailing rates in the vicinity; b) location of the property; c) use of the property; d) inflation
rate; and e) the testimony of the private respondents. In Umali v. The City of Naga, 96 Phil. 379
[1954], the Supreme Court added a catch-all phrase that other “minor factors” should be taken
into consideration.

471. The lessee constructed an enclosed garage on the leased premises. What are his
rights to the garage, if any?

The owner of the land, as lessor, can acquire the improvement by paying for one-half of
its value. Should the lessor refuse to reimburse said amount, the lessee may remove the
improvement, even though the principal thing may suffer damage thereby (Art. 1678, Civil Code)

472. Manny leased to Floyd a commercial building for a period of five years. As part
of the consideration of their lease agreement, Manny gave Floyd “the exclusive right and
privilege to purchase, within the lease period, the leased premises and all the improvements
thereon for the aggregate amount of P11.8 million.” The lease contract provides that in
order to exercise the option, Floyd has to send a letter to Manny manifesting his intent to
exercise the option within the lease period. Three weeks before the expiration of the lease
contract, Floyd notified Manny thru a letter of his intent to exercise the option with a
request for extension of the lease contract for six months “to allow him to generate sufficient
funds in order to exercise his option to buy the leased property.” When the lease period
expired, Floyd wrote Manny another letter reiterating his decision to exercise the option to
purchase the property and at the same time he made arrangements for the payment of the
stipulated down payment. Manny refused to accept the down payment on the ground that
the period within which the option should have been exercised had already lapsed. Is Floyd
still entitled to exercise the option under the lease contract?

Yes, Floyd’s letter to Manny three weeks before the expiration of the lease was fair notice
to the latter of his intent to exercise the option notwithstanding his request therein for extension of
the lease contact of lease for six months “to allow him to generate sufficient funds in order to
exercise his option to buy the leased property.” While the formal exercise of the option was
contained only in Floyd’s letter after the expiration of the lease, still the intent to exercise the
option was made manifest by Floyd’s earlier letter. (Carceller v. Court of Appeals, 302 SCRA 718
[1999])

473. What is the legal basis of the rule recognizing the validity of a provision in a
lease contract which grants the lessee the “exclusive option to renew”?

The reason is that the parties are free to enter into any contractual stipulation, provided it
is not contrary law, moral, good customs, public order or public policy. When such agreement,
freely and voluntarily entered into, turns out to be disadvantageous to a party, the courts cannot
rescue him without crossing the constitutional right to contract. The court is not authorized to
extricate a party from the necessary consequences of his acts, and the fact that the contractual
stipulation may turn out to be financially disadvantageous will not relieve the latter of his
obligation. (Torres v. court of Appeals, 320 SCRA 430)

474. Rey leased to Abe on a monthly basis a building. When Rey decided to sell the
building, he offered to Abe, thru a letter, a right of first refusal to be exercised within five
days from receipt thereof. When Abe failed to manifest his intention within the period, Rey
sold the building to Amado for P15 million subject to the condition that the balance of P5
million would be paid after the building is completely vacated by Abe.

In another letter, Rey informed Abe about the sale to Amado and the termination of
their lease agreement with a demand that Abe vacate the premises. Abe refused to vacate, so
Rey sued him for ejectment. Abe countered by filing an action for the extension of his lease
period conformably with Article 1687 of the Civil Code for having occupied the property for
more than thirty years already. The court dismissed Abe’s action on the ground that Article
1687 is not available because, first, the lease was for a definite period and second, the period
expired when the demand to vacate was made by Rey. Is the dismissal of Abe’s action
proper?

Article 1687 of the Civil Code is explicit that if the period for the lease has not been
fixed, it is understood to be from month-to-month if the rent agreed upon is monthly. However,
even though a monthly rent is paid, and no period for the lease has been set, the courts may fix a
longer term for the lease after the lessee has occupied the premises for over a year. Thus, the
provision contemplates two situations. One, where the period of the lease has not been fixed but
the rent agreed upon is monthly, in which event the period is understood to be month-to-month. In
other words, the law itself fixes the period. Two, where no period for the lease has been set, a
monthly rent is paid and the lessee has occupied the premises for over a year authorizing the
courts to fix a longer period of lease. In this second situation, both circumstances mentioned in
the first situation also exist and coupled with another circumstance, i.e., the lessee has occupied
the premises for over a year. The law treats the matter differently in the second situation because
the length of stay of the lessee in the premises may justify the courts to fix longer periods of
lease. The second situation is understood thus: where no period for the lease has been set and a
monthly rent is paid, the law itself fixes the period as monthly; yet the circumstance that the
lessee has occupied the premises for over a year warrants the fixing of a longer period by the
courts.

Inasmuch as the existence in the present case of the circumstances that no period for the
lease has been set, rent was being paid monthly, and Abe has been occupying the premises for
more than thirty years justify extending the period by the courts. It cannot be said that the period
expired at the end of the period when Rey stated this in his letter of the termination of their lease
agreement. The unilateral act of the lessor in terminating the lease should not be recognized as
writing finis to the agreement when the second situation in Article 1687 of the Civil Code is
involved. A contrary view would result in barring recourse to judicial lengthening of the period
and in allowing the utilization as subterfuge of the concept that “once a period had expired,
nothing is left to extend.” (Chua v. Court of Appeal, 356 SCRA 753 [2001])

475. Under what circumstances would an implied new lease or a tacita reconduccion
arise?

An implied new lease or tacita reconduccion arises if at the end of the contract the lessee
should continue enjoying the thing leased for 15 days with the acquiescence of the lessor, and
unless a notice to the contrary by either parties has previously been given (Art. 1670, Civil Code).
In short, in order that there may be tacita reconduccion there must be expiration of the contract;
there must be continuation of possession for 15 days or more; and there must be no prior demand
to vacate.

476. Is the lessee allowed to invoke the application of Article 1687 of the Civil Code
for the extension of his lease in the same ejectment case filed by his lessor?

Yes. The exercise of the power given to the courts in Article 1687 of the Civil Code to
extend the period of the lease when the lessee has been in occupancy of the premises for more
than a year does not contemplate a separate action for the purpose. That power may be exercised
as an incident in the action for ejectment itself and by the court having jurisdiction over it. (Yap v.
Court of Appeals, 353 SCRA 715 [2001])

477. Mr. Chua is the owner of a commercial building having acquired the same in
1964 through a Deed of Sale. As early as then, Juan was the occupant of a unit of the
building by way of a verbal contract of lease on a month-to-month basis. In 1989, Mr. Chua
notified Juan of the termination of their lease agreement on the ground that the lease being
on a month-to-month basis, is terminated at the end of every month. Juan failed to vacate
despite demand, hence, Mr. Chua filed a complaint for ejectment. May the court extend the
period of the lease?

No. It is a settled rule that the power of the courts to fix a longer term for lease is
potestative or discretionary -- “may” is the word -- to be exercised or not in accordance with the
particular circumstances of the case; a longer term to be granted where equities come into play,
demanding extension, to be denied where none appear, always with due deference to the parties
freedom to contract. (Ferrer v. Court of Appeals, 274 SCRA 219 [1997])

In the case at bar, it is undisputed that the lease was verbal, that the rentals were paid
monthly, and that proper demand and notice by the lessor to vacate was given. Under existing
jurisprudence, a verbal contract of lease between the owner and lessee on a month-to-month basis
is with a definite period and such expires after the last day of any 30-day period, upon proper
demand and notice by the lessor to vacate. Thus, the court has no right to extended the period of
lease considering that the potestative authority of the courts to fix a longer term for a lease under
Article 1687 of the Civil Code applies only to a case where there is no period fixed by the patties.
(Jolla, Inc. v. Court of Appeals, 359 SCRA 102 [2001])

478. Romeo leased to Samuel a piece of land for five years from 1991 to 1996. Their
lease agreement contains a stipulation that the lease is subject to “an option to renew.”
When the lease expired, Romeo immediately brought an action to eject Samuel from the
leased premises. Samuel defends that he is entitled to a renewal in view of the provision in
their contract of lease providing for automatic renewal. Is Samuel entitled to an extension of
his lease contract?

No. The power of the court to fix a longer term for a lease is discretionary. Such power is
to be exercised only in accordance with the particular circumstances of a case; a longer term to be
granted where equities demanding extension come into play, to be denied where none appear –
always with due deference to the parties’ freedom to contract.

Article 1675 of the Civil Code excludes cases falling under Article 1673 from those under
Article 1687. Article 1673 provides, among others, that “the lessor may judicially eject the lessee
upon the expiration of the period agreed upon or that which is fixed for the duration of the lease.”
Where no period has been fixed by the parties, the courts, pursuant to Article 1687, have the
potestative authority to set a longer period of lease.

In the present case, the lease contract provided for a fixed period of five years. Because
the lease period was for a determinate time, it ceased, by express provision of Article 1669 of the
Civil Code, on the day fixed, without need of a demand. Here, the five-year period expired,
whereas the complaint for ejectment was filed after its expiration. Because there was no longer
any lease that could be extended, the court, has no authority to make a new contract for the
parties.

Furthermore, the extension of the lease contract must be made before the term of the
agreement expires, not after. Upon the lapse of the stipulated period, courts cannot belatedly
extend or make a new lease for the parties, even on the basis of equity. Because the lease contract
had expired without the parties reaching any agreement for renewal, Samuel can be ejected from
the premises.

b) Is Samuel entitled to invoke the option to renew clause?

No. In Fernandez v. Court of Appeals, 166 SCRA 577 [1988], the Supreme Court
declared that in a reciprocal contract like a lease, the period of lease must be deemed to have been
agreed upon for the benefit of both parties, absent language showing that the term was
deliberately set for the benefit of the lessee or lessor alone. Thus, pursuant to Fernandez and
Article 1196 of Civil Code, the period of the lease contract is deemed to have been set for the
benefit of both parties. Its renewal may be authorized only upon the mutual agreement or at their
joint will. Its continuance, effectivity or fulfillment cannot be made to or depend exclusively upon
the free and uncontrolled choice of just one party. While the lessee has the option to continue or
to stop paying the rentals, the lessor cannot be completely deprived of any say on the matter.
Absent any contrary stipulation in a reciprocal contract, the period of lease is deemed to be for the
benefit of both parties. (LL and Company Dev’t. and Agro-industrial Corp. vs. Huang Chao
Chun, 378 SCRA 613 [2002])

479. Sta. Lucia Realty is the owner of an apartment building. For more than 20
years, Unit No. 15 was leased by Sta. Lucia Realty to Arnel. In 1984, Arnel, along with the
other apartment tenants, was informed by Alberto Barreto that Sta. Lucia Realty and its
assets had already been assigned and transferred to Albar Enterprises. Fearing that they
were to be ejected from their respective units, the tenants formed a tenants association to
negotiate with Albar Enterprises for the purchase of their respective apartment units.
Among those elected was Anselmo as president.

Believing that negotiations were still ongoing, Arnel was surprised to learn in 1987
that his unit was already sold to Anselmo. Shortly thereafter, he received a letter from
Anselmo demanding that he vacate the leased premises. Arnel refused on the ground that
his right of first refusal was violated when his unit was sold to Anselmo.

a) Is Arnel’s right of first refusal violated when Anselmo acquired the residential
apartment unit by purchase from the owner?

No. As lessee of the residential apartment unit, Arnel has no right of first refusal to speak
of. Apartment dwellers are excluded from the protective mantle of the Urban Land Reform Law.
The said law grants the right of first refusal only to legitimate tenants who have built their homes
on the land they are leasing. Arnel did not lease the land only. Neither did he build a home
thereon. There is no question that both the land and the building are owned by the lessor. In the
parallel case of Nidoy v . Court of Appeals, 214 SCRA 394 [1992], the Supreme Court held that
the right of first refusal applies only to tenants who have resided for ten years or more on the
leased land declared as within the Urban Land Reform Zone, and who have built their homes on
the land. It does not apply to apartment dwellers. Consequently, Arnel’s action for annulment of
the sale to Anselmo and reconveyance cannot prosper if based only on the ground that he was
denied his right of first refusal under P.D. 1517, the Urban land Reform Law.

b) Was an implied or constructive crust created between Arnel and Anselmo?

Yes. The absence of fraud or mistake on the part of Anselmo does not prevent the
creation of an implied or constructive trust between him and Arnel. The fact that Anselmo never
received any money from Arnel, nor was he unjustly enriched, does not negate the creation of an
implied or constructive trust. Constructive trusts do not only arise out of fraud or duress, but also
by abuse of confidence, in order to satisfy the demands of justice.

By acquiring for himself the apartment unit without informing Arnel of the progress of
the negotiations, or of his desire to purchase the said property. Anselmo did not act with the
candor and honesty expected of him. His successful, albeit clandestine, ploy to appropriate the
apartment unit of Arnel that he knew fully well Arnel had every intention to buy violated the trust
and confidence so willingly and without reservation reposed in him. Without doubt, Anselmo had
breached the confidence reposed in him by Arnel, and an implied trust was created by force of
law in favor of Arnel, a long-time occupant of the apartment unit which Anselmo surreptitiously
bought. (Arlegui v. Court of Appeals, 378 SCRA 322 [2002])

480. Jay leased to Jim a parcel of land which is subject to a real estate mortgage
executed by Jay in favor of PNB. Since the loan with PNB remained unpaid upon maturity,
the bank extra judicially foreclosed the mortgage thereon. At the public auction sale, the
bank emerged as the highest bidder.

Realizing that he could not possibly raise in time the money needed to redeem the
property within the redemption period, Jay decided to sell the same. Since the lease contract
contains a provision that the lessee, Jim has the right of first refusal should Jay decide to
sell the property during the term of the lease, Jay offered to sell the property to Jim for P6
million. After several letters, Jim confirmed his intention to purchase the property for the
“fixed and final price” of P5 million. Because of the nearing expiry date of the redemption
period, the money for which he could not raise on time, Jay then sold the land to Jabbar for
P5.4 million. Such that a few days before the expiry date of the redemption period, Jabbar
came up with the amount sufficient to cover the redemption money.

In selling the land to Jabbar, did Jay violate Jim’s right of first refusal?

No. An examination of the attendant particulars of the instant case lead to the inescapable
conclusion that Jim’s right of first refusal has not been violated. Jim was so intractable in his
position and took advantage of the knowledge of the time element in his negotiations with Jay as
the redemption period of the subject foreclosed property drew near. Jim strongly exhibited a
“take-it or leave it” attitude in his negotiation with Jay. It would have been far different had the
property been sold to Jabbar at a price equal to or less than Jim’s offer of P5 million.

Equity in this case tilts in favor of Jay and Jabbar that the sale between them concerning
the property be given imprimatur, for if Jim lost his opportunity to acquire it, he has only himself
to blame. (Riviera Filipina, Inc. v. Court of Appeals, April 5, 2002)
COMMON CARRIERS
481. What is a common carrier?

A common carrier is a person, corporation, firm or association engaged in the business of


carrying or transporting passengers or goods or both, by land, water, or air, for compensation,
offering its services to the public. (Art. 1732, Civil Code)

482. What is the basic distinction between a common carrier and a private carrier?

A private carrier makes its services available only to an individual or to a few persons or
to a selected group of persons, while a common carrier makes its services available to the public.

If a carrier is a common carrier, the general public is given a right which the law compels
the owner to give. The true criterion by which to judge the character of a carrier is whether the
public may enjoy it by right, in which case it is a common carrier, or by permission, in which case
it is only a private carrier.

483. What is the test to determine whether a carrier is a common carrier or only a
private carrier?

As laid down in Bascos vs. Court of Appeals, 221 SCRA 318 [1993], the test to determine
a common carrier is “whether the given undertaking is a part of the business engaged in by the
carrier which he has held out to the general public as his occupation rather than the quantity or
extent of the business transacted.”

484. Marco contracted the services of Acme Travel Agency to arrange and facilitate
his booking, ticketing and accommodation in a tour dubbed “Jewels of Europe.” The
package tour included seven European countries at a total cost of P1.5 million. Marco was
given a 5% discount on the amount, which included airfare, and the booking fee was also
waived because Marco’s cousin, Nena, was the travel agency’s ticketing manager. Pursuant
to the contract, Nena went to Marco’s residence on a Wednesday to deliver Marco’s travel
documents and plane tickets. Nena then told him to be at the NAIA on Saturday, two hours
before his flight, on board British Airways.

Without checking his travel documents, Marco went to NAIA on Saturday to take
the flight for the first leg of his journey. To his dismay, he discovered that the flight he was
supposed to take had already departed the previous day, Friday. Aggrieved by his failure to
join the European tour, Marco brought an action for damages against the travel agency for
breach of contract of carriage. He contends that the travel agency did not observe the
standard care required of a common carrier when it informed him wrongly of the flight
schedule. Will the action prosper?

No. By definition, a contract of carriage is one whereby a person or association of


persons obligate themselves to transport persons, things, or news from one place to another for a
fixed price. Such persons or association of persons are regarded as carriers and are classified as
private or special carriers and common or public carriers. A common carrier is defined under
Article 1732 of the Civil Code as persons, corporations, firms or associations engaged in the
business of carrying or transporting passengers or goods or both, by land, water, air, for
compensation, offering their services to the public.

It is obvious from the above definition that the travel agency is not an entity engaged in
the business of transporting either passengers or goods and is, therefore, neither a private nor a
common carrier. The travel agency did not undertake to transport Marco from one place to
another since its covenant with its customers is simply to make travel arrangements in their
behalf. The agency’s services as a travel agency include procuring tickets and facilitating travel
permits or visas as well as booking customers for tours. It is in this sense that the contract
between the parties was an ordinary one for services and not one of carriage. (Crisostomo v.
Court of Appeals, 409 SCRA 528 [2003])

485. Gemini Container Services, a customs broker, contracted with Robina Foods
Corp. for the transfer of imported raw materials from the Port Area in Manilla to Robina’s
warehouse in Ermita, Manila. The cargo was insured by UCPB General Insurance
Company. When the shipment arrived in Manila on board a ship, Gemini withdrew the
cargo from the arrastre operator and delivered it to Robina’s warehouse in Ermita, Manila.
The goods were then inspected by a cargo surveyor who found some of them
“wet/stained/torn.” The damage was placed at P900,000.

Robina collected payment from UCPB under its insurance contract. In turn, UCPB
as subrogee of Robina brought an action against Gemini for damages. Gemini defends on
the ground that it is not a common carrier but a private carrier.

a) Is Gemini a common carrier or a private carrier?

Yes. Article 1732 of the Civil Code defines a “common carrier” as a person, corporation,
firm or association engaged in the business of carrying or transporting passengers or goods or
both, by land, water, or air for compensation, offering their services to the public. The above
article makes no distinction between one whose principal activity is the carrying of persons or
goods or both, and who does such carrying only as an ancillary activity. Article 1732 carefully
avoids making any distinction between a person or enterprise offering transportation service on a
regular or scheduled basis and one offering such service on an occasional, episodic or
unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services to
the “general public,” i.e., the general community or population, and one who offers services or
solicits business only from a narrow segment of the general population. Article 1732 deliberately
refrained from making such distinctions. (De Guzman v. Court of Appeals, 168 SCRA 612 [1988])

There is greater reason for holding Gemini to be a common carrier because the
transportation of goods is an integral part of its business. To uphold its contention would be to
deprive those with whom it contracts the protection which the law affords them notwithstanding
the fact that the obligation to carry goods for his customers, as already noted, is part and parcel of
its business.

b) Is Gemini liable for damages?

Yes. Article 1733 of the Civil Code provides that common carriers, from the nature of
their business and for reasons of public policy, are bound to observe extraordinary diligence in the
vigilance over the goods and for the safety of the passengers transported by them, according to all
the circumstances of each case. In Compania Maritima vs. Court of Appeals, 164 SCRA 685
[1988], extraordinary diligence in the vigilance over the goods tendered for shipment requires the
common carrier to know and to follow the required precaution for avoiding damage to, or
destruction of the goods entrusted to it for sale, carriage and delivery. It requires common carriers
to render service with the greatest skills and foresight and “to use all reasonable means to
ascertain the nature and characteristic of goods tendered for shipment, and to exercise due care in
the handling and storage, including such methods as their nature requires.

Gemini’s insistence that the cargo could not have been damaged while in its custody as it
immediately delivered the containers to Robina’s compound, suffice it to say that to prove the
exercise of extraordinary diligence, Gemini must do more than merely show the possibility that
some other party could be responsible for the damage. It must prove that it used “all reasonable
means to ascertain the nature and character of goods tendered for transport and that he exercised
due care in the handling thereof.” Gemini failed to do this.

c) Is there basis to exempt Gemini from liability under Article 1734(4) of the Civil
Code which provides that common carriers are responsible for the loss, deterioration or
destruction of the goods unless the same is due to the character of the goods or defects in the
packing or in the containers?

No. For Article 1734(4) of the Civil Code to apply, the rule is that if the improper packing
or defect in the container is known to the carrier or his employees or apparent upon ordinary
observation, but he nevertheless accepts the same without protest or exception notwithstanding
such condition, he is not relieved of liability for damage resulting therefrom. (Southern Lines, Inc.
v. Court of Appeals, 4 SCRA 258 [1962]) In the instant case, Gemini accepted the cargo without
exception despite the apparent defects in some of the cargo. Hence, for failure of Gemini to prove
that it exercised diligence in the carriage of goods in this case or that it is exempt from liability,
the presumption of negligence as provided under Article 1735 holds. (Calvo v. UCPB General
Insurance Co. Inc., 379 SCFA 510 [2002])

486. The Universal Flour Mills of Portland, Oregon shipped 3,000 metric tons of
white wheat, valued at $450,000, for delivery to Manila in favor of the consignee, General
Milling Corporation. The consignee insured the shipment against all risks with FGU
insurance. Upon arrival of the shipment in Manila, the cargo was transferred to the custody
of Asia Lighterage which was contracted by the consignee to deliver the cargo to the
consignee’s warehouse in Pasig City. The cargo was then loaded on a barge owned by Asia
Lighterage for delivery to the consignee. The cargo did not reach its destination.

When sued for damages, Asia Lighterage asserts that it is not a common carrier but
a private carrier. It claims that it has no fixed and publicly known route, maintains no
terminals, and issues no tickets. It points out that it is not obliged to carry indiscriminately
for a fee any person. It is not bound to carry goods unless it consents. In short, it does not
hold out its services to the general public.

Is Asia Lighterage a common carrier or a private carrier?

Common carrier. Article 1732 of the Civil Code does not distinguish between one whose
principal business activity is the carrying of goods and one who does such carrying only as an
ancillary remedy. (De Guzman v. Court of Appeals, 168 SCRA 612 [1988]) Moreover, Article
1732 of the Civil Code does not distinguish between a carrier offering its services to the general
public, and one who offers services or solicits business only from a narrow segment of the
general population.

In the case presented, the principal business of Asia Lighterage is that of lighterage and it
offers its barges to the public for carrying or transporting goods by water for compensation.
Whether its carrying of goods is done on an irregular basis rather than scheduled manner, and
with only a limited clientele, Asia Lighterage is a common carrier. A common carrier need not
have a fixed and publicly known routes. Neither does it have to maintain terminals or issue
tickets. (Asia Lighterage and Shipping, inc. v. Court of Appeals, 409 SCRA 340 [2003])

487. Wyeth-Parma shipped on board an aircraft of KLM Airlines at Dusseldorf,


Germany several brands of oral contraceptives for delivery to Manila in favor of the
consignee, Wyeth-Suaco. The consignee insured the shipment against all risks with FGU
insurance. Upon arrival of the shipment at the NAIA, the cargo was immediately
discharged and delivered to Cargo Holders, a customs broker. Upon payment of customs
fees, Cargo Holders delivered the cargo to Wyeth-Suaco’s laboratory in Antipolo City for
quality check. Upon inspection, however, Wyeth-Suaco discovered certain goods were in bad
order. When sued for damages, Cargo Holders defends that it is not a common carrier but a
customs broker whose principal function is to prepare the correct customs declaration and
proper shipping documents as required by law. Is the defense tenable?

The defense is not tenable. Cargo Holders is liable for the damage to the cargo as a
common carrier. Article 1732 of the Civil Code does not distinguish between one whose principal
business activity is the carrying of goods and one who does such carrying only as an ancillary
remedy. (De Guzman v. Court of Appeals, 168 SCRA 612 [1988] The contention, therefore, of
Cargo Holders that it is not a common carrier but a customs broker whose principal function is to
prepare the correct customs declaration and proper shipping documents as required by law is
bereft of merit. It suffices that Cargo Holders undertakes to deliver the goods for pecuniary
consideration.

As a common carrier, Cargo Holders is mandated to observe, under Article 1733 of the
Civil Code, extraordinary diligence in the vigilance over the goods it transported according to all
the circumstances of each case. In the event that the goods are lost, destroyed or deteriorated, it is
presumed to have been at fault or to have acted negligently, unless it proves that it observed
extraordinary diligence. (A.F. Sanchez Brokerage, Inc. v. Court of Appeals, 447 SCRA 427
[2004])

488. Evergreen Gardens, Phils. delivered 600 units of artificial plants to Solomon &
Partners for shipment. Solomon & Partners is the general agent of MV Aardvark, a foreign
shipping corporation. The 600 units of artificial plants were loaded on a vessel of MV
Aardvark for shipment and delivery to the consignee in Norway. Federal Assurance
Corporation insured the cargo against all risks. While in transit, the vessel and its cargo
caught fire. Federal Assurance Corporation thereupon paid Evergreen Gardens. On the
basis of the subrogation receipt issued by Evergreen Gardens, Federal Assurance
Corporation demanded payment from Solomon & Partners and MV Aardvark. Both deny
liability on the ground that their liability was extinguished when the vessel carrying the
cargo was gutted by fire. Are Solomon & Partners and MV Aardvark liable?
Yes. They are liable because fire is not one of those enumerated in Article 1734 of the
Civil Code which exempts a carrier from liability for loss or destruction of the cargo. Since fire is
not among the exceptions mentioned in Article 1734, the common carrier shall be presumed to
have been at fault or to have acted negligently, unless it proves that it has observed extraordinary
diligence as required by law.

Common carriers are obliged to observe extraordinary diligence in the vigilance over the
goods transported by them. Accordingly, they are presumed to have been at fault or to have acted
negligently if the goods are lost, destroyed or deteriorated. There are very few instances when the
presumption of negligence does not attach and these instances are enumerated in Article 1734 of
the Civil Code. (DSR-Senator Lines, et. al. v. Federal Phoenix Assurance Corp. October. 7, 2003)

489. Are hotel keepers who transport their guests to and from the hotel to the
airport or other destinations considered as common carriers?

No. Hotel keepers transporting their guests to and from the hotel to the airport or other
destinations are not considered as common carriers since their services are not offered to the
public.

490. What degree of diligence must a common carrier observe in the transportation
of goods? In the transportation of persons?

In the transportation of goods, a common carrier is obliged to observe extraordinary


diligence over them. In the transportation of persons, a common carrier is bound to transport
passengers safely as far as human care and foresight can provide, using the utmost diligence of
very cautious persons, with due regard for all the circumstances. (Art. 1732, par. 1, Civil Code)

491. One of the rear tires of a cargo truck, which is owned by A, exploded. B, its
driver, parked the truck along the right side of the highway and removed the damaged tire
to have it vulcanized. B instructed his six helpers to watch over the stalled truck and told
them to place a spare tire six fathoms away behind the truck to serve as a warning for
oncoming vehicles. As it was about 12:00 midnight, the truck’s tail lights were left on. At
about 4:00 a.m., a bus, then being driven by C, but owned and operated by D, came.
According to C, he saw the stalled truck when it was 25 meters away. He applied the brakes
and tried to swerve the bus to the left to avoid hitting the truck, but it was too late. The bus
rammed into the truck’s left rear. As a result, P and his wife were injured. P survived, but
his wife died shortly thereafter.

Are A, B, C and D liable for P’s injuries and the death of his wife? Is the doctrine of
last clear chance applicable in this case?

D, the owner of the bus, is liable for breach of contract of carriage. Under the contract of
carriage, D assumed the express obligation to transport P and his wife to their destination safely
and to observe extraordinary diligence with due regard for all circumstances. Any injury suffered
by the passengers in the course thereof is immediately attributable to the negligence of the carrier.

There is no doubt that C, the bus driver, is liable for his own negligence under Article
2176 of the Civil Code. Since he saw the truck at a distance of 25 meters, he had more than
enough time to avoid hitting it if he was not driving very fast.
In leaving the truck parked askew without warning lights or reflector devises to alert
oncoming vehicles, B, the truck driver, was also negligent. Because B was negligent, there arises
a presumption that his employer, A, was also negligent based on a quasi-delict.

A, B, C and D may, therefore, be held liable jointly and severally.

The doctrine of last clear chance is not applicable in this case, as said principle only
applies in a suit between the owners and drivers of two colliding vehicles. (Tiu, et. al v.
Arriesgado, September 1, 2004)

492. What is the presumption under the law if a passenger is injured or killed while
being transported by a common carrier?

In case of injury to or death of a passenger, the presumption is that the common carrier
was negligent or at fault. The court need not make an express finding of fault or negligence in
order to hold the common carrier liable for damages.

493. May the common carrier overcome the above presumption? If so, how?

A common carrier may overcome the above presumption by providing that he had
exercised the required degree of diligence or that the injury or death of the passenger was due to a
fortuitous event.

494. May a common carrier be held liable for the death or injury of a passenger
caused by the willful acts or negligence of another passenger or stranger?

Yes. A common carrier is responsible for the death or injury of a passenger caused by the
willful act or negligence of another passenger or stranger, but only if the employees of the
common carrier through the exercise of diligence of a good father of a family could have
prevented the act or omission.

495. Fortune Express is a bus company operating in Mindanao. In 1989, a Fortune


Express bus figured in an accident with a jeepney resulting in the death of several persons,
including two Maranaos. Police investigators then revealed that certain Maranaos were
planning to take revenge on the bus company by burning some of its buses. Investigators
revealed this plan to the bus company.

A few weeks later, three armed Maranaos who pretended to be passengers, seized a
Fortune Express bus somewhere in Lanao del Norte while on its way to Iligan City. The
leader of the hijack group ordered the driver to stop the bus on the side of the highway, and
then shot the driver on the arm which caused him to slump on the steering wheel. All the
passengers were then ordered to get off the bus. The passengers, including Atty. Talib
Caorong, stepped out of the bus and went behind the bushes in a field some distance from
the highway. However, Atty. Caorong returned to the bus to retrieve something from the
overhead rack. At that time, one of the armed men was pouring gasoline on the head of the
driver. Atty. Caorong pleaded with the armed men to spare the driver. The driver, who had
in the meantime regained consciousness, climbed out of the left window and crawled to the
canal on the opposite side of the highway. He then heard shots from inside the bus. One of
the passengers saw Atty. Caorong was hit. Then the bus was set on fire. Some passengers
were able to pull Atty. Caorong out of the burning bus and rushed him the hospital where
he died while undergoing operation.

a) Is the bus company liable for the death of Atty. Caorong?

Yes. Article 1763 of the Civil Code provides that a common carrier is responsible for
injuries suffered by a passenger on account of the willful acts of the other passengers, if the
employees of the common carrier could have prevented the act through the exercise of the
diligence of a good father of a family. In the present case, it is clear that because of the negligence
of the bus company’s employees, the seizure of the bus by armed men was made possible. Had
the bus company and its employees been vigilant, they would not have failed to see the
malefactors had a large quantity of gasoline with them. Under the circumstances, simple
precautionary measures to protect the safety of passengers, such as frisking passengers and
inspecting their baggages, preferably with non-intrusive gadgets such as metal detectors, before
allowing them on board could have been employed without violating the passenger’s
constitutional rights. Consequently, a common carrier can be held liable for failing to prevent a
hijacking by frisking passengers and inspecting their baggages.

b) Is the seizure of the bus by armed men a force majeure?

The seizure of the bus does not constitute force majeure. Article 1174 of the Civil Code
defines a fortuitous event as an occurrence which could not be foreseen or which through
foreseen, is inevitable. To be considered as force majeure, it is necessary that 1) the cause of the
breach of the obligation must be independent of the human will; 2) the event must be either
unforeseeable or unavoidable; 3) the occurrence must be such as to render it impossible for the
debtor to fulfill the obligation in a normal manner; and (4) the obligor must be free of
participation in, or aggravation of, the injury to the creditor. The absence of any of the foregoing
requisites would prevent the obligor from being excused from liability. In the present case, this
factor of unforeseeability (the second requisite for an event to be considered as force majeure) is
lacking. Despite the report that the Maranaos were planning to burn some of the Fortune’s buses,
nothing was really done by the bus company to protect the safely of the passengers.

c) Is Atty. Caorong guilty of contributory negligence?

Atty. Caorong is not guilty of contributory negligence in returning to the bus to retrieve
something. The intended target of the violence was the bus company and its employees, not its
passengers. The armed men actually allowed Atty. Caorong to retrieve something from the bus.
What angered them was his attempt to help the bus driver by pleading for his life. He was playing
the role of a Good Samaritan. Certainly, this act cannot be considered an act of negligence, let
alone recklessness (Fortune Express, Inc. v. Court of Appeals, 305 SCRA 14 [1999])

496. What are the principles governing the liability of common carriers as to
passengers?

The following are the basic principles governing the liability of common carriers as to
passengers: a) the liability of a common carrier is contractual and arises upon breach of his
obligation, and there is a breach if he fails to exercise extraordinary diligence according to the
circumstances of each case; b) a carrier is obliged to carry his passengers with the utmost
diligence of a very cautious person, having due regard for all the circumstances; c) a carrier is
presumed to be at fault or to have acted negligently, it being his duty to prove that he exercised
the required diligence; d) a carrier is an insurer against all risks of travel; and e) a carrier is not
responsible for events which could not be foreseen, or which though foreseen, are inevitable.

497. When may a common carrier avoid liability for loss of or damage to goods
transported?

Under Article 1732 of the Civil Code, a common carrier may avoid liability for loss or
damage to goods transported under the following conditions:

1) The proximate and only cause of the loss or damage by any of the following:

(a) Flood, storm, earthquake, lighting or other natural calamity or disaster;

(b) Act of the public enemy in war, whether international or civil;

(c) Act or omission of the shipper or owner of the goods;

(d) The character of the goods or detects in the packaging or in the containers;

(e) Order or the act of competent public authority.

2) The common carrier must not have negligently incurred in delay in transporting the
goods.

498. May a common carrier still avoid liability for loss of or damage to goods he is
transporting although the cause thereof be not one of the excepted causes?

Yes. A common carrier may still avoid liability for loss of or damage to goods he is
transporting although the cause thereof be not one of the excepted causes. However, he has to
prove that the loss was due to accident or some other circumstances inconsistent with his liability.
The burden of proof shall be upon the common carrier. He has to overcome the presumption of
negligence.

499. While docking his vessel, Scorpio Nights, the master, through negligence,
damaged the wharf and the merchandise loaded on the deck. The owners of the wharf and
damaged merchandise sue the owner of the vessel and the master of the vessel for damage.

a) What is the basis of the liability of the vessel owner with respect to the damage to
the wharf? With respect to the merchandise?

The shipowner’s liability is based on culpa aquiliana under Article 2176 and 2180 of the
Civil Code, there being no pre-existing contractual relationship between the owner of the wharf
and the shipowner. The owner of the vessel is liable to the owner of the merchandise under the
principle of culpa contractual or breach of contract of carriage under which the goods have to be
carried safely to their destination.

b) Does the defense of exercise of the diligence of a good father of a family lie?

The defense of having observed the diligence of a good father of a family is available in
culpa aquiliana but not in culpa contractual.
500. Discuss the validity of a stipulation in a bill of lading that the carrier’s liability
“for loss or damage from any cause for any reason” is limited to a specified sum.

The stipulation in a bill of lading that the carrier’s liability for loss or damage from any
cause or any reason to goods carried by such carrier shall be limited to a specified sum is valid as
long as it is reasonable and just under the circumstances, and has been fairly and freely agreed
upon. (Art. 1750, Civil Code)

501. What is the effect of the use by the shipper of his “right of stoppage in transit”
on the obligation of the common carrier to exercise extraordinary diligence?

When a shipper uses his “right of stoppage in transit,” the contract of carriage is
theoretically terminated. So, thereafter, the carrier holds the goods as a bailee or a warehouseman.

TRUSTS
502. What is a trust?

A trust is the legal relationship between one person having an equitable ownership over a
certain property and another having a legal title thereto.

503. Who are the parties in a trust?

There are three parties in a trust, namely; the trustor, the trustee and the beneficiary. The
trustor is the person who establishes the trust; the one in whom confidence is reposed as regards
property for the benefit of another person is called the trustee; and the person for whose benefit
the trust has been created is referred to as the beneficiary. (Art. 1140, Civil Code)

504. What are the kinds of trusts?

A trust may either be an express trust or an implied trust. An express trust in one created
by the parties, or by the intention of the trustor. (Art. 1441, Civil Code). An implied trust, on the
other hand, is one that comes into being by operation of law. (Art. 1441, Civil Code)

505. What are the kinds of implied trusts?

Implied trusts may either be a resulting trust or a constructive trust, both of which come
into being by operation of law.

506. How may a resulting trust arise and what is its basis?

A resulting trust is based on equitable doctrine that valuable consideration and not legal
title determines the equitable title to or interest over a property and is presumed always to have
been contemplated by the parties. It arises from the nature or circumstances of the consideration
involved in a transaction whereby one person thereby becomes invested with legal title for the
benefit of another.

507. Benjie Chua died of cancer at the age of 34. He was survived by his wife, Sylvia,
and two minor children. In the action for the settlement of her husband’s estate, Sylvia
submitted to the court an inventory of Benjie’s estate, including a parcel of land in Forbes
Park, Makati, registered in the name of Benjie when he was still single. By way of motion,
Sylvia asked the court for authority to sell the Forbes Park property to pay the estate tax
assessed by the BIR.

The action taken by Sylvia did not sit well with Lauro, Benjie’s father. Lauro thus
brought an action for reconveyance of the Forbes Park property. He claims that he was the
one who bought the property, and that he registered the property in the name of his son,
Benjie, who is to hold the property as trustee. Who owns the Forbes Park property: Benjie
or his father?

While it may be conceded that the purchase price of the Forbes Park property came from
Benjie’s father, the existence of an implied trust must be ruled out because of the last sentence of
Article 1448 which provides: “However, if the person to whom the title is conveyed is a child,
legitimate or illegitimate, of the one paying the price of the sale, no trust is implied by law, it
being disputably presumed that there is a gift in favor of the child.” Article 1448 of the Civil
Code is clear. If the person to whom the title is conveyed is the child of the one paying the price
of the sale, and in this case this is undisputed, no trust is implied by law. The law, instead,
disputably presumes a donation in favor of the child. And if Benjie’s father intended a donation,
the net effect of this is that Benjie is obliged to collate into the mass of the estate of his father, in
the event of his father’s death, the Forbes Park property as an advance of Benjie’s share in the
estate of his father. (Ty v. Ty, G.R. No. 165696, April 30, 2008)

508. How is a constructive trust created and what is its basis?

A constructive trust is based on equitable doctrine to satisfy the ends of justice and to
prevent unjust enrichment. It arises when one, by fraud, duress, or abuse of confidence, obtains or
holds the legal right to property which he ought not, in equity and good conscience, hold.

509. The tenants of an apartment building, in order to purchase the building, named
the president of their association to negotiate for them with the building owner. No sale
ripened. Two years later, the tenants learned that their president became the new owner of
the apartment building. Was a constructive trust created between the president and the
tenants? Was such trust violated?

Yes, to both questions.

A constructive trust was created between the president and the tenants in respect to the
apartment building. Constructive trust arises against one who, by fraud, duress, or abuse of
confidence, obtains the legal right to the property which he ought not, in equity and good
conscience, hold. Said trust can be implied from the nature of the transaction since the president
was not only representing himself but also the other tenants, hence, showing the confidence
reposed in him.

The president violated the trust when he kept secret the perfection of the sale for two
years. He purchased the units for himself at bargain prices so he could resell them at a profit
(Policarpio v. Court of Appeals, 269 SCRA 334 [1997])

510. B is named as a vendee in a deed of sale although it is A who actually paid the
purchase price. Is there an implied trust between B and A?

Yes. An implied trust is created between B and A, the former being the trustee and the latter
the beneficiary. An implied trust arises when a person purchases land with his own money and
takes conveyance thereof in the name of another. In such case, the property is held by way of
resulting trust in favor of the one furnishing the consideration for the transfer, unless a different
intention appears. The first sentence of Article 1148 of the Civil Code, which is sometimes
referred to as “purchase money resulting trust” finds application in this case. Although the deed
of sale was in the name of B, the purchase price was paid by A who was the real owner of the
property. To give rise to a purchase money resulting trust, it is essential that there be a) an actual
payment of money, property, or services, or an equivalent, constituting valuable consideration;
and b) such consideration must be furnished by the alleged beneficiary of a resulting trust (Tigno
v. Court of Appeals, 280 SCRA 262 [1997])

511. Does an action to compel the trustee to convey the property registered in his
name for the benefit of the cestui que trust prescribe?

As a rule, no. The action to compel the trustee to convey the property registered in his
name for the benefit of the cestui que trust does not prescribe. If at all, it is only when the trustee
repudiates the trust that the period of prescription commences to run. (Heirs of dela Cruz v. Court
of Appeals, 182 SCRA 638) The prescriptive period is ten years from the repudiation of the trust.
The reckoning point is the repudiation of the trust by the trustee because from that moment his
possession becomes adverse. But before the period starts to run, it must be shown that: a) the
trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestrui que
trust; b) such positive acts of repudiation have been made known to the cestui que trust; and c)
the evidence thereon is clear and convincing. (Valdez v. Olorga, 51 SCRA 71)

512. When does an action for reconveyance based on implied or constructive trust
prescribe?

An action for reconveyance of a parcel of land based on an implied or constructive trust


prescribes in ten years, the point of reference being the date of registration of the deed or date of
issuance of the certificate of title over the property. Suffice it to say, however, that this rule
applies only when the plaintiff or the person enforcing the trust is not in possession of the
property, since if a person claiming to be the owner thereof is in actual possession of the property,
the right to seek reconveyance which in effect seeks to quiet title to the property does not
prescribe.

513. Manuel, Nestor, and Oswald are co-owners in pro-indiviso shares of a parcel of
land. Manuel and Nestor sold the entire property to Donato without the knowledge of their
co-owner, Oswald. A few years later, Oswald sold to Enrico the half portion of his 1/3 share
in the property and retained the other half for himself. Notwithstanding the sale of the
whole estate to Donato, Oswald and his vendee, Enrico, remained in possession of their
respective portions of the property. Oswald later files an action against Donato for
reconveyance.

Has the action prescribed?

The action has not yet prescribed. In Heirs of Olviga v. Court of Appeals, 227 SCRA 330,
the Supreme Court held that an action for reconveyance of a parcel of land based on implied or
constructive trust prescribes in ten years (point of reference being the date of registration of the
deed or the date of issuance of the certificate of title over the property), but this rule applies only
when plaintiff or the person enforcing the trust is not in possession of the property, since, if a
person claiming to be the owner thereof is in actual possession of the property as in the case of
Oswald, the right to seek reconveyance which is in effect an action to quit title does not prescribe.
The reason for this is that one who is in actual possession of the land claiming to be the owner
may wait until his possession of the land and his title is attacked before taking steps to vindicate
his right.

(NOTE: The rule that a trustee cannot acquire by prescription ownership over property
entrusted to him until and unless he repudiates the trust applies to express trusts and resulting
implied trusts. However, in constructive implied trusts, prescription may supervene if the trustee
does not repudiate the relationship (Buan vda. De Esconde v. Court of Appeals, 253 SCRA 66
[1996])

PARTNERSHIP
514. What is a partnership?

A partnership is a contract whereby two or more persons bind themselves to contribute


money, property, or industry to a common fund, with the intention of dividing the profits among
themselves, or in order to exercise a profession. (Art. 1767, Civil Code)

515. What are the tests to determine the existence of a partnership?

There are two tests to determine whether or not a partnership exists. The first is to
determine whether or not there is an agreement to contribute money, property, or industry to a
common fund, and the second test is to determine whether or not there is an intent of the
contracting parties to divide the profits among themselves. Once it can be shown that there was
an agreement to contribute money, property or industry to a common fund, and that there was an
intent to divide the profits among themselves, then a partnership contract exists. (Art. 1769, Civil
Code)

516. Under Article 1772 of the Civil Code, “every contract of partnership having a
capital of P3,000 or more, in money or property, shall appear in a public instrument, which
must be recorded in the office of the Securities and Exchange Commission.” Suppose this
requirement has not been complied with, is the partnership still la juridical person,
assuming that all other requisites are present?

Yes, in view of the express provision of Article 1768 of the Civil Code which provides
that “the partnership has a juridical personality separate and distinct from that of each of the
partners, even in case of failure to comply with the requirements of Article 1772.” It is settled that
the registration requirement under Article 1772 of the Civil Code is not intended as a prerequisite
for the acquisition of juridical personality by the partnership, but merely as a condition for the
issuance of the license to engage in business or trade.

517. What are the different kinds of partnership?

The Civil Code classifies partnership into two: according to their object and according to
the liability of the partners.
As to object, partnership may be universal or particular. A universal partnership may
refer to all present property or to all profits. (Art. 1777, Civil Code) A partnership of all present
property is that in which the parties contribute all property which actually belongs to them to a
common fund, with the intention of dividing the same among themselves, as well as all the profits
which they may acquire therewith. (Art. 1778, Civil Code) A universal partnership of profits
comprises all that the partners may acquire by their industry or work during the existence of the
partnership. (Art. 1780, Civil Code) A particular partnership, on the other hand, is that which has
for its object determinate things, their use or fruits, or a specific undertaking, or the exercise of a
profession or vocation. (Art. 1783, Civil Code)

As to liability of the partners, partnerships may be general or limited. A general


partnership is one where all of the partners are general partners; while a limited partnership is one
where there is at least one general partner and one limited partner.

518. Is there a prescribed form for the constitution of a partnership?

It depends. If the partnership is general, the partnership may be constituted in any form,
except where immovable property or real rights are contributed to the common fund, in which
case a public instrument, to which is attached an inventory of said property, signed by all of the
partners, shall be necessary for validity. (Arts. 1771, 1773, Civil Code) Furthermore, if it has a
capital of P3,000 or more, it must appear in a public instrument, which shall be recorded in the
Securities and Exchange Commission. However, this is not necessary for validity. (Art. 1772,
Civil Code)

If the partnership is limited, it is required that the contracting parties, in addition to the
formalities prescribed for the organization of general partnership, shall execute a certificate of
limited partnership which must be recorded in the Securities and Exchange Commission. (Art.
1843, Civil Code) These formalities must be complied with; otherwise, the partnership is not
limited but general.

519. What is a partnership by estoppel?

A partnership by estoppel arises when two persons who are not partners represent
themselves as partners to strangers. Similarly, when two persons who are partners, in connivance
with a friend who is not a partner, inform a stranger that said friend is their partner, a partnership
by estoppel may also result to the end that the stranger should not be prejudiced. (Art. 1769 (1),
and 1825, Civil Code)

520. As regards the liability of partners, how are partnerships classified?

As regards the liability of partners, a partnership may either be a general partnership or a


limited partnership. (Art. 1776, Civil Code)

A general partnership is one where all the partners are general partners, that is, they are
liable even with respect to their individual properties, after the assets of the partnership have been
exhausted.

A limited partnership is one where at least one partner is a general partner and the others
are limited partners. A limited partner is one whose liability is limited only up to the extent of his
contribution.

521. Rommel, Sherwin and Tito are general partners in a trading firm. Having
contributed equal amounts to the capital, they agreed on equal distribution of whatever net
profit is realized per fiscal period. After four years of operation, Tito conveyed his whole
interest in the partnership to Wanda without the knowledge and consent of Rommel and
Sherwin.

a) Is the partnership dissolved?

No. Under Article 1813 of the Civil Code, the conveyance by a partner of his or her
whole interest in the partnership does not itself dissolve the partnership in the absence of an
agreement.

b) What are the rights of Wanda, if any, should she desire to participate in the
management of the partnership and in the distribution of the net profit of P450,000 which
was earned after his purchase of Tito’s interest?

Pursuant to Article 1813 of the Civil Code, Wanda cannot interfere nor participate in the
management or administration of the partnership business affairs. She may, however, receive the
net profits to which Tito would have otherwise been entitled. In this case, Wanda is entitled to
P150,000 (1/3 of P450,000).

522. Lucy and Fernan formed an entity known as “Lucifer Builders” for the sole
purpose of entering into a contract with the Government for the construction of a bridge.
After a public bidding, the contract was awarded to “Lucifer Builders” for implementation.
After completion of the project, Lucy and Fernan parted ways to devote their time to their
own business undertakings. Efren, a supplier of materials used in the construction project,
brought an action against Lucy for collection of the amounts owed by the partnership. Lucy
moves to dismiss on the ground that it was the partnership which is liable for the debt.

Is Lucy liable for the payment of the debt?

Yes, because Lucy is still liable as a general partner for her 1/2 pro rata share. (Art. 1816,
Civil Code) Dissolution of a partnership caused by the termination of the particular undertaking
specified in the agreement does not extinguish the obligations of the partnership which must be
liquidated during the “winding up” of the partnership affairs. (Arts. 1829 and 1830, Civil Code)

523. Can a husband and wife form a limited partnership?

Yes, they can. The Civil Code prohibits a husband and wife from constituting a universal
partnership. Since a limited partnership is not a universal partnership, a husband and wife may
validly form one or be a member thereof (CIR v. Suter, et. al., 27 SCRA 152 [1967])

524. Who are the persons who together cannot form a universal partnership?

Persons who are prohibited from giving each other any donation or advantage cannot
enter into a universal partnership. They are as follows: a) husband and wife (Art. 87, Family
Code); b) those guilty of adultery or concubinage (Art. 739, Civil Code); and c) those guilty of
the same criminal offense, if the partnership was entered into in consideration of the same. (Art.
739, Civil Code)

525. Can two corporations organize a general partnership?

No. A corporation may not be a general partner in a general partnership, either with an
individual or with another corporation, because the principle of mutual agency in general
partnerships allowing the other general partner to bind the corporation will violate the principle in
corporation law that only the board of directors may bind the corporation.

526. A and B orally agreed to form a partnership 18 months from today, each one to
contribute a substantial capital to the proposed business venture. If at the arrival of the
period, A refuses to go ahead with the agreement; can B enforce the agreement by court
action?

No, because the agreement was merely oral and executory. It is true that a partnership
contract is not governed by the Statute of Frauds but here, there is merely an agreement to form a
partnership in the future. Since therefore the agreement is to be formed after one year from the
making thereof, the same should be in writing to be enforceable under the Statute of Frauds. (Art.
1403, No. (2) (a), Civil Code)

527. Paquito, Antonio and Fernando are partners in a construction firm. While
operating a bulldozer in the ordinary course of the partnership business, Paquito caused
damage to the cars of his partner Antonio and their client, Ramon. Is the partnership liable
for the losses suffered by Antonio and Ramon?

The partnership is liable for the damage suffered by Ramon but not to the damage
suffered by Antonio. Where, by any wrongful act or omission of any partner acting in the
ordinary course of the business of the partnership, or with the authority of his co-partners, loss or
injury is caused to any person, not being a partner in the partnership, or any penalty is incurred,
the partnership is liable therefor to the same extent as the partner so acting or omitting to act.

528. Due to a misunderstanding, Atty. Dumag withdraws his membership from a


law firm which does not have a fixed term. He later files with the SEC a petition for the
dissolution of the firm. After due proceedings, the SEC hearing officer denies the petition on
the ground that the withdrawal of Atty. Dumag has not dissolved the firm. Is the SEC
hearing officer correct?

No. A partnership which does not have a fixed term is a partnership at will. The law firm
of Atty. Dumag is one such partnership. The birth and life of a partnership at will is predicated on
the mutual desire and consent of the partners. The right to choose with whom a person wishes to
associate himself is the very foundation and essence of that partnership. Its continued existence is,
in turn, dependent on the constancy of that mutual resolve, along with each partner’s capability
to give it. Verily, anyone of the partners may, at his sole pleasure, dictate a dissolution of the
partnership at will. He must, however, act in good faith. If he acted in bad faith, it would not
prevent the dissolution of the partnership but that it can result in a liability for damages (Ortega,
et. al., v. Court of Appeals, 245 SCRA 529 [1995])

529. Tom and Gerry verbally enter into a partnership in the distribution of liquefied
petroleum gas in Manila. For convenience, Tom and Gerry agreed to register the business
solely in the name of Gerry as sole proprietor and for him to manage the business for a fee.
As agreed upon, Tom delivered his capital contribution of P100,000 to Gerry, while the
latter in turn produced the same amount as his counterpart contribution, with the intention
that the profits would be equally divided between them.

Upon Gerry’s death in 1999, his widow, Ellen, took over the operations and
management of the partnership business without Tom’s consent. Despite Tom’s repeated
demands upon Ellen for accounting, winding up, and restitution of his net shares in the
partnership business, Ellen failed to comply. Instead, Ellen continued the operations of the
business, converting to her own use and advantage its assets.

In 2002, due to Ellen’s refusal to comply with his demands, Tom filed an action for
“Winding Up of Partnership Affairs, Accounting and Recovery of Shares.” Ellen opposed
the action on the following grounds; a) that the oral partnership agreement between Tom
and Gerry is void; (b) that the action had already prescribed; and c) that the alleged
partnership was not registered with the SEC.

a) Is the oral partnership agreement between Tom and Jerry valid?

Yes. A partnership may be constituted in any form, except where immovable property or
real rights are contributed thereto, in which case a public instrument shall be necessary. Hence,
based on the intention of the parties, a verbal contract of partnership was formed between them.
The essential points that must be proven to show that a partnership was agreed upon are: 1)
mutual contribution to a common stock; and 2) a joint interest in the profits. Understandably so,
in view of the absence of a written contract of partnership between Tom and Jerry, Tom may
resort to the introduction of testimonial evidence to prove said partnership.

b) Has the action prescribed?

No. The action for accounting filed by Tom three years after Gerry’s death was well
within the prescribed period. The Civil Code provides that an action to enforce an oral contract
prescribes in six years, while the right to demand an accounting for a partner’s interest as against
the person continuing the business accrues at the date of dissolution, in the absence of any
contrary agreement. (Art. 1842, Civil Code) Considering that the death of a partner results in the
dissolution of the partnership, in this case, it was after Gerry’s death that Tom had the right to an
account of his interest as against Ellen. It bears stressing that while Gerry’s death dissolved the
partnership, the dissolution did not immediately terminate the partnership. The Civil Code
expressly provides that upon dissolution, the partnership continues and its personally is retained
until the complete winding up of its business, culminating in its termination. (Art. 1828, Civil
Code)

c) Is the requirement under Article 1772 of the Civil Code for the registration of a
partnership with a capital of P3,000 or more with the SEC mandatory?

No. The registration requirement under Article 1772 of the Civil Code is not mandatory;
it is merely directory. Article 1768 of the Civil Code explicitly provides that the partnership
retains its juridical personality even if it fails to register. The failure to register the contract of
partnership does not invalidate the same as among the partners, so long as the contract has the
essential requisites, because the main purpose of registration is to give notice to third parties, and
it can be assumed that the members themselves knew of the contents of their contact. In the case
at bar, non-compliance with this directory provision of the law will not invalidate the partnership
considering that the totality of the evidence shows the valid constitution of the partnership
between Tom and Gerry. (Sunga-Chan v. Chua, 363 SCRA 249 [2001])

530. Aragorn, Legolas and Gimli are partners in a fishing business venture. Due to a
quarrel, Gimli withdrew from the partnership in 1986 as a result of which they agreed to
dissolve their partnership and for that purpose they executed an agreement of partition and
distribution of the partnership properties. In 1994, Aragorn’s heirs brought an action
against Legolas and Gimli for accounting of the partnership assets and partition. Legolas
and Gimli promptly defend on ground of prescription. They contend that the action had
already prescribed four years after it accrued in 1986 when the partnership was dissolved
by the withdrawal of Gimli. Has the action prescribed?

The action has not yet prescribed. The three final stages of a partnership are: 1)
dissolution; 2) winding-up; and 3) termination. (Idos v. Court of Appeals, 296 SCRA 194 [1998])
The partnership, although dissolved, continues to exist and its legal personality is retained, at
which time it completes the winding up of its affairs, including the partitioning and distribution of
the net partnership assets to the partners, (Sy v. Court of Appeals, 313 SCRA 328 [1999]) For as
long as the partnership exists, any of the partners may demand an accounting of the partnership’s
business. Prescription of the said right starts to run only upon the dissolution of the partnership
when the final accounting is made. (Fue Leung v. Intermediate Appellate Court, 169 SCRA 746
[1989])

Contrary to defendants’ protestations that the right of Gimli’s heirs to inquire into the
business affairs of the partnership accrued in 1986 when the partnership was dissolved,
prescribing four years thereafter, prescription had not even begun to run in the absence of a final
accounting. Applied in relation to Articles 1807 and 1809, which also deal with the duty to
account, Article 1842 of the Civil Code states that the right to demand an accounting accrues at
the date of dissolution in the absence of any agreement to the contrary. When a final accounting is
made, it is only then that prescription begins to run. In the case at bar, no final accounting has
been made, and that is precisely what the heirs of Gimli are seeking in their action before the
court, since Legolas and Gimli have failed or refused to render an accounting of the partnership’s
business and assets. Hence, the action is not barred by prescription.(Emnace v. Court of Appeals,
370 SCRA 431 [2001])

AGENCY
531. What is meant by agency?

By the contract of agency a person binds himself to render some service or to do


something in representation or on behalf of another, with the consent or authority of the latter.
(Art. 1868, Civil Code)

532. What is agency by estoppel?

This kind of agency arises when one clothes another with apparent authority as his agent,
and holds him out to the public as such, cannot be permitted later to deny the authority of such
person to act as his agent, to the prejudice of innocent third parties dealing with such person in
good faith, and in the honest belief that he is what he appears to be. (Macke et. al. v. Campus 7
Phil 553)

533. Distinguish between agency by estoppel and implied agency.

As between the principal and the agent: In an implied agency, the agent is a true agent,
with rights and duties of an agent; in an agency by estoppel (caused for instance by estoppel on
the part of the agent), the “agent” is not a true agent; hence, has no rights as such.

As to third persons: If the estoppel is caused by the principal, he is liable, but only if the
third person acted on the misrepresentation; in an implied agency, the principal is always liable.
If the estoppel is caused by the agent, it is only the agent who is liable, never the alleged
principal; in an implied agency, the agent is never personally liable.

534. What is the doctrine of agency by necessity?

Strictly speaking, an agency can never be created by necessity. What is meant by the
phrase “agency by necessity” is however this: that by virtue of the existence of an emergency, the
authority of an agent is correspondingly enlarged in order to cope with the exigencies or the
necessities of the moment. Thus, if a bus conductor is seriously hurt, the driver is authorized to
engage the services of a physician, in the company’s name, so that the conductor may survive.
This is really for the interest of all concerned.

535. P appoints A, a minor, as his agent to sell a particular car. A sells the car to a
buyer, B. P afterwards seeks to disaffirm the sale, and brings an action to recover the car on
the ground that A’s act was voidable, as a minor cannot be an agent. Judgment for whom?

Judgment for B. The agent A is deemed to be an extension of the personality of the


principal, who himself is capacitated. Hence, P cannot annul the contract on the ground of the
agent’s incapacity.

536. Does the power to sell include the power to mortgage?

No. The power to sell does not include the power to mortgage or to pledge; neither does it
include the power to barter or exchange. The power to mortgage, on the other hand, does not
include the power to sell (Art. 1879, Civil Code) or to execute a second mortgage.

537. Jim appointed Art as his agent to sell his house and lot. One week later, Jim
appointed Ben as his agent to sell the same property. What is the effect of Ben’s
appointment with respect to the agency of Art?

Ben’s appointment revokes Art’s authority. Under Article 1923 of the Civil Code, the
appointment of a new agent for the same business or transaction revokes the previous agency
from the day on which notice thereof is given to the former agent. However, this rule is subject to
certain exceptions. They are as follows: (1) if the agency has been entrusted for the purpose of
contracting with specified persons, its revocation shall not prejudice the latter if they were not
given notice thereof (Art. 1921 , Civil Code); and 2) if the agent had general powers, revocation
of the agency does not prejudice third persons who acted in good faith and without knowledge of
the revocation. (Art. 1922, Civil Code)

538. Pedro owns a car. To raise money for his business venture, he instructed
Oswald to sell the car for him (Pedro). Oswald, in his own name, sold the car to Menardo.
Can Menardo sue Pedro in case the car has hidden defects?

Yes. In this case, although Oswald acted in his own name, still the sale involved a car
belonging to Pedro, the principal. Here we apply the exception stated in the second paragraph of
Article 1883 of the Civil Code which provides “In such case the agent is the one directly bound
in favor of the person with whom he has contracted, as if the transaction were his own, except
when the contract involves things belonging to the principal.” As a matter of fact, the sale is
completely valid.

539. Distinguish between a commission agent and a broker.

A commission agent is one engaged in the purchase and sale for a principal of personal
property, which for this purpose, has to be placed in his possession and at his disposal (Art. 1903,
Civil Code). He has a relation not only with his principal, and the buyers or sellers, but also with
the property which constitutes the object of the transaction.

A broker, on the other hand, maintains no relation with the thing which he purchases or
sells. He is supposed to be merely a go-between, an intermediary between the seller and the
buyer. As such, he does not have either the custody or the possession of the thing that he disposes
of. His only function is, therefore, to bring the parties to the transaction.

540. A, B and C are co-owners of a parcel of land. They employ D as their agent to
sell the property, with D receiving a commission equivalent to 10% of the selling price of the
land. If D is successful in selling the land, from whom can he collect his commission?

D can collect from any of the three co-owners because of their solidary liability under
Article 1915 of the Civil Code. If Art pays D his entire commission, he is entitled to recover from
B and C their respective shares.

(NOTE: If the co-owners engaged D to sell their separate ideal shares in the property,
their liability to D is merely joint, not solidary. This is so because the transaction is not a
common transaction or undertaking)

LOAN

541. Distinguish between commodatum and mutuum.

1) Commodatum ordinary involves something not consumable, while in mutuum, the


subject matter is money or other consumable thing.
2) In commodatum, ownership of the thing loaned is retained by the lender, while in
mutuum, the ownership is transferred to the borrower.

3) Commodatum is essentially gratuitous, while mutuum maybe be gratuitous or onerous,


that is, with stipulation to pay interest.

4) In commodatum, the borrower must return the identical thing loaned, while in mutuum,
the borrower need only pay the same amount of the same kind and quality.

5) Commodatum may involve real or personal property, while mutuum refers only to
personal property.

6) Commodatum is a loan for use, while mutuum, is a loan for consumption.

7) In commodatum, the bailor may demand the return of thing loaned before the
expiration of the term in case of urgent need, while in mutuum, the lender may not demand its
return before the lapse of the term agreed upon; and

8) In commodatum, the loss of the thing loaned is suffered by the bailor since he is the
owner, while in mutuum, the borrower suffers the loss even if caused exclusively by a fortuitous
event. ((Arts. 1933, 1935, 1936, 1937, 1946, 1942; 1174, Civil Code)

(NOTE: The bailor in commodatum need not be the owner of the thing loaned (Art.
1938, Civil Code) because ownership does not pass to the borrower. It is sufficient if the bailor
has such possessory interest in the subject-matter or right to its use which he may assert against
the bailee and third persons although not against the rightful owner)

542. Is the bailee in commodatum entitled to the fruits of the thing loaned?

As a rule, the bailee in commodatum is not entitled to the fruits of the thing loaned;
otherwise, the contract may be one of usufruct. However, to stipulate that the bailee may make
use of the fruits would not destroy the essence of commodatum by express provision of Article
1940 of the Civil Code; this is so because liberality is still the actual cause or consideration of the
contract.

543. Franklin was requested by his friend Angela for help in incorporating her
business, Heaven’s Garden. Specifically, Angela requested Franklin to deposit in a bank the
sum of P100,000 in the account of Heaven’s Garden for incorporation purposes. She assured
Franklin that he could withdraw his money from said account within a month’s time.
Relying on Angela’s assurances, Franklin opened a savings account in the name of Heaven’s
Garden and deposited in the account the amount of P300,000. Franklin made himself as the
only authorized signatory of the account for which a passbook was issued to him.

Franklin later learned to his dismay that Angela withdrew P150,000 from the
savings account, and that only a portion thereof remained. He was informed that he could
not even withdraw the remaining amount because it had to answer for some post-dated
checks issued by Angela. Franklin also discovered that Angela was allowed to withdraw
money from the savings account because she was the registered sole proprietor of Heaven’s
Garden.
What kind of transaction did Franklin and Angela enter into: mutuum or
commodatum?

The transaction between them was a commodatum, not mutuum. Article 1933 of the
Civil Code distinguishes between these two kinds of loan in this wise:

“By the contract of loan, one of the parties delivers to another,


either something not consumable so that the latter may use the same for a
certain time and return it, in which case the contract is called a
commodatum; or money or other consumable thing, upon the condition
that the same amount of the same kind and quality shall be paid, in which
case the contract is simply called a loan or mutuum.

Commodatum is essentially gratuitous.

Simple loan may be gratuitous or with stipulation to pay interest.

In commodatum, the bailor retains the ownership of the thing


loaned, while in simple loan, ownership passes to the buyer.”

The foregoing provision seems to imply that if the subject of the contract is a consumable
thing, such as money, the contract would be a mutuum. However, there are some instances where
a commodatum may have for its object a consumable thing. Article 1936 of the Civil Code
provides:

“Consumable goods may be the subject of a commodatum if the


purpose of the contract is not the consumption of the object, as when it is
merely for exhibition.”

Thus, if consumable goods are loaned only for purposes of exhibition, or when the
intention of the parties is to lend consumable goods and to have the very same goods returned at
the end of the period agreed upon, the loan is a commodatum and not a mutuum.

In the problem presented, Franklin agreed to deposit his money in the savings account of
Heaven’s Garden for the purpose of making it appear that said firm had sufficient capitalization
for incorporation, with the promise that the said amount shall be returned within 30 days.
Franklin merely “accommodated” Angela by lending his money without consideration, as a favor
to his friend. It was, however, clear to the parties that the money would be returned to Franklin in
30 days. (Producers Bank of the Phils.vs. Court of Appeals, 397 SCRA 651 [2003])

544. What are the instances when the bailee is liable for the loss of the thing loaned
even if it should be due a fortuitous event?

As a general rule, the bailee is not liable for loss or damage of the thing loaned even if it
should be through a fortuitous event, except in the following cases:

1) he devotes the thing to any purpose different from that for which it has been loaned:

2) he keeps it longer than the period stipulated or after the accomplishment of the use for
which the commodatum has been constituted;
3) if the thing loaned has been delivered with appraisal of its value, unless there is a
stipulation exempting the bailee from responsibility in case of a fortuitous event;

4) if he lends or leases the thing to a third person who is not a member of his household;

5) if, being able to save either the thing borrowed or his own thing, he chose to save the
latter. (Art. 1942, Civil Code)

545. A borrowed B’s truck. During a fire which broke out in A’s garage, he had time
to save only one vehicle, and he saved his car instead of the truck. Is A liable for the loss of
B’s truck?

Yes. The bailee in commodatum is liable for the loss of the thing loaned, even if it should
be through a fortuitous event if, being able to save either the thing borrowed or his own thing, he
chose to save the latter. (Art. 1492, Civil Code)

546. What is meant by precarium?

Precarium is a specie of commodatum where the bailor has the right to demand at will the
return of the thing which is the object of the contract. This takes place when: a) neither the
duration of the contract nor the use to which the thing loaned should be devoted has been
stipulated; and b) the use of the thing is merely tolerated. (Art. 1947, Civil Code)

547. a) In a simple loan with stipulation to pay usurious interest, what happens to
the obligation of the debtor to pay the principal debt?

In a simple loan with stipulation to pay usurious interest, the prestation of the debtor to
pay the principal debt, which is the cause of the contract, is not illegal. The illegality lies only in
the stipulated interest. Being separable, only the latter should be deemed void. To discourage
stipulations on usurious interest, said stipulations are treated as wholly void, so that the loan
becomes one without a stipulation to pay interest. It should not, however, be interpreted to mean
forfeiture even of the principal, for this would unjustly enrich the borrower at the expense of the
lender. (Puerto v. Court of Appeals, G. R. No. 138210, June 13, 2002)

b) Is the debtor liable to pay only the principal obligation?

By way of compensatory damages for the breach of the obligation, the debtor must pay
the principal debt, with interest thereon in the amount of 12% per annum, to be computed from
default, i.e., from judicial or extrajudicial demand in accordance with Article 1169 of the Civil
Code. Such interest is not due to stipulation, for there was none, the same being void. Rather it is
due to the general provision of law that in obligations to pay money, where the debtor incurs in
delay, he has to pay interest by way of damages, in conformity with the ruling in Eastern
Shipping Lines, Inc. v. Court of Appeals, 234 SCRA 78 [1994].

c) Suppose a loan is secured by a mortgage and the mortgage is foreclosed for non-
payment of the debt, is the debtor entitled to recover the foreclosed property?

Since the mortgage is void, the foreclosure of the property provided for in the mortgage
contract is ineffectual as well. Such foreclosure is invalid because it stemmed from the
enforcement of a usurious mortgage contract. The parties then must restore what each had
received from the other. The debtor must pay the principal loan with legal interest at (12% per
annum from the date of demand by way of damages. The lenders must return the debtor’s
property that had been invalidly foreclosed. The transfer certificate of title to the subject property
is cancelled and a new one issued in favor of the debtor. This is without prejudice to the right of
the lender to proceed against the debtor in the event the latter fails to satisfy his original
obligation including payment of 12% interest by way of damages.

548. What are the rules on interest rates under the Civil Code?

The following are the rules on interest rates under the Civil Code:

1) No interest rate shall be paid unless it is expressly stipulated in writing.

2) In the absence of stipulation as to the amount, interest rate of 12% applies to : a) loans
(Central Bank Circular No. 416); (b) forbearance for the use of money, goods or credit; and c)
judgment involving a loan or forbearance of money, goods or credit.

3) In all other monetary judgments not involving loans or forbearance for the use of
money, goods or credit, Article 2209 for the Civil Code provides that the legal interest of 6% per
annum shall be applied in the absence of stipulation. This applies, for example, in a judgment for
non-payment of purchase price or actions for damages for injury to persons or property.

4) Interest rate for actions for damages under Article 2209 is imposable a) from filing
before judgment, 6% per annum; b) from judgment up to the time of finality, 6% per annum; and
c) from finality up to actual payment, 12% per annum because it partakes of the nature of
forbearance for the use of money.

549. Minda, a Divisoria wholesaler, contracted with Shiela for the sewing of 20,000
pieces of assorted girl’s denims. Pursuant to their agreement, Minda obliged herself to pay
Shiela, for her services, the total amount of P200,000, and for Shiela to deliver the finished
products within two months. In less than two months, Shiela sewed the denims and
delivered them to Minda who promised payment in a week’s time. Because Minda failed to
pay despite repeated demands, Shiela instituted an action against her for collection of the
P200,000. In due time, the court rendered judgment directing Minda to pay Shiela the sum
of P200,000 with interest thereon at 12% per annum, to be counted from the filing of the
complaint until the amount is fully paid. Minda now assails the decision on the ground that
it was error for the court to impose the interest of 12% per annum for an obligation that
does not involve a loan or forbearance of money. Is Minda correct?

Yes. The amount due in this case arose from a contract for a piece of work, not from a
loan or forbearance of money, hence, the legal interest of 6% per annum should be applied.
Furthermore, since the amount of the demand could be established with certainty when the
complaint was filed, the 6% interest should be computed from the filing of the complaint. But
after judgment becomes final and executory until the obligation is satisfied, the interest should be
computed at 12% per year annum. The interim period is deemed to be equivalent to a forbearance
of credit. (Crismina Garments, Inc., v. Court of Appeals, 304 SCRA 356 [1999])
PLEDGE, MORTGAGE AND ANTICHRESIS
550. Samuel borrowed money from Teodoro. To guarantee payment, Samuel left the
Torrens Title of his land to Teodoro for the latter to hold until payment of the loan. Is there
a) a contract of pledge? b) a contract of mortgage? c) a contract of antichresis? or d) none
of the above?

None of the above. There is no pledge because only movable property may be pledged.
(Art. 2094, Civil Code) If at all, there was a pledge of the paper or document constituting the
Torrens Title, as a movable by itself, but not of the land which the title represents. There is no
mortgage because no deed or contract was executed in the manner required by law for a
mortgage. (Arts. 2085 to 2092, 2124 to 2131, Civil Code) There is no contract of antichresis
because no right to the fruits of the property was given to the creditor. (Art. 2131, Civil Code)

551. What is meant by mortgage in possession?

A mortgage in possession, otherwise known as antichresis, is one where the mortgagee


acquires actual or constructive possession of the property mortgaged for purposes only of
enforcing his security over the property and collecting the income to pay for the mortgagor’s
debt. (Nadal v. Court of Appeals, 320 SCRA 699)

552. What is the so-called dragnet clause in a mortgage contract?

A dragnet clause is a provision in a mortgage contract specifically phrased to subsume all


debts of past or future origin. (Phil. Bank of communications v. Court of Appeals, 253 SCRA 241)

553. May a contract of pledge, real estate mortgage, antichresis, and chattel
mortgage secure “after-incurred” obligations?

Except for a chattel mortgage, a pledge, real estate mortgage, or antichresis may
exceptionally secure “after-incurred” obligations so long as these future debts are accurately
described. This is so because a chattel mortgage can only cover obligations existing at the time
the mortgage is constituted. One of the requirements of chattel mortgage is an affidavit of good
faith and the law has provided that the parties to the contract must execute an oath that the
mortgage is made for the purpose of securing the obligation specified in the conditions thereof
and for no other purposes. The debt referred to in the law is a current obligation, not an
obligation that is merely contemplated.

A promise expressed in a chattel mortgage to include debts that are yet to be contracted
can be a binding agreement that can be a binding agreement that can be compelled upon but the
security itself does not come into existence until after a chattel mortgage agreement covering the
newly-contracted debt is executed either by including a fresh chattel mortgage or by amending
the old contract. Refusal on the part of a borrower to execute a new contract may be treated as
default and the mortgagee can then foreclose the original chattel mortgage with respect to the old
obligation.

(NOTE: Contracts of security are either personal or real. In contract of personal


security, such as guaranty or suretyship, the faithful performance of the obligation by the
principal debtor is secured by the personal commitment of another (the guarantor or surety). In
contracts of real security, such as pledge, mortgage or antichresis, the fulfillment is secured by
an encumbrance of property -- in pledge, the placing of the movable property in the possession
of the creditor; in chattel mortgage, by the execution of the corresponding deed substantially in
the form prescribed by law; in real estate mortgage, by the execution of a public instrument
encumbering the real property covered thereby; and in antichresis, by a written instrument
granting to the creditor the right to receive the fruits of an immovable property with the
obligation to apply such fruits to the payment of interest, if owing, and thereafter to the principal
of his credit upon the essential condition that if the principal obligation becomes due and the
debtor defaults, then property encumbered can be alienated for the payment of the obligation, but
should the obligation be duly paid, then the contract is automatically extinguished from the
accessory character of the agreement. As the law so puts it, once the obligation is complied with,
the contract of security becomes, ipso facto, null and void)