TABLE OF CONTENTS CIVIL LAW

TABLE OF CONTENTS

PERSONS AND FAMILY RELATIONS H. Paternity And Filiation……………………..48

I. EFFECT AND APPLICATION OF I. Support………………………………………….53
LAWS…………………………………….1 J. Parental Authority……………………………56
A. When Law Takes Effect……………………..1
B. Ignorance Of The Law; Ignorance Of OBLIGATIONS AND CONTRACTS
Fact…………………………………………………1 OBLIGATIONS…………………………………………….63
C. Retroactivity Of Laws; Vested Rights I. CIVIL AND NATURAL
Principle…………………………………………..1 OBLIGATIONS……………………….63
D. Mandatory, Prohibitory, And Permissive A. Civil Obligations………………………………63
Laws……………………………………………….1 B. Natural Obligations………………………….63
E. Waiver Of Rights………………………………2 II. GENERAL PROVISIONS……………66
F. Repeal Of Laws………………………………..2 A. Definition……………………………………….66
G. Judicial Decision……………………………….3 B. Elements Of An Obligation……………….66
H. Duty To Render Judgment…………………3 C. Sources Of Obligations…………………….66
I. Interpretation Of Doubtful Statute……..3 III. NATURE AND EFFECT OF
J. Custom……………………………………………3 OBLIGATIONS……………………….67
K. Legal Periods……………………………………3 A. Obligation To Give…………………………..67
L. Generality Principle Of Penal Laws……..4 B. Obligation To Do Or Not To Do…………68
M. Conflict Of Laws……………………………….4 IV. DIFFERENT KINDS OF
II. HUMAN RELATIONS………………….7 OBLIGATIONS……………………….78
A. Abuse Of Rights……………………………….7 A. Pure………………………………………………78
B. Unjust Enrichment…………………………….7 B. Conditional…………………………………….78
C. Thoughtless Extravagance…………………8 C. Obligation With A Period Or A
D. Tortious Interference…………………………8 Term…………………………………………..…82
III. PERSONS……………………………….9 D. Alternative Or Facultative…………………85
A. Natural Persons………………………………..9 E. Joint And Solidary Obligations………….87
B. Juridical Persons……………………………..14 F. Obligations With A Penal Clause……….91
C. Domicile; Residence………………………..15 V. EXTINGUISHMENT OF
D. Surnames………………………………………16 OBLIGATIONS……………………….93
E. Absentees………………………………………17 A. Modes Of Extinguishing
IV. MARRIAGE AND FAMILY Obligations…………………………………….93
RELATIONS…………………………..19 B. Other Modes Of Extinguishing
A. General Principles And Requisites Of Obligations…………………………………….93
Marriage………………………………………..19 C. Other Forms Of Extinguishment Not
B. Mixed Marriages, Foreign Marriages, And Found In Article 1231………………………93
Foreign Divorce (Art. 26, Family Code) CONTRACTS…………………………………………….115
…………………………………………………….22 I. ESSENTIAL REQUISITES OF A
C. Void Marriages………………………………..23 CONTRACT………………………….115
D. Voidable Marriages………………………….28 A. Consent……………………………………….115
E. Legal Separation…………………………….30 B. Object………………………………………….122
F. Property Relations Between Spouses…35 C. Cause Or Consideration………………….123
G. Rights And Obligations Between D. Basic Principles Of Contract……………124
Husband And Wife………………………….47 E. Reformation Of Instruments…………..128
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F. Defective Contracts……………………….131 A. Abuse Of Rights……………………………176

II. VOIDABLE CONTRACTS………….135 B. Illegal Acts……………………………………176
III. UNENFORCEABLE C. Acts Contra Bonus Mores……………….176
CONTRACTS………………………...138 D. Violation Of Human Dignity…………….177
IV. VOID OR INEXISTENT E. Dereliction Of Duty………………………..179
CONTRACTS………………………...139 F. Unfair Competition………………………..180
ESTOPPEL………………………………………………..142 VII. INDEPENDENT CIVIL
QUASI-CONTRACTS………………………………….144 ACTIONS…………………………….180
I. NEGOTIORUM GESTIO…………..144 A. Violation Of Civil And Political
A. Obligations Of A Gestor………………….144 Rights………………………………………….180
B. Obligations Of The Owner Of The B. Defamation, Fraud, And Physical
Property Or Business……………………..145 Injuries………………………………………..182
C. Extinguishment Of Management…….145 C. Neglect Of Duty…………………………….182
II. SOLUTIO INDEBITI (UNDUE D. Catch-All Independent Civil
PAYMENT)..................................147 Action………………………………………….183
III. OTHER QUASI-CONTRACTS…….148 VIII. DAMAGES……………………………183
A. When Allowed………………………………183
TORTS AND DAMAGES B. Duty Of Injured Party…………………….183
I. COMMON PRINCIPLES…………..153 C. Types Of Damages………………………..184
A. Definition……………………………………..153
B. Torts vs………………………………………..153 SALES, LEASE, AND AGENCY
II. NEGLIGENCE……………………….154 I. CONTRACT OF SALE………………203
A. Definition……………………………………..154 A. Nature And Form…………………………..203
B. Degrees Of Diligence And Negligence; B. Capacity To Buy Or Sell………………...210
Presumptions………………………………..154 C. Obligations Of The Vendor……………..211
C. Medical Negligence And D. Double Sale………………………………….212
Malpractice…………………………………..158 E. Effects Of The Thing Sold………………212
III. PROXIMATE CAUSE……………….159 F. Recto Law…………………………………….214
A. Definition……………………………………..159 G. Maceda Law…………………………..…….215
B. Proximate Cause vs……………………….159 H. Rights Of Unpaid Seller………………….216
C. Tests……………………………………………159 I. Extinguishment Of Sale………………….220
IV. LIABILITIES………………………..161 II. CONTRACT OF LEASE…………….224
A. The Tortfeasor; Joint And A. General Provisions…………………………224
Direct…………………………………………..161 B. Rights And Obligations Of Lessor And
B. Persons Specifically Liable………………161 Lessee………………………………………….225
C. Vicarious Liability…………………………..165 C. Sublease And Assignment Of
V. DEFENSES IN TORT Lease…………………………………………..228
ACTIONS…………………………….172 D. Grounds For Termination Of The
A. Plaintiff’s Negligence Is Proximate Lease…………………………………………..228
Cause…………………………………………..172 III. AGENCY……………………………..229
B. Contributory Negligence…………………172 A. Nature, Form, And Kinds……………...229
C. Fortuitous Event……………………………173 B. Obligations Of The Agent……………..232
D. Assumption Of Risk/Volenti Non Fit C. Obligations Of The Principal………….234
Injuria………………………………………….173 D. Extinguishment……………………………235
E. Prescription………………………………….174
VI. HUMAN RELATIONS TORTS…….176
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PROPERTY A. Characteristics………………………………279
I. CLASSIFICATION OF B. Kinds Of Easements………………………279
PROPERTY…………………………..241 C. Modes Of Acquiring Easements………273
A. Immovables And Movables…………….241 D. Effects Of Easement………………………284
B. Public Dominion; Patrimonial; E. Extinguishment Of Easement………….285
Private…………………………………………245 IX. NUISANCE…………………………..286
II. OWNERSHIP………………………..247 A. Classes Of Nuisance………………………286
A. Rights Included In B. Doctrine Of Attractive Nuisance………287
Ownership……………………………………247 C. Liability Of Nuisance………………………287
B. Limitations On The Right Of D. Regulation Of Nuisances………………..288
Ownership……………………………………249 X. DIFFERENT MODES OF ACQUIRING
III. RIGHT OF ACCESSION, MOVABLES OWNERSHIP………………………..290
AND IMMOVABLES………………..249 A. Occupation…………………………………..290
A. Accession Discreta…………………………252 B. Tradition………………………………………292
B. Accession Continua……………………….253 C. Donation………………………………………293
IV. QUIETING OF TITLE………………258 D. Prescription………………………………….297
A. Requisites Of An Action To Quiet
Title…………………………………………….259 LAND TITLES AND DEEDS
B. Requisites For Existence Of Cloud On THE REGALIAN DOCTRINE……………….303
Title…………………………………………….259 I. Concept Of Regalian Doctrine…………303
C. Requisites For An Action To Prevent A A. History of the Regalian Doctrine……..303
Cloud On Title………………………………259 B. Effects of the Regalian Doctrine……..304
D. Prescription Or Non-Prescription Of II. Exception To The Regalian
Action………………………………………….260 Doctrine……………………………………….304
V. CO-OWNERSHIP…………………..260 A. Native Title…………………………………..304
A. Requisites…………………………………….260 B. Ancestral Domains………………………..305
B. Sources Of Co-Ownership………………261 III. Land Classification…………………………305
C. Rights Of Co-Ownership…………………262 A. Primary Classification…………………….305
D. Rules……………………………………………267 B. Secondary Classification………………..305
E. Termination Or Extinguishment………268 RESTRICTIONS ON LAND
F. The Condominium Act [R.A. 4726, As OWNERSHIP…………………………………306
Amended].......................................270 I. Nationality Restrictions………………….306
VI. POSSESSION……………………….273 A. Individual ……………………………………307
A. Kinds Of Possession………………………273 B. Corporations………………………………..308
B. Ways Of Acquiring Possession………..275 II. Other Restrictions………………..……….309
C. Effects Of Possession…………………….276 REGISTRY OF PROPERTY…………………309
VII. ACTIONS TO RECOVER I. Registrable Lands………………………….309
OWNERSHIP AND POSSESSION OF A. Registrable Lands………………………….309
REAL PROPERTY…………………..277 II. Concept Of Registration…………………310
A. Accion Interdictal………………………….277 A. Nature and Purpose………………………310
B. Accion Publiciana…………………………..277 B. Laws that Govern Land
C. Accion Reivindicatoria……………………278 Registration…………………………………310
D. Writ Of Possession………………..………278 C. Land Title……………………………………310
E. Injunction…………………………………….278 THE TORRENS SYSTEM; CERTIFICATE OF
VIII. EASEMENTS…………………………279 TITLE…………………………………………..311
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I. The Torrens System………………………311 E. Initial Hearing……………………………….323

II. Nature And Purpose………………………311 F. Hearing and Evidence……………………324
A. Nature………………………………………….311 G. Judgment…………………………………….325
B. Purpose……………………………………….311 H. Decree of Registration…………………..326
III. Principles Underlying The Torrens I. Writ of Possession…………………………328
System…………………………………………312 V. Finality Of Decree Of
A. Mirror Principle……………………………..312 Registration………………………………….328
B. Curtain Principle……………………………312 A. Finality of Decree………………………….328
IV. Administration Of The Torrens VI. Remedies On The Judgment In Original
System…………………………………………312 Registration………………………………….330
A. Land Registration Authority……………312 A. Review of Decree of Registration…….330
B. Register of Deeds…………………………313 B. Reconsideration Or New Trial………….331
V. Effects Of Registration In The Torrens C. Appeal………………………………………….331
System…………………………………………314 D. Relief From Judgment…………………...331
A. Land Is Placed Under The Operation of E. Annulment Of Judgment………………..331
The Torrens System……………………...314 VII. Innocent Purchaser For Value…………332
B. Title To The Land Becomes A. Rights………………………………………….333
Non-Prescriptible…………………………..314 B. Effect of Subsequent Sale………………333
C. Torrens Certificate is Presumed Valid CONFIRMATION OF IMPERFECT
and Devoid of Flaws……………………..314 TITLES…………………………………………334
VI. Effects Of Non-Registration In The I. Concept Of Imperfect Titles……………334
Torrens System…………………………….315 II. Judicial Confirmation Of Imperfect
A. As To Validity……………………………….315 Titles……………………………………………334
B. As to Prescriptibility………………………315 A. Who May Apply; Requisites…………….334
VII. Certificate Of Title…………………………315 B. Ra 11573……………………………………..335
A. Original Certificate Of Title…………….316 C. Effect Of Judicial Confirmation………..336
B. Transfer Certificate Of Title…………….316 SUBSEQUENT REGISTRATION…………..336
C. Patents…………………………………………317 I. Voluntary Dealings………………………..337
VIII. Statutory Liens……………………………..317 A. REGISTRATION OF VOLUNTARY
ORIGINAL REGISTRATION………………318 INSTRUMENTS……………………………..338
I. Nature Of Proceedings……………..……319 B. Dealings Less Than Ownership……….339
II. Jurisdiction And Venue…………………..319 C. Sale And Transfers…………………………340
A. Jurisdiction……………………………………319 D. Mortgage……………………………………..341
B. Venue………………………………………….319 E. Powers Of Attorney……………………….341
III. Who May Apply…………………………….319 F. Trust Instruments………………………….342
A. UNDER PD 1529, SEC. 14, AS AMENDED II. Involuntary Dealings……………………..342
By Ra 11573………………………………...319 A. Attachment…………………………………..342
B. Under Ca 141, Sec. 48(B), As Amended B. Sale On Execution Or For Taxes Or For
By R.A. 11573………………………………321 Any Assessment……………………………345
C. Under Ra 8371 Or Ipra………………….321 III. Adverse Claims……………………………..346
IV. Proceedings………………………………….322 A. Nature and Purpose………………………346
A. Filing of Petition……………………………322 B. Requisites For Registration…………….347
B. Notice of Initial Hearing………………..322 C. Effect Of Registration Of An Adverse
C. Amendment…………………………………323 Claim…………………………………………..347
D. Opposition/Answer………………………..323 IV. Lis Pendens………………………………….348
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A. Nature and Purpose………………………348 SUCCESSION

B. Registration Of The Notice Of Lis I. WILLS & SUCCESSION…………..363
Pendens……………………………………….349 A. General Provisions…………………………363
C. Effect Of Notice Of Lis Pendens………349 B. Testamentary Succession……………….366
D. Cancellation Of Lis Pendens……………350 C. Testamentary Capacity…………………..368
NON-REGISTRABLE PROPERTIES………350 II. CODICILS & INCORPORATION BY
I. Under The Civil Code…………………….350 REFERENCE…………………………373
A. Lands For Public Use And Public A. Codicils………………………………………..373
Service………………………………………..350 B. Incorporation By Reference……………373
B. Water…………………………………………..351 III. CONFLICT RULES………………….374
II. Specific Kinds Of Non-Registrable IV. REVOCATION OF WILLS…………374
Properties…………………………………….351 A. Definition……………………………………..374
A. Forest Lands…………………………………351 B. When Revocation May Be
B. Mineral Lands…….…………………………351 Effected……………………………………….374
C. National Parks………………………………351 C. Law Governing Revocation…………….374
D. Mangrove Swamps………..………………351 D. Modes Of Revocation…………………….375
E. Foreshore Land And Seashore And E. Doctrine Of Dependent Relative
Reclaimed Lands………………………..…351 Revocation……………………………………375
F. Creeks And Streams………………………352 F. Doctrine Of Presumed
G. Military Or Naval Reservations………..352 Revocation……………………………………376
H. Watershed……………………………………352 G. Effect Of Revocation………………………376
I. Grazing Lands………………………………352 V. REPUBLICATION AND REVIVAL OF
J. Alluvial Deposit Along Rivers, When Man WILLS………………………………..377
Made…………………………………………..352 A. Republication Vs. Revival……………….377
K. Previously Titled Land…………………...352 B. Provisions On Republication……………377
DEALINGS WITH UNREGISTERED VI. ALLOWANCE AND DISALLOWANCE
LANDS…………………………………………352 OF WILLS……………………………377
ASSURANCE FUND…………………………353 A. Allowance…………………………………….377
I. Concept And Purpose…………………….353 B. Disallowance…………………………………379
II. Conditions For Compensation…………354 VII. INSTITUTION & SUBSTITUTION OF
A. When Not Liable……………………………354 HEIRS………………………………..379
B. When Liable Or Compensable…………354 A. Institution Of Heirs In General………..379
III. Limitation Of Action……………………….355 B. Kinds Of Institution……………………….383
A. Against Whom The Action Is Filed…..355 C. Substitution Of Heirs……………………..384
B. Prescription..………………………………..355 VIII. DISPOSITION WITH A CONDITION
C. Judgment, How Satisfied……………….355 OR TERM…………………………….385
RECONSTITUTION OF TITLE…………….356 A. Conditional……………………………………385
I. Concept……………………………………….356 B. With A Term…………………………………388
II. General Rule - Judicial IX. COMPULSORY HEIRS;
Reconstitution………………………………357 LEGITIME……………………………389
A. Who May Apply; Where To File……….357 A. Legitime……………………………………….389
B. Contents Of The Petition For B. Preterition…………………………………….394
Reconstitution………………………………357 C. Reserva Troncal…………………………….395
C. Notice And Publication…………………..359 X. DISINHERITANCE…………………397
D. Quantum Of Proof…………………………359 A. Requisites…………………………………….397
 TABLE OF CONTENTS CIVIL LAW

B. Effect…………………………………………..397 D. Nature And Extent Of Suretyship…….432

C. Grounds……………………………………….397 E. Legal And Judicial Bonds……………….434
D. Modes Of Revocation Of IV. PERSONAL PROPERTY SECURITY
Disinheritance……………………………….398 ACT (R.A. No. 11057).................435
XI. LEGACIES AND DEVISES………..398 A. Scope…………………………………………..435
A. Object Of Legacies And Devises……..398 B. Security Interest……………………………436
B. Persons Charged With Legacies And C. Security Agreement……………………….438
Devises………………………………………..398 D. Perfection Of Security Interest………..438
C. Generic Legacies And Devises…………399 E. Registration Of Security Interest…….440
D. Warranty For Generic Legacies And F. Priority Of Security Interest……………441
Devises (Art.928)............................399 G. Enforcement Of Security Interest……445
E. Defective Legacies And Devises………399 H. Modes Of Enforcement Of Security
XII. LEGAL OR INTESTATE Interest………………………………………..446
SUCCESSION……………………….400 I. Takeover Rights…………………………….449
A. Causes Of Intestacy & J. Transitional Provisions……………………449
Relationship………………………………….400 V. REAL ESTATE MORTGAGE……….451
B. Right To Representation…………………401 A. Objects Of Real Estate Mortgage…….451
C. Order Of Intestate Succession………..401 B. Obligations Secured………………………451
XIII. PROVISIONS COMMON TO C. Characteristics………………………………452
TESTATE AND INTESTATE D. Kinds……………………………………………453
SUCCESSION……………………….406 E. Indivisibility Of Mortgage……………….453
A. Right Of Accretion…………………………406 F. Recording Required……………………….454
B. Persons Incapable Of G. Foreclosure…………………………………..454
Succeeding…………………………………..407 H. Waiver Of Security…………………………458
C. Acceptance & Repudiation Of I. Redemption………………………………….458
Inheritance…………………………………..408
D. Collation……………………………………….409 COMPROMISE AGREEMENTS……………………..461
I. REQUISITES………………………..461
CREDIT TRANSACTIONS II. NATURE……………………………...461
I. LOAN…………………………………413 III. KINDS…………………….………….461
A. Nature Of Loan……………………………..413 IV. WHAT CAN BE
B. Commodatum V. Mutuum………………413 COMPROMISED……………………461
C. Commodatum……………………………….415 V. WHAT CANNOT BE
D. Mutuum……………………………………….418 COMPROMISED……………………461
E. Precarium…………………………………….418 VI. SCOPE………………………………..461
F. Interest………………………………………..418 VII. EFFECTS……………………………..462
II. DEPOSIT…………………………….421 A. Suspension of Action/Proceeding……462
A. Voluntary Deposit………………………….422 B. Mitigation of Damages…………………..462
B. Necessary Deposit…………………………424 C. Res Judicata…………………………………462
C. Judicial Deposit…………………………….425 VIII. COURT APPROVAL………………..462
III. GUARANTY AND IX. WHEN VOIDABLE………………….463
SURETYSHIP……………………….426 X. NEWLY-DISCOVERED DOCUMENTS
A. Nature And Extent Of Guaranty………426 ART. 2039, CC)...........................463
B. Effect Of Guaranty…………………………429 XI. COMPROMISE AFTER FINAL
C. Extinguishment Of Guaranty…………..431 JUDGMENT………………………….463
 TABLE OF CONTENTS CIVIL LAW

XII. RESCISSION………………………..463
XIII. EFFECT OF NON-COMPLIANCE...463
 PERSONS AND FAMILY RELATIONS CIVIL LAW

Ignorantia legis non excusat.

EFFECT AND APPLICATION It is founded not only on expediency and policy
OF LAWS but also on necessity. [Zulueta v. Zulueta, G.R.
No. 428 (1902)]

Every person is presumed to know the law even

I. WHEN LAW TAKES EFFECT if he has no actual knowledge of the law
[Tañada v. Tuvera, supra].

Article 2, Civil Code. Laws shall take Ignorance of fact (ignorantia facti) may excuse a
effect after fifteen days following the party from the legal consequence of his
completion of their publication either in the conduct; but not ignorance of law, for ignorantia
Official Gazette or in a newspaper of general juris neminem excusat [Floresca v. Philex
circulation in the Philippines, unless it is -
Mining, G.R. No. L-30642 (1985)]
otherwise provided. (As amended by E.O. No.
-

200) III. RETROACTIVITY OF LAWS;

is mandated by
VESTED RIGHTS PRINCIPLE
publication
Article 4 . Laws -hall have no retroactive effect unless the contrary is

General Rule:
,

law
provided

The clause "unless it is otherwise General Rule:

provided" refers to the date of effectivity and All statutes should be construed as having only
not to the requirement of publication itself, prospective operations.
-
which cannot, in any event, be omitted.
[Tañada v. Tuvera, G.R. No. L-63915 (1986)] Exceptions:
1. When the law itself expressly provides;
Publication is -indispensable in every case, but a. Exceptions to Exception:
the legislature may in its discretion provide that ● Ex post facto law
the usual fifteen-day period shall be shortened ● Impairment of the
or extended. [Tañada v. Tuvera, G.R. No. obligations in the contract
L-63915 (1986)] 2. In case of remedial statutes;
3. In case of curative statutes;

-
that laws that are internal in
It is presumed

Exception: nature are already circularized

a. Exceptions to the Exception:
Interpretative regulations and those merely ● It will violate the
internal in nature (i.e. regulating only the Constitution.
personnel of the administrative agency and not ● It will destroy the rights of
the public and letters of instruction issued by third persons.
administrative superiors relative to guidelines to ● Final judgment
be followed by their subordinates in the 4. In case of laws interpreting others;
performance of their duties) need not be 5. In case of laws creating new rights
published. [Villafuerte v. Codial, G.R. No. 222450 [Bona v. Briones, G.R. No. L-10806
-

(2020)] (1918)]; and Penal Laws favorable to

the accused [Art. 22, RPC].
II. IGNORANCE OF THE LAW;
IGNORANCE OF FACT
IV. MANDATORY, PROHIBITORY,
AND PERMISSIVE LAWS
Article 3, Civil Code. Ignorance of the law
excuses no one from compliance therewith.
Article 5, Civil Code. Acts executed
against the provisions of mandatory or

1
BOC 2024
 PERSONS AND FAMILY RELATIONS CIVIL LAW

prohibitory laws shall be void, except when General Rule:

the law itself authorizes their validity. Rights may be waived.
CAct shall considered void enforceable
Exceptions:
be and

1. If the waiver is contrary to law, public

Article 17, par. 3, Civil Code. Prohibitive
order, public policy, morals or good
laws concerning persons, their acts or
customs
property, and those which have for their
e.g. Contracts or agreements in
object public order, public policy and good
undue or unreasonable restraint of
customs shall not be rendered ineffective by
trade [Ferrazzini v. Gsell, G.R. No.
laws or judgments promulgated, or by
L-10712 (1916)]
determinations or conventions agreed upon in
2. If the waiver prejudices a third person
a foreign country.
3. If the alleged rights do not yet exist
4. If the right is a natural right- Ex Rights as provided in the Bill of
:
Rights

Acts contrary to directory, permissive or Acts 5. Waiver of an action for future fraud is
contrary to directory, permissive or suppletory void [Article 1171, Civil Code]
laws are not nullified by this article. It is not
possible to violate them. [Tolentino] VI. REPEAL OF LAWS
The violation of mandatory or prohibitory statute
renders
= the act illegal and void. [Tolentino] Article 7, Civil Code. Laws are repealed
only by subsequent ones, and their violation
V. WAIVER OF RIGHTS or non-observance shall not be excused by
disuse, or custom or practice to the contrary.

Article 6, Civil Code. Rights may be -

When the courts declare a law to be
-
·
waived, unless the waiver is contrary to law, inconsistent with the Constitution, the former
-

--
-

public order, public policy, morals, or good

- -
shall be void and the latter shall govern.
=

customs, or-
-
prejudicial to a third person with G constitution reign supreme
a right recognized by law. Administrative or executive acts, orders and
regulations shall be valid only when they are
-

not contrary to the laws or the Constitution.

Waiver: voluntary and intentional
relinquishment or abandonment of a known
TWO KINDS OF REPEAL [Tolentino]:
-

legal right or privilege. It has been ruled that a

waiver to be valid and effective must be
-
couched in clear and unequivocal terms which a. Express or Declared: contained in a special
leave
= no doubt as to the intention of a party to provision of a subsequent law; names the law
give up a right or benefit which legally pertains repealed.
to him. [RB Michael Press v. Galit, G.R. No.
153510 (2008)] b. Implied or Tacit: takes place when the
provisions of the subsequent law are
The waiver should be made in a positive incompatible or inconsistent with those of an
earlier law.
-

manner
-
[Dona Adela Export International Inc. v.
Tidcorp, G.R. No. 201931 (2015)].
The fundamental rule is that the legislature
Requisites of a Valid Waiver should be presumed to have known the existing
1. Existence of a right; laws on the subject and not have enacted

C
2. Knowledge of the existence thereof; and conflicting statutes. Hence, all doubts must be
3. An intention to relinquish the right resolved against any implied repeal, and all
[Herrera v. Borromeo, G.R. No. L-41171, efforts should be exerted in order to harmonize
(1987)]. and give effect to all laws on the subject.

2
Disposalof aproperta b BOC 2024
invalid
 PERSONS AND FAMILY RELATIONS CIVIL LAW

[Republic v. Marcopper Mining, G.R. No. 13174 IX. INTERPRETATION OF

(2000)] DOUBTFUL STATUTES
VII. JUDICIAL DECISION
Article 10, Civil Code. In case of doubt in
the interpretation or application of laws, it is
Article 8, Civil Code. Judicial decisions presumed that the lawmaking body intended
applying or interpreting the laws or the right and justice to prevail.
Constitution shall form part of the legal C Avoids injustice
system of the Philippines.

X. CUSTOM
Jurisprudence cannot be considered as an
independent source of law, it cannot create law.
[1 Camus 38 as cited in Tolentino] To consider would violate so
Article 11, Civil Code. Customs which are
the checks and balances because the
contrary to law, public order or public policy

C
J cannot create laws

The doctrine of stare decisis gives stability to

-
shall not be countenanced.
the courts and fills the gaps of the law to adapt C/Approved
to changing times. Article 12, Civil Code. A custom must be
A
legal principle that direct courts to adhere to previous judgments while
resolving a case with allegedly comparable facts proved as a fact, according to the rules of

·
The interpretation or construction placed by the
-

evidence.
Jurisprudence courts establishes the contemporaneous -

helps
the
in adapting to
changing times
legislative intent of the law. The latter as so
Custom is defined as “a rule of conduct formed by
-

interpreted and construed would thus constitute

a part of the law as of the date the statute is repetition of acts, uniformly observed (practiced)
enacted. It is only when a prior ruling of this as a social rule, legally binding and obligatory.” The
Court finds itself later overruled, and a different Court had occasion to state that “a local custom as
view is adopted, that the new doctrine may a source of right cannot be considered by a court
have to be applied prospectively in favor of of justice unless such custom is properly
parties who have relied on the old doctrine and >
established by competent evidence like any other
have acted in good faith in accordance fact. The same evidence, if not one of a higher
-

therewith. [Pesca v. Pesca, G.R. No. 136921 degree, should be required of a foreign custom Le
(2001)] [Yao Kee v. Sy-Gonzales, G.R. No. 55960 (1988)]. Being married
in a chinese village by
a
villager.
General Rule:
VIII. DUTY TO RENDER JUDGMENT
Customs must be proved⑦ as a fact according
to the rules of evidence [Art. 12, Civil Code].
Article 9, Civil Code. No judge or court
shall decline to render judgment by reason of Exception:
the silence, obscurity or insufficiency of the If there is already a E
decision rendered by the
laws. same court recognizing the custom. It
becomes an official act of the judicial
-

Art. 9 of the Civil Code talks about the principle

department in which the court may take
-

of equity which is justice with mercy. judicial notice [Sec. 2, Rule 129, Rules of
-
Court].
Exception:
This article does not apply to criminal XI. LEGAL PERIODS
prosecutions because where there is no law
punishing an act, the case must be dismissed.
[Tolentino] Section 31, Revised Administrative
The
Code (RAC). “Year” shall be understood to
judge may apply any
rules that he desire

as it is in with general interest,

as long harmony
order , morals good customs 3
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 PERSONS AND FAMILY RELATIONS CIVIL LAW

be twelve calendar months; “month” of thirty XII. GENERALITY PRINCIPLE OF

days, unless it refers to a specific calendar PENAL LAWS
month in which case it shall be computed
according to the number of days the specific
month contains; “day,” to a day of twenty-four Article 14, Civil Code. Penal laws and
hours; and “night,” from sunset to sunrise. those of public security and safety shall be
obligatory upon all who live or sojourn in
Philippine territory, subject to the principles of
1. Year - 12 calendar months public international law and to treaty
& Revised Administrative
code
stipulations. Territoriality principle
Sec. 31 of the RAC governs the computation of
-

legal periods with respect to counting a year

since it is a more recent law than Art. 13 of the Exemptions to the Territoriality
Civil code which indicated that years are 365 Principle under International Law
days each [Commissioner of Internal Revenue (Theory of Extraterritoriality):
vs. Aichi Forging Company of Asia, G.R. No. 1. When the offense is committed by a
184823 (2010)] foreign sovereign while in Philippine
territory

O
2. Month - 30 days, unless month is -
2. When the offense is committed by
identified
-
diplomatic representatives
provided
3. When the offense is committed in a
If E
months are designated by their name, they public or armed vessel of a foreign
shall be computed by the number of days which
-
country * Deemed be extension
-
to an
country which of the
in

they respectively have [Art., 13, Civil Code].

-
the abovementioned belong.

XIII. CONFLICT OF LAWS

3. Day – 24 hours
4. Night – Sunset to sunrise
5. Calendar week – Sunday to Saturday
6. Week – 7 - successive days, not -
A. JURISDICTION: FORUM NON
necessarily Sunday to Saturday. CONVENIENS
⑭
-

In computing a period, the first day shall be

excluded, and the last day included [Art. 13, Literally means “forum is inconvenient.” Thus,
Civil Code]. even if the court assumes jurisdiction over the
parties and the subject matter, it may decline to
try the case on the ground that the controversy
Rule if the last day is a weekend or a
may be more suitably tried elsewhere.
legal holiday
If the last day of the period, as thus computed,
falls on a Saturday, a Sunday, or a legal holiday
-

in the place where the court sits, the time shall B. CHOICE OF LAW: DOCTRINE OF
- -
not run until the next working- day [Sec. 1, Rule RENVOI; DOCTRINE OF
22, Rules of Court]. In counting should include only those of
-
, PROCESSUAL PRESUMPTION
working days

Exception for contractual obligations

Doctrine of Renvoi
-

The act will still be due despite the fact that the
last day falls on a weekend or a legal holiday. The court, in determining the question before it,
must take into account the whole law of the
This is because obligations arising from other jurisdiction, but also its rules as to conflict
contracts have the force of law between the
-
of laws, and then apply the law to the actual
contracting parties. [Paras] question which the rules of the other jurisdiction
prescribe [In the Matter of The Testate Estate of

4
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 PERSONS AND FAMILY RELATIONS CIVIL LAW

Edward E. Christensen, Deceased, G.R. No.

successions, both with respect to the order of
L-16749 (1963)].
succession and to the amount of successional
rights and to the intrinsic validity of
Doctrine of Processual Presumption testamentary provisions, shall be regulated by
When a foreign law is involved, it must be
-
the national law of the person whose
alleged
- and proved or it will be assumed to be -

succession is under consideration, whatever

the same as ours.
-

-
may be the nature of the property and
regardless of the country wherein said
-
a. Lex Nationali property may be found. (10a)
-

Article 15, Civil Code. Laws relating to Personal and real property are governed by the
family rights and duties, or to the status,
- -

- -
law of the country where it is situated (situs).
-
condition and legal capacity of persons are
- However, intestate and testate succession are
binding upon citizens of the Philippines, even governed by nationality principle and cannot be
though living abroad. Nationality principle made to follow#
Philippine rule. tothepersonwhoconsideration

It is true that owing to the nationality principle Art. 16, par. 2 is bolstered by Art. 1039 of the
embodied in Article 15 of the CC, only Philippine CC, which further provides that capacity to
nationals are covered by the policy against succeed is governed by the law of the nation of
-

absolute divorces, the same being considered the decedent. [Ancheta v. Guersey-Dalaygon,
-

contrary to our concept of public policy and G.R. No. 139868 (2006)]
morality. However, aliens may obtain divorces
abroad, which may be recognized in the c. Lex Contractus
Philippines, provided they are valid according to
- -

their national law. [Dacasin v. Dacasin, G.R. No.

-

168785 (2010)] Law of the place of making. Looks into where

“the last act is done which is necessary to bring
Exceptions the binding agreement into being so far as the
1. Aliens may obtain divorces abroad, acts of the parties are concerned.”
which may be recognized in the
Philippines, provided they are valid d. Lex Loci Celebrationis
according to their national law.
[Dacasin v. Dacasin, G.R. No. 168785
(2010)] Article 17, par. 1, Civil Code. The forms
2. Divorces obtained abroad by Filipino
-

and solemnities of contracts, wills, and other

citizens may now be validly recognized
-

public instruments shall be governed by the

in the Philippines but only in cases of
-

- laws of the country in which they are

mixed marriages involving a Filipino and
-

- executed.
a foreigner. [Republic v. Manalo, G.R.
-

No. 221029 (2018)]

The validity of a contract is governed by laws of
the land where it is made, executed, or to be
b. Lex Rei Sitae performed [Ambrose v. Suque-Ambrose, G.R.
No. 206761 (2021)].
immovable
Article 16, Civil Code. Real property as
-

e. Lex Domicilii
---
well as personal property is subject to the law
Movable
of the country where it is situated.
The national law, the domiciliary law, or the law
However, intestate and testamentary of the place where the person was domiciled,

5
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 PERSONS AND FAMILY RELATIONS CIVIL LAW

which determines such matters as capacity to It is allowed when the court is evidently familiar
make a will, validity of such will, or succession to with such foreign law. [Delgado v. Republic, G.R.
property. No. L-2546 (1950)]

f. Lex Fori Familiarity with the foreign law may be because

Philippine law was derived therefrom or the
judge had previously ruled upon it in other
The law of the forum or law of the country in cases. [Coquia and Aguiling-Pangalangan]
which an action is brought
Burden of Proof
It governs all procedural matters as The party whose cause of action or defense
distinguished from substantive rights and applies depended upon the foreign law has the burden
whenever the content of the otherwise of proving the foreign law.
applicable foreign law is excluded from
application. [Alcala v. Alcañeses, G.R. No. Such foreign law is treated as a question of fact
187847 (2021)] to be properly pleaded and proved in
conformity with the law of evidence of the state
g. Lex Loci Delicti where it is presented.

The law of the place where the delict was D. RECOGNITION AND ENFORCEMENT
committed governs matters affecting the OF FOREIGN JUDGMENT
substantive rights of the parties. [Alcala v.
Alcañeses, G.R. No. 187847 (2021)]
Section 48, Rule 39, Rules of Civil
h. Lex Loci Solutionis Procedure. Effect of foreign
judgments or final orders. – The effect
Law of the place of performance governs all of a judgment or final order of a tribunal of a
matters relating to the: foreign country, having jurisdiction to render
the judgment or final order is as follows:
a. Time (a) In case of a judgment or final order upon
b. Place and manner of performance a specific thing, the judgment or final order is
c. Sufficiency of performance conclusive upon the title to the thing; and
d. Valid excuses for non-performance (b) In case of a judgment or final order
against a person, the judgment or final order
is presumptive evidence of a right as between
the parties and their successors in interest by
C. RECOGNITION AND ENFORCEMENT a subsequent title.
OF FOREIGN LAW
In either case, the judgment or final order
may be repelled by evidence of a want of
General Rule: jurisdiction, want of notice to the party,
Judge is not authorized to take judicial notice of collusion, fraud, or clear mistake of law or
foreign law and is presumed to know only
-
fact.
domestic law.
-

There is an evident distinction between a

Exception: foreign judgment in an action in rem and one in
When judicial notice is allowed. [Rule 129,
personam. For an action in rem, the foreign
Section 1, Rules of Court]
judgment is deemed conclusive upon the title
to the thing, while in an action in personam, the
foreign judgment is presumptive, and not

6
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 PERSONS AND FAMILY RELATIONS CIVIL LAW

conclusive, of a right as between the parties excessive or unduly harsh; there must be no
and their successors in interest by a subsequent intention to injure another.
title. However, in both cases, the foreign
judgment is susceptible to impeachment in our
local courts on the grounds of want of A. ACT CONTRA BONUS MORES
jurisdiction or notice to the party, collusion,
fraud, or clear mistake of law or fact. Thus, the
party aggrieved by the foreign judgment is Article 21, Civil Code. Any person who
entitled to defend against the enforcement of wilfully causes loss or injury to another in a
such decision in the local forum. The party manner that is contrary to morals, good
attacking a foreign judgment has the burden of customs or public policy shall compensate the
overcoming the presumption of its validity. latter for the damage.
[Mijares v. Granada, G.R. No. 139325 (2005)]

Elements [Albenson v. CA, G.R. No. 88694

HUMAN RELATIONS (1993)]
1. There is an act which is legal;
2. But which is contrary to morals, good
I. ABUSE OF RIGHTS customs, and public policy; and
3. It is done with intent to injure.

Article 19, Civil Code. Every person Does a “willful” act require malice or
must, in the exercise of his rights and in the
deceit?
performance of his duties, act with justice,
Yes. The Code uses the motive-laden word
give everyone his due, and observe honesty
“willfully” rather than the comparatively weaker
and good faith.
word “intentionally.”
An act that is “willful” connotes an evil or
Note: On its own, Article 19 is not actionable. malicious motive, while an act that is merely
While Article 19 lays down a rule of conduct for intentional has ordinarily no such implication
the government of human relations and for the [Carpio, Antonio T., Intentional Torts in
maintenance of social order, it does not provide Philippine Law, 47 PHIL L.J. 649 (1972)].
a remedy for its violation. Generally, an action
for damages under either Article 20 or Article B. BREACH OF PROMISE OF
21 would be proper. [Tocoms Philippines v. MARRIAGE
Philips Electronics, G.R. No. 214046 (2020);
Globe MacKay Cable and Radio Corp. v. CA, Mere breach of promise to marry is not an
G.R. No. 81262 (1989)] actionable wrong. But to formally set up a
wedding and go through the above-described
Elements [Albenson v. CA, G.R. No. 88694 preparation and publicity, only to walk out of it
when the matrimony is about to be solemnized,
(1993)]:
is quite different. This is palpably and
1. There is a legal right or duty;
unjustifiably contrary to good customs.
2. Which is exercised in bad faith;
[Wassmer v. Velez, G.R. No. L-20089 (1964)]
3. For the sole intent of prejudicing or
injuring another. [California Clothing v.
Quiñones, G.R. No. 175822 (2013)]. II. UNJUST ENRICHMENT

Test of abuse of rights Unjust enrichment is a term used to depict

No hard and fast rule; it depends on the result or effect of failure to make remuneration
circumstances of each case. The exercise of a of or for property or benefits received under
right must be in accordance with the purpose circumstances that give rise to legal or equitable
for which it was established, and must not be obligation to account for them; to be entitled to

7
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 PERSONS AND FAMILY RELATIONS CIVIL LAW

remuneration, one must confer benefit by The restitution must cover the loss suffered by
mistake, fraud, coercion, or request. [Shinryo the plaintiff but it can never exceed the amount
Company Inc v. RRN Incorporated, G.R. No. of unjust enrichment of the defendant if it is less
172525 (2010)] than the loss of the plaintiff.

Elements:
Article 22, Civil Code. Every person who 1. That the defendant has been enriched;
through an act of performance by another, or 2. That the plaintiff has suffered a loss;
any other means, acquires or comes into 3. That the enrichment of the defendant is
possession of something at the expense of without just or legal ground; and
the latter without just or legal ground, shall 4. That the plaintiff has no other action
return the same to him. based on contract, crime or quasi-delict.

III. THOUGHTLESS
Article 23, Civil Code. Even when an act
EXTRAVAGANCE
or event causing damage to another’s
property was not due to the fault or
negligence of the defendant, the latter shall Article 25, Civil Code. Thoughtless
be liable for indemnity if through the act or extravagance in expenses for pleasure or
event he was benefited. display during a period of acute public want or
emergency may be stopped by order of the
courts at the instance of any government or
Article 2142, Civil Code. Certain lawful, private charitable institution.
voluntary and unilateral acts give rise to the
juridical relation of quasi-contract to the end
that no one shall be unjustly enriched or IV. TORTIOUS INTERFERENCE
benefited at the expense of another.
Article 26, Civil Code. Every person shall
respect the dignity, personality, privacy and
Article 2143, Civil Code. The provisions peace of mind of his neighbors and other
for quasi-contracts in this Chapter do not persons. The following and similar acts,
exclude other quasi-contracts which may though they may not constitute a criminal
come within the purview of the preceding offense, shall produce a cause of action for
article. damages, prevention and other relief:

One person should not be permitted to unjustly (1) Prying into the privacy of another’s
enrich himself at the expense of another, but residence;
should be required to make restitution of, or for
property or benefits received, retained, or (2) Meddling with or disturbing the private life
appropriated where it is just and equitable that or family relations of another; dumrrI
such restitution be made, and where such action
involves no violation or frustration of law or (3) Intriguing to cause another to be alienated
opposition to public policy, either directly or from his friends;
indirectly.
(4) Vexing or humiliating another on account
Enrichment at the expense of another is not per of his religious beliefs, lowly station in life,
se forbidden. It is such enrichment without just place of birth, physical defect, or other
or legal cause that is contemplated here. Just personal condition.
and legal cause is always presumed, and the
plaintiff has the burden of proving its absence.

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

Article 26 specifically applies to intentional acts determines the nature and number of rights of
which fall short of being criminal offenses. It an individual. [Tolentino]
itself expressly refers to tortious conduct which
“may not constitute criminal offenses.” Juridical Capacity and Capacity to Act
Distinguished
Note: Coverage of Art. 26 is not limited to those
enumerated therein, the enumeration being
merely examples of acts violative of a person’s Juridical Capacity Capacity to Act
rights to dignity, personality, privacy and peace Fitness of a person to Power to do acts with
of mind. Other “similar acts” are also covered be the subject of legal legal effect
within the scope of the article. relations

Violation of Human Dignity Passive Active

The law seeks to protect a person from being
unjustly humiliated, so the court awarded moral Aptitude for the Aptitude to exercise
damages to the plaintiff who was accused by holding and rights
the respondent of having an adulterous enjoyment of right
relationship with another woman in the Inherent in natural Acquired (not
presence of his wife, children, neighbors and persons inherent) and may be
friends [Concepcion v. CA, G.R. No. 120706 lost
(2000)].
Lost upon death and Lost through death and
cannot be limited or may be restricted by
restricted other causes

Can exist without Must exist with juridical

PERSONS capacity to act capacity

Cannot be limited or May be restricted or

I. NATURAL PERSONS restricted limited

A. CAPACITY TO ACT Note: Juridical capacity can exist even without

capacity to act; the existence of the latter
implies that of the former. Full civil capacity is
a. Civil Personality
the existence of both capacity to act and
juridical capacity.
Person
Any being, physical, moral, real, juridical, and Capacity and incapacity depend on the law.
legal susceptible of rights and obligations or Therefore, they cannot be modified by
being the subject of legal relations. [Tolentino] agreements. It is a matter of public interest.
[Tolentino]
Personality
The aptitude of a person to become the subject b. Definitions
of legal relations is inherent in every natural
person and is lost only through death.
[Tolentino] Natural persons refer to individuals or human
beings who are created by procreation.
Status
The legal condition or class to which one Art. 40, Civil Code provides that the conceived
belongs in society or the legal and juridical child shall be considered born for all purposes
position of the individual in society, which that are favorable to it, provided it be born later
with the conditions specified in Art. 41, Civil

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

Code (see Conditions below). This proviso, artificial or juridical person for the
however, is not a condition precedent to the purposes of the settlement and
right of the conceived child; for if it were, the distribution of his estate which include
first part of Art. 40 would become entirely the exercise of the rights and the
useless and ineffective [Quimiguing v. Icao, 145 fulfillment of obligations that survived
Phil. 45 (1970)]. after his death. [Limjoco v. Intestate
Estate of Fragrante, 80 Phil. 776 (1948)]
Persons with presumptive or provisional
personality refer to a conceived child c. Capacity to Act of Natural
considered born for all purposes favorable to it,
Persons
provided it be born later with the conditions
under Art. 41, Civil Code. [Article 40, Civil Code]
Capacity to act refers to the power to do acts
Conditions [Article 41, Civil Code] with legal effect. [Article 37, Civil Code]
1. It is alive at the time it is completely
Presumption of Capacity: Capacity to act
delivered from the mother’s womb;
must be supposedly attached to a person who
or
has not previously been declared incapable, and
2. If it had an intra-uterine life of less such capacity is presumed to continue for so
than seven months, it has not died long as the contrary is not proved. [Standard Oil
within twenty-four hours after its Co. v. Arenas, 19 Phil. 363 (1911)]
complete delivery from the maternal
womb Restrictions on Capacity to Act
Circumstances which modify, limit, or restrict
Characteristics of Fetal Personality capacity to act:
1. Limited – because it only has rights for 1. Minority
purposes favorable to it 2. Insanity or imbecility
2. Provisional/Conditional – because it 3. Deaf-mutism
should be born alive later before the 4. Civil Interdiction (Penalty)
rights can be claimed. 5. Prodigality
3. Can enjoy rights – inherit by will or 6. Family relations
intestacy and be given donations even 7. Alienage
before birth. 8. Absence
9. Insolvency and trusteeship
A conceived child has a provisional personality
for all purposes favorable to it. Religious belief and political opinion do not limit
the capacity to act. [Article 39, Civil Code]
1. It is entitled to support. [Quimiguing v.
Icao, supra.] d. Restrictions
2. It may inherit or succeed. [Article 1025,
i. Minority
Civil Code]

3. It may receive donations. [Article 742, Art. 234, Family Code is amended, lowering the
Civil Code] age of emancipation/majority from 21 to 18
years. Arts. 235 and 237 of the Family Code are
Period of Conception: The first 120 days of the repealed. [Rep. Act No. 6809 (1989)]
300 days preceding the birth of the child.
[Article 166, Family Code] Effects on Contracts (Civil Code)
1. They cannot give consent to a contract.
4. Quasi-Personality refers to the estate of [Article 1327]
the deceased which is considered an
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 PERSONS AND FAMILY RELATIONS CIVIL LAW

2. The minority cannot be asserted by the parents/guardians, are void. [Article 35,
other party in an action for annulment. Family Code]
[Article 1397]
3. Not obliged to make restitution except Effect on Crimes [Rep. Act No. 9344
insofar as he has been benefited. (2006)]
[Article 1399]
4. Minor has no right to demand the
General Rule:
thing/price voluntarily returned by him.
Exempted from criminal liability
[Article 1426]
5. Minor has no right to recover voluntarily
paid sum or delivered thing if consumed Exception:
in good faith. [Article 1427] Acted with discernment, and the minor is
6. Must pay a reasonable amount for between 15 and 18 years of age
necessaries delivered to him. [Article
1489] ii. Insanity
7. A contract where one of the parties is a
minor is voidable. [Article 1390(1)]
8. A contract is unenforceable when both Insanity includes many forms of mental
of the parties are minors (incapable of disease, either inherited or acquired. A person
giving consent). [Article 1403(3)] may not be insane but only mentally deficient
9. The legal capacity of contracting parties (idiocy, imbecility, feeble-mindedness).
is an essential requisite of marriage.
[Article 2(1), Family Code] Insanity is the complete deprivation of reason or
intelligence or power to discern. [People v.
Estoppel works against minors who misrepresent Austria, 328 Phil. 1208 (1996)]
their ages in a contract and are compelled to
comply with its terms. [Mercado v. Espiritu, 37 Prevailing Presumption:
Phil. 215 (1917)] Every person is of sound mind in the absence of
proof to the contrary. [Article 800, Civil Code]
However, when a minor made no active
misrepresentation as to his minority and such Effect on Contracts
minority is known to the other party, the 1. Incapacity to give consent to a contract.
contract may be annulled by the minor upon [Article 1327, Civil Code]
attaining age the age of majority. [Bambalan v. 2. Contracts entered into during lucid
Maramba, 51 Phil. 417 (1928)] intervals are valid. [Article 1328, Civil
Code]
Failure of the minors to disclose their age does 3. Burden of proof lies with the party
not constitute fraud. Because it was merely a asserting that the contract was entered
passive misrepresentation, they were not into by the insane during a lucid interval
stopped and cannot be legally bound by their 4. Restitution of benefits [Article 1399, Civil
signature in the contract. They do not have to Code]
pay the interest, they may just return their 5. Voidable if one of the parties is insane
portion of the loan. However, the minors are [Article 1390, Civil Code]
obliged to make restitution insofar as they have 6. Unenforceable if both of the parties are
benefited from what they have received. insane [Article 1403, Civil Code]
[Braganza v. Villa Abrille, 105 Phil. 456 (1959)]
Effect on Marriage
Effects on Marriage Marriage may be annulled if either party was of
1. May not yet contract marriage. [Article unsound mind unless such party, after coming to
5, Family Code] reason, freely cohabited with the other as
2. Marriages, where one of the parties is husband and wife. [Article 45(2), Family Code]
below 18, even with the consent of
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 PERSONS AND FAMILY RELATIONS CIVIL LAW

Action for annulment of marriage must be filed Effect on Marriage and Property
by the sane spouse who had no knowledge of 1. For the validity of marriage settlements,
the other’s insanity, or by any relative/guardian the participation of the guardian shall be
of the insane before the death of either party; or indispensable [Article 123, Civil Code]
by the insane spouse during a lucid interval or 2. Sentence of one’s spouse to a penalty
after regaining sanity. [Article 47(2), Family that carries with it civil interdiction is
Code] sufficient to cause for judicial separation
of property. [Article 135(1), Family
iii. State of being deaf-mute Code]
3. The administration of the exclusive
property of either spouse may be
Effect on Contracts transferred by the court to the other
1. Cannot give consent to a contract if spouse when one of them is sentenced
he/she also does not know how to write. to civil interdiction. [Article 142(3),
[Article 1327, Civil Code] Family Code]
2. Can make a valid will, if able to do so; 4. Does not have the right to manage his
otherwise, he shall designate two property and the right to dispose of
persons to read it and communicate to such by any act inter vivos. [Article 34,
him, in some practicable manner, the Revised Penal Code]
contents thereof [Article 807, Civil Code]
3. Cannot be a witness to the execution of
a will [Article 820, Civil Code]
vi. Family relations
4. Voidable if one of the parties is a
deaf-mute who does not know how to Familyrelations include those:
write. [Article 1390(1), Civil Code] 1. Between husband and wife;
5. Unenforceable if both of the parties are 2. Between parents and children;
deaf-mutes and do not know how to 3. Among other ascendants and
write. [Article 1403, Civil Code] descendants; and
4. Among brothers and sisters, whether of
iv. Prodigality the full- or half-blood [Article 150,
Family Code]

The word “incompetent” includes prodigals.

Effect on Litigation
[Sec. 2, Rule 92, Rules of Court]
Marital Disqualification Rule or
Note: It is not the circumstance of prodigality,
but the fact of being under guardianship that Spousal Immunity [Sec. 23, Rule 130,
restricts the capacity to act. Rules of Court]

v. Civil interdiction Elements

a. Marriage is valid and subsisting at the
time of the offer of testimony
It is an accessory penalty imposed upon persons b. The “other” spouse is a party to the
who are sentenced to a principal penalty not action, either as a plaintiff or defendant
lower than reclusion temporal. [Article 41, c. Without the consent of the affected
Revised Penal Code] spouse

Effect on Parental/Marital Authority Exception:

Offender is deprived of the rights of parental Spouse may testify against the other even
authority, or guardianship, and of marital without the consent of the latter:
authority. [Article 34, Revised Penal Code] a. In a civil case by one against the other;
or

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

b. In a criminal case for a crime committed viii. Alienage [Cordora v.

by one against the other or the latter’s COMELEC, 599 Phil. 168
direct descendants/ascendants. (2009)]

Marital Privilege [Sec. 24(a), Rule 130,

Rules of Court] Dual Citizenship Dual Allegiance
Involuntary Result of individual’s
A husband or wife, during or after the marriage,
volition
cannot be examined without the consent of the
other as to any communication received in Arises when, as a Refers to the situation
confidence by one from the other during the result of the in which a person
marriage. concurrent simultaneously owes,
application of the by some
Exception: different laws of two or positive act, loyalty to
Spouse may testify against the other even more states, a person two or more states
without the consent of the latter is simultaneously
considered a national
a. In a civil case by one against the other; by said states
or
b. In a criminal case for a crime committed
by one against the other or the latter’s ix. Insolvency and
direct descendants/ascendants. trusteeship

Parental and Filial Privilege Rule [Sec. A debtor who has been found insolvent cannot
25, Rule 130, Rules of Court] dispose of his property or receive payments.
[Act No. 1956 (1909)]
No person shall be compelled to testify against
his or her: a. Commencement and End of Civil
a. Parents; Personality
b. Other direct ascendants;
c. Children; or
d. Other direct descendants Article 40, Civil Code. Birth determines
personality; but the conceived child shall be
Exception: considered born for all purposes that are
When such testimony is indispensable in a favorable to it, provided it be born later with
crime: the conditions specified in the following
a. Against that person or article.
b. By one Parent against the other.

vii. Absence Article 41, Civil Code. For civil purposes,

the foetus is considered born if it is alive at
Absence is a limitation because it is a ground for the time it is completely delivered from the
the judicial appointment of a representative. mother’s womb. However, if the foetus had an
[Article 381, Civil Code] intra-uterine life of less than seven months, it
is not deemed born if it dies within
Note: Refer to the separate discussion on twenty-four hours after its complete delivery
Absence. from the maternal womb.

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Article 42, Civil Code. Civil personality is called to succeed each other, as to which of
extinguished by death. them died first, whoever alleges the death of
one prior to the other, shall prove the same;
The effect of death upon the rights and in the absence of proof, it is presumed that
obligations of the deceased is determined by they died at the same time and there shall be
law, by contract and by will. no transmission of rights from one to the
other.

For civil purposes, the fetus is considered born if

it is alive at the time it is completely delivered The following presumptions are satisfactory if
from the mother’s womb. [Article 41, Civil Code] uncontradicted, but may be contradicted and
overcome by other evidence:
Because of the expectancy that it may be born,
the law protects it and reserves its rights, That except for purposes of succession, when
making its legal existence, if born alive, retroact two persons perish in the same calamity, such
to the moment of its conception. [Tolentino] as wreck, battle, or conflagration, and it is not
shown who died first, and there are no
particular circumstances from which it can be
When Considered inferred, the survivorship is determined from
Intrauterine Life
Born the probabilities resulting from the strength and
7 months or If alive (e.g. can breathe age of the sexes, according to the following
more independently, etc. upon rules:
delivery)
1. If both were under the age of fifteen
Less than 7 If alive after completion years, the older is deemed to have
months of 24 hours from survived;
delivery 2. If both were above the age of sixty, the
younger is deemed to have survived;
3. If one is under fifteen and the other
However: above sixty, the former is deemed to
1. The State shall equally protect the life of have survived;
the mother and the life of the unborn 4. If both be over fifteen and under sixty,
from conception. [Sec. 12, Article II, and the sex be different, the male is
1987 Constitution] deemed to have survived; if the sex be
2. The life of a new human being the same, the older;
commences upon fertilization. [Imbong 5. If one be under fifteen or over sixty, and
v. Ochoa, 732 Phil. 1 (2014)] the other between those ages, the latter
is deemed to have survived. [Sec. 3(jj),
The Child and Youth Welfare Code further Rule 131, Rules of Court]
provides that the civil personality of the child
shall commence from the time of his
conception, for all purposes favorable to II. JURIDICAL PERSONS
him, subject to the requirements of Article
41 of the Civil Code. [Article 5, Child and
Article 44, Civil Code. The following are
Youth Welfare Code]
juridical persons:

b. Proof of Death (1) The State and its political subdivisions;

(2) Other corporations, institutions and

Article 43, Civil Code. If there is a doubt, entities for public interest or purpose, created
as between two or more persons who are by law; their personality begins as soon as

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patrimonial relations–it has no family and

they have been constituted according to law;
personal rights. [Tolentino]
(3) Corporations, partnerships and
associations for private interest or purpose to Juridical persons may:
which the law grants a juridical personality,
separate and distinct from that of each 1. Acquire and possess the property of all
shareholder, partner or member. kinds
2. Incur obligations
3. Bring civil or criminal actions
[Tolentino]
Article 45, Civil Code. Juridical persons
mentioned in Nos. 1 and 2 of the preceding
article are governed by the laws creating or Juridical persons are not completely at par with
recognizing them. natural persons as to capacity because they
cannot exercise rights that presuppose physical
Private corporations are regulated by laws of existence, such as family rights, making of wills,
general application on the subject. etc. But like natural persons, they can have
nationality, a domicile, a name, and a right to
Partnerships and associations for private reputation. They can own and possess property,
interest or purpose are governed by the dispose of such property, enter into contracts,
provisions of this Code concerning and inherit by will. They can also incur
partnerships. obligations. [Tolentino]

III. DOMICILE; RESIDENCE

Article 46, Civil Code. Juridical persons
may acquire and possess property of all kinds, Domicile of Natural Persons
as well as incur obligations and bring civil or The place of their habitual residence [Article 50,
criminal actions, in conformity with the laws Civil Code]
and regulations of their organization.
Domicile of Juridical Persons
The place where their legal representation is
Article 47, Civil Code. Upon the established, or where they exercise their primary
dissolution of corporations, institutions and functions unless there is a law or other provision
other entities for public interest or purpose that fixes the domicile. [Article 51, Civil Code]
mentioned in No. 2 of article 44, their
property and other assets shall be disposed of Domicile and Residence, as
in pursuance of law or the charter creating distinguished
them. If nothing has been specified on this While domicile is permanent (there is intent to
point, the property and other assets shall be remain), the residence is temporary and may be
applied to similar purposes for the benefit of changed anytime (there is no necessary intent
the region, province, city or municipality to remain).
which during the existence of the institution
derived the principal benefits from the same. Requisites of Domicile

A juridical person is an abstract being, formed 1. Residence or bodily appearance in a

for the realization of collective purposes, to new locality;
which the law has granted capacity for rights 2. Intention to permanently remain there
and obligations. The entity must be recognized (animus manendi); and
as having its own rights and obligations which 3. An intention to abandon the old domicile
are not that of its component members. Its (animus non revertendi).
personality is manifested only in the realm of

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

There must be animus manendi coupled with B. SURNAME OF WIFE DURING

animus non revertendi. One must have an actual AND AFTER MARRIAGE
change of domicile and a bona fide intention to
establish a new residence. [Poe-Llamanzares v.
COMELEC, 782 Phil. 292 (2016)] a. During Marriage

IV. SURNAMES Prevailing Rule

A married woman may use:
A. SURNAME OF CHILDREN Under the Civil Code
1. Her maiden first name and surname
and add her husband’s surname;
a. Legitimate and Legitimated 2. Her maiden first name and her
husband’s surname;
Reading Art. 364 of the Civil Code together with 3. Her husband’s full name, but
the State's declared policy to ensure the prefixing a word indicating that she
fundamental equality of women and men before is his wife, such as “Mrs.” [Art. 370,
the law, a legitimate child is entitled to use the Civil Code]; or
surname of either parent as a last name. [Alanis 4. Her maiden name [Remo v. The
III v. CA, 890 Phil. 74 (2020)] Honorable Secretary of Foreign
Affairs, G.R. No. 169202 (2010)].

b. Adopted A woman is not prohibited from continuously

using her maiden name once she is married
An adopted child shall bear the surname of the because when a woman marries, she does not
adopter. [Article 149(1), Family Code] change her name but only her civil status.
[Remo v. The Honorable Secretary of Foreign
In addition, under the Domestic Administrative Affairs, supra]
Adoption and Alternative Child Care Act, the
adopter has the right to choose the name by Exception
which the child is to be known, consistent with Under the Philippine Passport Act, as amended,
the best interest of the child. [Sec. 41(2), Rep. once a married woman opted to adopt her
Act. No. 11642 (2022)] husband’s surname in her passport, she may not
revert to the use of her maiden name, except in
c. Illegitimate the following cases:
1. Death of Husband;
2. Divorce;
Illegitimate children shall use the surname of 3. Annulment; or
their mother. However, illegitimate children may 4. Nullity of Marriage. [Rep. Act. No. 8239
use the surname of their father if their filiation (1996)]
has been expressly recognized by the father
through the record of birth appearing in the civil
b. After Marriage
register, or when an admission in a public
document or private handwritten instrument is
made by the father. [Art. 176, Civil Code, as Separation Wife’s Surname
amended by R.A. 2955 (2004)]
Annulment Wife is the guilty
It is the illegitimate child who is given the choice (Art. 371, Civil Code) party
on the surnames by which they will be known Shall resume using her
[Grande v. Antonio, G.R. No. 206248 (2014)]. maiden name

Wife is the innocent

party

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

Wife has the choice to Who May Be Appointed

continue using The spouse present shall be preferred, when
husband’s surname or there is no legal separation.
her maiden name
If there is no spouse, any competent person
Exception: The court may be appointed by the court. [Article 382,
decrees otherwise, or Civil Code]
she or former husband Safeguarding the Absentee’s Rights
is married again to and Properties
another person. The judge shall specify the power, obligations,
and remuneration of the absentee’s
representative, regulating them, according to
Legal Separation (Art. The wife shall continue the circumstances, by the rules concerning
372, Civil Code) using her name and guardians. [Article 383, Civil Code]
surname employed
before the legal
separation. b. Declaration of Absence

Death of the Husband A widow may use the

When Absence May Be Declared
(Art. 373, Civil Code) deceased husband’s
A person’s absence may be declared:
surname as though he
1. After two years have elapsed without
were
any news about the absentee or since
still living, in
the receipt of the last news; or
accordance with
2. After five years have elapsed, in case
Art. 370, Civil Code.
the absentee left a person in charge of
the administration of his property.
V. ABSENTEES [Article 384, Civil Code]

A. CIVIL CODE PROVISIONS Who May Ask for the Declaration of

Absence
a. Provisional Measures in Case 1. The spouse present;
of Absence 2. The heirs instituted in a will, who may
present an authentic copy of the same;
3. The relatives who may succeed by the
General Rule:
law of intestacy;
A judge, at the instance of an interested party, a
4. Those who may have, over the property
relative, or a friend, may appoint a person to
of the absentee, some right
represent the absentee in all that may be
subordinated to the condition of his
necessary.
death. [Article 385, Civil Code]
The same shall be observed when under similar
Effectivity of the Judicial Declaration
circumstances, that power conferred by the
absentee has expired. [Article 381, Civil Code] of Absence
The judicial declaration of absence shall not take
effect until six months after its publication in a
Requisites
newspaper of general circulation. [Article 386,
1. A person disappears from his domicile.
Civil Code]
2. His whereabouts are unknown.
3. He did not leave an agent to administer
his property.

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

c. Administration of the Exception

Property of the Absentee If the absentee disappeared after the age of
seventy-five (75) years: An absence of five (5)
years shall be sufficient to open his succession.
Appointment of Administrator [Article 390, Civil Code]
An administrator of the absentee’s property shall
be appointed in accordance with Article 383.
Where Disappearance is Attendant
[Article 387, Civil Code]
with Dangerous Circumstance
On Alienation or Encumbrance of the
The absentee shall be presumed dead for all
Property Administered purposes, if he were absent under the following
The wife who is appointed as an administratrix circumstances:
of the husband’s property cannot alienate or
encumber the husband’s property; or that of the 1. Where the absentee is on board a vessel
conjugal partnership, without judicial authority. lost during a sea voyage, or an
[Article 388, Civil Code] aeroplane which is missing, who has not
been heard of for four (4) years since
Cessation of Administration [Article 389, the loss of the vessel or airplane;
Civil Code] 2. Where the absentee is in the armed
forces who have taken part in the war,
When Administration Ceases and has been missing for four (4) years.
1. When the absentee appears personally 3. Where the absentee has been in danger
or by means of an agent; of death under other circumstances and
2. When the death of the absentee is his existence has not been known for
proved and his testate or intestate heir four (4) years. [Article 391, Civil Code]
appears;
3. When a third person appears, showing In Case of the Absentee’s
by a proper document that he has Reappearance or Proof of Existence
acquired the absentee’s property by If the absentee appears, or without appearing,
purchase or other titles. his existence is proved, he shall recover his
property in which it may have been alienated.
Effects of Cessation [Article 392, Civil Code]
1. The administrator shall cease in the
performance of his office, and;
2. The property shall be at the disposal of B. PRESUMPTIVE DEATH OF
those who may have a right thereto. ABSENT SPOUSE [ARTICLE 41,
FAMILY CODE]
d. Presumption of Death
General Rule:
General Rule: [Art. 390, Civil Code & Art. 41, Marriage contracted by any person during the
Family Code] subsistence of a previous marriage is void.
1. Seven (7) years, for all purposes, except
succession and marriage. Exceptions:
2. Ten (10) years, for the purpose of the When there is a subsequent marriage due to
opening of the succession, except ordinary absence, where:
marriage. 1. The prior spouse had been absent for
3. Four (4) consecutive years, for purposes four (4) consecutive years under
of remarriage. ordinary circumstances, or for two (2)
consecutive years under the
extraordinary circumstances in Art. 391,
Civil Code; and

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

2. The surviving spouse had a Legal capacity. For purposes of marriage, legal
well-founded belief that the absent capacity has three components:
spouse was already dead.
1. Age, i.e., 18 years or upward (Art. 5,
Family Code);

MARRIAGE AND FAMILY The attainment of the minimum age for

RELATIONS marriage should be reckoned on the date of the
marriage. [Sec. of Justice Op. No. 146, s. 1991]

I. GENERAL PRINCIPLES AND 2. Sex, where the contracting parties must be

of opposite sex, i.e., a male and a female;
REQUISITES OF MARRIAGE and

A person’s sex is an essential factor in marriage

Article 1, Family Code. Marriage is a and family relations. It is a part of a person’s
special contract of permanent union legal capacity and civil status. In this
between a man and a woman entered into connection, sex is defined as “the sum of
in accordance with law for the peculiarities of structure and function that
establishment of conjugal and family life. It distinguish a male from a female.” The sex of a
is the foundation of the family and an person is determined at birth, visually done by
inviolable social institution whose nature, the birth attendant (the physician or midwife) by
consequences, and incidents are governed examining the genitals of the infant.
by law and not subject to stipulation,
except that marriage settlements may fix Thus, the words “male” and “female” in
the property relations during the marriage everyday understanding do not include persons
within the limits provided by this Code. who have undergone sex reassignment.
Furthermore, considering that there is no law
legally recognizing sex reassignment, the
By the contract of marriage, a man and a determination of a person’s sex made at the
woman enter a joint life acting, living, and time of his or her birth, if not attended by error,
working as one. Whether under the common law is immutable. [Silverio v. Republic, 562 Phil. 953
or under the civil law, upon marriage, the (2007)]
husband and the wife become one single moral,
spiritual and social being, not only for the However, the Supreme Court eventually ruled
purpose of procreation, but also for the purpose that when the change in sex happens naturally,
of mutual help and protection physically, morally as when the person has Congenital Adrenal
and materially. [Saclolo v. Court of Agrarian Hyperplasia (CAH) or is “biologically or naturally
Relations, 106 Phil. 1038 (1960)] intersex,” the determining factor in their sex
classification would be what they, having
A. ESSENTIAL REQUISITES OF reached the age of majority, with good reason
thinks is their sex. Sexual development in cases
MARRIAGE
of intersex persons makes the sex classification
1. Legal capacity of the contracting parties at birth inconclusive, hence a change in name
who must be a male and a female; and and sex as registered in the birth certificate is
here allowed. [Republic v. Cagandahan, 586 Phil.
2. Consent freely given in the presence of
637 (2008)]
the solemnizing officer. (Art. 2, Family
Code)
3. Absence of legal impediments, as
provided in Articles 37 and 38, Family Code.

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

Consent. For purposes of marriage, consent ● registered with the civil registrar
must be freely given by the contracting parties general; and
and must be in the presence of the solemnizing ● acting within the limits of
officers. written authority granted to
The consent must refer to the contracting him;
parties’ bona fide intention to be married to the
other. i.e., to make the woman his wife. [People Provided, further, that one of the contracting
v. Santiago, 51 Phil. 68 (1927)] parties belongs to the solemnizing
officer’s church or religious sect.
When consent is absent, the marriage is void.
When consent is defective or vitiated, the 1. Any ship captain or airplane chief
marriage is voidable. only in the cases mentioned in Art. 31,
Family Code.
B. FORMAL REQUISITES OF
MARRIAGE
Article 31, Family Code. A marriage in
1) Authority of the solemnizing officer;
articulo mortis between passengers or crew
2) A valid marriage license except in the
members may also be solemnized by a ship
cases provided for in Chapter 2 of this
captain or by an airplane pilot not only while
Title; and
the ship is at sea or the plane is in flight, but
3) A marriage ceremony which takes place
also during stopovers at ports of call.
with the appearance of the contracting
parties before the solemnizing officer
and their personal declaration that they 2. Any military commander of a unit to
take each other as husband and wife in which a chaplain is assigned, in the
the presence of not less than two absence of the latter, during
witnesses of legal age. [Art. 3, Family military operation, likewise only in
Code] the cases mentioned in Art. 32, Family
Code.
Authority
Who may solemnize marriage?
Article 32, Family Code. A military
1. Any incumbent member of the commander of a unit, who is a commissioned
judiciary within the court’s jurisdiction officer, shall likewise have authority to
solemnize marriages in articulo mortis
With national jurisdiction: between persons within the zone of military
Chief Justice and Associate Justices of the operation, whether members of the armed
Supreme Court and Presiding Justices and forces or civilians.
Justices of the Court of Appeals, Sandiganbayan,
and Court of Tax Appeals 3. Any consul-general, consul or vice
consul in the case provided in Art. 10,
With limited jurisdiction: Family Code.
Trial court judges
In Art. 10, Family Code, the marriage to be
2. Any priest, rabbi, imam, or minister solemnized abroad by the consul-general,
of any church or religious sect, consul, or vice consul shall be between
provided that such solemnizing officer Filipino citizens only.
is:
● duly authorized by the 4. City or municipal mayors [Sec.
church/religious sect; 444(b)(1)(xviii), Rep. Act. No. 7610
(1991)]
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 PERSONS AND FAMILY RELATIONS CIVIL LAW

enable such party to appear personally

General Rule: Those solemnized by any person before the local civil registrar; [Article 28,
not legally authorized to perform marriages are Family Code]
void. 3. Marriage among Muslims or among
members of ethnic cultural communities
Exception: Unless such marriages were provided the same are solemnized according
contracted with either or both parties believing to their customs, rites, or practices; [Article
in good faith that the solemnizing officer had the 33, Family Code] and
legal authority to do so. [Article 35(2), Family 4. Marriage of a man and a woman who have
Code] lived together as husband and wife for at
least five years and without any legal
Good faith refers to questions of fact, not impediment to marry each other. [Article 34,
ignorance of the law (e.g. they did not know the Family Code]
priest’s license expired vs. thinking a Senator
could solemnize their marriage) [Legarda, Marriage Ceremony [Article 8, Family
Deriquito-Mawis, and Vargas].
Code]
An irregularity in a formal requisite will not The marriage shall be solemnized publicly in any
affect the validity of the marriage but those of the following places or venues:
responsible may be held criminally, civilly, 1. In the chamber of the judge or in his sala in
and administratively liable. [Articles 4, 7, open court, if the marriage is to be
Family Code] solemnized by a member of the judiciary;
2. In the church, chapel or temple of the
solemnizer concerned, if the marriage is to
Marriage License be solemnized by a religious solemnizer; or
3. In his office, if the marriage is to be
Article 9, Family Code. A marriage
solemnized by the consul-general, consul or
license shall be issued by the local civil
vice-consul.
registrar of the city or municipality where
either contracting party habitually resides,
except in marriages where no license is Exceptions.
required in accordance with Chapter 2 of this The marriage may be celebrated elsewhere in
Title. the following cases:
1. In cases where either both of the
contracting parties are at the point of
What if the marriage license was death;
issued elsewhere, other than the city 2. In cases of marriage contracted in remote
or municipality where either places in accordance with the provisions of
contracting party habitually resides? Article 29 of the Family Code; and
3. In cases where both of the parties to the
marriage requested the solemnizing officer
The marriage will still be valid since this act is
in writing and under oath to solemnize the
only a mere irregularity. A marriage license
marriage elsewhere.
issued elsewhere shall be valid in any part of the
Philippines. [Rabuya]
Effect of Absence or
Exceptions to the marriage license Defect/Irregularity of the Requisites
requirement: on the Marriage [Article 4, Family Code]
1. In cases where either or both of the
contracting parties are at the point of death; Defect or
[Article 27, Family Code] Requisites Absence
Irregularity
2. If the residence of either party is so located
that there is no means of transportation to Essential Void Voidable

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Formal Void No effect, but 5. If one of the parties in a subsequent

makes the party marriage is a party to a prior marriage
responsible for which has been annulled or judicially
such irregularity declared void but fails to comply with
civilly, criminally the requirement of article 52 of the
and/or Code; [Article 35(6), Family Code]
administratively
liable 6. If one of the parties to a marriage, at
the time of the celebration, was
psychologically incapacitated to comply
with the essential marital obligations of
The term “defect” is used for essential requisites
marriage; [Article 36, Family Code]
while “irregularity” is used for formal requisites.
7. If the marriage is incestuous [Article 37,
Family Code]
II. MIXED MARRIAGES,
FOREIGN MARRIAGES, AND 8. If the marriage is void by reason of
FOREIGN DIVORCE (Art. 26, public policy [Article 38, Family Code]
Family Code)
This means that the foreign marriage may still
be recognized as valid in the Philippines even if
A. FOREIGN MARRIAGES it would have fallen under Pars. 2 & 3, Art. 35,
Family Code so long as it is valid under the law
of the country in which it was solemnized.
General Rule
All marriages solemnized outside the Philippines,
Essential
in accordance with the laws in force in the Formal Requisites
Requisites
country where they are solemnized, and valid
there as such, shall also be valid in this country. Inherent in the Requirements
parties, carried independent of the
Exceptions everywhere parties
The following marriages are still void ab initio,
even if valid in the place where it was Lex Nationalii – Lex loci
celebrated: Laws relating to celebrationis –
family rights and If valid where
1. If both parties are Filipinos and either duties, or to the celebrated, then valid
one or both of them is below 18; [Article status, condition, and everywhere; forms of
35(1), Family Code] legal capacity of contracting marriage
persons are binding are to be regulated by
2. If one of the parties to a marriage is a upon Filipino citizens the law where it is
citizen of the Philippines and he or she even though living celebrated.
is below 18; abroad. [Art. 17, Civil Code]
[Art. 15, Civil Code]
3. If the marriage is bigamous or
polygamous; [Article 35(4), Family Code] Foreign marriages Foreign marriages may
void under the be void under the
4. If the marriage is contracted through Philippine law due to Philippine law due to
mistake of one contracting party as to lack of an essential the absence of a
the identity of the other; [Article 35(5), requisite, even if valid formal requisite
Family Code] under foreign laws, under foreign laws.
will not be
recognized.

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Proof of Foreign Marriage in order that it On the other hand, if a Filipino spouse became a
may be upheld: naturalized citizen of a foreign country and
1. Provisions of the foreign law, and subsequently obtained divorce in such country,
2. Celebration of the marriage in then the other Filipino spouse shall have the
accordance with said provisions. capacity to remarry. [Republic v. Orbecido III,
509 Phil. 108 (2005)]
B. FOREIGN DIVORCE
What is the effect of a same-sex
marriage of Filipino citizens celebrated
Where a marriage between a Filipino citizen and in a foreign country?
a foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien The marriage is void. If a Filipino contracts a
spouse capacitating him or her to remarry, the marriage abroad with a person of the same sex,
Filipino spouse shall have capacity to remarry whether such person is another Filipino or a
under Philippine law. [Article 26(2), Family foreigner, such a marriage shall not be
Code] recognized here. Art. 15 of the Civil Code applies
in this case. Moreover, in the Philippines, a
Par. 2, Art. 26, Family Code applies to mixed person has legal capacity to marry only a person
marriages where the divorce decree is: of the opposite sex. [Sta. Maria]

1. obtained by the foreign spouse;

2. obtained jointly by the Filipino and III. VOID MARRIAGES
foreign spouse; or
3. obtained solely by the Filipino spouse.
Types of Void Marriages [Tan-Andal v.
[Galapon v. Republic, 869 Phil. 351
(2020)] Andal, G.R. No. 196359 (2021)]:

Divorces obtained abroad by Filipino citizens 1. Absence of any essential or formal

may now be validly recognized in the Philippines requisites [Art. 35, Family Code]
but only in cases of mixed marriages involving a 2. Bigamous and polygamous marriages
Filipino and a foreigner. [Republic v. Manalo, 831 [Art. 35 (4), Family Code]
Phil. 33 (2018)] 3. Bad faith of both spouses in the
subsequent marriage [Art. 44, Family
Code]
What is the effect when the husband
4. Psychologically incapacitated spouse
and the wife, both are Filipinos, obtain
[Art. 36, Family Code]
divorce from the foreign country 5. Void subsequent marriages [Art. 35 (6),
where their marriage was celebrated? Family Code] for failure to comply with
Art. 53, Family Code
The divorce is void. 6. Incestuous Marriages [Art. 37, Family
Code]
Art. 15 of the Civil Code provides that laws 7. Void by reasons of public policy [Art. 38,
relating to family rights and duties, or to status, Family Code]
condition and legal capacity of persons are 8. Those subsequent bigamous marriage
binding upon citizens of the Philippines, even under Art. 41 of the Family Code if both
though living abroad. parties therein acted in bad faith [Art.
41, Family Code]
The Philippines has no divorce law; therefore, if
a Filipino divorcee had a subsequent marriage,
such marriage is void because the previous
marriage is still valid under the Philippine law.
[Garcia v. Recio, G.R. No. 138322 (2001)]

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

A. ABSENCE OF REQUISITES deny the accused the right to collaterally

attack the validity of a void ab initio
marriage in the criminal prosecution for
1. Those contracted by any party below
bigamy. [Pulido v. People, G.R. No. 220149,
eighteen years of age; [Article 35(1),
July 27, 2021]
Family Code]

2. Those solemnized by any person not C. BAD FAITH OF BOTH SPOUSES

legally authorized to perform marriages;
[Article 35(2), Family Code]
General Rule:
Exception: Unless such marriages were A marriage contracted by any person during
contracted with either or both parties the subsistence of a previous marriage shall
believing in good faith that the be null and void.
solemnizing officer had the legal
authority to do so. Exceptions:
Unless before the celebration of the
3. Those solemnized without license; subsequent marriage –
[Article 35(3), Family Code]
1. The prior spouse had been absent for
4. Those bigamous or polygamous four consecutive years; and
marriages; [Article 35(4), Family Code] 2. The spouse present had a well-founded
belief that the absent spouse was
5. Those contracted through mistake of already dead. [Article 41, Family Code]
one contracting party as to the identity
of the other; [Article 35(5), Family Code] What is “well-founded belief”?
6. Those subsequent marriages that are The law did not define what is meant by
void under Art. 53, Family Code; “well-founded belief.” It depends upon the
circumstances of each particular case. Its
determination, so to speak, remains on a
B. BIGAMOUS AND POLYGAMOUS case-to-case basis. To be able to comply with
MARRIAGES this requirement, the present spouse must prove
that his/her belief was the result of diligent
and reasonable efforts and inquiries to
Elements of a Bigamous Marriage
locate the absent spouse and that based on
1. Offender legally married;
these efforts and inquiries, he/she believes that
2. Marriage not legally dissolved;
under the circumstances, the absent spouse is
3. Offender contracts a subsequent
already dead. It requires exertion of active
marriage; and
effort (not a mere passive one). [Republic v.
4. Subsequent marriage has all the
essential requisites for validity, except Cantor, 723 Phil. 114 (2013)]
legal capacity. [Capili v. People, 713 Phil.
256 (2013)] In case of disappearance where there is danger
of death under the circumstances set forth in
The parties are not required to obtain a the provisions of Article 391 of the Civil Code, an
judicial declaration of absolute nullity absence of only two years shall be sufficient.
of a void ab initio first and subsequent (Only for purposes of remarriage) [Article
41, Family Code]
marriages in order to raise it as a
defense in a bigamy case. The same rule
now applies to all marriages celebrated
under the Civil Code and the Family Code.
Art. 40, Family Code did not amend Art.
349, Revised Penal Code, and thus, did not

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

Article 391, Civil Code. The following Republic v. CA Tan-Andal v.

shall be presumed dead for all purposes, Andal
including the division of the estate among the
heirs: The root cause of the MODIFIED.
psychological Presentation of
(1) A person on board a vessel lost during a incapacity must be (a) expert opinion is not
sea voyage, or an aeroplane which is missing, medically or clinically an indispensable
who has not been heard of for four years identified, (b) alleged requirement. The
since the loss of the vessel or aeroplane; in the complaint, (c) totality of evidence is
sufficiently proven by enough to prove
(2) A person in the armed forces who has experts and (d) clearly psychological
taken part in war, and has been missing for explained in the incapacity, e.g.,
four years; decision. Root cause presentation of
must be identified as a ordinary witnesses
(3) A person who has been in danger of death psychological illness who are present in
under other circumstances and his existence and its incapacitating the life of the
has not been known for four years. nature fully explained. spouses even before
Expert evidence may they contracted
be given by qualified marriage.
For the purposes of contracting the
psychiatrists and
subsequent marriage, the spouse present
clinical psychologists.
must institute a summary proceeding for the
declaration of presumptive death of the
The incapacity must be The juridical
absentee, without prejudice to the effect of
proven to be existing antecedence
reappearance of the absent spouse.
at “the time of the requirement is
celebration of the RETAINED.
D. PSYCHOLOGICAL INCAPACITY marriage.”

Such incapacity must The incurability

also be shown to be requirement is
medically or clinically MODIFIED. It is
permanent or incurable but in a
incurable. legal sense, i.e., only
with respect to a
specific partner
where the couple’s
respective
personality
structures are so
incompatible and
On psychological incapacity, please see antagonistic that the
comparison below: only result of the
union would be the
Republic v. CA Tan-Andal v. inevitable and
Andal irreparable
breakdown of the
The burden of proof to MODIFIED. Quantum marriage.
show the nullity of the of proof is “clear and
marriage belongs to convincing evidence.” Such illness must be The gravity
the plaintiff. grave enough to bring requirement is
about the disability of RETAINED.

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Under Art. 53, Family Code, a subsequent

Republic v. CA Tan-Andal v. marriage shall be null and void when the
Andal requirements under Art. 52, Family Code, are
not complied with.
the party to assume
the essential
obligations of F. INCESTUOUS MARRIAGES
marriage. Thus, “mild [Article 37, Family Code]
characterological
peculiarities, mood
changes, occasional Marriages between the following are
emotional outbursts” considered incestuous, and are
cannot be accepted as therefore void ab initio:
root causes.
1. Between ascendants and descendants of
The essential martial RETAINED. any degree, legitimate or illegitimate;
obligations that were and
failed to fulfill due to 2. Between brothers and sisters, whether
psychological of the full or half-blood.
incapacity are found in
Art. 68-71, FC (as
regards the husband G. VOID MARRIAGES BY REASONS
and wife) and Arts. OF PUBLIC POLICY [Article 38,
220, 221 and 225, FC Family Code]
(as parents to their
children).
Marriages between the following are
Interpretations of the RETAINED. considered against public policy, and
Catholic Church about are therefore void ab initio:
psychological
incapacity should be 1. Between collateral blood relatives,
given great respect by whether legitimate or illegitimate, up to
our courts. the fourth civil degree;
2. Between step-parents and step-children;
3. Between parents-in-law and
E. NON-COMPLIANCE WITH children-in-law; and
RECORDING REQUIREMENT 4. Between the adopting parent and the
AFTER DECLARATION OF adopted child;
NULLITY [Article 35(6), Family 5. Between the surviving spouse of the
adopting parents and the adopted child;
Code]
6. Between the surviving spouse of the
adopted child and the adopter;
7. Between an adopted child and a
Art. 52, Family Code. The judgment of legitimate child of the adopter;
annulment or of absolute of the marriage, the 8. Between the adopted children of the
partition and distribution of the properties of same adopter;
the spouses and the delivery of the children's 9. Between parties where one, with the
presumptive legitimes shall be recorded in the intention to marry the other, killed that
appropriate civil registry and registries of other person’s spouse or his or her own
property; otherwise, the same shall not affect spouse.
third persons.

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

H. BAD FAITH OF BOTH SPOUSES Confession of Judgment

IN SUBSEQUENT MARRIAGE The admission by one party admitting his/her
fault to cause the invalidity of the marriage.
Although the admission of guilt of the wife
Art. 44, Family Code. If both spouses of constitutes a confession of judgment, the
the subsequent marriage acted in bad faith, husband was also able to present other evidence
said marriage shall be void ab initio and all to support the allegation. Hence, there was no
donations by reason of marriage and collusion. [De Ocampo v. Florenciano, 107 Phil.
testamentary dispositions made by one in 35 (1960)]
favor of the other are revoked by operation of
law. Participation of the Office of the
Solicitor General (OSG)
The obvious intent of the A.M. No. 02-11-10-SC
Prescription period: The action or defense for was to require the OSG to appear as counsel for
the declaration of absolute nullity of a marriage the State in the capacity of a defensor vinculi
shall not prescribe. [Article 39, Family Code] (i.e., defender of the marital bond) to oppose
petitions for, and to appeal judgments in favor of
Who may file the Petition for Nullity of declarations of nullity of marriage under Art. 36,
Void Marriages? Family Code, thereby ensuring that only the
meritorious cases for the declaration of nullity of
General Rule: marriages based on psychological
Only the husband or wife may file the petition incapacity-those sufficiently evidenced by
[Sec. 2, Void and Voidable Marriage Rule] gravity, incurability, and juridical antecedence
would succeed. [Mendoza v. Republic, 698 Phil.
Exceptions: 241 (2012)]
1. Nullity of marriage cases commenced before
the effectiveness of A.M. No. 02-11-10-SC No Motion to Dismiss
2. Marriages celebrated during the Sec. 7, A.M. No. 02-11-10-SC prohibits the filing
effectiveness of the Civil Code [Carlos v. of a motion to dismiss in actions for annulment
Sandoval, 594 Phil. 534 (2008)] of marriage. [Aurelio v. Aurelio, 665 Phil. 693
(2011)]
Procedure in Attacking a Void
Marriage Effect of Pendency of Action for
Void Marriages may be attacked collaterally or Declaration of Nullity:
directly. 1. The court shall provide for the support of
the spouses.
Safeguard Against Collusion and No 2. The custody and support of the common
Confession of Judgment children, giving paramount consideration to
In all cases of annulment or declaration of their moral and material welfare, their
absolute nullity of marriage, no judgment shall choice of parent with whom they wish to
be based upon a stipulation of facts or remain.
confession of judgment. [Article 48(2), Family 3. The court shall also provide for visitation
Code] rights of the other parent. [Article 49, Family
Code]
Stipulation of Facts
An admission by both parties after agreeing to Effect of Final Judgment Declaring
the existence of any of the grounds or facts that Nullity
would constitute a void/voidable marriage. The effects provided for by Pars. 2, 3, 4 & 5,
Art. 43 and by Art. 44, Family Code shall also
apply in the proper cases to marriages that are
declared void ab initio or annulled by final

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

judgment under Arts. 40 and 45. [Article 50(1), A. THERE IS DEFECT IN CONSENT
Family Code]

Final judgment in such cases shall provide for: a. Lack of parental consent
1. Liquidation, partition, and distribution of the
properties of the spouses
That the party in whose behalf it is sought to
2. Custody and support of the common
have the marriage annulled was 18 years of
children
age or over but below 21, and the marriage
3. Delivery of their presumptive legitimes
was solemnized without the consent of the
parents, guardian or person having substitute
Unless: Such matters had been adjudicated in
parental authority over the party, in that order,
previous judicial proceedings [Article 50(2),
unless after attaining the age of 21, such party
Family Code]
freely cohabited with the other and both lived
together as husband and wife;
All creditors of the spouses/property regime
shall be notified of the proceedings for
liquidation. [Article 50(3), Family Code] Case 1
Who may institute By the party whose
In the partition, the conjugal dwelling and lot action for parent/guardian did
shall be adjudicated to the spouse with whom annulment not give consent
majority of the common children remain.
[Articles 102, 129, Family Code] Prescriptive period Within 5 years after
attaining the age of
Generally, children born or conceived within 21
void marriages are illegitimate.

Exceptions: Case 2
1. Children conceived or born before the Who may institute By the parent or
judgment under Art. 36 has become action for guardian or person
final and executory; and annulment having legal charge
2. Children conceived or born of of the minor
subsequent marriages under Art. 53.
[Article 54, Family Code] Prescriptive period At any time before
such party has
IV. VOIDABLE MARRIAGES reached the age of
21
A defect in any of the essential requisites shall
render the marriage voidable as provided in Art.
45, Family Code. [Article 4, Family Code] b. Insanity

Art. 45, Family Code (Voidable That either party was of unsound mind,
Marriages) and Art. 47, Family Code unless such party after coming to reason, freely
(Who May Institute Action for cohabited with the other as husband and wife;
Annulment and the Prescriptive
Periods)

A marriage may be annulled for any of the

following causes, existing at the time of the
marriage:

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

3. Concealment of a sexually
Who may ● By the sane
transmissible disease, regardless of
institute action spouse who had
its nature, existing at the time of the
for annulment no knowledge of
marriage; or
the other’s
insanity;
4. Concealment of drug addiction,
habitual alcoholism or
● By any relative,
homosexuality or lesbianism
guardian or
existing at the time of the marriage.
person having
legal charge of
No other misrepresentation or deceit as to
the insane; or
character, health, rank, fortune or chastity shall
constitute such fraud as will give grounds for
● By the insane
action for the annulment of marriage.
spouse during a
lucid interval or
after regaining d. Force, intimidation, undue
sanity influence

Prescriptive At any time before the

period death of either party That the consent of either party was obtained
by force, intimidation or undue influence,
unless the same having disappeared or ceased,
c. Fraud such party thereafter freely cohabited with the
other as husband and wife;

That the consent of either party was obtained Who may institute The injured party
by fraud, unless such party afterwards, with action for
full knowledge of the facts constituting the annulment
fraud, freely cohabited with the other as
husband and wife; Prescriptive period Within 5 years from
the time the force,
intimidation or undue
Who may institute The injured party influence
action for disappeared or
annulment ceased

Prescriptive period Within 5 years after

Take note of the clauses beginning with
the discovery of such
“unless”. Such acts will ratify the annullable
fraud
acts described in the preceding clause.
Ratification shall cure the defect, rendering the
What constitutes fraud? marriage valid.
(Art. 46, Family Code)
B. THERE IS PHYSICAL OR SEXUAL
1. Non-disclosure of a previous conviction
INCAPABILITY
by final judgment of the other party
of a crime involving moral turpitude;
a. Impotence
2. Concealment by the wife of the fact that
at the time of the marriage, she was
That either party was physically incapable of
pregnant by a man other than her
consummating the marriage with the other, and
husband;

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

such incapacity continues and appears to be grossly abusive conduct should only be
incurable; or committed by one spouse, i.e., the respondent,
and not by both to each other.
b. Sexually-Transmissible Disease With respect to the “child”, this ground does not
include repeated physical violence by the
Serious and Incurable.
respondent upon his/her own child (This
happens when the respondent has a child with
That either party was afflicted with a anyone other than his/her spouse). The law
sexually-transmissible disease found to be does not give a cause of action to the petitioner
serious and appears to be incurable. to file a case for legal separation on the ground
Who may institute The injured party that the respondent-spouse repeatedly inflicts
action for physical violence upon his or her own child with
annulment another person. However, such repeated
physical violence may be a cause to suspend or
Prescriptive period Within 5 years after terminate, depending on the severity of the
marriage violence, the parental authority of the
respondent upon his or her own minor child with
another person pursuant to Art. 231(1), Family
Take note that the physical incapability or the Code. [Tolentino]
sexually-transmitted disease must exist at the
time of the celebration of marriage. In either Acts of Violence according to the Anti- Violence
case, such incapability or disease was unknown Against Women and Their Children Act of 2004
to the other party when the marriage was (RA 9262) are also grounds for legal separation
solemnized. These two grounds are not subject under Art. 55 (1), Family Code.
for ratification. [Tolentino]

Under Art. 45, Family Code, marriage is b. Physical violence or moral

voidable, i.e., valid until annulled, as provided in pressure to compel the
Art. 47, Family Code. petitioner to change religious or
political affiliation;
V. LEGAL SEPARATION
The law does not require the violence or moral
An action for legal separation involves nothing pressure to be repeated. A single act of violence
more than the bed-and-board separation of the is sufficient to be a ground since religious and
spouses. It is purely personal in nature. [Lapuz political beliefs are human rights.
Sy v. Eufemio, 150 Phil. 204 (1972)]
A single incident is enough, but mere arguments
to persuade the petitioner to change should not
A. GROUNDS FOR LEGAL SEPARATION by itself be sufficient. There must be some
(Art. 55, Family Code) element of coercion present, whether physical or
moral. [Tolentino]
a. Repeated physical violence or
grossly abusive conduct c. Attempt of respondent to
directed against the petitioner, corrupt or induce the petitioner,
a common child, or a child of the a common child, or a child of the
petitioner; petitioner, to engage in
prostitution, or connivance in
The violence must be of serious degree and such corruption or inducement;
must be repeated to the extent that common life
with respondent becomes extremely difficult for Only one spouse should be guilty of these acts.
the petitioner. Repeated physical violence or Otherwise, if both spouses agreed that a spouse
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 PERSONS AND FAMILY RELATIONS CIVIL LAW

or a child engaged in prostitution, neither of the g. Contracting by the respondent

spouses should be allowed to obtain legal of a subsequent bigamous
separation. A person must come to court with marriage, whether in the
clean hands. [Tolentino] Philippines or abroad;

d. Final judgment sentencing the Bigamy is the act of illegally contracting a

respondent to imprisonment of second marriage despite full knowledge that the
more than six years, even if first marriage is still validly existing or without
pardoned; obtaining the needed judicial declaration of
presumptive death of the first spouse who was
It is immaterial what crime was committed, who absent for four or two consecutive years. [Article
was the victim in such crime, nor whether or not 41, Family Code]
a pardon was obtained. [Sta. Maria]
Whether the illegal subsequent marriage has
For as long as a final judgment convicted a been solemnized in the Philippines or abroad is
spouse for a crime and was sentenced to immaterial. So long as there has been a second
imprisonment for more than six years, it is bigamous marriage, wherever celebrated, a legal
enough justification for the innocent spouse to separation decree may issue. However, if the
obtain legal separation. [Tolentino] bigamous marriage were committed abroad, the
guilty party cannot be criminally prosecuted for
bigamy in the Philippines as our penal statutes
e. Drug addiction or habitual are territorial in nature. [Sta. Maria]
alcoholism of the respondent;
h. Sexual infidelity or perversion;
f. Lesbianism or homosexuality of
the respondent; Although adultery and concubinage are included
in acts of sexual infidelity, other acts of sexual
They may only be a ground for legal separation infidelity short of adultery and concubinage are
when they come to exist after the celebration of enough a spouse would constitute to betray the
marriage. [Tolentino] trust of the other spouse by having intimate love
affairs with other persons. Hence, even a
However, when these acts were concealed and husband’s single act of sexual intercourse with a
unknown to the party at the time of celebration woman other than his wife may warrant the
of marriage but only manifested after the issuance of a decree of legal separation. This is
marriage, this is a ground for annulment since true even if the husband and the woman did not
consent to enter into marriage was obtained commit concubinage. [Sta. Maria]
through fraud. [Articles 45(3), 46(4), Family
Code] Sexual perversion, on the other hand, includes
all unusual and abnormal sexual practices which
The other forms of psychoses, if existing at may be offensive to the feelings or sense of
the inception of marriage, like the state of a decency of either spouse. There must be the
party being of unsound mind or concealment of element of coercion by the respondent to make
drug addiction, habitual alcoholism, the petitioner submit the act, but if the act of
homosexuality or lesbianism, merely renders the sexual perversion is “mutual”, neither party can
marriage contract voidable pursuant to Art. 46, ask for legal separation because they are equally
Family Code. If drug addiction, habitual guilty of the perverse act. [Tolentino]
alcoholism, lesbianism or homosexuality should
occur only during the marriage, they become
mere grounds for legal separation under Art. 55,
Family Code. [Santos v. CA, 310 Phil. 21 (1995)]

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

i. Attempt by the respondent with the wife despite the wife’s cruelty.
against the life of the petitioner; “Although he did not wish it, [he did it]
or eventually for the sake of peace” [De Ocampo v.
Florenciano, supra.]
This implies that there must be the intent to kill.
Therefore, it must constitute attempted or b. Consent by the aggrieved party
frustrated parricide. [Tolentino] to the commission of the
offense – before the
Legal separation cannot be obtained when: commission of the offense; may
1. The spouse caught the other in flagrante be expressed [e.g. written
delicto having carnal knowledge with agreement, Matubis v.
another man or woman. [Sta. Maria] Praxedes, G.R. No. L-11766
2. The spouse acted in self-defense or in
(1960)] or implied
defense of a child against the unlawful
aggression of the other spouse.
[Tolentino] The non-interference of the husband with regard
to the amorous relations between his wife and
Ramos constitutes consent [People v. Sensano,
G.R. No. L-37720, March 27, 1933].
j. Abandonment of petitioner by
respondent without justifiable
cause for more than one year. c. Connivance between parties in
the commission of the offense
Abandonment is not mere physical
estrangement but also financial and moral Connivance is present when the husband throws
desertion. There must be an absolute cessation no protection around his wife nor warns her
of marital relations, duties, and rights with the against intimacy with the driver. A husband who
intention of perpetual separation. [De La Cruz v. had reliable reports for two months that gave
De La Cruz, 130 Phil. 324 (1968)] him reason to suspect that his wife was having
an affair with her driver yet did nothing to keep
To be a ground for legal separation, the latter away is guilty of connivance [Sargent
abandonment must be without just cause. v. Sargent, 114 A. 428 (1920)].
[Ong Eng Kiam v. Ong, 535 Phil. 805
(2006)] d. Mutual guilt or recrimination
between spouses in the
Note: Legal separation may only be done commission of any ground for
through a judicial decree based only on the
legal separation
grounds provided in Art. 55, Family Code. [Sta.
Maria]
Recrimination (mutual guilt), as a defense, is a
counter-charge in a suit for legal separation that
B. DEFENSES (Art. 56, Family Code) the complainant is also guilty of an offense
constituting a ground for legal separation.
a. Condonation by the aggrieved [Tolentino]
party – after the commission of
the offense; may be expressed In other words, for legal separation to prosper, it
must be claimed only by the innocent spouse
or implied.
and where both spouses are offenders, a legal
separation cannot be claimed by either of them.
Condonation may be given expressly or
impliedly. An example of an implied condonation
is when a husband repeatedly has intercourse
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 PERSONS AND FAMILY RELATIONS CIVIL LAW

For instance, although concubinage of the Where to File the Action

respondent-husband was proved, constituting a The petition shall be filed in the Family Court of
sufficient cause for legal separation, legal the province or city where the petitioner or the
separation was denied because the respondent has been residing for at least six (6)
petitioner-wife was also guilty of adultery months prior to the date of filing “or in the case
[Benedicto v. De La Rama, 3 Phil 34 (1903)]. of a non-resident respondent, where he may be
found in the Philippines, at the election of the
e. Collusion between parties to petitioner”. [Sec. 2(c), Legal Separation Rule]
obtain a decree of legal
separation When to File Action
An action for legal separation shall be filed
within five (5) years from the time of the
Collusion in matrimonial cases is the act of occurrence of the cause. [Article 57, Family
married persons in procuring a divorce by Code]
mutual consent, whether by preconcerted
commission by one of a matrimonial offense, or Cooling-off and Reconciliation Effects
by failure, in pursuance of the agreement, to An action for legal separation shall in no case be
defend divorce proceedings [Brown v. Yambao, tried before six (6) months shall have elapsed
102 Phil. 168 (1957)]. since the filing of the petition. [Article 58, Family
Code]
f. Prescription of action for legal
separation Actions cannot be tried unless the court has
attempted to reconcile the spouses and
determined that despite such efforts,
An action for legal separation shall be filed
reconciliation is highly improbable. [Article 59,
within five years from the time of the occurrence
Family Code]
of the cause. [Article 57, Family Code]
Note:
g. Reconciliation of parties during A. This is without prejudice to a judicial
the pendency of action [Art. 66 determination of custody of children,
(1), Family Code] alimony, and support pendente lite.
B. This Family Code provision dictating a
mandatory 6-month cooling-off period does
A joint manifestation, under oath and duly
not apply in cases where violence, as used
signed by the spouses shall be filed with the
in R.A. No. 9262, is alleged. The case should
court in the same proceeding for legal
be heard as soon as possible by the court.
separation. [Article 65, Family Code]

h. Death of either party during the D. EFFECTS OF FILING PETITION

pendency of action
1. The spouses are entitled to live separately,
but the marital bond is not severed. [Article
C. PROCEDURE
61(1), Family Code]
2. Administration of community or conjugal
Who may File the Action property – If there is no written agreement
A petition for legal separation may be filed only between the parties, the court shall
by the husband or the wife. [Sec. (a)(1), Legal designate one of them or a third person to
Separation Rule] administer the ACP or CPG. [Article 61(2),
Family Code]

Note: No motion to dismiss the petition shall be

allowed except on the ground of lack of
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 PERSONS AND FAMILY RELATIONS CIVIL LAW

jurisdiction over the subject matter or over the action prescribes after five (5) years from
parties; provided, however, that any other the decree of legal separation.
ground that might warrant a dismissal of the
case may be raised as an affirmative defense in 7. Obligation for mutual support ceases, but
an answer. [Sec. 4, Legal Separation Rule] the court may order the guilty spouse to
support the innocent spouse. [Article 198,
Family Code]
E. EFFECTS OF PENDENCY [Article 49,
62, Family Code] 8. The wife shall continue to use the surname
of the husband even after the decree for
The Court shall provide for: legal separation. [Laperal v. Republic, 116
1. Support of spouses Phil. 672 (1962)]
2. Custody of children: The court shall give
custody of children to one of them if there is G. EFFECTS OF RECONCILIATION
no written agreement between the spouses.
3. Visitation rights of the other spouse
1. Proceedings for legal separation shall be
F. EFFECTS OF DECREE OF LEGAL terminated at whatever stage. [Article 66(1),
Family Code]
SEPARATION
2. If there is a final decree of legal separation,
1. The spouses can live separately but the it shall be set aside. [Article 66(2), Family
marriage bonds are not severed. [Article 63, Code]
Family Code]
3. The separation of property and forfeiture of
2. The ACP or CPG shall be dissolved and share of the guilty spouse shall subsist
liquidated, and the share of the guilty unless the spouses agree to revive their
spouse shall be forfeited in favor of the former property regime or institute another
common children, previous children, or property regime. [Articles 66-67, Family
innocent spouse, in that order. [Articles Code]
43(2), 63(2), Family Code]
4. Joint custody of children is restored.
3. Custody of the minor children shall be 5. The right to intestate succession by the
awarded to the innocent spouse. [Articles guilty spouse from the innocent spouse is
63(2), 213, Family Code] restored

4. The guilty spouse shall be disqualified from 6. The right to testamentary succession
inheriting from the innocent spouse by depends on the will of the innocent spouse.
intestate succession, and the provisions in
favor of the guilty party in the will of the
innocent spouse shall also be revoked by
H. EFFECT OF DEATH OF ONE OF THE
operation of law. [Article 63(4), Family Code] PARTIES

5. Donations in favor of the guilty spouse may

The death of either party to a legal separation
be revoked but this action prescribes after
five (5) years from the decree of legal proceeding, before final decree, abates the
separation. [Article 64, Family Code] action. There is no more need for legal
separation because the marriage is already
6. An innocent spouse may also revoke the dissolved by the death of one of the parties. An
designation of a guilty spouse as a action for legal separation is also purely personal
beneficiary in an insurance policy, even if
such stipulations are irrevocable, but this
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 PERSONS AND FAMILY RELATIONS CIVIL LAW

between the spouses. [Lapuz Sy v. Eufemio, wife or children under his parental
supra] authority;
(2) If the donee imputes to the donor
any criminal offense, or any act
VI. PROPERTY RELATIONS
involving moral turpitude, even
BETWEEN SPOUSES though he should prove it, unless
the crime or the act has been
A. DONATION PROPTER NUPTIAS; committed against the donee
VOID DONATIONS himself, his wife or children under
his authority;
(3) If he unduly refuses him support
a. Definition: when the donee is legally or
1. Made before the celebration of the morally bound to give support to
marriage the donor. [Article 765, Civil Code]
2. In consideration of the marriage
3. In favor of one or both spouses. Void Donations
[Article 82, Family Code]
Art. 87, Family Code. Every donation or
b. General Rules grant of gratuitous advantage is void except
moderate gifts which the spouses may give
Governing Law each other on the occasion of any family
The rules on ordinary donations established in rejoicing.
Title III of Book III of the Civil Code, [Article 83,
Family Code] while the provisions of The Court held that the ban on donations
testamentary succession and formality of wills applies to common law spouses. Common law
govern future property. [Article 84, Family Code] marriage spouses cannot be placed in a better
position than those in lawful marriages.
Limitations [Matabuena v. Cervantes, G.R. No. L-28771,
Spouses who agree on a regime other than ACP March 31, 1971]
cannot donate more than one-fifth of their
present property.
B. ABSOLUTE COMMUNITY OF
Grounds for Revocation: PROPERTY REGIME
● The marriage is not celebrated or is
judicially declared void ab initio except a. General Rules
donations made in marriage settlements
which are governed by Article 80.
Time of Commencement
● The marriage takes place without the
It commences at the precise moment that the
consent of the parent or guardian as
marriage is celebrated. [Article 88, Family Code]
required by law.
● The marriage is annulled and the donee
Waiver During Marriage
acted in bad faith.
No waiver of rights, shares and effects of ACP
● Upon legal separation, the donee being
can be made except in case of judicial
the guilty spouse
separation of property. [Article 89, Family Code]
● If it is with a resolutory condition and
the condition is complied with. Waiver After Marriage
● If the donee committed an act of The waiver shall appear in a public instrument
ingratitude as follows: when it prejudices third persons. The creditors
(1) The donee commits some offense of the spouse who made such a waiver may
against the person, the honor or petition the court to rescind the waiver to the
the property of the donor, or of his
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extent of the amount sufficient to cover the c. Presumption of ACP

amount of their credits. [Article 89, Family
Code]
Art. 93, Family Code. Property acquired
Suppletory Rule during the marriage is presumed to belong to
The provisions on co-ownership shall apply to the community, unless it is proved that it is
the ACP in all matters not provided for in this one of those excluded therefrom.
Chapter. [Article 88, Family Code]

b. What Constitutes Community d. Charges and Obligations of the

Property ACP

General Rule Family Obligations

All the property owned by the spouses (1) at the 1. The support of the spouses, their
time of the celebration of the marriage or (2) common children, and legitimate
acquired thereafter. [Article 91, Family Code] children of either spouse; however, the
support of illegitimate children shall be
Exceptions governed by the provisions of this Code
1. Property acquired during the marriage on Support. l
by gratuitous title, and the fruits as well
as the income thereof, if any, unless it is Debts of spouses for the benefit of the
expressly provided by the donor, family
testator or grantor that they shall form 1. All debts and obligations contracted
part of the community property; during the marriage by the designated
administrator-spouse for the benefit of
2. Property for personal and exclusive use the community, or by both spouses, or
of either spouse. However, jewelry shall by one spouse with the consent of the
form part of the community property; other;
2. Debts and obligations contracted by
3. Property acquired before the marriage either spouse without the consent of the
by either spouse who has legitimate other to the extent that the family may
descendants by a former marriage, and have been benefited;
the fruits as well as the income, if any,
of such property. [Article 92, Family Subsidiary liabilities
Code] 1. All taxes, liens, charges and expenses,
including major or minor repairs, upon
Art. 92, par. (3) of the Family Code excludes the community property;
from the community property the property
acquired before the marriage of a spouse who 2. All taxes and expenses for mere
has legitimate descendants by a former preservation made during marriage
marriage; and the fruits and the income, if any, upon the separate property of either
of that property. Neither these two vehicles nor spouse used by the family;
the house and lot belong to the second marriage 3. Expenses to enable either spouse to
[Spouses Abrenica v. Law Firm of Abrenica, G.R. commence or complete a professional or
No. 180572 (2012)] vocational course, or other activity for
self-improvement;

Sole Obligations of a Spouse

1. Ante-nuptial debts of either spouse
insofar as they have redounded to the
benefit of the family;

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

2. The value of what is donated or remedy, which must be availed of within five
promised by both spouses in favor of years from the date of the contract
their common legitimate children for the implementing such decision. [Article 96, Family
exclusive purpose of commencing or Code]
completing a professional or vocational
course or other activity for In case one spouse is incapacitated
self-improvement; The other spouse may assume sole powers of
3. Ante-nuptial debts of either spouse administration, not including disposition or
other than those falling under paragraph encumbrance without authority of the court or
(7) of this Article, the support of the written consent of the other spouse. [Article
illegitimate children of either spouse, 96, Family Code]
and liabilities incurred by either spouse
by reason of a crime or a quasi-delict, in The Family Code does not provide a period
case of absence or insufficiency of the within which the wife who gave no consent may
exclusive property of the debtor-spouse, assail her husband's sale of real property. It
the payment of which shall be simply provides that without the other spouse's
considered as advances to be deducted written consent or a court order allowing the
from the share of the debtor-spouse sale, the same would be void [Ko v. Aramburo,
upon liquidation of the community; and G.R. No. 190995 (2017)]
4. Expenses of litigation between the
spouses unless the suit is found to be Disposal of Community Property
groundless. Either spouse may dispose by will of his or her
Note: If the community property is insufficient to interest in the community property. [Article 97,
cover the foregoing liabilities, except those Family Code]
falling under paragraph (9), the spouses shall be
solidarily liable for the unpaid balance with their Donation of Community Property
separate properties. [Article 94, Family Code] Neither spouse may donate any community
property without the consent of the other.
Gambling losses However, either spouse may, without the
consent of the other, make moderate donations
Article 95, Family Code. Whatever may from the community property for charity or on
be lost during the marriage in any game of occasions of family rejoicing or family distress.
chance, betting, sweepstakes, or any other
kind of gambling, whether permitted or f. Dissolution of Absolute
prohibited by law, shall be borne by the loser
Community Regime
and shall not be charged to the community
but any winnings therefrom shall form part of
the community property. The absolute community terminates:
1. Upon the death of either spouse
2. When there is a decree of legal
e. Administration and Enjoyment separation;
of Property 3. When the marriage is annulled or
declared void; or
General Rule 4. In case of judicial separation of property
The administration and enjoyment of the [Article 99, Family Code]
community property shall belong to both
spouses jointly. [Article 96, Family Code] Effect of separation de facto

In Case of Disagreement
The husband's decision shall prevail, subject to
recourse to the court by the wife for proper

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General Rule g. Liquidation of the Absolute

The separation in fact between husband and Community Assets and
wife shall not affect the regime of absolute Liabilities
community.

Exceptions Liquidation
1. The spouse who leaves the conjugal 1. An inventory shall be prepared, listing
home or refuses to live therein, without separately all the properties of the
just cause, shall not have the right to be absolute community and the exclusive
supported; properties of each spouse.
2. When the consent of one spouse to any 2. The debts and obligations of the
transaction of the other is required by absolute community shall be paid
law, judicial authorization shall be out of its assets. In case of insufficiency
obtained in a summary proceeding; of said assets, the spouses shall be
3. In the absence of sufficient community solidarily liable for the unpaid balance
property, the separate property of both with their separate properties.
spouses shall be solidarily liable for the 3. Whatever remains of the exclusive
support of the family. properties of the spouses shall
thereafter be delivered to each of
Additional privilege of present spouse: them.

The spouse present shall, upon proper Partition

petition in a summary proceeding, be given 1. The net remainder of the properties of
judicial authority to administer or encumber the absolute community shall constitute
any specific separate property of the other its net assets, which shall be divided
spouse and use the fruits or proceeds equally between husband and wife,
thereof to satisfy the latter's share. [Article unless otherwise agreed on, or unless
100, Family Code] there has been a voluntary waiver
of such share provided in this Code. For
Effect of abandonment purpose of computing the net profits
A spouse is deemed to have abandoned the subject to forfeiture in accordance with
other when her or she has left the conjugal Articles 43, No. (2) and 63, No. (2), the
dwelling without intention of returning. said profits shall be the increase in value
between the market value of the
The spouse who has left the conjugal dwelling community property at the time of the
for a period of three months or has failed within celebration of the marriage and the
the same period to give any information as to market value at the time of its
his or her whereabouts shall be prima facie dissolution.
presumed to have no intention of returning to
the conjugal dwelling. Distribution
1. The presumptive legitimes of the
Remedy common children shall be delivered
The aggrieved spouse may petition the court for upon partition.
receivership, for judicial separation of property 2. Unless otherwise agreed upon by the
or for authority to be the sole administrator of parties, in the partition of the
the absolute community, subject to such properties, the conjugal dwelling and
precautionary conditions as the court may the lot on which it is situated shall be
impose. [Article 101, Family Code] adjudicated to the spouse with whom
the majority of the common children
choose to remain. Children below the
age of seven years are deemed to have
chosen the mother, unless the court has

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

decided otherwise. In case there is no the contract of partnership in all that is not in
such majority, the court shall decide, conflict with what is expressly determined in
taking into consideration the best this Chapter or by the spouses in their
interests of said children. [Article 102, marriage settlements.
Family Code]

Liquidation after death of one spouse b. What Constitutes CPG

The community property shall be

Article 106, Family Code. Under the
liquidated in the same proceeding for the
regime of conjugal partnership of gains, the
settlement of the estate of the deceased.
husband and wife place in a common fund
If no judicial settlement proceeding is instituted,
the proceeds, products, fruits and income
the surviving spouse shall liquidate the
from their separate properties and those
community property either judicially or
acquired by either or both spouses through
extra-judicially within six months from the death
their efforts or by chance, and, upon
of the deceased spouse. If upon the lapse of the
dissolution of the marriage or of the
six months period, no liquidation is made, any
partnership, the net gains or benefits
disposition or encumbrance involving the
obtained by either or both spouses shall be
community property of the terminated marriage
divided equally between them, unless
shall be void.
otherwise agreed in the marriage
settlements.
Should the surviving spouse contract a
subsequent marriage without compliance with
the foregoing requirements, a mandatory What are included in CPG
regime of complete separation of property 1. Those acquired by onerous title during
shall govern the property relations of the the marriage at the expense of the
subsequent marriage. [Article 103, Family common fund, whether the acquisition
Code] be for the partnership, or for only one of
the spouses;
Liquidation of Marriage Settlements 2. Those obtained from the labor, industry,
work or profession of either or both of
before the Family Code
the spouses;
The respective capital, fruits and income of each
3. The fruits, natural, industrial, or civil,
community shall be determined upon such proof
due or received during the marriage
as may be considered according to the rules of
from the common property, as well as
evidence. In case of doubt as to which
the net fruits from the exclusive
community the existing properties belong, the
property of each spouse;
same shall be divided between the different
4. The share of either spouse in the hidden
communities in proportion to the capital and
treasure which the law awards to the
duration of each. [Article 104, Family Code]
finder or owner of the property where
the treasure is found;
C. CONJUGAL PARTNERSHIP OF GAINS 5. Those acquired through occupation such
REGIME as fishing or hunting;
6. Livestock existing upon the dissolution
of the partnership in excess of the
General Rules number of each kind brought to the
marriage by either spouse; and
a. Suppletory Rules 7. Those which are acquired by chance,
such as winnings from gambling or
betting. However, losses therefrom shall
Article 107, Family Code. The conjugal be borne exclusively by the
partnership shall be governed by the rules on loser-spouse. [Article 117, Family Code]
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 PERSONS AND FAMILY RELATIONS CIVIL LAW

deed of sale that he did not have any interest in

The Court held that since the petitioner was the property [Laperal v. Katigbak, G.R. No.
presumed to have entered the contract with L-16991 (1964)]
Panam (bought a ticket) with his wife and to
have used conjugal money, thus, the damages The retired premiums in contention in this case
to be demanded were also presumed conjugal are presumed to be conjugal property, there
[Zulueta v. Panam, G.R. No. L-28589 (1973)] being no proof that the premiums were paid
from the exclusive funds of the deceased Judge.
Property bought in installments Such being the case, one-half of the amount
Property bought on installments paid partly from belongs to the wife as her property in the
exclusive funds of either or both spouses and conjugal partnership and the other half shall go
partly from conjugal funds (1) belongs to the to the estate of the deceased Judge which shall
buyer or buyers if full ownership was vested in turn be distributed to his legal heirs [Berciles
before the marriage and (2) to the conjugal v. GSIS, G.R. No. 57257 (1984)]
partnership if such ownership was vested during
the marriage. 2. That which each acquires during the
In either case, any amount advanced by the marriage by gratuitous title;
partnership or by either or both spouses shall be
reimbursed by the owner or owners upon The Court held that Martinez's jewelry inherited
liquidation of the partnership. [Article 118, from her mother is not part of the conjugal
Family Code] property [Veloso v. Martinez, 28 Phil. 255
(1914)]
Credit due
3. That which is acquired by right of
Whenever an amount or credit payable belongs
redemption, by barter or by exchange
to one of the spouses, the sums which may be
with property belonging to only one of
collected during the marriage in partial
the spouses; and
payments or by installments on the principal
shall be the exclusive property of the spouse.
Plata mortgaged a property while single and
However, interests falling due during the
redeemed it while married. This is within the
marriage on the principal shall belong to the
exemptions to conjugal property under CPG.
conjugal partnership. [Article 119, Family Code]
She remortgages it with her husband and
because they are unable to pay. Villanueva, a
a. Exclusions from CPG creditor, sues Begosa the husband and Plata
refused to leave the property. The Court held
1. That which is brought to the marriage that she cannot be cited for contempt for
as his or her own; leaving a property she owns, especially since
she is not the object of the eviction suit [Plata v.
The legal presumption that all properties Yatco, G.R. No. L-20825 (1964)].
acquired during the marriage are conjugal is
rebuttable. In the instant case, the property in 4. That which is purchased with exclusive
question is paraphernal despite its having been money of the wife or of the husband.
acquired during coverture as proven by the [Article 109, Family Code]
following circumstances: the disputed land is in
the name of the wife; the property was of such b. Administration of exclusive
substantial value as the husband then by himself property
could not have afforded to buy; the purchase
price was furnished by the wife's mother; and it
was established that it was a practice of the Administration by the spouse-owner
wife's parents to so provide their children with The spouses retain the ownership, possession,
money to purchase realties for themselves; and, administration and enjoyment of their exclusive
the husband expressly acknowledged in the properties.

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advanced by the conjugal partnership of

Administration by the other spouse gains. [Article 114, Family Code]
Either spouse may, during the marriage, transfer
the administration of his or her exclusive
property to the other by means of a public Improvements on CPG property
instrument, which shall be recorded in the
The ownership of improvements, whether for
registry of property of the place the property is
utility or adornment, made on the separate
located. [Article 110, Family Code]
property of the spouses at the expense of the
partnership or through the acts or efforts of
Encumbrance / disposition of either or both spouses shall pertain to the
exclusive property conjugal partnership, or to the original
owner-spouse, subject to the following rules:
Consent from other spouse is not ● When the cost of the improvement
necessary made by the conjugal partnership and
A spouse of age may mortgage, encumber, any resulting increase in value are more
alienate or otherwise dispose of his or her than the value of the property at the
exclusive property, without the consent of the time of the improvement, the entire
other spouse, and appear alone in court to property of one of the spouses shall
litigate with regard to the same. [Article 111, belong to the conjugal partnership,
Family Code] subject to reimbursement of the value
of the property of the owner-spouse at
The Court held that the P14,000, borrowed by the time of the improvement; otherwise,
Emiliano Boncan upon the credit of the property said property shall be retained in
of his wife, became conjugal property, and when ownership by the owner-spouse,
the same was reinvested in the construction of a likewise subject to reimbursement of the
house, the house became conjugal property and cost of the improvement.
was liable for the payment of the debts of the
husband [Palanca v. Smith-Bell, 9 Phil. 131 In either case, the ownership of the entire
(1907)] property shall be vested upon the
reimbursement, which shall be made at the time
Effects of Disposition of the liquidation of the conjugal partnership.
● The alienation of any exclusive property [Article 120, Family Code]
of a spouse administered by the other
automatically terminates the c. Charges Upon and Obligations
administration over such property and of the CPG
the proceeds of the alienation shall be
turned over to the owner-spouse.
[Article 112, Family Code] Support
● Property donated or left by will to the 1. The support of the spouse, their
spouses, jointly and with designation of common children, and the legitimate
determinate shares, shall pertain to the children of either spouse; however, the
donee-spouses as his or her own support of illegitimate children shall be
exclusive property, and in the absence governed by the provisions of this Code
of designation, share and share alike, on Support;
without prejudice to the right of
accretion when proper. [Article 113, Obligations
Family Code] 1. All debts and obligations contracted
● If the donations are onerous, the during the marriage by the designated
amount of the charges shall be borne by administrator-spouse for the benefit of
the exclusive property of the donee the conjugal partnership of gains, or by
spouse, whenever they have been both spouses or by one of them with the

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consent of the other; [Article 121, Family 8. Expenses of litigation between the
Code] spouses unless the suit is found to be
2. Debts and obligations contracted by groundless.
either spouse without the consent of the
other to the extent that the family may If the conjugal partnership is insufficient to
have benefited; cover the foregoing liabilities, the spouses shall
be solidarily liable for the unpaid balance with
The husband in acting as guarantor or their separate properties. [Article 121, Family
surety for another in an indemnity Code]
agreement as that involved in this case
did not act for the benefit of the Payment of Personal Debts
conjugal partnership [Luzon Surety v. de The payment of personal debts contracted by
Garcia, G.R. No. L-25659, (1969)]. the husband or the wife before or during the
marriage shall not be charged to the conjugal
The obligation which the petitioner is properties partnership except insofar as they
seeking to enforce against the conjugal redounded to the benefit of the family. [Article
property managed by the private 122, Family Code]
respondent Lily Yulo was undoubtedly
contracted by Augusto Yulo for his own However, the payment of personal debts
benefit because at the time he incurred contracted by either spouse before the
the obligation he had already marriage, that of fines and indemnities imposed
abandoned his family and had left their upon them, as well as the support of illegitimate
conjugal home. Worse, he made it children of either spouse, may be enforced
appear that he was duly authorized by against the partnership assets after the
his wife in behalf of A & L Industries, to responsibilities enumerated in the preceding
procure such loan from the petitioner. Article have been covered, if the spouse who is
Clearly, to make A & L Industries liable bound should have no exclusive property or if it
now for the said loan would be unjust should be insufficient; but at the time of the
and contrary to the express provision of liquidation of the partnership, such spouse shall
the Civil Code [BA Finance v. CA, G.R. be charged for what has been paid for the
No 82040 (1991)] purpose above-mentioned. [Article 122, Family
3. All taxes, liens, charges, and expenses, Code]
including major or minor repairs upon
the conjugal partnership property; Gambling
4. All taxes and expenses for mere Whatever may be lost during the marriage in
preservation made during the marriage any game of chance or in betting, sweepstakes,
upon the separate property of either or any other kind of gambling whether permitted
spouse; or prohibited by law, shall be borne by the loser
5. Expenses to enable either spouse to and shall not be charged to the conjugal
commence or complete a professional, partnership but any winnings therefrom shall
vocational, or other activity for form part of the conjugal partnership property.
self-improvement; [Article 123, Family Code]
6. Ante-nuptial debts of either spouse
insofar as they have redounded to the
benefit of the family; d. Administration of the Conjugal
7. The value of what is donated or Partnership Property
promised by both spouses in favor of
their common legitimate children for the
exclusive purpose of commencing or Joint Administration
completing a professional or vocational The administration and enjoyment of the
course or other activity for conjugal partnership shall belong to both
self-improvement; and spouses jointly. In case of disagreement, the

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

husband's decision shall prevail, subject to e. Dissolution of Conjugal

recourse to the court by the wife for proper Partnership Regime
remedy, which must be availed of within five
The conjugal partnership terminates:
years from the date of the contract
(1) Upon the death of either spouse
implementing such decision. [Article 124, Family
(2) When there is a decree of legal
Code]
separation;
(3) When the marriage is annulled or
In a case where the wife asked for receivership
declared void; or
and to give administration to her after husband
(4) In case of judicial separation of property
gives administration to a third party, claiming
[Article 126, Family Code]
fraud yet failing to provide evidence, the Court
held that: The purpose of receivership, as a
provisional remedy, is to preserve or protect the Effect of Separation de Facto
rights of the parties during the pendency of the
main action. To apply this remedy to the case at General Rule
hand is to lose sight of its purpose. At stake The separation in fact between husband and
here are the husband's power of administration wife shall not affect the regime of conjugal
and the wife's right to be protected from abuse partnership.
thereof. The wife's right rests upon proof of such
abuse. Absent that proof, the wife's right does Exceptions
not exist. [Ysasi v. Fernandez, G.R. No. L-28593, 1. The spouse who leaves the conjugal
(1968)] home or refuses to live therein, without
just cause, shall not have the right to be
Sole Administration supported;
2. When the consent of one spouse to any
In the event that one spouse is incapacitated or
transaction of the other is required by
otherwise unable to participate in the
law, judicial authorization shall be
administration of the conjugal properties, the
obtained in a summary proceeding;
other spouse may assume sole powers of
3. In the absence of sufficient conjugal
administration. These powers do not include
partnership property, the separate
disposition or encumbrance without authority of
property of both spouses shall be
the court or the written consent of the other
solidarily liable for the support of the
spouse. In the absence of such authority or
family. The spouse present shall, upon
consent, the disposition or encumbrance shall be
petition in a summary proceeding, be
void. However, the transaction shall be
given judicial authority to administer or
construed as a continuing offer on the part of
encumber any specific separate property
the consenting spouse and the third person, and
of the other spouse and use the fruits or
may be perfected as a binding contract upon the
proceeds thereof to satisfy the latter's
acceptance by the other spouse or authorization
share. [Article 127, Family Code]
by the court before the offer is withdrawn by
either or both offerors. [Article 124, Family
Code] Effect of Abandonment

Donations Definition
Neither spouse may donate any conjugal A spouse is deemed to have abandoned the
partnership property without the consent of the other when he or she has left the conjugal
other. However, either spouse may, without the dwelling without intention of returning. The
consent of the other, make moderate donations spouse who has left the conjugal dwelling for a
from the conjugal partnership property for period of three months or has failed within the
charity or on occasions of family rejoicing or same period to give any information as to his or
family distress. her whereabouts shall be prima facie presumed
to have no intention of returning to the conjugal
dwelling.
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 PERSONS AND FAMILY RELATIONS CIVIL LAW

Remedy spouse, even due to a fortuitous event,

If a spouse without just cause abandons the shall be paid to said spouse from the
other or fails to comply with his or her obligation conjugal funds, if any.
to the family, the aggrieved spouse may petition Partition
the court for receivership, for judicial separation 1. The net remainder of the conjugal
of property, or for authority to be the sole partnership properties shall constitute
administrator of the conjugal partnership the profits, which shall be divided
property, subject to such precautionary equally between husband and wife,
conditions as the court may impose. The unless a different proportion or division
obligations to the family mentioned in the was agreed upon in the marriage
preceding paragraph refer to marital, parental or settlements or unless there has been a
property relations. [Article 128, Family Code] voluntary waiver or forfeiture of such
share as provided in this Code.
f. Liquidation of the Conjugal
Partnership Assets and Delivery
1. The presumptive legitimes of the
Liabilities
common children shall be delivered
upon the partition in accordance with
Procedure of Dissolution Article 51.
2. In the partition of the properties, the
conjugal dwelling and the lot on which it
Liquidation is situated shall, unless otherwise
1. An inventory shall be prepared, listing agreed upon by the parties, be
separately all the properties of the adjudicated to the spouse with whom
conjugal partnership and the exclusive the majority of the common children
properties of each spouse. choose to remain. Children below the
2. Amounts advanced by the conjugal age of seven years are deemed to have
partnership in payment of personal chosen the mother, unless the court has
debts and obligations of either spouse decided otherwise. In case there is no
shall be credited to the conjugal such majority, the court shall decide,
partnership as an asset thereof. taking into consideration the best
3. Each spouse shall be reimbursed for the interests of said children. [Article 129,
use of his or her exclusive funds in the Family Code]
acquisition of property or for the value
of his or her exclusive property, the Amores married a Dutch man and the latter tries
ownership of which has been vested by to get his share of the properties because he
law in the conjugal partnership. paid for them “with his disability pension.” Court
4. The debts and obligations of the held that it is Amores’ property because Beumer
conjugal partnership shall be paid out of cannot own land in the Philippines [Beumer v.
the conjugal assets. In case of
Amores, G.R. No. 195670 (2012)]
insufficiency of said assets, the spouses
shall be solidarily liable for the unpaid
balance with their separate properties, Effect of Death of One Spouse
in accordance with the provisions of Upon the termination of the marriage by death,
paragraph (2) of Article 121. the conjugal partnership property shall be
5. Whatever remains of the exclusive liquidated in the same proceeding for the
properties of the spouses shall settlement of the estate of the deceased.
thereafter be delivered to each of them. If no judicial settlement proceeding is instituted,
6. Unless the owner had been indemnified the surviving spouse shall liquidate the conjugal
from whatever source, the loss or partnership property either judicially or
deterioration of movables used for the extra-judicially within six months from the death
benefit of the family, belonging to either of the deceased spouse. If upon the lapse of the

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

six-month period no liquidation is made, any comply with his or her obligations to the
disposition or encumbrance involving the family as provided for in Article 101;
conjugal partnership property of the terminated 5. That the spouse granted the power of
marriage shall be void. administration in the marriage
Should the surviving spouse contract a settlements has abused that power;
subsequent marriage without compliance with and
the foregoing requirements, a mandatory regime 6. That at the time of the petition, the
of complete separation of property shall govern spouses have been separated in fact
the property relations of the subsequent for at least one year and
marriage. .[Article 130, Family Code] reconciliation is highly improbable.
[Article 135, Family Code]
Support during CPG liquidation
From the common mass of property support Voluntary separation of property
shall be given to the surviving spouse and to the The spouses may jointly file a verified petition
children during the liquidation of the inventoried with the court for the voluntary dissolution of
property and until what belongs to them is the absolute community or the conjugal
delivered; but from this shall be deducted that partnership of gains, and for the separation of
amount received for support which exceeds the their common properties.
fruits or rents pertaining to them. [Article 133, All creditors of the absolute community or of the
Family Code] conjugal partnership of gains, as well as the
No distinction is made between minors and adult personal creditors of the spouse, shall be listed
kids, and all are entitled to support. [Santero v. in the petition and notified of the filing thereof.
CFI, 153 SCRA 728 (1987)] The court shall take measures to protect the
creditors and other persons with pecuniary
interest. [Article 136, Family Code]
D. JUDICIAL SEPARATION OF
PROPERTY Liquidation
Once the separation of property has been
decreed, the absolute community or the
When possible
conjugal partnership of gains shall be liquidated
In the absence of an express declaration in the
in conformity with this Code. [Article 137, Family
marriage settlements, the separation of property
Code]
between spouses during the marriage shall not
take place except by judicial order. Such judicial
separation of property may either be voluntary
Support pendente lite
During the pendency of the proceedings for
or for sufficient cause.
separation of property, the absolute community
or the conjugal partnership shall pay for the
Sufficient Cause support of the spouses and their children.
Any of the following shall be considered [Article 137, Family Code]
sufficient cause for judicial separation of
property:
Regime after JSP
1. That the spouse of the petitioner has
After dissolution of the absolute community or of
been sentenced to a penalty which
the conjugal partnership, the provisions on
carries with it civil interdiction;
complete separation of property shall apply.
2. That the spouse of the petitioner has
[Article 138, Family Code]
been judicially declared an absentee;
3. That loss of parental authority of the
spouse of petitioner has been decreed
Binding effect on third parties
● The petition for separation of property
by the court;
4. That the spouse of the petitioner has and the final judgment granting the
abandoned the latter or failed to same shall be recorded in the proper

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local civil registries and registries of If the other spouse is not qualified by reason of
property. [Article 139, Family Code] incompetence, conflict of interest, or any other
● The separation of property shall not just cause, the court shall appoint a suitable
prejudice the rights previously acquired person to be the administrator. [Article 142,
by creditors. [Article 140, Family Code] Family Code]

Revival of Property Relations E. SEPARATION OF PROPERTY REGIME

When
1. civil interdiction terminates; Property Covered
2. absentee spouse reappears;
3. When the court, authorizes the Article 143, Family Code. Separation of
resumption of said administration, being
property may refer to present or future
satisfied that the spouse granted the
property or both. It may be total or partial. In
power of administration in the marriage
the latter case, the property not agreed upon
settlements will not again abuse that
as separate shall pertain to the absolute
power,
community.
4. When the spouse who has left the
conjugal home without a decree of legal
separation resumes common life with Administration by Owner
the other; Article 145, Family Code. Each spouse
5. When parental authority is judicially shall own, dispose of, possess, administer
restored to the spouse previously and enjoy his or her own separate estate,
deprived thereof; without need of the consent of the other. To
6. When the spouses who have separated each spouse shall belong all earnings from his
in fact for at least one year, reconcile or her profession, business or industry and all
and resume common life; or fruits, natural, industrial or civil, due or
7. When after voluntary dissolution of the received during the marriage from his or her
absolute community of property or separate property.
conjugal partnership has been judicially
decreed upon the joint petition of the Family Expenses
spouses, they agree to the revival of the
former property regime. No voluntary
Article 146, Family Code. Both spouses
separation of property may thereafter
shall bear the family expenses in proportion
be granted. [Article 141, Family Code]
to their income, or, in case of insufficiency or
default thereof, to the current market value of
Ownership by Other Spouse/ their separate properties.
Transferring
The administration of all classes of exclusive The liabilities of the spouses to
property of either spouse may be transferred by creditors for family expenses shall,
the court to the other spouse: however, be solidary.
1. When one spouse becomes the guardian
of the other;
2. When one spouse is judicially declared F. PROPERTY REGIME OF UNIONS
an absentee; WITHOUT MARRIAGE
3. When one spouse is sentenced to a
penalty which carries with it civil
interdiction; or Property Regime of Common Law
4. When one spouse becomes a fugitive marriages or if annulled
from justice or is in hiding as an When a man and a woman who are capacitated
accused in a criminal case. to marry each other, live exclusively with each
other as husband and wife without the benefit
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of marriage or under a void marriage, their proof to the contrary, their contributions and
wages and salaries shall be owned by them in corresponding shares are presumed to be equal.
equal shares and the property acquired by both The same rule and presumption shall apply to
of them through their work or industry shall be joint deposits of money and evidence of credit.
governed by the rules on co-ownership.
Where one of the parties is in a
Fruits “Obtained by Joint Efforts” bigamous relationship
In the absence of proof to the contrary, If one of the parties is validly married to
properties acquired while they lived together another, his or her share in the co-ownership
shall be presumed to have been obtained by shall accrue to the absolute community or
their joint efforts, work or industry, and shall be conjugal partnership existing in such valid
owned by them in equal shares. For purposes of marriage. If the party who acted in bad faith is
this Article, a party who did not participate in not validly married to another, his or her share
the acquisition by the other party of any shall be forfeited in the manner provided in the
property shall be deemed to have contributed last paragraph of the preceding Article.
jointly in the acquisition thereof if the former's The foregoing rules on forfeiture shall likewise
efforts consisted in the care and maintenance of apply even if both parties are in bad faith.
the family and of the household. [Article 148, Family Code]
The Court held that the common law wife did
Property Encumbrance and Disposal not have to pay damages for a jeep accident
Neither party can encumber or dispose by acts caused because the jeep belongs to the
inter vivos of his or her share in the property common law husband and his lawfully wedded
acquired during cohabitation and owned in wife. [Juaniza v. Jose, G.R. No. L-50127-28
common, without the consent of the other, until (1979)]
after the termination of their cohabitation.
VII. RIGHTS AND OBLIGATIONS
Waiver of Rights of one Spouses
BETWEEN HUSBAND AND
When only one of the parties to a void marriage
is in good faith, the share of the party in bad WIFE
faith in the co-ownership shall be forfeited in
favor of their common children. In case of A. MARITAL OBLIGATIONS
default of or waiver by any or all of the common
children or their descendants, each vacant share The husband and wife are obliged (1) to live
shall belong to the respective surviving together, (2) observe mutual love, respect and
descendants. In the absence of descendants, fidelity, and (3) render mutual help and support.
such share shall belong to the innocent party. In [Article 68, Family Code]
all cases, the forfeiture shall take place upon
termination of the cohabitation. [Article 147, Related Laws
Family Code] RPC Art. 11(2) justifies any act somebody makes
in defense of their spouse and RPC 247 exempts
This also applies to marriages declared null a spouse from the penalty of murder when they
under Article 36 of the family code [Salas v. kill their spouse who they caught in the act of
Aguila, G.R. No. 202370 (2013)] having sex with someone else.
Common law relationships with legal
impediments B. FAMILY DOMICILE
In cases of cohabitation not falling under the
preceding Article, only the properties acquired The husband and wife shall fix the family
by both of the parties through their actual joint domicile. In case of disagreement, the court
contribution of money, property, or industry shall shall decide.
be owned by them in common in proportion to
their respective contributions. In the absence of

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Exceptions Management of the household

if the latter should live abroad or there are other The expenses for such management shall be
valid and compelling reasons. However, such paid in accordance with the provisions of Article
exemption shall not apply if the same is not 70. [Article 71, Family Code]
compatible with the solidarity of the family.
When one spouse neglects his duty
Conjugal residence is presumed in accordance When one of the spouses neglects his or her
with Family Code Article 68 which states that duties to the conjugal union or commits acts
husband and wife are obliged to live together. which tend to bring danger, dishonor or injury to
[Abella v. COMELEC, 201 SCRA 253 (1991)] the other or to the family, the aggrieved party
may apply to the court for relief. [Article 72,
The Court cannot sanction a spouse for leaving Family Code]
the conjugal dwelling nor can they enforce
consortium, but the spouse may lose control of
the property and be compelled to give back D. EXERCISE OF PROFESSION
what they should and may not be entitled to
support. [Arroyo v. Vasquez, G.R. No. L-17014 General Rule
(1921)] Either spouse may exercise any legitimate
profession, occupation, business or activity
Are the spouses entitled to support without the consent of the other. The latter may
after leaving the conjugal dwelling? object only on valid, serious, and moral grounds.
Where the wife is forced to leave the [Article 73, Family Code]
matrimonial abode and to live apart from her
husband, she can, in this jurisdiction, compel In case of disagreement, the court shall decide
him to make provision for her separate whether or not:
maintenance and he may be required to pay the 1. The objection is proper, and
expenses, including attorney's fees, necessarily 2. Benefit has accrued to the family prior
incurred in enforcing such obligation [Goitia v. to the objection or thereafter.
Campos – Rueda, G.R. No. 11263 (2016)]
If the benefit accrued prior to the objection, the
Note: The courts have to be careful in granting resulting obligation shall be enforced against the
support because it presupposes condoning the community property. If the benefit accrued
separation de facto of the couple, which is thereafter, such obligation shall be enforced
against public order and policy. against the separate property of the spouse who
has not obtained consent.
C. MANAGEMENT AND FAMILY
The foregoing provisions shall not prejudice the
SUPPORT rights of creditors who acted in good faith.
[Article 74, Family Code]
Spouses are jointly responsible for:
VIII. PATERNITY AND FILIATION
Support of Family
The expenses for such support and other
A. PATERNITY, FILIATION, AND
conjugal obligations shall be paid:
LEGITIMACY
1. from the community property and,
2. in the absence thereof, from the income The filiation of children may be (a) by nature or
or fruits of their separate properties. (b) by adoption. Natural filiation may be (a)
3. In case of insufficiency or absence of legitimate or (b) illegitimate [Art. 163, Family
said income or fruits, such obligations Code]
shall be satisfied from the separate
properties. [Article 70, Family Code]

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B. LEGITIMATE AND ILLEGITIMATE The Family Code does not require, as a condition
CHILDREN for the legitimacy of the child, the impotence of
the husband.
a. Who are Legitimate Children Note: The child must be born to the wife to be
considered legitimate [Art. 164, Family Code].
a. Children conceived or born during
the valid marriage of the parents b. Proof of Filiation
[Art. 164, Family Code]

b. Children conceived through artificial Proof of Filiation is Necessary:

insemination [Art. 164, Family Code] 1. Where the child is born after 300 days
following the termination of the
c. Children of a subsequent marriage marriage → Child has no status, and
conceived prior to its termination whoever alleges legitimacy must prove
[Art. 43, Family Code]. This refers to it.
those subsequent marriages which
were terminated after the 2. If the legitimacy of a child conceived or
reappearance of the spouse born in wedlock is impugned and the
presumed dead. plaintiff has presented evidence to prove
any of the grounds provided in Art. 166,
d. Children conceived or born before Family Code → proof of filiation may be
the judgment of annulment under used as a defense [Tolentino]
Art. 45 or absolute nullity under Art.
36 has become final and executory Legitimate Children may Establish
[Art. 54, Family Code] Their Filiation by any of the Following
[Art. 172, Family Code]:
e. Children conceived or born of the
subsequent marriage under Art. 53 1. Primary Evidence (for voluntary
[Art. 54, Family Code] recognition)
a. Their record of birth appearing
f. Legitimated children [Art. 177, in the civil register or a final
Family Code] judgment
b. An admission of his filiation by
g. Adopted Children [RA 11642] his parent in a public document
or a private handwritten
Natural/Biological instrument and signed by said
A child conceived or born during a valid parent
marriage is presumed to belong to that
marriage, regardless of the existence of 2. Secondary Evidence (for involuntary
extramarital relationships [Liyao v. Liyao, G.R. recognition)
No. 138961 (2002)]. a. Proof of open and continuous
possession of status as a
Artificial Insemination legitimate child
Artificial insemination is the impregnation of a b. Any other means stated by the
female with semen from a male without sexual rules of court or special laws
intercourse.
Note: Only in the absence of primary evidence
The child conceived through artificial can secondary evidence be admitted
insemination with the consent of both husband
and wife is legitimate.

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Action for Claiming Filiation (Legitimate However, illegitimate children may use the
Children) [Art. 173, Family Code]: surname of their father if their filiation has been
1. The child can bring the action during his expressly recognized by the father through the
or her lifetime. record of birth appearing in the civil register, or
2. If the child dies during minority or in a when an admission in a public document or
state of insanity, such action shall be private handwritten instrument is made by the
transmitted to his heirs, who shall have father [Art. 176, Civil Code, as amended by R.A.
a period of five (5) years within which to 2955 (2004)]
institute the action.
3. The action commenced by the child shall It is the illegitimate child who is given the choice
survive notwithstanding the death of on the surnames by which they will be known
either or both of the parties. [Grande v. Antonio, G.R. No. 206248 (2014)]

It is mandatory that the mother of an illegitimate

c. Rights of Legitimate Children
child sign the birth certificate of her child in all
cases, irrespective of whether the father
3S: Support, Surname, Succession recognizes the child as his or not. The only
legally known parent of an illegitimate child, by
1. To bear the Surnames of the father and the fact of illegitimacy, is the mother of the child
the mother, in conformity with the who conclusively carries the blood of the mother
provisions of the Civil Code on [Barcelote v. Republic, G.R. No. 222095 (2017)].
Surnames
2. To receive Support from their parents, Illegitimate children shall be under the parental
their ascendants, and in proper cases, authority of their mother. Mothers are entitled to
their brothers and sisters, in conformity the sole parental authority of their illegitimate
with the provisions of the Family Code children, notwithstanding the father’s
on Support recognition of the child. In the exercise of that
3. To be entitled to the legitimate and authority, mothers are consequently entitled to
other Successional rights granted to keep their illegitimate children in their company,
them by the Civil Code and the Court will not deprive them of custody,
absent any imperative cause showing the
Future support cannot be the subject of a mother’s unfitness to exercise such authority
compromise, pursuant to Art. 2035, Civil Code. and care [Masbate v. Relucio, G.R. No. 235498
The reason behind this prohibition is that the (2018)].
right to support is founded upon the need of the
recipient to maintain his existence, and thus the The choice of a child over seven (7) years of age
renunciation of such will be tantamount to [Art. 213, Family Code] and over ten (10) years
allowing the suicide of the person or his of age [Sec. 6, Rule 99, Rules of Court] shall be
conversion to a public burden, which is contrary considered in custody disputes only between
to public policy. [De Asis v. CA, G.R. No. 127578 married parents, as they are accorded joint
(1999)] parental authority over their common children
[Art. 211, Family Code]. This choice is not
d. Rights of Illegitimate Children available to an illegitimate child, because
parental authority is given only to the mother
[Art. 176, Family Code], unless she is shown to
Illegitimate children shall use the surname and be unfit or unsuitable [Masbate v. Relucio,
shall be under the parental authority of their supra].
mother, and shall be entitled to support in
conformity with the Family Code. The legitime of
each illegitimate child shall consist of one-half
(1/2) of the legitime of a legitimate child [Art. e. Acts to Impugn Legitimacy
176, Family Code].

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Article 166, Family Code. Legitimacy of C. LEGITIMATED CHILDREN

a child may be impugned only on the
following grounds:
Legitimated children are illegitimate children
1. That it was physically impossible for
who because of the subsequent marriage of
the husband to have sexual
their parents are, by legal fiction, considered
intercourse with his wife within the
legitimate.
first 120 days of the 300 days which
immediately preceded the birth of the
child because of: a. Rights of Legitimated Children
a. the physical incapacity of the Legitimated children have the same rights as
husband to have sexual those of legitimate children [Art. 179, Family
intercourse with his wife; Code].
b. the fact that the husband
and wife were living
separately in such a way that
sexual intercourse was not D. ADOPTED CHILDREN
possible; or
c. serious illness of the
a. Domestic Administrative
husband, which absolutely
prevented sexual intercourse; Adoption and Alternative Child
2. That it is proved that for biological or Care Act (R.A. No. 11642)
other scientific reasons, the child
could not have been that of the Since adoption is wholly and entirely artificial,
husband, except in the instance to establish the relation, the statutory
provided in the second paragraph of requirements must be strictly carried out;
Article 164; or otherwise, the adoption is an absolute nullity
3. That in case of children conceived [Lazatin v. Honorable Judge Campos, Jr., G.R.
through artificial insemination, the No. L-43955-56 (1979); Republic v. CA and
written authorization or ratification of Caranto, G.R. No. 103695 (1996)].
either parent was obtained through
mistake, fraud, violence, intimidation, Under RA 11642, the Inter-Country Adoption
or undue influence. Board is reorganized into the National
Authority for Child Care. The duties, functions
Grounds to impugn legitimacy, and responsibilities of the ICAB, the DSWD and
summarized: other government agencies relating to
1. It was physically impossible for the alternative child care and adoption are
husband to have sexual intercourse with transferred to the NACC.
his wife within the first 120 days of the
300 days immediately preceding the Who May Adopt
birth of the child. 1. Filipino Citizens [Sec. 21 (a), RA
2. It is biologically or scientifically 11642]
impossible that the child is that of the a. Of at least twenty-five (25)
husband except those born through years of age
artificial insemination. b. With full civil capacity and legal
3. That in the case of artificial rights
insemination, the written authorization c. Of good moral character and
or ratification of either parent was has not been convicted of any
obtained through mistake, fraud, crime involving moral turpitude
violence, intimidation, or undue d. Emotionally and psychologically
influence. capable of caring for children

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e. At least sixteen (16) years older Who May Be Adopted [Sec. 22, RA
than the adoptee, except: 11642]
i. when the adopter is the 1. A child who has been issued a
biological parent of the Certificate Declaring a Child Legally
adoptee; or Available for Adoption (CDCLAA)
ii. the spouse of the 2. Legitimate child of one spouse by the
adoptee’s parent; other spouse
iii. iii. the sibling of the 3. Illegitimate child by a qualified adopter,
adopted. to improve the child’s status to that of
f. In a position to support and legitimacy
care for adopted his/her 4. A Filipino of legal age if, prior to the
children in keeping with the adoption, said person has been
means of the family consistently considered and treated, for
g. Has undergone pre-adoption a period of at least three (3) years, by
services the adopter(s) as his/her child since
minority
2. Foreign Nationals 5. A child whose previous adoption has
a. Are permanent or habitual been rescinded
residents of the Philippines for 6. A child whose biological or adoptive
at least five (5) years parents(s) haves died, provided that no
b. Must possess the same proceedings shall be initiated within six
qualifications as stated for (6) months from the time of death of
Filipino nationals prior to the said parents(s)
filing of the petition 7. A foster child
c. Must come from a country with 8. A relative of the adopter
diplomatic relations with the
Philippines and that the laws of Rights of Adopted Children
the adopter’s country will:
i. acknowledge the
1. In General [Sec. 42, RA 11642]
Certificate of Adoption
Except in cases where the biological
as valid
parent is the adopter’s spouse, all legal
ii. acknowledge the child
ties between biological parent and
as a legal child of the
adoptee shall be severed, and the same
adopters
shall then be vested on the adopters.
iii. allow entry of the child
into the such country as
2. Legitimacy [Sec. 41, RA 11642]
an adoptee
The adoptee shall be considered the
legitimate son/daughter of the adopters
3. Guardians [Sec. 21 (b), RA 11642]:
for all intents and purposes, and as such
With respect to their wards, after the
is entitled to all rights and obligations
termination of the guardianship and
provided by law to legitimate children
clearance of his/her financial
born to them without discrimination of
accountabilities
any kind. The adoptee is entitled to
love, guidance, and support in keeping
4. Foster parent [Sec. 21 (c), RA 11642]:
with the means of the family.
With respect to the foster child
3. Succession [Sec. 43, RA 11642]
5. Philippine government officials and
In testate and intestate succession, the
employees [Sec. 21 (d), RA 11642]
adopter and the adoptee shall have
a. Deployed abroad, and
reciprocal rights of succession without
b. Are able to bring the child with
distinction from legitimate filiation.
them
However, if the adoptee and his/her
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biological parents had left a will, the law c. Simulated Birth Rectification
on testamentary succession shall Act (R.A. No. 11222)
govern.
Republic Act No. 11222 grants criminal and
4. Name [Sec. 41, RA 11642] administrative amnesty to parents and
Under RA 11642, the adopter has the
persons who tampered or made it appear in
right to choose the name by which the
child is to be known, consistent with the
the birth certificate of their adopted children
best interest of the child. that they are their biological parents.

5. Nationality Requirements:
Adoption does not confer citizenship of
the adopter to the adopted, and vice 1. That the simulation of birth was for the
versa. Under Sec. 3, Art. IV of the best interest of the child, and the child
Constitution, Philippine citizenship may has been consistently considered and
be lost/acquired [only] in the manner treated as the grantee’s own;
provided by law. The adoption of an 2. That a petition for adoption with an
alien is not a means of acquiring application for rectification of the
Philippine citizenship. A Filipino adopted simulated birth shall be applied for
by an alien does not lose his Philippine within 10 years from the date of the
citizenship. effectivity of the law on March 29, 2019;
3. That the child has been living with the
The right to confer citizenship belongs person/s qualified to avail of the
to the State (political) and cannot be amnesty for at least three (3) years
granted by a citizen through adoption. before March 29, 2019; and
Adoption creates a relationship between 4. A CDCLAA is issued by the DSWD in
the adopter and adoptee, not between favor of the child.
the State and the adoptee [Tolentino].

IX. SUPPORT
b. Inter-Country Adoption Act
(R.A. No. 8043) A. SCOPE

Inter-Country Adoption refers to the sociolegal Support consists of everything indispensable for
process of adopting a Filipino child by a sustenance, dwelling, clothing, medical
foreigner or a Filipino citizen permanently attendance, education, and transportation, in
residing abroad where the petition is filed, the keeping with the financial capacity of the family
supervised trial custody is undertaken, and the [Art. 194 (1), Family Code].
decree of adoption is issued outside the 1. Education includes a person’s schooling
Philippines. or training for some profession, trade, or
vocation, the right to which shall subsist
When Allowed beyond the age of majority [Art. 194
No child shall be matched to a foreign adoptive (2), Family Code].
family unless it can be satisfactorily shown that 2. Transportation includes expenses in
the child cannot be adopted locally [Sec. 11, RA going to and from school, or to and
8043]. from a place of work [Art. 194 (2),
Family Code].

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B. WHO ARE OBLIGED TO GIVE be deducted from the obligor’s share upon
SUPPORT liquidation of such regime [Art. 197, Family
Code].

Those obliged to support each other are:

1. Spouses,
2. Legitimate ascendants and descendants, D. ORDER OF SUPPORT
3. Parents and their children (legitimate
and illegitimate) and the children of the
latter (legitimate and illegitimate), Article 199, Family Code. Whenever two
4. Legitimate brothers and sisters, whether or more persons are obliged to give support,
of full or half-blood; [Art. 195, Family the liability shall devolve upon the following
Code] persons in the order herein provided:
5. Illegitimate brothers and sisters,
whether of full or half-blood a. Except (1) The spouse;
when the need for support of one (who
is of age) is due to a cause imputable to (2) The descendants in the nearest degree;
his/her fault or negligence [Art. 196,
Family Code] (3) The ascendants in the nearest degree;
and
Mutual Obligation to Support of Spouses
Both legitimate and illegitimate children are (4) The brothers and sisters.
entitled to support. The only difference is the
source of support which, for illegitimate children,
The order of liability among ascendants and
is the parent’s separate properties. Where the
descendants would be:
illegitimate parent is legally married to another
1. Legitimate children and descendants,
person, their CPG or ACP cannot answer for
2. Legitimate parents and ascendants, and
support for the illegitimate child of one of them,
3. Illegitimate children and their
unless the parent has no adequate separate
descendants [Tolentino].
property, in which case, support will be taken
from the CPG or ACP subject to reimbursement
upon liquidation [Arts. 122 & 197, Family Code]. In Case of Multiple Obligors
When the obligation to give support falls upon
two or more persons, the payment of the same
C. SOURCE OF SUPPORT shall be divided between them in proportion to
their resources [Art. 200 (1), Family Code].
CPG or ACP shall answer for the support of the:
Also, in case of urgent need and by special
1. Spouse,
circumstances, the judge may order only one
2. their common children, and
obligor to furnish support without prejudice to
3. the legitimate children of their spouse
reimbursement from other obligors of the share
[Arts. 94 & 121, Family Code].
due from them [Art. 200 (2), Family Code]
The separate property of the obligor shall
In Case of Multiple Recipients
answer for the support of the:
If there are multiple recipients and only one
1. Legitimate ascendants,
obligor, and the latter has no sufficient means to
2. [All other] descendants, whether
satisfy all claims:
legitimate or illegitimate and
1. Observe order in Art. 199 as to whose
3. 3. Brothers and sisters, whether
claim shall be satisfied first;
legitimate or illegitimately related.
2. But if the concurrent obligees are the
spouse and a child subject to parental
If no separate property, the ACP/CPG (if
financially capable) shall advance the support, to

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

authority, the child shall be preferred Reason

[Art. 200 (3), Family Code]. The amount of support agreed upon in the
contract or given in the will can be more than
Support Given by a Stranger what the recipient needs [Sempio-Diy].

Furthermore, contractual support shall be

Article 206, Family Code. When, without subject to adjustment whenever a modification
the knowledge of the person obliged to give is necessary due to changes in circumstances
support, it is given by a stranger, the latter manifestly beyond the contemplation of the
shall have a right to claim the same from the parties [Art. 208, Family Code].
former, unless it appears that he gave it
without intention of being reimbursed.
F. MANNER AND TIME OF PAYMENT
The stranger contemplated in this provision is
one who does not have any obligation to
support the recipient. Article 203, Family Code. The obligation
to give support shall be demandable from the
Person Obliged Refuses or Fails to Give time the person who has a right to receive the
Support same needs it for maintenance, but it shall
not be paid except from the date of judicial or
extra-judicial demand.
Article 207, Family Code. When the
person obliged to support another unjustly Support pendente lite may be claimed in
refuses or fails to give support when urgently accordance with the Rules of Court.
needed by the latter, any third person may
furnish support to the needy individual, with Payment shall be made within the first five
right of reimbursement from the person days of each corresponding month or when
obliged to give support. This Article shall the recipient dies, his heirs shall not be
particularly apply when the father or mother obliged to return what he has received in
of a child under the age of majority unjustly advance.
refuses to support or fails to give support to
the child when urgently needed.
Two Options to Fulfill the Obligation to
Give Support
1. Payment of the amount; or
E. AMOUNT OF SUPPORT
2. Receiving and maintaining the recipient
The amount of support is in proportion to the in the home of the provider
means of the provider and the needs of the
receiver, and can be reduced or increased if such Requisites for Option #2:
circumstances change [Arts. 201 & 202, Family 1. The obligor has his own home or
Code]. domicile, and
2. There is no moral or legal reason which
Contractual Support or that Given by prevents the recipient from living in the
Will obligor’s home or domicile [Art. 204,
The excess in an amount beyond that required Family Code].
for legal support shall be subject to levy on
attachment or execution [Art. 208, Family
G. RENUNCIATION AND
Code].
TERMINATION
The obligation of spouses to mutual support lies
in the existence of marriage bonds. Once the

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

marriage has been declared null, this obligation General Rule

ceases. Parental authority is not renounceable and
non-transferable.
The Court held that the validity of the marriage
can be collaterally attacked, so long as it is in an Exception
action for support. Although the suit is not In cases provided by law.
instituted to directly address the issue of validity,
the Court deems it essential to the Who Exercises Parental Authority [Arts.
determination of the issue on support [De 211-213, Family Code]
Castro v. Assidao-De Castro, G.R. No. 160172
(2008)].
General Rule
Joint exercise by the father and the mother of a
Under Art. 194, Family Code, the obligation to
child [Art. 211 (1), Family Code].
support a recipient’s education may continue
even after the person entitled has reached the
age of majority [Art. 194, Family Code].
Exceptions:
1. In case of disagreement, the father’s
decision prevails [Art. 211 (1), Family
H. SUPPORT PENDENTE LITE Code].
a. Exception to the Exception: If
there is a judicial order to the
Pending legal separation or annulment, and for
contrary
declaration of nullity, support pendente lite for
2. In case of absence or death of either
spouses and children will come from the
parent, the parent present or alive [Art.
ACP/CPG. After the final judgment granting the
212, Family Code].
petition, the mutual support obligation between
3. In case of separation of the parents, the
the spouses ceases. However, in a legal
parent designated by the court [Art.
separation, the court may order the guilty
213, Family Code].
spouse to give support to the innocent spouse
4. In the case of illegitimate children, the
[Art. 198, Family Code].
mother [Art. 176, Family Code]
Note: In Par. 1, Art. 100, Family Code, de facto
separation does not affect the ACP/ and the
CPG, except that the spouse who leaves the A. SUBSTITUTE PARENTAL
conjugal home without just cause shall not be AUTHORITY
entitled to support [Art. 100 (1), Family Code].

When Substitute Parental Authority is

X. PARENTAL AUTHORITY
Exercised [Art. 214, Family Code]
In case of death, absence, or unsuitability of the
What Comprises Parental Authority [Art. 209,
parents
Family Code]
1. Caring for and rearing of children for
civic consciousness and efficiency, and; Who Exercises Substitute Parental
2. Development of the moral, mental, and Authority (in order)
physical character and well-being of 1. The surviving grandparent [Art. 214,
children. Family Code].
a. Exception: When several
What Characterizes Parental Authority survive, the one designated by
[Art. 210, Family Code] the court, taking into account all
relevant considerations [Art.
214, Family Code].
2. The oldest brother or sister, over 21
years of age [Art. 216, Family Code].

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 PERSONS AND FAMILY RELATIONS CIVIL LAW

3. The child’s actual custodian, over 21 However, if in the same proceeding the court
years of age [Art. 216, Family Code]. finds the petitioner at fault, irrespective of the
merits of the petition, or when the
circumstances warrant, the court may also order
the deprivation or suspension of parental
B. SPECIAL PARENTAL AUTHORITY authority or adopt such other measures as it
may deem just and proper.
Who Exercises Special Parental
Authority [Art. 218, Family Code] The person exercising substitute parental
1. The school (its administrators and authority shall have the same authority over the
teachers), or person of the child as the parents [ [Art. 233
2. The individual, entity, or institution (1), Family Code].
engaged in child care
b. Effect of Parental Authority over
When is Special Parental Authority the Child’s Property
Exercised [Art. 218, Family Code]
1. While the child is under their Joint Legal Guardianship [Art. 225 (1),
supervision, instruction, or custody Family Code]
2. During all authorized activities, whether The father and the mother shall jointly exercise
inside or outside the premises of the legal guardianship over the property of their
school, entity, or institution unemancipated child without the necessity of a
court appointment.

C. EFFECTS OF PARENTAL AUTHORITY In case of disagreement, the father’s decision

shall prevail, unless there is a judicial order to
the contrary.
a. Effect of Parental Authority over
the Child’s Person Nature of Administration [Art. 226, Family
Code]
Civil Liability [Art. 221, Family Code] The property of the unemancipated child earned
Parents and other persons exercising parental or acquired with his work or industry or by
authority shall be civilly liable for the injuries onerous or gratuitous title shall belong to the
and damages caused by the acts or omissions of child in ownership and shall be devoted
their unemancipated children living in their exclusively to the latter’s support and education,
company and under their personal parental unless the title or transfer provides otherwise.
authority subject to the appropriate defenses
provided by law. The right of the parents over the fruits and
incomes of the child’s property shall be limited
Disciplinary Measures over the Child primarily to the child’s support and secondarily
[Art. 223, Family Code] to the collective daily needs of the family [Art.
Persons exercising parental authority over a 226, Family Code].
child may petition the proper court of the place
where the child resides for an order providing Bonds [Art. 225 (2), Family Code]
for disciplinary measures over the child. Where the market value of the property or the
annual income of the child exceeds P50,000, the
Note: parent concerned shall be required to furnish a
The child shall be entitled to the assistance of bond in such amount as the court may
counsel, either of his choice or appointed by the determine, but not less than ten per centum
court, and a summary hearing shall be (10%) of the value of the property or annual
conducted wherein the petitioner and the child income, to guarantee the performance of the
shall be heard.

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obligations prescribed for general guardians 4. Upon final judgment of a competent

[Art. 225 (2), Family Code]. court divesting the party concerned of
The petition shall be considered as a summary parental authority
special proceeding, with the ordinary rules on a. Note: Also mandatory and
guardianship being merely suppletory. permanent if the person
Except the Following, in which case exercising parental authority has
the Ordinary Rules on Guardianship subjected the child or allowed
shall Apply: him to be subjected to sexual
abuse [Art. 232, Family Code].
1. When the child is under substitute 5. Upon judicial declaration of absence or
parental authority; incapacity of the person exercising
2. When the guardian is a stranger, or; or parental authority.
3. When a parent has remarried.
When Suspended [Arts. 230-231, Family
Trusts [Art. 227, Family Code] Code]
If the parents entrust the management or 1. Upon conviction of the parent or the
administration of any of their properties to an person exercising the same of a crime
unemancipated child, the net proceeds of such which carries with it the penalty of civil
property shall belong to the owner. interdiction;
2. Upon final judgment of a competent
The child shall be given a reasonable monthly court in an action filed for the purpose
allowance in an amount not less than that which or in a related case, if the parent or the
the owner would have paid if the administrator person exercising the same:
were a stranger unless the owner grants the a. Treats the child with excessive
entire proceeds to the child. harshness or cruelty;
b. Gives the child corrupting
In any case, the proceeds thus given in whole or orders, counsel, or example;
in part shall not be charged to the child’s c. Compels the child to beg, or
legitime d. Subjects the child or allows him
to be subjected to acts of
lasciviousness [Art. 231, Family
Code].
D. SUSPENSION OR TERMINATION OF
PARENTAL AUTHORITY Note: The grounds enumerated above are
deemed to include cases that have resulted from
culpable negligence of the parent or person
When Permanently Terminated [Art.
exercising parental authority [Art. 231, Family
228, Family Code] Code].
1. Upon the death of the parents
2. Upon the death of the child, or
When Reinstated [Arts. 230-231, Family
3. Upon the emancipation of the child
Code]
1. Automatically upon service of penalty
Unless Subsequently Revived by Final
(civil interdiction).
Judgment, there is Permanent 2. Automatically upon pardon or amnesty
Termination [Art. 229, Family Code] of the offender.
1. Upon adoption of the child; 3. By judicial order, if the court finds that
2. Upon appointment of a general the cause, therefore, has ceased and
guardian; will not be repeated [Art. 231, Family
3. Upon judicial declaration of Code].
abandonment of the child in a case filed
for the purpose;

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Prohibition for Persons Exercising

Special Parental Authority
In no case shall the school administrator,
teacher or individual engaged in child care and
exercising special parental authority inflict
corporal punishment upon the child.

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 OBLIGATIONS AND CONTRACTS CIVIL LAW

enforcing compliance by intervention of courts

OBLIGATIONS [Article 1423, Civil Code].

b. Conditions Necessary for

I. CIVIL AND NATURAL
Natural Obligations
OBLIGATIONS
1. That there be a juridical tie between two
Art. 1423, Civil Code. Obligations are persons; (this distinguishes it from moral
civil or natural. Civil obligations give a obligations) and
right of action to compel their 2. That this tie is not given effect by law (this
performance. Natural obligations, not distinguishes it from civil obligations).
being based on positive law but on equity
and natural law, do not grant a right of c. Examples of Natural
action to enforce their performance, but Obligations
after voluntary fulfillment by the obligor,
the authorize the retention of what has
1. Performance after prescription
been delivered or rendered by reason
2. Contracts made by a minor
thereof. Some natural obligations are set
3. Performance by winning party
forth in the following articles.
4. Payment beyond inheritance
5. Payment of a void legacy
A. CIVIL OBLIGATIONS
i. Performance after
Civil obligations give a right of action to compel Prescription
their performance [Article 1423, Civil Code].
1. Voluntary Performance by
B. NATURAL OBLIGATIONS
Obligor

a. Concept
Art. 1424, Civil Code. When a right to
General Rule: sue upon a civil obligation has lapsed by
Natural obligations do not grant a right of action extinctive prescription, the obligor who
voluntarily performs the contract cannot
to enforce their performance.
recover what he has delivered or the
value of the service he has rendered.
Exception:
After voluntary fulfillment, they authorize the
retention of what has been delivered/rendered Requisites
by reason thereof. 1. There is a civil obligation.
2. The right to sue upon it has already
In order that there may be a natural obligation lapsed by extinctive prescription.
there must exist a juridical tie which is not 3. Obligor performs contract voluntarily.
prohibited by law [Article 1306, Civil Code] and
which in itself could give a cause of action but Consequence
because of some special circumstances is 1. Obligor cannot recover what he has
actually without legal sanction or means of delivered or value of the service he
rendered.

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2. Obligee gains the right to retain what

has been paid. Note: Majority commences at the age of
eighteen (18) years [Art. 234, Family Code, as
2. When Third Person Pays amended by RA 6809]. This article may no
the Debt longer have any application because
emancipation terminates parental authority
[Article 327, Civil Code].
Art. 1425, Civil Code. When without
the knowledge or against the will of the
Requisites
debtor, a third person pays a debt which
1. There is a civil obligation.
the obligor is not legally bound to pay
2. Minor between eighteen (18) and
because the action thereon has
prescribed, but the debtor later voluntarily twentyone (21) entered into the
reimburses the third person, the obligor contract without consent of parent or
cannot recover what he has paid. guardian.
3. Obligation is annulled after minor has
received the price or whole thing.
Requisites 4. Minor returns whole thing or price
(Prescribed Civil Obligation – Payment to 3rd received voluntarily.
Person)
1. There is a debt.
Consequence
2. Action upon the debt has prescribed.
There is no right to demand the thing or price
3. A third person, without the knowledge
returned.
or against the will of the debtor, pays
the debt.
2. Minor Voluntarily Pays
4. Debtor voluntarily reimburses the third
person.
Art. 1427, Civil Code. When a minor
Consequence between eighteen and twenty-one years
Obligor cannot recover what he has paid. of age, who has entered into a contract
without the consent of the parent or
ii. Contracts Made by a Minor guardian, voluntarily pays a sum of
money or delivers a fungible thing in
1. Minor Voluntarily Returns fulfillment of the obligation, there shall be
no right to recover the same from the
Payment
obligee who has spent or consumed it in
good faith. (1160a)
Art. 1426, Civil Code. When a minor
between eighteen and twenty-one years Requisites
of age who has entered into a contract 1. There is a civil obligation.
without the consent of the parent or 2. Minor between eighteen (18) and
guardian, after the annulment of the
twentyone (21) entered into the
contract voluntarily returns the whole
contract without consent of parent or
thing or price received, notwithstanding
guardian.
the fact that he has not been benefited
3. Minor pays a sum of money or delivers a
thereby, there is no right to demand the
thing or price thus returned. fungible thing voluntarily.

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4. Obligee spends the money or consumes Consequence

the thing in good faith. Defendant cannot demand return of what he
has delivered or the payment of the value of the
Consequence service.
There is no right to recover the money paid or
the thing delivered. iv. Payment beyond
inheritance
Note: It is not the voluntary payment that
prevents recovery, but the consumption or
spending of the thing or money in good faith. Art. 1429, Civil Code. When a testate
or intestate heir voluntarily pays a debt of
the decedent exceeding the value of the
3. Arts. 1426 and 1427, Civil
property which he received by will or by
Code, distinguished the law of intestacy from the estate of the
deceased, the payment is valid and
Art. 1426 Art. 1427 cannot be rescinded by the payer.

Presupposes a prior No prior annulment is

annulment involved Requisites:
1. Decedent incurred in debt during his
Refers to any object Refers to money or lifetime.
fungible things 2. Heir voluntarily pays debt.
3. Value of debt exceeds value of heir’s
Consumption in good Requires consumption
inheritance.
faith is not required in good faith

Consequence
iii. Performance by winning Payment is valid and heir cannot rescind it.
party
v. Payment of a void legacy
Art. 1428, Civil Code. When, after an
action to enforce a civil obligation has Art. 1430, Civil Code. When a will is
failed the defendant voluntarily performs declared void because it has not been
the obligation, he cannot demand the executed in accordance with the
return of what he has delivered or the formalities required by law, but one of the
payment of the value of the service he intestate heirs, after the settlement of the
has rendered. debts of the deceased, pays a legacy in
compliance with a clause in the defective
Requisites will, the payment is effective and
1. There is a civil obligation. irrevocable.
2. An action to enforce such obligation has
failed. Requisites
3. Defendant voluntarily performs the 1. There is a will providing for a legacy.
obligation. 2. The will is declared void because it was
not executed in accordance with the
formalities required by law.

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3. Heir pays legacy in compliance with a C. SOURCES OF OBLIGATIONS

clause in the defective will.

Art. 1157, Civil Code. Obligations arise

Consequence
from:
Payment is effective and irrevocable.
1. Law;
2. Contracts;
II. GENERAL PROVISIONS 3. Quasi-contracts;
4. Acts or omissions punished by law;
A. DEFINITION and
5. Quasi-delicts. (1089a)

Art. 1156, Civil Code. An obligation is a

juridical necessity to give, to do or not to Law
do. (n) Obligations arise when imposed by the law
itself and cannot be presumed [Article 1158,
Civil Code].
An obligation is a juridical relation, whereby a
person (called the creditor) may demand from
another (called the debtor) the observance of a Contracts
determinative conduct, and in case of breach, Obligations arise from the stipulation of the
may obtain satisfaction from the assets of the parties; it has the force of law and should be
latter [Makati Stock Exchange v. Campos, G.R. complied with in good faith [Article 1159, Civil
No. 138814 (2009)]. Code].

Quasi-Contracts
B. ELEMENTS OF AN OBLIGATION Obligations arise from lawful, voluntary and
unilateral acts which are enforceable to the
Active Subject (Obligee/Creditor) end that no one shall be unjustly enriched
The person (natural or juridical) who has the or benefited at the expense of another [Article
right or power to demand the prestation 2142, Civil Code].

Passive Subject (Obligor/Debtor)

Acts or omissions punished by
The person bound to perform the prestation
law/Delicts
Obligations arise from civil liability which is the
Prestation (Object)
consequence of a criminal offense [Article
The conduct required to be observed by the
1161, Civil Code].
debtor/obligor (i.e. to give, to do, or not to do)
[Ang Yu Asuncion v. CA, G.R. No. 109125
Quasi-delicts
(1994)]:
Obligations arise from damages caused to
1. Must be possible, physically and
another through an act or omission, there being
juridically
fault or negligence but no contractual
2. Must be determinate or at least
relations exist between the parties [Article
determinable according to
2176, Civil Code].
pre-established elements
3. Must have a possible equivalent in
Note: Responsibility for fault or negligence
money
under a quasi-delict [Article 2176, Civil Code] is

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entirely separate and distinct from the civil

liability arising from negligence under the Penal
Code. But the plaintiff cannot recover damages
twice for the same act or omission of the
defendant [Article 2177, Civil Code].

III. NATURE AND EFFECT OF OBLIGATIONS

A. OBLIGATION TO GIVE

a. Types of Things

Specific/ Determinate Thing Generic Thing Limited Generic Thing

Particularly designated or Object is designated only by its When the generic objects are
physically segregated from all class, genus, or species confined to a particular class
others of the same class [Art.
1460, Civil Code]; Identified by
individuality

Cannot be substituted against Can be substituted by any of the Can be substituted by any of the
the obligee’s will, although the same class and same kind same particular class
thing may be of the same value
as, or more valuable than that
which is due [Art. 1244, Civil
Code]

b. Rights and Duties of Parties

Duties of the Debtor Rights of the Creditor

To Give a Specific Thing

1. To preserve or take care of the thing due 1. To compel delivery [Art. 1165, Civil Code]
with the proper diligence of a good father of a 2. To the fruits from the time the obligation to
family, unless another standard of care is deliver arises [Art. 1164, Civil Code]
required by the law or stipulation of the 3. To the accessions and accessories, even if
parties [Art. 1163, Civil Code] not mentioned [Art. 1166, Civil Code]
2. To deliver the thing itself [Art. 1165, Civil 4. Cannot be compelled to receive a
Code] different thing, although of the same value
3. To deliver the fruits of the thing [Art. 1166, as, or more valuable than that which is due
Civil Code] [Art. 1244, Civil Code]
4. To deliver its accessions and accessories, 5. To recover damages in case of breach,
even though not mentioned [Art. 1166, Civil exclusive or in addition to specific
Code] performance [Arts. 1165 and 1170, Civil
a. Accessions - everything which is Code]
produced by a thing, or which is

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Duties of the Debtor Rights of the Creditor

To Give a Specific Thing

incorporated or attached thereto,

excluding fruits
b. Accessories - things designed for the
embellishment, use or preservation of
another thing of more importance.
5. To pay damages in case of breach [Art. 1170,
Civil Code]

To Give a Generic Thing

1. To take care of the thing [Art. 1163, Civil 1. To ask that the obligation be complied with
Code] at the expense of the debtor [Art. 1165, Civil
2. To deliver a thing of the quality intended by Code]
the parties taking into consideration the 2. To recover damages in case of breach [Art.
purpose of the obligations and other 1170, Civil Code]
circumstances [Art. 1246, Civil Code] 3. Not to be compelled to receive a
3. Creditor cannot demand a thing of different one, although of the same value
superior quality; neither can the debtor as, or more valuable than that which is due
deliver a thing of inferior quality [Art. 1246, [Art. 1244, Civil Code]
Civil Code] 4. To ask that the obligation be complied with by
4. To pay damages in case of breach [Art. a third person at the expense of the
1170, Civil Code] debtor [Art. 1165, Civil Code]

B. OBLIGATION TO DO OR NOT TO DO

a. Rights and Duties of Parties

Duties of the Debtor Rights of the Creditor

Obligation To Do

1. To do it [Art. 1167, Civil Code] 1. To have the obligation executed at the cost of
2. To shoulder the cost of execution should he the debtor [Art. 1167, Civil Code]
fail to do it [Art. 1167, Civil Code] 2. To recover damages in case of breach [Art.
3. To undo what has been poorly done [Art. 1170, Civil Code]
1167, Civil Code]
4. To pay damages in case of breach [Art. Note: The debtor cannot be compelled to perform
1170, Civil Code] his obligation. The ultimate sanction of civil
obligations is indemnification of damages.
Otherwise, this would be tantamount to
involuntary servitude.

Obligation Not To Do

1. Not to do what should not be done 1. To ask to undo what should not be done, at
2. To shoulder the cost of undoing what should the debtor’s expense [Art. 1168, Civil Code]

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Duties of the Debtor Rights of the Creditor

not have been done [Art. 1168, Civil Code] 2. To recover damages, where it would be
3. To pay damages in case of breach [Art. physically or legally impossible to undo what
1170, Civil Code] should not have been done, because of:
a. The very nature of the act itself
b. Rights acquired by third persons who
acted in good faith
c. When the effects of the acts prohibited
are definite in character and will not cease
even if the thing prohibited be undone

b. Transmissibility of Obligations other manner, of an obligation [Article 1232,

Civil Code].

Art. 1178, Civil Code. Subject to the

General Rule/Requirement
laws, all rights acquired in virtue of an
The thing or service in which the obligation
obligation are transmissible, if there has
consists must be completely delivered or
been no stipulation to the contrary.
(1112) rendered, as the case may be [Article 1233, Civil
Code].

General Rule
Exceptions
All rights acquired by virtue of an obligation are
1. Substantial Performance
transmissible [Article 1178, Civil Code].
The obligation has been substantially
Contracts take effect only between the parties,
performed in good faith.
their assigned and heirs [Article 1311, Civil
Effect: The obligor may recover though
Code].
there had been a strict and complete
fulfillment, less damages suffered by the
Exception obligee [Article 1234, Civil Code].
If the nature of obligation, law, or stipulation
provides otherwise [Articles 1178 and 1311, Civil 2. Incomplete/Irregular performance
Code]. Obligee accepts performance despite
knowledge of its incompleteness or
Only personal obligations, or those identified irregularity, and without expression any
with the persons themselves, are extinguished protest or objection.
by death [Stronghold Insurance Co. v. Effect: The obligation is deemed fully
Republic-Asahi Glass Corp., G.R. No. 147561 complied with.
(2006)]. Note: There is a clear distinction
between acceptance and mere receipt.
c. Performance of Obligations The word accept, as used in Article 1235
of the Civil Code, means to take as
Definition satisfactory or sufficient, or agree to an
Payment means not only (1) the delivery of incomplete or irregular performance [De
money, but also (2) the performance, in any Castro v. CA, G.R. No. 115838 (2002)]

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3. Partial Liquidation
Substantial Breach Slight or Casual
The debt is partly liquidated and partly Breach
unliquidated.
Effect: The creditor may demand and 2. Amounts to 2. There is partial/
the debtor may affect the payment of nonperformance, substantial
the liquidated debt without waiting for which is basis for performance in
rescission under good faith
the liquidation of the unliquidated debt
Art. 1191 and 3. Gives rise to
[Article 1248(2), Civil Code] payment of liability for
damages damages only
d. Breaches of Obligations [Art. 1234, Civil
Code]
Those who in the performance of their
obligations are guilty of the following are liable Substantial breach
for damages [Article 1170, Civil Code]: The question of whether a breach of contract is
substantial depends upon the attending
1. Fraud (dolo): The fraud contemplated by circumstances and not merely on the percentage
the foregoing provision is the deliberate and of the amount not paid [Sps. Cannu v. Sps.
intentional evasion of the normal fulfillment Galang, G.R. No. 139523 (2005)].
of obligations or what is called dolo
incidente/fraud. Substantial performance in good faith
2. Negligence (culpa): Fault or negligence of ● An attempt in good faith to perform,
the debtor as an incident in the fulfillment of without any willful or intentional departure
an existing obligation. therefrom.
3. Delay (mora): Delay in the fulfillment of ● The deviation from the obligation must be
the obligation. The delay however must be slight, and the omission or defect must be
imputable to the debtor/obligor. technical and unimportant, and must not
4. Those who in any manner contravene pervade the whole or be so material that
the tenor thereof: Covers any illicit act the object which the parties intended to
which impairs the strict and faithful accomplish in a particular manner is not
fulfillment of the obligation. attained [International Hotel Corp. v.
Joaquin, G.R. No. 158361 (2013)].
i. Failure to Perform
ii. Default, Delay, or Mora
Rule
Rescission of a contract will not be permitted for
Definition
a slight or casual breach, but only for such
Default or mora, which is a kind of voluntary
substantial and fundamental breach as would
breach of an obligation, signifies the idea of
defeat the agreement [Vermen Realty Corp v.
delay in the fulfillment of an obligation with
CA, G.R. No. 101762 (1993)].
respect to time.

Effect of Failure to Perform In positive obligations, like an obligation to give,

Substantial Breach Slight or Casual the obligor or debtor incurs in delay from the
Breach time the obligee or creditor demands from him
the fulfillment of the obligation [Pineda v. De
1. Total Breach 1. Partial breach Vega, G.R. No. 233774 (2019)].
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Rules on Default, Delay, or Mora 3. When the law so provides;

4. When the obligation expressly
Unilateral Reciprocal
declares;
Obligations Obligations
5. When the obligor has explicitly
General Rule Neither party incurs acknowledged that he is in default.
“No demand, no in delay if the other
delay.” The mere does not comply or is Note: It is insufficient that the law or obligation
expiration of the not ready to comply fixes a date for performance. It must further
period fixed by the in a proper manner
state expressly that after the period lapses,
parties is not enough with what is
in order that the incumbent upon him. default will commence.
debtor may incur in From the moment
delay. Those obliged one of the parties Kinds of Delay
to deliver or to do fulfills his obligation, 1. Mora Solvendi
something incur in delay by the other 2. Mora Accipiendi
delay from the time begins [Art. 1169(3),
3. Compensatio Morae
the obligee judicially Civil Code].
or extrajudicially
demands from them No delay if neither Mora Solvendi
the fulfillment of their performs. Delay on the part of the debtor to fulfill his
obligation [Art. obligation either to give (ex re) or to do (ex
1169(1), Civil Code]. persona).

When demand is not necessary in Requisites

order that delay may exist 1. Obligation must be liquidated, due and
[Art. 1169(2), Civil Code] demandable.
2. The debtor did not perform the
1. When demand would be useless, as obligation within the period agreed upon
when the obligor has rendered it beyond 3. Demand, judicial or extrajudicial, by the
his power to perform, such as: creditor, unless demand is not necessary
a. When the impossibility is caused by under the circumstances enumerated in
some act or fault of the debtor (e.g. Art. 1169(2), Civil Code [Pantaleon v.
debtor absconded or has destroyed American Express International Inc.
the thing to be delivered); or (AMEX), G.R. No. 174269 (2009)]
b. When the impossibility is caused by
a fortuitous event, but the debtor Effects
has bound himself to be liable in 1. The debtor is liable for damages [Article
case of such event [Art. 1262(2) 1170, Civil Code].
Civil Code]. 2. For determinate objects, the debtor shall
2. When from the nature and the bear the risk of loss, even if the loss is
circumstances of the obligation it due to fortuitous events [Article
appears that the designation of the 1165(3), Civil Code].
time when the thing is to be
delivered or the service is to be Mora Accipiendi
rendered was a controlling motive Delay on the part of the creditor to accept the
for the establishment of the contract performance of the obligation [Pantaleon v.
(time is of the essence);

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 OBLIGATIONS AND CONTRACTS CIVIL LAW

American Express International Inc. (AMEX), Equitable Tempering under Art. 1192
supra]. vs. under Art. 2215
Art. 1192 Art. 2215
Requisites
[Pantaleon v. AMEX, supra] In case both parties In contracts,
1. Debtor offers performance. have committed a quasi-contracts, and
2. Offer must be in compliance with the breach of the quasi-delicts, the
prestation as it should be performed. obligation, the liability court may equitably
of the first infractor mitigate the damages
3. Creditor refuses performance without
shall be equitably under circumstances
just cause. tempered by the other than the case
courts. referred to in the
Effects preceding article, as
1. The responsibility of the debtor is in the ff. instances:
reduced to fraud and gross negligence.
(1) That the plaintiff
2. The debtor is exempted from the risk of
himself has
loss of the thing, which is borne by the contravened the
creditor. [Article 1262(1), Civil Code] terms of the contract
3. The expenses incurred by the debtor for - xxx
the preservation of the thing after the
delay shall be chargeable to the creditor. The second infractor Does not consider
is not liable for which infractor first
a. If the obligation bears interest, the
damages at all; only committed the
debtor does not have to pay from the first infractor is breach.
the time of delay. liable, but with his
b. The creditor is liable for damages. liability mitigated.
c. The debtor may relieve himself of [Ong v. Bognalbal, G.R. No. 149140 (2006)]
the obligation by consigning the
thing [Article 1256, Civil Code].
iii. Fraud (Dolo) in the
Performance of the
Compensatio Morae
Obligation
Delay of both parties in reciprocal obligations
[Megaworld Properties and Holdings Inc. v.
Majestic Finance and Investment Co., G.R. No. Art. 1171, Civil Code. Responsibility
169694 (2015)]. arising from fraud is demandable in all
obligations. Any waiver of an action for
Effects future fraud is void. (1102a)
1. Delay of the obligor cancels delay of
obligee (and vice versa), hence it is as if Definition
there is no default. Fraud (dolo) is the deliberate or intentional
2. The liability of the first infractor shall be evasion of the normal fulfillment of an obligation
equitably tempered by the courts. If it (dolo incidente) [Legaspi Oil Co. Inc. v. CA, G.R.
cannot be determined which of the No. 96505 (1993)]. It may also refer to an
parties first violated the contract, the inducement through false representation and
same shall be deemed extinguished, and insidious machination (dolo causante) [Cathay
each shall bear his own damages Pacific Airways Ltd. v. Sps. Vazquez, G.R. No.
[Article 1192, Civil Code]. 150843 (2003)].
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Two (2) types of fraud 2. It must have induced the other party to
enter into the contract [Article 1338,
Dolo Causante Dolo Incidente
Civil Code];
[Arts. 1338(1), [Art. 1344(2), Civil
1344, Civil Code] Code] 3. It must have been serious [Article 1344,
Civil Code]; and
Definition 4. It must have resulted in damage or
injury to the party seeking annulment
Those deceptions or Those which are not
[Constantino v. CA, G.R. No. 116018
misrepresentations of serious in character
a serious character and without which (1996)].
employed by one the other party would
party and without still have entered into Note: Any waiver of action for future fraud is
which the other party the contract [Tankeh void [Article 1171, Civil Code]. This means that
would not have v. DBP, supra]. past fraud may be the subject of a valid waiver.
entered into the
contract [Tankeh v.
DBP, G.R. No. 171428 iv. Negligence (Culpa) in the
(2013)]. Performance of the
Obligation
When Present

Deception is used by Deception is used by Art. 1172, Civil Code. Responsibility

one party prior to or one party at the time arising from negligence in the
simultaneous with the of birth or perfection, performance of every kind of obligation is
contract, in order to or performance of the
also demandable, but such liability may
secure the consent of obligation.
be regulated by the courts, according to
the other [Tankeh v.
DBP, supra]. the circumstances. (1103)

Object
Art. 1173, Civil Code. The fault or
Essential cause of the Some particular or negligence of the obligor consists in the
obligation without accident of the omission of that diligence which is
which the other party obligation required by the nature of the obligation
would not have and corresponds with the circumstances
entered into the
of the persons, of the time and of the
contract
place. When negligence shows bad faith,
Effect the provisions of articles 1171 and 2201,
paragraph 2, shall apply.
Voidable and Damages
Damages If the law or contract does not state the
diligence which is to be observed in the
Requisites for Fraud to Vitiate a performance, that which is expected of a
good father of a family shall be required.
Contract (Dolo Causante)
(1104a)
1. It must have been employed by one
contracting party upon the other [Article
1344, Civil Code]; General Rule
Standard of care required is diligence of a good
father of the family.

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Exceptions required of a hospital's staff, as they

(Other standards of care) deal with the lives of patients who seek
1. Common Carriers urgent medical assistance. [Our Lady of
They are bound to observe Lourdes Hospital v. Spouses Capanzana,
extraordinary diligence in the vigilance G.R. No. 189218 (2017)].
over the goods and for the safety of the
passengers transported by them [Article Test of Negligence
1733, Civil Code]. Conduct is said to be negligent when a prudent
man in the position of the tortfeasor would have
2. Hotel and Inn-keepers foreseen that an effect harmful to another was
The keepers of hotels or inns shall be sufficiently probable to warrant his foregoing the
responsible for the deposit of effects, conduct or guarding against its consequences
made by travelers, as depositaries, [Picart v. Smith, G.R. No. L-12219 (1918)].
provided that notice was given to them,
or their employees of such effects and Kinds of Civil Negligence
that they take precautions relative to
the care and vigilance of their effects Culpa Contractual Culpa Aquiliana
[Article 1998, Civil Code].
Negligence is merely Negligence is direct,
incidental in the substantive, and
This responsibility shall include the loss
performance of an independent.
of, or injury to, the personal property of
obligation.
the guests caused by the servants or
employees of the keepers of hotels or There is always a There may or may
inns as well as strangers; but not that pre-existing not be a pre-existing
which may proceed from any force contractual relation. contractual
majeure [Article 2000, Civil Code]. obligation.

The source of the The source of

3. Banks obligation of the obligation is the
Banks have the obligation to treat the defendant to pay defendant’s
accounts of their clients ‘meticulously damages is the negligence itself.
and with the highest degree of care’ breach or
[Poole-Blunden v. UnionBank, G.R. No. nonfulfillment of the
contract.
205838 (2017)]
Proof of the existence The negligence of the
4. Pharmacists of the contract and of defendant must be
As active players in the field of its breach or proven.
dispensing medicines to the public, the nonfulfillment is
highest degree of care and diligence is sufficient prima facie
to warrant recovery.
expected [Mercury Drug Corporation v.
De Leon, G.R. No. 165622 (2008)].

Note: The Court has emphasized that a

higher degree of caution and an
exacting standard of diligence in patient
management and health care are

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Extent of Damages to be Awarded e. Remedies Available to Creditor

[Article 2201, Civil Code] in Cases of Breach
Good Faith Bad Faith
i. Principal Remedies of
Obligor is liable for Obligor shall be Creditors
those that are the responsible for all
natural and probable damages which may
consequences of the be reasonably Obligation to Give Obligation to Give
breach of the attributed to the a Specific Thing a Generic Thing
obligation, and which nonperformance of and Obligation to
the parties have the obligation. Do
foreseen or could
have reasonably Any waiver or Alternative Remedies
foreseen at the time renunciation made in
the obligation was the anticipation of Compel the debtor to Ask the obligation to
constituted. such liability is null make delivery be complied with at
and void. (specific the expense of the
performance) [Art. debtor [Art. 1165(2),
1165(1), Civil Code] Civil Code].
v. Contravention of the
Tenor of the Obligation Rescission [Art. 1191, If a person obliged to
Civil Code] do something fails to
do it, the same shall
The contravention of the tenor includes any illicit be executed at his
act which impairs the strict and faithful cost [Art. 1167, Civil
fulfillment of the obligation. It constitutes every Code]
kind of defective performance [Arrieta v.
National Rice and Corn Corp., G.R. No. L15645 What has been poorly
done [may] be
(1964)].
undone [Art. 1167,
Civil Code].
For example, there is a contravention of the
tenor of the obligation when a person tasked to Rescission [Art. 1191,
repair a typewriter fails to repair it and, instead, Civil Code]
returns it in shambles. Under Art. 1167 of the
Damages in any event
Civil Code, said person should pay the cost of
the labor or service expended in the repair of Those who in the performance of their
the typewriter by another person. Under Art. obligations are guilty of fraud, negligence, or
1170, Civil Code, said person shall also be liable delay, and those who in any manner
for the cost of missing parts because he failed to contravene the tenor thereof, are liable for
return the typewriter in the same condition as it damages [Art. 1170, Civil Code].
was when he received it [Chaves v. Gonzales,
G.R. No. L-27454 (1970)]. Rescission
(Resolution in Reciprocal Obligations)

Art. 1191, Civil Code. The power to

rescind obligations is implied in reciprocal
ones, in case one of the obligors should

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Rescission may take place extrajudicially, by the

not comply with what is incumbent upon
declaration of the injured party. The party who
him.
deems the contract violated may consider
it resolved or rescinded, and act
The injured party may choose between
the fulfillment and the rescission of the accordingly, without previous court action,
obligation, with the payment of damages but it proceeds at its own risk. For it is only
in either case. He may also seek the final judgment of the corresponding court
rescission, even after he has chosen that will conclusively and finally settle whether
fulfillment, if the latter should become the action taken was or was not correct in law.
impossible. But the law definitely does not require
that the contracting party who believes
The court shall decree the rescission itself injured must first file suit and wait
claimed, unless there be just cause for a judgment before taking extrajudicial
authorizing the fixing of a period. steps to protect its interest [UP v. Delos Angeles,
G.R. No. L-28602 (1970)].
This is understood to be without prejudice
to the rights of third persons who have Under Art. 1191, the right to rescind an
acquired the thing, in accordance with obligation is predicated on the violation of the
articles 1385 and 1388 and the Mortgage reciprocity between parties, brought about by a
Law. (1124) breach of faith by one of them. Rescission,
however, is allowed only where the breach is
Rescission substantial and fundamental to the fulfillment of
The unmaking of a contract, or its undoing from the obligation [Del Castillo Vda. de Mistica v.
the beginning, and not merely its termination Naguiat, G.R. No. 137909 (2003); Sps. Cannu v.
[Pryce Corp v. PAGCOR, G.R. No. 157480 Sps. Galang, G.R. No. 139523 (2005)].
(2005)].
It will not be permitted in casual or slight breach
Right to Rescind [Song Fo v. Hawaiian Philippines, G.R. No.
The rescission on account of breach of 23769 (1925)].
stipulations is not predicated on injury to the
economic interests of the party plaintiff but on Distinguished from Rescission under
the breach of faith by the defendant, that Art. 1380
violates the reciprocity between the parties
Rescission / Rescission [Art.
[Universal Food Corporation v. CA, G.R. No.
Resolution [Art. 1380, Civil Code]
L-29155 (1970)]. 1191, Civil Code]

Effect of Rescission Based on Based on lesion or

Under Article 1191, rescission extinguishes the nonperformance or fraud upon creditors.
non-fulfillment of
obligatory relation as if it had never been
obligation.
created, the extinction having a retroactive
effect. Both parties must surrender what they Action is instituted Action is instituted by
have respectively received and return each other only by the injured either party or by a
as far as practicable to their original situation party. third person.
[Article 1385, Civil Code].
Principal action, Subsidiary action, in

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1. To levy by attachment and execution

Rescission / Rescission [Art.
Resolution [Art. 1380, Civil Code] upon all the property of the debtor,
1191, Civil Code] except those exempt from execution;
2. To exercise all the rights and actions of
retaliatory in the absence of any the debtor, except such as are inherently
character. other legal means to personal to him; and
obtain reparation.
3. To ask for rescission of the contracts
Applies only to Applies to either made by the debtor in fraud of their
reciprocal obligations unilateral or rights.
where one party is reciprocal obligations
guilty of even when the Note: Previous approval of the court is not
non-fulfillment contract has been necessary to exercise the accion subrogatoria.
fully fulfilled.

In some cases, the Court cannot grant a 2. Accion Pauliana

court may grant a period or term within
term for which one must Creditors may also impugn the acts which the
performance. comply. debtor may have done to defraud them [Article
Non-performance by Non-performance by 1177, Civil Code].
the other party is the other party is
important. immaterial.
Art. 1381, par. 3, Civil Code. The
following contracts are rescissible: [...]
ii. Subsidiary Remedies of
Creditors (3) Those undertaken in fraud of creditors
when the latter cannot in any other
manner collect the claims due them;
1. Accion Subrogatoria

Requisites
Art. 1177, Civil Code. The creditors,
[Cheng v. CA, G.R. No. 144169 (2001)]
after having pursued the property in
1. There is a credit in favor of the
possession of the debtor to satisfy their
plaintiff prior to the alienation by the
claims, may exercise all the rights and
debtor.
bring all the actions of the latter for the
same purpose, save those which are 2. The debtor has performed a
inherent in his person; they may also subsequent contract conveying
impugn the acts which the debtor may patrimonial benefit to third person/s.
have done to defraud them. (1111) 3. The debtor’s acts are fraudulent to
the prejudice of the creditor.
4. The creditor has no other legal
The right of the creditor to exercise all of the
remedy to satisfy his claim.
rights and bring all the actions which his debtor
5. The third person who received the
may have against third persons.
property is an accomplice to the
fraud.
In order to satisfy their claims against the
debtor, creditors have the following
An accion pauliana presupposes the following:
successive rights:
1. A judgment;

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2. the issuance by the trial court of a writ

Every obligation which contains a
of execution for the satisfaction of the
resolutory condition shall also be
judgment; and
demandable, without prejudice to the
3. the failure of the sheriff to enforce and
effects of the happening of the event.
satisfy the judgment of the court. (1113)

It requires that the creditor has exhausted the

property of the debtor. The date of the decision A pure obligation is immediately demandable,
of the trial court is immaterial. What is important regardless of the presence of a condition or a
is that the credit of the plaintiff antedates that of term/period.
the fraudulent alienation by the debtor of his
property. After all, the decision of the trial court B. CONDITIONAL
against the debtor will retroact to the time when
the debtor became indebted to the creditor Art. 1181, Civil Code. In conditional
[Cheng v. CA, G.R. No. 144169 (2001)]. obligations, the acquisition of rights, as
well as the extinguishment or loss of
Accion Accion Pauliana those already acquired, shall depend
Subrogatoria upon the happening of the event which
constitutes the condition. (1114)
Not necessary that Credit must exist
creditor’s claim is prior to the
prior to the fraudulent alienation Definition
acquisition of the [Siguan v. Lim, G.R. A condition is a future AND uncertain event.
right by the debtor No. 134685 (1999)]. This includes the acquisition of proof or
knowledge of a past event unknown to the
No need for Fraudulent intent is parties.
fraudulent intent required if the
contract rescinded is
onerous a. Kinds of Conditions as to
Effect
No period for Prescribes in four (4)
prescription years from the
i. Suspensive
discovery of the
fraud.
Obligation shall only be effective upon the
fulfillment of the condition [Article 1181, Civil
IV. DIFFERENT KINDS OF Code]. The obligee acquires a mere hope or
OBLIGATIONS expectancy, protected by law, upon the
constitution of the obligation.
A. PURE
Before Fulfillment After Fulfillment
Art. 1179, Civil Code. Every obligation
whose performance does not depend The demandability The obligation arises
upon a future or uncertain event, or upon and acquisition/ or becomes effective.
a past event unknown to the parties, is effectivity of the
rights arising from The obligor can be
demandable at once.
the obligation is compelled to comply
suspended, but the with what is

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Before Fulfillment After Fulfillment retroact to the day of the constitution of

the obligation. Nevertheless, when the
creditor may bring incumbent upon him obligation imposes reciprocal prestations
the appropriate upon the parties, the fruits and interests
actions for the during the pendency of the condition shall
preservation of his be deemed to have been mutually
right [Art. 1188, Civil compensated. If the obligation is
Code].
unilateral, the debtor shall appropriate the
fruits and interests received, unless from
Doctrine of Constructive Fulfillment of the nature and circumstances of the
Suspensive Conditions obligation it should be inferred that the
intention of the person constituting the
same was different.
Art. 1186, Civil Code. The condition
shall be deemed fulfilled when the obligor
voluntarily prevents its fulfillment. (1119) Rationale
Obligation is constituted when its essential
elements concur. The condition imposed is only
A suspensive condition is deemed fulfilled when: an accidental element.
1. Obligor intends to prevent obligee
from complying with the condition.
Applicability
2. Obligor actually prevents obligee from
This applies to consensual contracts only.
complying with the condition.

Exception
The two (2) requisites must concur. Mere
This does not apply to real contracts which can
intention of the debtor to prevent the happening
only be perfected by delivery.
of the condition, or to place ineffective obstacles
to its compliance, without actually preventing
Effects of the Happening of Suspensive
the fulfillment, is insufficient [International Hotel
Corporation v. Joaquin, G.R. No. 158361 Conditions
(2013)]. To give To Do/Not To Do

Doctrine does not apply to If reciprocal, the In obligations to do

1. Resolutory conditions fruits and interests or not to do, the
2. External contingency that is lawfully shall be deemed to court shall determine
within the control of the obligor [Taylor have been mutually the retroactive effect
compensated as a of the condition that
v. Uy Tieng, G.R. No. L-16109 (1922)]
matter of justice and has been complied
3. Obligor, in preventing the fulfillment of convenience [Art. with [Art. 1187(2),
the condition, acts pursuant to a right 1187(1), Civil Code]. Civil Code].

Principle of Retroactivity in Suspensive If unilateral, the The power of the

debtor shall court includes the
Conditions appropriate the fruits determination of
Art. 1187, par. 1, Civil Code. The and interests whether or not there
received, unless from will be any retroactive
effects of a conditional obligation to give,
the nature and effect. This rule shall
once the condition has been fulfilled, shall circumstance it likewise apply in

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To give To Do/Not To Do ii. Casual

The fulfillment of the condition depends upon

should be inferred obligations with a
that the intention of resolutory condition chance or upon the will of a third person [Article
the persons [Art. 1190(3), Civil 1182, Civil Code].
constituting the same Code]. iii. Mixed
was different [Art.
1187(1), Civil Code].
The fulfillment of the condition depends partly
upon the will of a party to the contract and
ii. Resolutory partly upon chance and/or will of a third person.

The obligation is demandable at once, without

Exclusively Condition and obligation
prejudice to the effects of the happening of the upon the are valid
event [Article 1179(2), Civil Code]. Creditor’s Will

Exclusively Condition and obligation

Before Fulfillment After Fulfillment upon the are void because to allow
Debtor’s Will such condition would be
Preservation of Whatever may have in case of a equivalent to sanctioning
creditor’s rights [Art. been paid or Suspensive obligations which are
1188(1), Civil Code] delivered by one or Condition [Art. illusory. It also constitutes
also applies to both of the parties 1182, Civil a direct contravention of
obligations with a upon the constitution Code] the principle of mutuality
resolutory condition. of the obligation shall of contracts.
have to be returned
upon the fulfillment Exclusively Condition and obligation
of the condition [Art. upon the are valid because in such
1190(1), Civil Code]. Debtor’s Will a situation, the position of
There is no return to in case of a the debtor is exactly the
the status quo. Resolutory same as the position of the
However, when the Condition [Art. creditor when the
condition is not 1179(2) , Civil condition is suspensive. It
fulfilled, rights are Code] does not render the
consolidated and they obligation illusory.
become absolute in
character.
Illustration: The condition that payment should
be made by Hermosa as soon as he receives
b. Kinds of Conditions as to funds from the sale of his property in Spain is a
Cause/Origin mixed condition, depending partly upon the will
of intestate and partly upon chance, i.e., the
i. Potestative presence of a buyer of the property for the price
and under the conditions desired by the
The fulfillment of the condition depends on the intestate.
sole act or decision of a party.
The condition implies that the obligor
already decided to sell the house and all
that was needed to make the obligation

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demandable is that the sale be

Without Debtor’s With Debtor’s
consummated and the price thereof Fault/Act Fault/Act
remitted to the islands. There were still other
conditions that had to concur to effect the sale, Loss
mainly that of the presence of a buyer, ready,
able and willing to purchase the property under Obligation is Obligation is
extinguished. [Art. converted into one of
the conditions set by the intestate [Hermosa v.
1189 (1), Civil Code] indemnity for
Longara, G.R. No. L5267 (1953)]. damages. [Art. 1189
(2), Civil Code]
Loss, Deterioration, or Improvement
Deterioration
of a Specific Thing
Definition Impairment to be Creditor may choose
borne by the creditor. between bringing an
[Art. 1189 (3), Civil action for rescission
Loss of a Thing A thing is deemed lost:
Code] of the obligation OR
a. When it perishes;
bringing an action for
b. When it goes out of
specific performance,
commerce of man;
with damages in
or
either case. [Art.
c. When it disappears in
1189 (4), Civil Code]
such a manner that its
existence is Improvement
unknown or it
cannot be Improvement by the Improvement at the
recovered [Art. thing’s nature or by debtor’s expense, the
1189(2), Civil Code] time shall inure to the debtor shall ONLY
benefit of the have usufructuary
Deterioration Any reduction or creditor. [Art. 1189 rights. [Art. 1189 (6),
of a Thing impairment in the (5), Civil Code] Civil Code]
substance or value of a
thing which does not
amount to a loss
Obligations To Do and Not To Do
Improvement Anything added to,
of a Thing incorporated in, or
Art. 1187, par. 2, Civil Code. In
attached to the thing that
is due obligations to do and not to do, the courts
shall determine, in each case, the
retroactive effect of the condition that has
Obligation to Deliver a Determinate Thing been complied with. (1120)
When the conditions have been imposed with
the intention of suspending the efficacy of an
obligation to give, the following rules shall be Art. 1190, par. 3, Civil Code. As for
observed in case of the improvement, loss or obligations to do and not to do, the
deterioration of the thing during the pendency provisions of the second paragraph of
of the condition [Article 1189, Civil Code]:
article 1187 shall be observed as regards
the effect of the extinguishment of the
obligation. (1123)

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Obligations With a Resolutory Positive [Art. 1184, Negative [Art.

Condition Civil Code] 1185, Civil Code]
Upon the happening of the resolutory condition,
the rules of Article 1189, Civil Code shall be obligation shall render the
applied to the party who is bound to return (i.e. 1. as soon as the obligation effective
time expires or from the moment
the creditor in the original obligation).
2. if it has become 1. the time indicated
indubitable that has elapsed, or
c. Impossible Conditions the event will not 2. if it has become
take place. evident that the
General Rule event cannot
occur.
Impossible conditions, those contrary to good
customs or public policy, and those prohibited by
law shall annul the obligation which depends Where no date of fulfillment is stipulated, the
upon them [Article 1183, Civil Code]. condition must be fulfilled within a reasonable
time or the time probably contemplated
Exceptions [Article 1183, Civil Code] according to the nature of the obligation [Article
1. If the obligation is divisible 1185(2), Civil Code].
The part thereof which is not affected
by the impossible or unlawful condition C. OBLIGATION WITH A PERIOD
shall be valid. OR A TERM
2. If the condition is not to do an
impossible thing 1. Obligations for whose fulfillment a day
Said condition shall be considered as not certain has been fixed ⎯ shall be
having been agreed upon. demandable only when that day comes
[Article 1193, Civil Code].
The prohibition in the deed of donation against 2. Obligations with a resolutory period ⎯
the alienation of the property for an entire take effect at once, but terminate upon
century, being an unreasonable emasculation arrival of the day certain [Article 1193, Civil
and denial of an integral attribute of ownership, Code].
should be declared as an illegal or impossible 3. When the debtor binds himself to pay when
condition. Consequently, such condition shall be his means permit him to do so, the
considered as not imposed. [Roman Catholic obligation shall be deemed to be one with a
Archdiocese of Manila v. CA, G.R. No. 77425 period [Article 1180, Civil Code].
(1991)]
Term or Period
d. Positive and Negative Interval of time, which either suspends
Conditions demandability or produces extinguishment.

A fortuitous event does not interrupt the running

Positive [Art. 1184, Negative [Art. of the period. It only relieves the contracting
Civil Code] 1185, Civil Code]
parties from the fulfillment of their respective
The condition that The condition that obligations during the period [Victoria’s Planters
some event happen some event will not v. Victoria Milling Co., G.R. No. L-6648 (1955)].
at a determinate time happen at a
shall extinguish the determinate time

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Term/Period and Condition 2. The obligor being unaware of the period or

Distinguished believing that the obligation has become
due and demandable.
Term/Period Condition

Interval of time which Fact or event which is Effect

is future and certain future and uncertain That thing paid or delivered may be recovered
with fruits and interests.
Must necessarily May or may not
come, although it happen c. Loss, Deterioration, or
may not be known
when Improvement of the Thing
Before Period Expires
No effect on Gives rise to an [Article 1194, Civil Code]
existence of the obligation or
obligation, only its extinguishes one
demandability or already existing Trigger
performance In case of loss, deterioration or improvement of
the thing before the arrival of the day certain.
No retroactive effect Has retroactive effect
unless there is an
agreement to the
Effect
contrary The rules in Article 1189 shall apply.

When it is left When it is left d. Benefit of the Period [Article

exclusively to the will exclusively to the will
1196, Civil Code]
of the debtor, the of the debtor, the
existence of the very existence of the
obligation is not obligation is affected Trigger
affected Whenever in an obligation, a period is
designated.
a. Kinds of Period [Article
1193, Civil Code] Effect
It is presumed to have been established for the
1. Ex die / Suspensive Period - Obligation benefit of both the creditor and the debtor
becomes demandable after the lapse of the
period. Exception
2. In die / Resolutory Period - Obligation From the tenor of the same or other
becomes demandable at once but is circumstances it should appear that the period
extinguished after the lapse of the period. has been established in favor of one or of the
other.
b. Effect of Advance Payment
Period for the benefit of either creditor
or Delivery [Article 1195,
or debtor
Civil Code]
Creditor Debtor
Trigger
1. Something has been paid or delivered Creditor may Debtor may oppose
demand the any premature
before the arrival of the period; and
fulfillment or demand on the part

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obligation is deemed to be one with a period

performance of the of the obligee for the
obligation at any time performance of the [Article 1180, Civil Code].
but the obligor obligation, or if he so
cannot compel him desires, he may General Rule
to accept payment renounce the The courts may fix the duration of the period.
before the expiration benefit of the Once fixed by the courts, the period cannot be
of the period. period by performing
changed by the parties. The courts shall
his obligation in
advance. determine such period as may, under the
circumstances, have been probably
contemplated by the parties [Article 1197(3),
If the period is for the benefit of the Civil Code].
debtor alone, he shall lose every right
to make use of it Exception
1. When after the obligation has been The court shall not fix a period anymore if the
contracted, he becomes insolvent, unless he fixing is rendered futile by the circumstances of
gives a guaranty or security for the debt; the case. For example, if it can be deduced that
[Article 1198(1), Civil Code] the parties intended that the obligation be
2. When he does not furnish to the creditor the complied with within a reasonable time, and it
guaranties or securities which he has has been fifty (50) years since the execution,
promised; [Article 1198(2), Civil Code] the reasonable time contemplated by the parties
3. When by his own acts he has impaired said has already lapsed. Hence, there is no need to
guaranties or securities after their fix a period which will only be a mere formality
establishment, and when through a with no other purpose than to delay or lead to
fortuitous event they disappear, unless he an unnecessary multiplication of suits [Clemente
immediately gives new ones equally v. Republic, G.R. No. 220008 (2019)].
satisfactory; [Article 1198(3), Civil Code]
4. When the debtor violates any undertaking, “Period probably contemplated by the
in consideration of which the creditor agreed
parties”
to the period; [Article 1198(4), Civil Code]
The seller was given a reasonable time to
5. When the debtor attempts to abscond
comply with its obligation to construct streets in
[Article 1198(5), Civil Code]
the perimeter of the land. In fixing a period, the
6. When required by law or stipulation; [Article
SC ruled that the parties intended that the
1306, Civil Code]
period be indefinite and shall last until the
informal settlers are evicted from the land where
e. When Courts May Fix Period the streets ought to be constructed [Araneta v.
Phil. Sugar Estates, G.R. No. L- 22558 (1967)].
Triggers
1. If the obligation does not fix a period but it The parents, out of parental love, allowed their
can be inferred from its nature and the children to occupy their land. The SC ruled that
circumstances that a period was intended no period was intended from such agreement.
[Article 1197(1), Civil Code]; Hence, the Court has no authority to set a
2. If the period depends upon the will of the period. Rather, the parties implied a resolutory
debtor [Article 1197(2), Civil Code]; or condition that the agreement would end upon
3. If the debtor binds himself to pay when his the dissipation of parental love [Macasaet v.
means permit him to do so and thus the Macasaet, G.R. Nos. 154391-92 (2004)].

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D. ALTERNATIVE OR FACULTATIVE part of the debtor. give rise to any

liability on the part
Alternative and Facultative Conditions of the debtor.
Distinguished
Alternative Facultative Right of Choice [Article 1200, Civil
Obligations Obligations Code]

Of the two or more Of the two or more

prestations, several prestations, only one Art. 1200, Civil Code. The right of
are due. [Art. 1199, is due, while the choice belongs to the debtor, unless it has
Civil Code]. other/s may be been expressly granted to the creditor.
performed in
substitution of the
The debtor shall have no right to choose
one due. [Art.
those prestations which are impossible,
1206(1), Civil Code].
unlawful or which could not have been
May be complied with May be complied with the object of the obligation. (1132)
by performance of by performance of
one of the prestations another prestation in
which are substitution of that
General Rule
alternatively due. which is due. Belongs to the debtor

The right of choice Choice of prestation Exception

belongs to the pertains only to the
1. It is expressly granted to the creditor.
debtor, unless it debtor.
has been expressly 2. It is expressly granted to a third person.
granted to the
creditor [Art. 1200, Consent of other party
Civil Code]. The law does not require the other party to
consent to the choice made by the party entitled
Loss/impossibility of Loss/impossibility of
to choose [Article 1200(1), Civil Code]. The only
all prestations due the prestation due
to a fortuitous event to a fortuitous event possible exception is when the debtor has
shall extinguish the is sufficient to chosen a prestation which could not have been
obligation. extinguish the the object of the obligation [Article 1200(2), Civil
obligation. Code]

Loss/impossibility of Loss/impossibility of
The consent of the creditor to a novation by
one of the the substitute/s
prestations does does not extinguish change of debtor is as indispensable as the
not extinguish the the obligation, creditor’s consent in conventional subrogation in
obligation. provided the order that a novation shall legally take place
obligation which is [Reyes v. CA, G.R. No. 120817 (1996)]
due subsists

Culpable loss of any Culpable loss of the Debtor cannot make a choice, or
of the objects object which the delays selection
alternatively due debtor may deliver in If through the creditor's acts the debtor cannot
before the choice is substitution before make a choice according to the terms of the
made may give rise the substitution is obligation, the latter may rescind the
to liability on the effected does not

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 OBLIGATIONS AND CONTRACTS CIVIL LAW

contract with damages [Art. 1203, Civil

the value of the last
Code]. thing which
disappeared or
Debtor does not select at the them the service which become
performance should be effected impossible, plus
If the debtor does not select at the time when damages other than
performance should be effected, the choice can the value may also be
awarded
be made for him by the creditor by applying
Article 1167. Some prestations lost/impossible

In obligations to do (debtor considered to have Debtor to perform Debtor to perform

waived his right, subject to equity that which he shall that which the debtor
choose from among shall choose from
considerations) [Article 1167, Civil Code].
the remainder. among the remainder,
without liability for
Effect of notice of choice damages
The effect of the notice is to limit the obligation
to the object or prestation selected. The One prestation remains
obligation is converted into a simple obligation
Debtor to perform Debtor to perform
to perform the prestation chosen. [Art. 1205, that which remains. that which remains
Civil Code]

Once a selection has been communicated, it is If Creditor’s Choice [Article 1205, Civil
irrevocable. Code]:
Fortuitous Event Debtor’s Fault
Instances when obligation is
converted into a simple obligation All prestations lost/impossible
1. The person with the right of choice has
Debtor is released Creditor may claim
communicated his choice [Articles 1201 & from the obligation. the price/value of any
1205(1), Civil Code] of them, with
2. Only one prestation is practicable [Article indemnity for
1202, Civil Code] damages

Some prestations lost/impossible

Loss of Specific Things or Impossibility
of Performance of Prestations in an Debtor to deliver that Creditor may claim
Alternative Obligation which he shall choose any of those
from among the subsisting without a
remainder. right to damages OR
If Debtor’s Choice [Article 1204, Civil price/value of the
Code]: thing lost, with right
to damages
Fortuitous Event Debtor’s Fault
One prestation remains
All prestations lost/impossible
Debtor to perform Creditor may claim
Debtor is released Creditor shall have a that which remains. the remaining thing
from the obligation. right to indemnity for without a right to
damages based on

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 OBLIGATIONS AND CONTRACTS CIVIL LAW

and/or demanded by several creditors (joint

damages OR the
price/value of the creditors).
thing lost with right
to damages Each debtor is liable only for a proportionate
part of the debt, and each creditor is entitled
only to a proportionate part of the credit [Article
Facultative Obligations
1208, Civil Code].
Only one prestation is agreed upon, but the
obligor may render another in substitution
[Article 1206, Civil Code].
Presumption of Joint Obligation [Article
1207, Civil Code]
Loss or Deterioration of Substitute in
General Rule
Facultative Obligations [Article 1206, Civil
An obligation is presumed joint if there is a
Code]:
concurrence of several creditors, or of several
Before After Substitution debtors, or of several creditors and debtors in
Substitution is is Made one and the same obligation.
Made

If due to bad faith The loss or Exceptions

or fraud of obligor: deterioration of the 1. When the obligation expressly states that
obligor is liable. substitute on account there is solidarity [Article 1207, Civil Code]
of the obligor’s delay, 2. When the law requires solidarity, i.e.
If due to the negligence, or fraud, quasi-delicts [Article 2194, Civil Code], joint
negligence of the renders the obligor
obligor: obligor is payees by mistake [Article 2157, Civil Code],
liable because once
not liable. the substitution is acts under Arts. 19-22, Civil Code, if
made, the obligation committed by two or more persons acting
is converted into a jointly
simple one with the 3. When the nature of the obligation requires
substituted thing as solidarity [Article 1207, Civil Code]
the object of the
4. When a charge or condition imposed upon
obligation.
heirs or legatees, and the testament
Debtor to perform
that which the debtor expressly makes the charge or condition in
shall choose from solidum
among the remainder, 5. When the solidary responsibility is imputed
without liability for by a final judgment upon several defendants
damages
As a rule, hospitals are not liable for the
E. JOINT AND SOLIDARY negligence of its independent contractors.
OBLIGATIONS However, it may be found liable if the physician
or independent contractor acts as an ostensible
a. Joint Obligations agent of the hospital. This exception is also
known as the "doctrine of apparent
The whole obligation, whether capable of authority." [Casumpang v. Cortejo, G.R. No.
division into equal parts or not, is to be paid or 171127 (2015)]
performed by several debtors (joint debtors)

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 OBLIGATIONS AND CONTRACTS CIVIL LAW

Presumption of Divisibility in Joint Summary: In Case of Breach

Obligations [Article 1208, Civil Code] Joint Divisible Joint Indivisible
Obligations Obligations
Credit or debt shall be presumed to be divided
into as many equal shares as there are creditors In case of breach of In case of breach
or debtors, the credits or debts being considered obligation by one of where one of the
the debtors, damages joint debtors fails to
distinct from one another.
due must be borne by comply with his
him alone. undertaking, the
Joint Divisible Obligation obligation can no
One where a concurrence of several creditors, or longer be fulfilled or
of several debtors, or of several creditors and performed. Thus, the
debtors, by virtue of which, each of the creditors action must be
converted into one
has a right to demand, and each of the debtors
for indemnity for
is bound to render compliance with his damages, with each
proportionate part of the prestation which debtor liable only for
constitute the object of the obligation. his part in the price
or value of the
Joint Indivisible Obligation prestation.

Art. 1209, Civil Code. If the division is

impossible, the right of the creditors may b. Solidary Obligations
be prejudiced only by their collective acts,
and the debt can be enforced only by An obligation where there is concurrence of
proceeding against all the debtors. If one several creditors, or of several debtors, or of
of the latter should be insolvent, the several creditors and several debtors, by virtue
others shall not be liable for his share. of which, each of the creditors has the right to
(1139) demand, and each of the debtors is bound to
render, entire compliance with the prestation
which constitutes the object of the obligation
When there are several debtors or creditors, but
[Article 1207, Civil Code].
the prestation is indivisible, the obligation is
joint, unless solidarity has been stipulated
The indivisibility of an obligation does not
[Article 1209, Civil Code].
necessarily give rise to solidarity. Nor does
solidarity of itself imply indivisibility [Article
When Indivisible [Article 1225, Civil Code]
1210, Civil Code].
1. Obligations to give definite things
2. Obligations not susceptible of partial
Solidarity may exist although the creditors and
performance
the debtors may not be bound in the same
3. Indivisibility is provided by law or intended
manner and by the same periods and condition
by the parties, even though the object or
[Article 1211, Civil Code].
service may be physically divisible
4. In obligations not to do, when character of
Other terms for solidary obligations are:
prestation requires indivisibility
a. Joint solidarily;
b. Jointly and severally; or
c. In solidum.

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concessionaires the right to operate the

Solidarity Indivisibility
waterworks and sewerage areas in these Service
Refers to the legal tie Refers to the Areas. [Maynilad v. Secretary, G.R. 202897
(vinculum juris), and prestation that is not (2019)]
consequently to the capable of partial
subjects or parties of performance
As to Parties Bound
the obligation
1. Active (solidarity among creditors) — Each
More than one Exists even if there is creditor has the authority to claim and
creditor or more than only one creditor enforce the rights of all, with the resulting
one debtor (plurality and/or one debtor obligation of paying everyone what belongs
of subjects) to him.
2. Passive (solidarity among debtors) — Each
Each creditor may Each creditor cannot
demand the entire demand more than debtor can be made to answer for the
prestation and each his share and each others, with the right on the part of the
debtor is bound to debtor is not bound debtor-payor to recover from the others
pay the entire to pay more than his their respective shares.
prestation share 3. Mixed (solidarity among creditors and
debtors) — The creditor can commence an
Effect of breach: Effect of breach:
Solidarity remains Obligation is action against anyone of the debtors for the
converted to compliance with the entire obligation minus
indemnity for the portion or share which corresponds to
damages the debtor affected by the condition or
period [Article 1211, Civil Code].
All debtors are liable Only the debtors
for breach committed guilty of breach of
by a codebtor obligation is liable for Active Solidary Obligation (among
damages creditors)

All debtors are Other debtors are not

proportionately liable liable if one debtor is Article 1214, Civil Code. The debtor
for insolvency of one insolvent may pay any one of the solidary creditors;
debtor but if any demand, judicial or
extrajudicial, has been made by one of
Kinds of Solidary Obligations them, payment should be made to him.

As to Source Effects of Active Solidarity

1. Legal — imposed by law 1. If from the law or the nature or the wording
2. Conventional — agreed upon by parties of the obligation the contrary does not
3. Real — imposed by the nature of the appear, an obligation is presumed to be only
obligation joint [Alipio v. CA, G.R. 134100 (2000)]
2. Each represents the other in receiving
Illustration: MWSS shall be solidarily liable for payment and all other advantageous acts
liabilities for fines of its concessionaires, having (i.e. interrupt prescription and render the
bound itself to have jurisdiction, supervision, debtor in default for the benefit of all
and control over all waterworks and sewerage creditors) [Article 1212, Civil Code]
systems in certain areas and for granting

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 OBLIGATIONS AND CONTRACTS CIVIL LAW

3. Each one of the solidary creditors may do that part of the debt for which the latter are
whatever may be useful to the others, but responsible [Article 1222, Civil Code].
not anything which may be prejudicial to the
latter [Article 1212, Civil Code] Effects of Passive Solidarity
4. One creditor does NOT represent all others 1. Each debtor can be required to pay the
in acts such as novation (even if entire obligation, but after payment he can
advantageous), compensation and recover from the co-debtors their respective
remission. In this case, even if the debtor is shares [Article 1217(2), Civil Code]
released, the other creditors can still enforce 2. Each debtor may set up his own claims
their rights against the creditor who made against the creditor as payment of the
the novation, compensation or remission obligation
[Article 1215(2), Civil Code] 3. Remission of the entire debt affects all
5. The creditor who collects the debt, shall be debtors, but when remission is limited to the
liable to the others for the share in the share of one debtor, the other debtors are
obligation corresponding to them [Article still liable for the balance of the obligation
1215(2), Civil Code] a. The remission of the whole obligation,
6. The credit and its benefits are divided obtained by one of the solidary debtors,
equally among them, unless agreement to does not entitle him to reimbursement
the contrary. [Article 1215(2), Civil Code] from his co-debtors [Article 1220, Civil
7. Debtor may pay any one of the solidary Code].
creditors; but if any demand, judicial or b. The remission made by the creditor of
extrajudicial, has been made by one of the share which affects one of the
them, payment should be made to him who solidary debtors does not release the
demanded [Article 1214, Civil Code] latter from his responsibility towards the
co-debtors, in case the debt had been
Passive Solidary Obligation totally paid by any one of them before
the remission was effected [Article
General Rules 1219, Civil Code].
1. The creditor may proceed against any one 4. All debtors are liable for the loss of the thing
of the solidary debtors or some or all of due, even if only one of them is at fault, or
them simultaneously, so long as the debt after incurring delay it is lost by fortuitous
has not been fully collected [Article 1216, event [Article 1221 (2), Civil Code]
Civil Code]. 5. Interests due by delay of one is borne by all
2. Payment made by one of the solidary of them [Article 1221 (2), Civil Code]
debtors extinguishes the obligation. If two
or more solidary debtors offer to pay, the Defenses Available to a Solidary
creditor may choose which offer to accept Debtor [Article 1222, Civil Code]
[Article 1217 (1), Civil Code].
3. A solidary debtor may, in actions filed by the a. Those derived from the nature of
creditor, avail himself of all defenses which the obligation
are derived from the nature of the obligation Defenses inherent in an obligation include
and of those which are personal to him, or non-existence of the obligation because of
pertain to his own share. For defenses which absolute simulation or illicit object, nullity due to
personally belong to the others, such debtor defect in capacity or consent of all debtors,
may avail himself thereof only as regards unenforceability, non-performance of suspension

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 OBLIGATIONS AND CONTRACTS CIVIL LAW

condition or non-arrival of period,

against the principal the share which
extinguishment of the obligation, res judicata, [Palmares v CA, G.R. corresponds to them
and prescription. No. 126490 (1998)]. with interest, UNLESS
payment is barred by
b. Those personal to him prescription or
Personal defenses such as minority, insanity, illegality [Article
1218, Civil Code].
fraud, violence, or intimidation will serve as a
complete exemption of the defendant debtor
from liability to the creditor. Loss of the thing or impossibility of
performance of the passive/mixed
c. Those pertaining to his own share solidary obligation [Article 1221, Civil
Code]
d. Those personally belonging to
Without The obligation shall be
other co-debtors but only as fault of the extinguished.
regards that part of the debt for debtors
which the latter are responsible.
With fault All debtors shall be
of any of responsible to the creditor, for
Comparing Demand Upon Solidary the debtors the price and the payment of
Debtor and Payment by a Solidary damages and interest,
Debtor without prejudice to their
action against the guilty or
Demand Upon a Payment by a negligent debtor.
Solidary Debtor Solidary Debtor
Through a All debtors shall be
The demand made Full payment made fortuitous responsible to the creditor, for
against one of them by one of the solidary event after the price and the payment of
shall not be an debtors extinguishes one damages and interest,
obstacle to those the obligation [Art. incurred in without prejudice to their
which may 1217 (1), Civil Code]. delay action against the guilty or
subsequently be negligent debtor.
directed against the
others so long as the
debt has not been F. OBLIGATIONS WITH A PENAL
fully collected [Art.
CLAUSE
1216, Civil Code].

The creditor may If two or more Penal Clause

proceed against any solidary debtors offer An accessory obligation which the parties attach
one of the solidary to pay, the creditor to a principal obligation for the purpose of
debtors or all may choose which insuring the performance thereof by imposing on
simultaneously [Art. offer to accept [Art.
the debtor a special presentation (generally
1216, Civil Code]. 1217 (1), Civil Code].
consisting in the payment of a sum of money) in
A creditor’s right to The solidary debtor case the obligation is not fulfilled or is irregularly
proceed against the who made the or inadequately fulfilled" [SSS v. Moonwalk
surety exists payment shall have Development & Housing Corp., G.R. No.
independently of his the right to claim
73345(1993)].
right to proceed from his co-debtors

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If the principal obligation is void, the penal b. Enforcement of the Penalty

clause shall also be void. However, the nullity of
the penal clause does not carry with it the nullity The enforcement of the penalty can be
of the principal obligation [Article 1230, Civil demanded by the creditor only when the
Code]. nonperformance is due to the fault or fraud of
the debtor. The non-performance gives rise to
a. Rules on Penalty the presumption of fault; in order to avoid the
payment of the penalty, the debtor has the
1. The penalty shall substitute the indemnity burden of proving an excuse - the failure of the
for damages and payment of interest in case performance was due to either force majeure or
of non-compliance [Article 1226, Civil Code], the acts of the creditor himself [Development
unless: Bank of the Philippines v. Go, G.R. No. 168779
a. There is an express provision to that (2007)].
effect
b. The obligor refuses to pay the penalty c. Proof of Actual Damage
c. The obligor is guilty of fraud in
nonfulfillment Proof of actual damage suffered by the creditor
2. Debtor cannot exempt himself from the is not necessary in order that the penalty may
performance of the principal obligation by be enforced [Article 1228, Civil Code].
paying the stipulated penalty unless this
right has been expressly reserved for him d. When Penalty may be
[Article 1227, Civil Code]. reduced [Article 1229, Civil
3. The creditor cannot demand the fulfillment
Code]:
of the principal obligation and demand the
satisfaction of the penalty at the same time
1. If the principal obligation has been partly
unless the right has been clearly granted to
complied with.
him [Article 1227, Civil Code]. A tacit or
2. If the principal obligation has been
implied grant is admissible.
irregularly complied with.
a. If the creditor chooses to demand
3. If the penalty is iniquitous or
the satisfaction of the penalty, he
unconscionable, even if there has been no
cannot afterwards demand the
performance.
fulfillment of the obligation.
b. If there was fault on the part of the
The question of whether a penalty is
debtor, the creditor may demand not
reasonable or iniquitous can be partly
only the satisfaction of the penalty but
subjective and partly objective. Its
also the payment of damages.
resolution would depend on such factors as, but
c. If the creditor has chosen to
not necessarily confined to, the type, extent and
demand the fulfillment of the
purpose of the penalty, the nature of the
principal obligation and the
obligation, the mode of breach and its
performance thereof becomes
consequences, the supervening realities, the
impossible without his fault, he may
standing and relationship of the parties, and the
still demand the satisfaction of the
like, the application of which, by and large, is
penalty.
addressed to the sound discretion of the court
[Ligutan v CA, G.R. No. 138677 (2002)].

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 OBLIGATIONS AND CONTRACTS CIVIL LAW

V. EXTINGUISHMENT OF
OBLIGATIONS a. Payment or Performance

A. MODES OF EXTINGUISHING i. Definition

The delivery of money OR the performance of
OBLIGATIONS [Par. 1, Article 1231,
obligation in any other manner [Article 1232,
Civil Code] (P-L-C3-N)
Civil Code]

a. By Payment or performance
ii. Object of Payment
b. By the Loss of the thing due;
c. By the Condonation or remission of the
debt; Integrity of Prestation
d. By the Confusion or merger of the rights General Rule
of creditor and debtor; A debt shall be understood to have been paid
e. By Compensation; when the thing or service in which the obligation
f. By Novation consists has been completely delivered or
rendered [Article 1233, Civil Code]. Partial or
B. OTHER MODES OF EXTINGUISHING irregular performance will not produce the
extinguishment of an obligation as a general
OBLIGATIONS [Par. 2, Article 1231,
rule.
Civil Code] (P-A-R-F)
Exceptions
1. When the obligation has been substantially
a. By Annulment
performed in good faith [Article 1234, Civil
b. By Rescission
Code]
c. By Fulfillment of a resolutory condition
d. Prescription
Requisites of substantial performance
a. Attempt in good faith to perform without
C. OTHER FORMS OF
willful or intentional departure;
EXTINGUISHMENT NOT FOUND IN
b. Deviation is slight;
ARTICLE 1231
c. Omission or defect is unimportant; and
d. Must be not so material that intention of
a. Death of one of the contracting parties
the parties is not attained [International
in personal obligations [Article 1311(1),
Hotel Corporation v. Joaquin, G.R. No.
Civil Code]
158361 (2013)]
b. Will of one of the contracting parties
c. Renunciation or Waiver by the creditor
2. When the obligee accepts the performance
d. Mutual Desistance or withdrawal [Saura
despite its incompleteness or irregularity and
Import & Export Co. v. DBP, G.R. No. L-
without expressing any protest or correction
24968 (1972)]
[Article 1235, Civil Code]
e. Happening of a fortuitous event [Article
1174, Civil Code]
Identity of Prestation
f. Compromise [Article 2028, Civil Code]
g. Impossibility of fulfillment [Arts. 1184 &
1266, Civil Code] General Rule
h. Expiration of resolutory term or period For obligations to give: The same thing or
[Article 1193(2), Civil Code] the same prestation, in the manner agreed

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upon, must be delivered or performed. The 3. When the nature of the obligation is
debtor cannot compel the creditor to receive a susceptible to partial fulfillment (e.g. there
different one, although the latter may be of the are different prestations with different terms
same value as, or more valuable than that which and conditions, or the obligation cannot be
is due [Article 1244(1), Civil Code]. performed at one time)

For obligations to do or not to do: An act or iv. By whom

forbearance cannot be substituted by another
act or forbearance against the obligee's will Payor must have:
[Article 1244(2), Civil Code]. 1. free disposal of the thing due, and
2. capacity to alienate it [Article 1239, Civil
Exceptions to Article 1244, Civil Code: Code].
1. If the obligation is facultative [Article
1206, Civil Code] Free disposal of the thing due means that the
2. When the creditor agrees to a dation in thing to be delivered must not be subject to any
payment [Article 1245, Civil Code] claim or lien or encumbrance of a third person.
3. When obligee accepts incomplete or Capacity to alienate means that the person is
irregular performance without any not incapacitated to enter into contracts [Arts.
protest → obligation deemed fully complied 1327 &1329, Civil Code].
with [Article 1235, Civil Code].
4. If there is substantial performance by However, when a minor between eighteen (18)
debtor → The obligor may recover as and twenty-one years (21) of age entered into a
though there had been a strict and complete contract without the consent of the parent or
fulfillment, less damages suffered by the guardian, and voluntarily pays a sum of money
obligee [Article 1234, Civil Code] or delivers a fungible thing in fulfillment of the
obligation, there shall be no right to recover the
iii. Necessity of Complete same from the obligee who has spent or
Performance [Article 1248, consumed it in good faith. [Article 1427, Civil
Civil Code] (CD) Code].

General Rules Payor may either be:

1. The Creditor cannot be compelled partially 1. The debtor or his duly authorized agent
to receive the prestations in which the 2. The debtor’s heir or successor in interest
obligation consists. 3. A third person interested in the fulfillment of
2. The Debtor may not be required to make the obligation (i.e. codebtor, guarantor,
partial payments surety, owner of mortgaged property or
pledge) whether the debtor consents to it or
not, and even without debtor’s knowledge
Exceptions
[Article 1302, Civil Code]. This includes
1. There is an express stipulation that permits
payment by a joint debtor [Monte de Piedad
partial performance
y Caja de Ahorros de Manila v. Rodrigo, G.R.
2. When the debt is in part liquidated and in
part unliquidated, the creditor may demand No. L- 42928 (1936)] but not a solidary
and the debtor may effect the payment of codebtor.
the former without waiting for the
liquidation of the latter

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Effects of payment by interested third legally subrogated creditor to subrogate

person [Art. 1302, Civil him on his rights [Art.
a. Obligation is extinguished; Code]. 1237, Civil Code].
b. Debtor should fully reimburse the interested
third person; Reimbursement and Subrogation
c. The interested third person is subrogated to
Distinguished
the rights of the creditor [Art 1302(3)].
Reimbursement Subrogation
4. A third person not interested in the
Personal action to Includes
obligation. However, the creditor is not
recover amount paid reimbursement, but
bound to accept payment by him, unless also the exercise of
there is a stipulation to the contrary [Article other rights attached
1236, Civil Code]. to the original
obligation (e.g.
Payment by a third person not guaranties, securities)
interested in the fulfillment of the
obligation Payment made by a third person who does
General Rule not intend to be reimbursed by the debtor
The creditor is not bound to accept payment or is deemed to be a donation, which requires
performance by a third person who has no the debtor’s consent. But the payment is in any
interest in the fulfillment of the obligation case valid as to the creditor who has accepted it
[Article 1236, Civil Code] [Article 1238, Civil Code].
v. To whom
Exceptions
1. Stipulation to the contrary [Article 1236, 1. Payment shall be made to:
Civil Code] a. The person in whose favor the
2. With consent of debtor [Article 1302(2)] obligation has been constituted; or
b. His successor in interest; or
c. Any person authorized to receive it
Reimbursement for Payment Made by a [Article 1240, Civil Code]
Third Person
2. Payment to a person who is
The third party The third party incapacitated to administer his
pays with the pays without the property shall be valid if:
consent of the knowledge or a. He has kept the thing delivered, OR
debtor consent of the b. Insofar as the payment has been
debtor beneficial to him [Article 1241(1), Civil
Code].
The third party may The third party may
claim reimbursement only claim insofar as 3. Payment made to a third person may
for the full amount the payment has also be valid
[Art. 1236(2), Civil been beneficial to the a. Insofar as it has redounded to the
Code]. debtor [Art. 1236(2), benefit of the creditor
Civil Code]. b. Proof that such payment has redounded
to the benefit of the creditor is required.
The third party is The third party
presumed to be cannot compel the c. When payment is made to the wrong
party, the obligation is not extinguished

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as to the creditor who is without fault or vii. Time of Payment

negligence even if the debtor acted in
utmost good faith and by mistake as to General Rule
the person of the creditor or through Upon demand
error induced by fraud of a third person
[Allied Banking Corp. v. Lim Sio Wan, Exceptions
G.R. No. 133179 (2008)]. 1. When time is of the essence
2. When the debtor loses the benefit of the
Exceptions to the requirement of proof period
of benefit: 3. When the obligation is reciprocal
a. Subrogation: if after the payment, the
third person acquires the creditor’s rights; viii. Form of Payment
b. Ratification: if the creditor ratifies the
payment to the third person; General Rule
c. Estoppel: if by the creditor’s conduct, the Payment must be made in the currency
debtor has been led to believe that the third stipulated
person has authority to receive the payment
[Article 1241, Civil Code]; Legal Tender
d. Payment made in good faith to any
Such currency which in a given jurisdiction can
person in possession of the credit shall
be used in the payment of debts, and which
release the debtor [Article 1242, Civil Code]
cannot be refused by the creditor.

4. In case of active solidarity

When payment is not in legal tender
a. The debtor may pay any one of the
solidary creditors. General Rule
b. But, if any demand, judicial or The creditor may refuse to accept payment (e.g.
extrajudicial, has been made by one of checks) not made in legal tender [Philippine
them, payment should be made to him. Airlines v. CA, G.R. No. L-49188 (1990)].
[Article 1214, Civil Code] Checks representing demand deposits do not
have legal tender power and their acceptance in
vi. Place of Payment the payment of public and private debts is at the
creditor’s option [Sec. 60, R.A. No. 7653].
1. In the place designated in the
If the creditor accepts the check or no prompt
obligation.
objection to the form of payment is made, there
2. In the absence of stipulation and if the
is a valid tender of payment and credit can no
obligation is to deliver a determinate thing:
longer claim later that payment is not in legal
Wherever the thing might be at the
tender. While it is true that in general, a
moment the obligation was
manager’s check is not legal tender, the creditor
constituted.
has the option of refusing or accepting it.
3. In any other case: domicile of debtor
[Pabugais v. Sahijwani, G.R. No. 156846 (2004)]
[Article 1251, Civil Code]

Generally, when payment in check is accepted, it

produces the effect of payment only when the
check is cleared and the funds are transferred to

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the account of the creditor [Sec. 60, R.A. No. Extraordinary Inflation or Deflation
7653]. However, the subsequent failure to Requires Judicial Determination
encash the check within a period of ten (10) The supervening of extraordinary inflation is
years or more, will have the effect of payment never assumed. The party alleging it must lay
[Evangelista v. Screenex, Inc., G.R. No. 211564 down the factual basis for the application of
(2017)]. Article 1250, Civil Code. The effects of
extraordinary inflation are not to be applied
The delivery of promissory notes payable to without an official declaration by competent
order, or bills of exchange or other mercantile authorities and the only competent authority so
documents shall produce the effect of payment far recognized by this Court to make such an
only when: official proclamation is the BSP [Citibank v.
1. they have been cashed, or Sabeniano, G.R. No. 156132 (2007)].
2. through the fault of the creditor they have
been impaired [Article 1249(2), Civil Code]. 1. Application of Payments

Extraordinary Inflation or Deflation Requisites

In case an extraordinary inflation or deflation of If there is plurality of debts, the debtor, at the
the currency stipulated should supervene → the time of payment, may declare to which of the
value of the currency at the time of the debts the payment must be applied, provided:
establishment of the obligation shall be the 1. Debts are of the same kind;
basis of payment. 2. Debts are owed to the same creditor and
by the same debtor;
Exception 3. All debts are due, UNLESS parties so
There is an agreement to the contrary [Article stipulate, or when application is made by
1250, Civil Code]. the party for whose benefit the term has
been constituted; and
Requisites for application of Article 4. Payment made is not sufficient to cover
1250, Civil Code all debts [Article 1252, Civil Code].
1. Official declaration of extraordinary inflation
of deflation from the BSP Rules on Application of Payments
2. Obligation is contractual in nature 1. Preferential right of debtor - debtor has
3. Parties expressly agreed to consider the the right to select which of his debts he is
effects of extraordinary inflation or deflation paying
[Equitable PCI Bank v. Sheung Ngor, G.R. 2. The debtor makes the designation at
No. 171545 (2007)] the time he makes the payment.
3. Unless the parties so stipulate, or when the
Even if the price index of goods and services application of payment is made by the party
may have risen during the intervening period, for whose benefit the term has been
this increase, without more, cannot be constituted, application shall not be
considered as resulting to "extraordinary made as to debts which are not yet
inflation" as to justify the application of Article due. [Article 1252, Civil Code].
1250, Civil Code [Telengtan & Sons, Inc. v. 4. If not, the creditor makes the
United States Lines, G.R. No. 132284 (2006)]. application, by so stating in the receipt
that he issues, unless there is cause for
invalidating the contract.

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5. If neither the creditor nor debtor exercises Limitations

the right to apply, or if the application is not 1. Creditor may refuse partial payment [Article
valid, the application is made by operation 1248, Civil Code]
of law. 2. Payment of principal not yet made if interest
has not been covered [Article 1253, Civil
Note: The court will apply the payment Code]
according to the justice and equity of the 3. Debtor cannot apply payment to a debt
case, taking into consideration all its which is not yet liquidated [Article 1252(1),
circumstances [Premiere Development Bank Civil Code].
v. Central Surety, G.R. No. 176246 (2009)]. 4. He cannot choose a debt with a period
(established for the creditor’s benefit) before
6. If debt produces interest, the payment the period has arrived [Ibid].
of principal is not deemed to have been
made unless the interests are covered 2. Dation in Payment
[Article 1253, Civil Code].
7. When no application can be inferred Definition
from the circumstances of payment, it is Property is alienated to the creditor in
applied: satisfaction of a debt in money [Article 1245,
a. to the most onerous debt of the Civil Code]
debtor; or
b. if debts due are of the same nature and
burden, to all the debts in proportion Requisites
[Article 1254, Civil Code]. 1. Existence of a money obligation
8. Rules on application of payment may not 2. Alienation to the creditor of a property by
be invoked by a surety or solidary the debtor with the creditor’s consent
guarantor. 3. Satisfaction of the money obligation

Exceptions Special form of payment where the debtor

1. Rules on application of payment apply to a assigns/abandons ALL his property for the
person owing several debts of the same kind benefit of his creditors in order that from the
to a single creditor. They cannot be made proceeds thereof, the latter may obtain payment
applicable to a person whose obligation as a of their credits [Article 1255, Civil Code].
mere surety is both contingent and singular.
There must be full and faithful compliance Requisites
with the terms of the contract [Reparations 1. There is a plurality of debts
Commission v. Universal Deep-Sea Fishing 2. There is a plurality of creditors
Corp., G.R. Nos. L-21901 and L-21996 3. Partial or relative insolvency of debtor
(1978)]. 4. Acceptance of the cession by the
2. The debtor’s right to apply payment can be creditors
waived and even granted to the creditor if 5. Debtor is released only for the net
the debtor so agrees [Premiere proceeds unless there is a stipulation to
Development v. Central Surety, G.R. No. the contrary [Article 1255, Civil Code].
176246 (2009)].

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Remedy if Creditors Refuse Cession Tenders of payment, in order to be valid, must

There will be a proceeding in accordance with be made in the lawful currency. The tender of
the FRIA such that all of the assets of an a check to pay for an obligation is not a valid
insolvent debtor are pooled then sold for the tender of payment thereof [Soco v. Militante,
benefit of the creditors [R.A. No. 10142]. G.R. No. L-58961 (1983)].

Cession and Dation Distinguished b. Consigation

Deposit of the object of obligation in a
Cession Dacion en Pago
competent court in accordance with the rules
Plurality of creditors One creditor prescribed by law whenever the creditor unjustly
refuses payment or because of some
Debtor must be Debtor not circumstances which render direct payment to
partially or relatively necessarily in state of the creditor impossible or inadvisable [Spouses
insolvent financial difficulty
Bontostro v. Spouses Luna, G.R. No. 172346
Universality of Thing delivered is (2013)].
property is ceded equivalent of
performance ii. Requisites of Consignation
Merely releases Extinguishes
1. There is a debt due;
debtor for the net obligation to the
proceeds of things extent of the value of 2. Consignation is made because of some
ceded or assigned, the thing delivered, legal cause:
unless there is as agreed upon, a. There was tender of payment and
contrary intention proved or implied creditor refuses without just cause to
from the conduct of accept it
the creditor
b. Instances when consignation alone
Involves all properties Does not involve all would suffice as provided under Article
of debtor properties of debtor 1256, Civil Code
3. Previous notice of consignation was given
Creditor does not Creditor becomes to those persons interested. Previous notice
become owner of the owner is essential to the validity of the
ceded property
consignation and its lack invalidates the
same [Soco v. Militante, supra] (1st notice)
3. Tender of Payment and 4. Actual deposit/consignation with proper
Consignation judicial authority
5. After the consignation has been made, the
i. Definitions persons interested were notified thereof
(2nd notice) [Art 1258(2), Civil Code]
a. Tender of payment
Manifestation made by the debtor to the Tender of Payment and Consignation
creditor of his desire to comply with his Distinguished
obligation, with offer of immediate
Tender of Payment Consignation
performance [Del Carmen v. Sps. Sabordo,
G.R. No. 181723 (2014)]. Manifestation made Deposit of the object
by the debtor to the of obligation in a
creditor of his desire competent court in

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the Civil Code cannot apply [Llobrera v.

to comply with his accordance with the
obligation, with offer rules prescribed by Fernandez, G.R. No. 142882 (2006)].
of immediate law whenever the
performance. creditor unjustly iv. What Constitutes Valid
refuses payment or Consignation
because of some
circumstances which
render direct In order that the consignation of the thing due
payment to the may release the obligor, it must first be
creditor impossible or announced to the persons interested in
inadvisable. the fulfilment of the obligation. The
consignation shall be ineffectual if it is not made
Antecedent or Principal act
strictly in consonance with the provisions which
preparatory act
regulate payment [Article 1257, Civil Code].
Extrajudicial Judicial
v. How Consignation Is Made
Both Tender and Consignation Needed
Consignation shall be made by depositing the
To Produce Effect of Payment
things due at the disposal of judicial
To have the effect of payment and the
authority, before whom the tender of payment
consequent extinguishment of the obligation to
shall be proved, in a proper case, and the
pay, the law requires the companion acts of
announcement of the consignation in other
tender of payment and consignation. Tender of
cases. The consignation having been made, the
payment without consignation only frees the
interested parties shall also be notified thereof
debtor from the obligation to pay interest on the
[Article 1258, Civil Code].
amount due from the time the unjustified refusal
takes place [Go Cinco v. CA, G.R. No. 151903
vi. Who Bears the Expenses
(2009)].

The expenses of consignation, when properly

iii. When tender and refusal not
made, shall be charged against the creditor
required / Consignation
[Article 1259, Civil Code].
alone is sufficient [Article
1256, Civil Code] vii. Effects of Consignation

a. Creditor is absent or unknown, or does If accepted by the creditor or judicial declaration

not appear at the place of payment; by the Court that consignation is properly made:
b. Creditor is incapacitated to receive the 1. Debtor is released in same manner as if
payment at the time it is due; he had performed the obligation at the time
c. When without just cause, creditor of consignation
refuses to give receipt; 2. Accrual of interest is suspended from
d. Two or more persons claim the same the moment of consignation
right to collect (i.e. Interpleader); 3. Deterioration or loss of the thing or
e. Title of the obligation has been lost. amount consigned, occurring without the
fault of debtor, must be borne by creditor
Unless there is an unjust refusal by a creditor to from the moment of deposit
accept payment from a debtor, Article 1256 of

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When Consignation is Completed b. Loss of determinate thing due or

Consignation is completed at the time the impossibility or difficulty of
creditor accepts the same without performance
objections, or, if he objects, at the time the
court declares that it has been validly made in i. Loss
accordance with law [Dalton v. FGR Realty and
Development Corporation, G.R. No. 172577 1. Loss of Determinate Thing
(2011)].
General Rule
viii. Withdrawal of Consigned Obligor shall not be liable for delivery of a
Amount by the Debtor determinate thing when:
1. Thing is lost or destroyed without
a. Amount deposited may be withdrawn by debtor’s fault; and
debtor if made before approval of the 2. Debtor has not incurred in delay [Article
court or acceptance of the creditor. 1262(1), Civil Code].
In such a case, obligation remains in
force [Article 1260(2), Civil Code]. Exceptions
b. After approval of the court or The obligor is still liable for the loss when:
acceptance by the creditor, with the 1. Law or a stipulation provides that obligor
consent of the latter → Obligation is still liable for fortuitous events; or
remains in force, but guarantors and 2. The nature of the obligation requires an
co-debtors are released. Preference of assumption of risk.
the creditor over the thing is lost [Article In such a case, the obligor is also liable
1261, Civil Code]. for damages [Article 1262(2), Civil
c. After approval of the court or Code].
acceptance by the creditor, and 3. When the obligation to deliver a determinate
without creditor’s consent → debtor object arises from a criminal act, debtor
can no longer withdraw the consigned shall be liable for the payment of its price
amount since the obligation has already [Article 1268, Civil Code]
been extinguished [Pabugais v. 4. Acceptance of payments in bad faith
Sahijwani, G.R. No. 156846 (2004)]. [Article 2159, Civil Code]
d. If the creditor authorizes the debtor to
withdraw, third persons who were When the legal excuse of fortuitous
benefited by the consignation are not
event is not applicable:
prejudiced by the revival of the
1. Obligor delays delivery of determinate thing
obligation.
[Article 1165(3), Civil Code];
2. Obligor promises to deliver the same
thing to two or more persons who do
not have the same interest [Article 1165(3),
Civil Code]
3. Nature of the obligation requires
assumption of risk [Article 1174, Civil
Code]
4. Provided by law or stipulation; [Article
1174, Civil Code]
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5. Liability of a bailee in fortuitous events; Presumption of Fault

[Article 1942, Civil Code] General Rule
6. Liability of a depositary in fortuitous It is presumed that the loss was due to debtor’s
events [Article 1979, Civil Code] fault when the thing is lost while in his
7. Liability of the officious manager in possession [Article 1265, Civil Code].
fortuitous events [Article 2147, Civil Code]
Exceptions
2. Loss of Generic Things 1. There is proof to the contrary; or
2. In case of earthquake, flood, storm or
General Rule other natural calamity [Article 125, Civil
Obligation is NOT extinguished. Code].
Article 1263, Civil Code. In an
obligation to deliver a generic thing, the Loss in Obligations to Give with
loss or destruction of anything of the Resolutory Conditions
same kind does not extinguish the When the conditions have been imposed with
obligation. the intention of suspending the efficacy of
an obligation to give, the following rules shall
be observed in case of the improvement, loss or
Exceptions
deterioration of the thing during the pendency
1. Delimited Generic Thing - When there is
of the condition:
a limitation of the generic object to a
1. If the thing is lost without the fault of the
particular existing mass or a particular group
debtor, the obligation shall be extinguished;
of things, the obligation is extinguished by
2. If the thing is lost through the fault of the
the loss of the particular mass or group or
debtor, he shall be obliged to pay damages;
limited quantity from which the prestation
it is understood that the thing is lost
has to be taken.
when it perishes, or goes out of
2. Genus goes out of commerce - The
commerce, or disappears in such a way
obligation to deliver is extinguished.
that its existence is unknown or it
cannot be recovered [Article 1189, Civil
3. Partial Losses
Code].

When there is partial loss of the object, the

Effects of Loss [Articles 1262-1263, Civil
courts shall determine whether, under the
circumstances, the partial loss is so important as
Code]
to extinguish the obligation [Article 1264, Civil Obligation to Obligation to
Code]. In other words, the court will decide Deliver a Specific Deliver a Generic
whether the partial loss is such as to be Thing Thing
equivalent to a complete or total loss [De Leon].
Obligation is Loss of a generic
extinguished if the thing does not
Effect of Partial Losses thing was destroyed extinguish an
1. Loss is significant - possible without fault of the obligation, EXCEPT
extinguishment of obligation. debtor and before he in case of delimited
2. Loss is insignificant - obligation is NOT has incurred delay. generic things, where
the kind or class is
extinguished.
limited itself, and the
whole class perishes.

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i. Types of Impossibility
Creditors’ Rights
The obligation having been extinguished by the 1. Physical and Legal
loss of the thing, the creditor shall have all the Physical Impossibility: There is physical
rights of action which the debtor may have impossibility when the act, by reason of its
against third persons by reason of the loss nature, cannot be accomplished [Tolentino].
[Article 1269, Civil Code].
Legal Impossibility: Occurs where the
Requisites (ExL) intended acts, even if completed, would not
1. Obligation is extinguished; and amount to crime. [Intod v. Court of Appeals,
2. Extinguishment is due to the loss of the G.R. No. 103119, (October 21, 1992), 289 PHIL
thing. 485-495] There is legal impossibility when the
act, by subsequent law, is prohibited [Tolentino].
Effect
Creditor shall have all rights of action which the 2. Subjective and Objective
debtor may have against third persons by Objective Impossibility: There is objective
reason of the loss. impossibility when the act or service in itself,
without considering the person of the obligor,
ii. Impossibility of Performance becomes impossible [Tolentino].

In General Subjective Impossibility: There is subjective

impossibility when the act or service cannot be
Article 1266, Civil Code. The debtor in done by the debtor himself, but it can be
obligations to do shall also be released accomplished by others. Failure of performance
when the prestation becomes legally or
is imputable to the debtor. Thus, the debtor
physically impossible without the fault of
must indemnify the creditor for the damages
the obligor.
suffered by the latter [Tolentino].

Impossibility at Constitution and 3. Partial Impossibility

Subsequent Impossibility The rule in Article 1264, Civil Code, (partial loss)
Distinguished may be applied. Thus, the Courts shall
determine whether it is so important as to
Impossibility at Impossibility
the Time the which Supervenes extinguish the obligation. If the debtor has
Obligation was at the Time of performed part of the obligation when
Constituted Performance impossibility occurred, the creditor must pay
[Art. 1348, Civil [Art. 1266, Civil the part done as long as he benefits from it
Code] Code] [Tolentino].

Brings about the Brings about a

nullity of the contract. modification or ii. Unforeseen Difficulty
extinguishment of the
obligation, depending When the service has become so difficult as to
on whether or not it be manifestly beyond the contemplation of all
is imputable to the the parties, the obligor may also be released
debtor.
therefrom, in whole or in part [Article 1267, Civil
Code].

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fault
Requisites
1. The event or change in circumstances could Effect
not have been foreseen at the time of
the execution of the contract; Non-liability If without Release from
for delay/ fault, the obligation
2. It makes the performance of the contract
damages extinguishes in whole or in
extremely difficult but not impossible; the part
3. The event must not be due to the act of obligation;
any of the parties; and If with fault,
4. The contract is for a future prestation liability for
[Tagaytay Realty Co, Inc. v. Gacutan, G.R. damages
No. 160033 (2015)].

Doctrine of Unforeseen Events c. Condonation or Remission of

The parties to the contract must be presumed to Debt
have assumed the risks of unfavorable
developments. It is therefore only in absolutely Definition
exceptional changes of circumstances that Condonation or remission of debt is an act of
equity demands assistance for the debtor [PNCC liberality, by virtue of which, without receiving
v. CA, G.R. No. 116896 (1997)]. any equivalent, the creditor renounces the
enforcement of the obligation, which is
Fortuitous Events, Loss/ Impossibility, extinguished in its entirety or in that part or
and Unforeseen Difficulty aspect of the same to which the remission
Distinguished refers. [H. Villarica Pawnshop, Inc. v. SSS, G.R.
No. 228087, (2018)]
Fortuitous Loss/ Unforeseen
Events Impossibi- Difficulty
lity General Rules
1. Condonation or remission is essentially
Could not Perishes, Could not gratuitous, and
have been goes out of have been 2. Requires the acceptance by the
foreseen or commerce or Foreseen. obligor.
foreseen but disappears Service has
3. It may be made expressly or impliedly.
inevitable. become so
Causes loss difficult but 4. One and the other kinds shall be subject to
of the thing not impossible the rules which govern inofficious
or obligation donations. Express condonation shall,
could not be furthermore, comply with the forms of
complied donation [Article 1270 Civil Code].
with in the
normal
manner Requisites
1. The debt must be existing and demandable;
2. The renunciation must be gratuitous;
Fault 3. Parties must be capacitated and must
consent;
Without fault May be with Without fault
or without

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4. The debtor must accept the remission -

2. Partial Refers to only a particular
implied in mortis causa and express in inter aspect of the obligation,
vivos condonation; i.e. amount of
5. Formalities of a donation are required in the indebtedness or an
case of an express remission or accessory obligation [Dizon
condonation. v. CTA, supra]

As To Manner
Effect
The obligation is extinguished. 1. Inter Vivos Effective during the lifetime
of the creditor
If 2nd Requisite is Not Met
2. Mortis Effective upon the death of
If the renunciation is not gratuitous, the nature
Causa the creditor
of the act changes and it may become:
1. Dation in payment - when the creditor
receives a thing different from their i. Express Remission
stipulated;
2. Novation - when the object or principal One and the other kind shall be subject to the
conditions of the obligation have changed; rules which govern inofficious donations.
3. Compromise - when the matter renounced Express condonation shall, furthermore, comply
is in litigation or dispute and in exchange of with the forms of donation [Article 1270 (2),
some concession which the creditor receives Civil Code].
[Dizon v. CTA, G.R. No. 140944, (2018)].
The law subjects express remission to the same
Kinds of Remission formalities as donations.

As To Form Express Remission of Movable or

1. Express Express remission must Personal Property
Remission comply with forms of The donation of a movable may be made orally
ordinary donations. An or in writing.
express remission must be
accepted in order to be An oral donation requires the simultaneous
effective [Art. 1270, Civil
delivery of the thing or of the document
Code].
representing the right donated.
When the debt refers to
movable or personal If the value of the personal property donated
property, Art. 748 will exceeds five thousand pesos (Php 5,000), the
govern; if it refers to donation and the acceptance shall be made in
immovable or real writing. Otherwise, the donation shall be void
property, Art. 749 applies.
[Art. 748, Civil Code].
2. Implied It is inferred from the acts
Remission of the parties. Express Remission of Immovable or
Real Property
As To Extent
In order that the donation of an immovable
1. Total Extinguishes the entire property may be valid, it must be made in a
obligation public document, specifying therein the

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property donated and the value of the charges

which the donee must satisfy. Trigger
1. A thing is pledged;
The acceptance may be made in the same 2. There has been a delivery of such thing to
deed of donation or in a separate public the creditor; and
document, but it shall not take effect unless it is 3. The thing pledged is found in the possession
done during the lifetime of the donor. of the debtor, or of a third person who owns
the thing.
If the acceptance is made in a separate
instrument the donor shall be notified thereof in Effect
an authentic form, and this step shall be noted It is presumed that the accessory obligation of
in both instruments [Article 749, Civil Code]. pledge has been remitted.

ii. Implied Remission Presumption of Delivery

Whenever the private document in which the
Presumption of Renunciation debt appears is found in the possession of the
The delivery of a private document evidencing a debtor, it shall be presumed that the creditor
credit, made voluntarily by the creditor to the delivered it voluntarily, unless the contrary is
debtor, implies the renunciation of the action proved [Article 1272, Civil Code].
which the former had against the latter [Article
1271(1), Civil Code]. Trigger
The private document in which the debt appears
Trigger is found in the possession of the debtor.
1. Delivery of a private document evidencing a
credit; and Effect
2. Delivery was made voluntarily by the There is a presumption that it has been
creditor to the debtor voluntarily delivered by the creditor.

Effect Exception
There will be implied renunciation. The contrary is proved.
Exception
The contrary is proved. iii. Partial Remission

Note: If in order to nullify this waiver it should

Article 1273, Civil Code. The
be claimed to be inofficious, the debtor and his
renunciation of the principal debt shall
heirs may uphold it by proving that the delivery
extinguish the accessory obligations; but
of the document was made in virtue of payment
the waiver of the latter shall leave the
of the debt [Article 1271(1), Civil Code].
former in force.

Presumption of Renunciation of
On Acceptance
Accessory Obligation
1. The donee must accept the donation
Accessory obligation of pledge has been
personally, or through an authorized
remitted when the thing after its delivery is
person with a special power for the
found in the possession of the debtor or third
purpose, or with a general and sufficient
person [Article 1274, Civil Code].
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power; otherwise, the donation shall be void 2. The very same obligation must be involved;
[Article 745, Civil Code]. and
2. Acceptance must be made during the 3. The confusion must be total, i.e. as regards
lifetime of the donor and of the donee the whole obligation [Valmonte v. CA, G.R.
[Article 746, Civil Code]. No. L-41621, (1999)].

On Amount Effects
1. The donation may comprehend all the 1. In General
present property of the donor, or part The obligation is extinguished from the time the
thereof, provided he reserves, in full characters of the debtor and creditor are
ownership or in usufruct, sufficient merged in the same person [Article 1275, Civil
means for the support of himself, and of all Code].
relatives who, at the time of the acceptance
of the donation, are by law entitled to be 2. Confusion among the
supported by the donor. Without such Guarantors
reservation, the donation shall be reduced A merger which takes place in the person of the
on petition of any person affected [Article principal debtor or creditor benefits the
750, Civil Code]. guarantors. Confusion which takes place in the
2. The provisions of Article 750 person of any of the latter does not extinguish
notwithstanding, no person may give or the obligation [Article 1276, Civil Code].
receive, by way of donation, more than he
may give or receive by will. The donation
3. In case of joint or solidary
shall be inofficious in all that it may exceed
obligations
this limitation [Article 752, Civil Code].
Confusion in Joint Confusion in
d. Confusion Obligation Solidary Obligation

Confusion DOES NOT Extinguishes the

Definition extinguish a joint entire obligation, but
When the characters of creditor and debtor are obligation EXCEPT as the other debtors
merged in the same person [Article 1275, Civil regards the share of may be liable for
Code]. the person in whom reimbursement if
the two characters payment was made
concur [Art. 1277, prior to remission.
The rights of creditor and debtor are not merged Civil Code]
in one same person by the fact that the things
pertaining to said creditor and debtor which
Obligation is not extinguished when confusion
were the subject of the obligation were
takes place in the person of a subsidiary debtor
transferred to him where said transfer did not
(i.e. guarantor), but merger in the person of the
include, among the rights and obligations
principal debtor shall benefit the former.
transferred, the credit that the creditor had
against the debtor. [Testate Estate of Mota v.
Note: Where, however, the mortgagee acquires
Serra, G.R. No. 22825, (1925)]
ownership of the entire mortgaged property, the
mortgage is extinguished; but this does not
Requisites
necessarily mean the extinguishment of the
1. It should take place between principal
obligation secured thereby, which may become
debtor and creditor;
an unsecured obligation.
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e. Compensation By Operation of Law

Compensation takes place by operation of law,
Mode of extinguishing the obligations of two even though the debts may be payable at
persons, who in their own right, are reciprocal different places, but there shall be an indemnity
creditors and debtors of each other [Article for expenses of exchange or transportation to
1278, Civil Code]. the place of payment [Article 1286 Civil Code].

Requisites Compensation takes effect by operation of law

1. Each obligor is bound principally, and at the even without the consent or knowledge of
same time a principal creditor of the other; the parties concerned when all the
2. Both debts must consist in a sum of money, requisites mentioned in Art. 1279, Civil
or if the things due are consumable, they be Code are present [Trinidad v. Acapulco, G.R.
of the same kind and quality; No. 147477, (2006)].
3. Both debts are due;
4. Debts are liquidated and demandable; and Compensation Distinguished from
5. There must be no retention or controversy Other Modes of Extinguishment
over either of the debts, commenced by
Compensation Confusion
third persons and communicated in due time
to the debtor [Art. 1279, Civil Code]. Must always have two Involves only one
obligations. obligation.
Taxes cannot be subject to compensation for
the simple reason that the government and the There are two There is only one
taxpayer are not creditors and debtors of each persons who are person whom the
other [Philex Mining v. CIR, G.R. No. 125704, mutually debtors and characters of the
(1998)] creditors of each creditor and debtor
other in two separate meet.
obligations, each
To warrant the application of set off under Art. arising from the same
1278 of the Civil Code, the debtor’s cause.
admission of his obligation must be clear
and categorical and not one which merely There is indirect There is an
arises by inference or implication from the payment. impossibility of
payment.
customary execution of official documents in
assuming the responsibilities of a predecessor
[Bangko Sentral v. COA, G.R. No. 168964, Compensation Payment
(2006)].
Capacity to dispose Requires capacity to
Nature and Effects and receive the thing dispose of the thing
is unnecessary since paid and capacity to
General Rule compensation receive.
When all requisites mentioned in Art. 1279 are operates by law.
present, compensation takes effect by operation
of law, and extinguishes both debts to the May be partial. Must be total
concurrent amount, even though the creditors performance.
and debtors are not aware of the compensation
[Art. 1290, Civil Code].

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b. Bank deposits, against the accounts of

Compensation Counterclaim
a depositor whose checks were
Takes place by Must be pleaded to dishonored [BPI v. CA, G.R. No. 116792
operation of law. be effectual. (1996)].

i. Kinds of Compensation b. Voluntary Compensation

Takes place when parties who are mutually
1. As to extent creditors and debtors of each other agree to
compensate their respective obligations even
though one of the requisites of compensation
a. Total
may be lacking.
When two debts are of the same amount. If
they are of different amounts, compensation is
The parties may agree upon the compensation
total as regards the smaller debt, and partial
of debts which are not yet due [Article 1282,
only with respect to the larger debt [Article
Civil Code].
1281, Civil Code].

Requisites of conventional compensation

b. Partial 1. That each of the parties can dispose of the
When the two obligations are of different credit he seeks to compensate, and
amounts and a balance remains [Art. 1281, Civil 2. That they agree to the mutual
Code]. extinguishment of their credits [United
Planters v. CA, G.R. No. 126890, (2009)].
2. As to cause
c. Judicial Compensation
a. Legal Compensation Takes place by judicial decree, needs pleading
Takes place by operation of law from the and proof. All requirements must concur except
moment all requisites are present. liquidation.

Since it takes place ipso jure, when used as a If one of the parties to a suit over an obligation
defense, it retroacts to the date when all its has a claim for damages against the other, the
requisites are fulfilled. former may set it off by proving his right to said
damages and the amount thereof [Article 1283,
When all the requisites mentioned in Article Civil Code].
1279 of the Civil Code are present,
compensation takes effect by operation of law, “Judicial Compensation” NOT
and extinguishes both debts to the concurrent Contemplated by the Civil Code
amount, even though the creditors and debtors In reality, what is set off against the other party
are not aware of the compensation [Article is a counterclaim as provided in the Rules of
1290, Civil Code]. Court. A counterclaim must be pleaded to be
effectual; whereas, a compensation takes place
Legal compensation may apply to by mere operation of law and extinguishes the
a. Awards of attorney’s fees, against the two debts as soon as they exist simultaneously,
litigant and not his lawyer [Gan Tion v. to the amount of their respective sums. Hence,
CA, G.R. No. L-22490, (1969)] the counterclaim defined by the Rules of Court is
not the legal compensation contemplated by the

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Code [Yap Unki v. Chua Jamco, G.R. No. 5202,

such right at the time
(1909)]. he gave his consent.

d. Facultative Compensation With debtor’s Debtor may set up

knowledge but compensation of
When it can be claimed by one of the parties
without consent debts previous to the
who, however, has the right to object to it. assignment but not of
subsequent ones.
This kind of compensation can only be set up at
the option of a creditor, when legal Without debtor’s Debtor may set up
compensation cannot take place because some knowledge compensation of all
credits prior and also
legal requisites in favor of the creditor are
later to the
lacking.
assignment until he
had knowledge of the
Obligations which cannot be assignment.
compensated
1. Contracts of depositum Order of Compensation
2. Contracts of commodatum If a person should have against him several
3. Future support due by gratuitous title debts which are susceptible of compensation,
4. Civil liability arising from a penal offense the rules on application of payments shall apply
5. Obligations due to the government to the order of the compensation [Article 1289,
6. Damage caused to the partnership by a Civil Code].
partner [Articles 1287-1288, Civil Code].
f. Novation
Note: The indebtedness of a shareholder to a
banking corporation cannot be compensated
In General
with the amount of his shares therein, there
It is the substitution or change of an obligation
being no relation of creditor and debtor with
by another resulting in its extinguishment or
respect to such shares. [Garcia v. Lim Chu Sing,
modification by:
G.R. No. L-39427, (1934)]
1. Changing their object or principal
conditions;
Right of a Guarantor 2. Substituting the person of the debtor; or
A guarantor may set up compensation as 3. Subrogating a third person in the rights of
regards what the creditor may owe the principal the creditor [Article 1291, Civil Code].
debtor [Article 1280, Civil Code].
Unlike other modes of extinguishment, it is a
Effect of Assignment of Rights by the juridical act of dual function - it extinguishes an
Creditor to a Third Person [Art. 1285, obligation, and at the same time, it creates a
Civil Code] new one in lieu of the old. It operates as a
relative, not an absolute, extinction.
With debtor’s Debtor cannot set up
consent against assignee
compensation This is not to say however, that in every case of
pertaining to him novation the old obligation is necessarily
against assignor extinguished. Our Civil Code now admits of the
UNLESS he reserved so-called imperfect or modificatory
novation where the original obligation is
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not extinguished but modified or changed

Code].
in some of the principal conditions of the
obligation. Thus, Art. 1291 of the Civil Code 1. New Obligation void: No
provides that obligations may be modified novation.
[Modomo v. Sps. Layug, G.R. No. 197722, 2. New obligation voidable:
(2019)]. Novation is effective.

Requisites Accessory Obligations

1. A previous valid obligation Accessory obligations are also extinguished, but
2. Agreement of all the parties to the new may subsist only insofar as they may benefit
obligation third persons who did not give their consent to
3. Animus novandi or intent to novate the novation [Article 1296, Civil Code].
4. Substantial difference between old and new
obligations and, consequently, Accidental Modifications
extinguishment of the old obligation The extension or shortening of the period for
5. Validity of the new obligation [Tomimbang v. the performance of the obligation is generally
Tomimbang, G.R. No. 165116, (2009)] considered as merely accidental and does not
bring about a novation [Tolentino].
Effects
Original or new obligation with
In General Old obligation is extinguished
and replaced by the new one suspensive or resolutory condition
stipulated. If the original obligation was subject to a
suspensive or resolutory condition, the new
If Original Novation is void if the original obligation shall be under the same condition,
Obligation is obligation was void, EXCEPT
unless it is otherwise stipulated [Article 1299,
Void when annulment may be
claimed only by the debtor, or Civil Code].
when ratification validates acts
that are avoidable [Art. 1298,
Compatible Incompatible
Civil Code].
Conditions Conditions
1. Original obligation is 1. Fulfillment of 1. Original
void: No novation. both conditions: obligation is
2. Original obligation is new obligation extinguished,
voidable: Effective if the becomes while new
contract is ratified before demandable. obligation exists.
novation. 2. Fulfillment of 2. Demandability
condition shall be subject
concerning the to
original fulfillment/nonfulf
obligation: old illment of the
obligation is condition
If New New obligation is void, the old revived; new affecting it.
Obligation is obligation subsists, UNLESS the obligation loses
Void parties intended that the former force.
relations shall be extinguished 3. Fulfillment of
in any event [Art. 1297, Civil condition
concerning the

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new obligation:
The incompatibility must take place in any of the
no novation;
requisite of a essential elements of the obligation, such as its
previous valid object, cause or principal conditions thereof;
and effective otherwise, the change would be merely
obligation modificatory in nature and insufficient to
lacking. extinguish the original obligation [Quinto v.
People, supra].
i. Kinds of Novation
Novation must be established either by the
a. As to Form express terms of the new agreement or by the
acts of the parties clearly demonstrating the
1. Express intent to dissolve the old obligation as a
Novation must be explicitly stated and declared consideration for the emergence of the new one
in unequivocal terms that their object in [Fortune Motors (Phils.) Corp. v. CA, supra].
executing the new contract is to extinguish the
old one [Fortune Motors (Phils.) Corp. v. CA, b. As to Extent or Effect
G.R. No. 112191, (1997); Quinto v. People, G.R.
No. 126712, (1999)]. 1. Total
When the obligation is completely extinguished.
Novation is Never Presumed [Tomimbang v. Tomimbang, G.R. No. 165116,
In the absence of an unequivocal declaration of (2009)]
extinguishment of the pre-existing obligation,
only proof of incompatibility between the old 2. Partial
and new obligation would warrant a novation by When there is only a modification or change in
implication [California Bus Line v. State some principal conditions of the obligation.
Investment, G.R. No. 147950, (2003)]. [Tomimbang v. Tomimbang, G.R. No. 165116,
(2009)]
2. Implied
The old and new obligations must be The will to novate, whether totally or partially,
incompatible on every point [Fortune Motors must appear by express agreement of the
(Phils.) Corp. v. CA supra]. parties, or by their acts which are too clear and
unequivocal to be mistaken [Fortune Motors
No specific form is required for an implied (Phils.) Corp. v. CA, supra].
novation. All that is prescribed by law would be
an incompatibility between the two contracts. c. As to Essence or Object
[Quinto v. People, G.R. No. 126712, (1999)]
1. Objective/Real
Test of Incompatibility When the object (or cause) or principal
The test of incompatibility is whether the two conditions of the obligation are changed [Article
obligations can stand together, each one having its 1291(1), Civil Code].
independent existence. If they cannot, they are
incompatible and the latter obligation novates the first
2. Subjective/Personal
[Nyco Sales Corporation v. BA Finance Corporation,
Substitution of debtor or by subrogation [Article
G.R. No. 71694, (1991)].
1291 (2&3), Civil Code].
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old debtor is not

3. Mixed required.
Change in the object or principal condition and
change in the persons of either creditor and Effects
debtor of an existing obligation [Article 1291,
1. Old debtor is 1. Insolvency of the
Civil Code].
released new debtor
2. Insolvency of the revives the
Objective/ Subjective/
Real Personal Expromision Delegacion

1. Change of the 1. Substitution of New debtor does not Obligation of the old
subject matter; debtors revive the old debtor if it was
2. Change of cause a. Expromision obligation in case the anterior and public,
or consideration; b. Delegacion old debtor did not and known to the old
or agree to expromision. debtor.
3. Change of the 2. Subrogation of a
principal third person to the 3. If with the 2. New debtor can
conditions or rights of the knowledge and demand
terms creditor consent of the reimbursement of
a. Conventional old debtor, the the entire amount
b. Legal new debtor can he has paid from
demand the original
reimbursement of debtor. He may
a. Substitution of Debtors the entire amount compel the
paid and with creditor to
Expromision Delegacion subrogation of subrogate him to
creditor’s rights. all of his rights.
Initiative for change Debtor (delegante) 4. If without
does not emanate offers or initiates the knowledge of the
from the debtor, and change, and the old debtor, the
may even be made creditor (delegatorio) new debtor can
without his accepts a third demand
knowledge. person (delegado) as reimbursement
consenting to the only up to the
substitution. extent that the
latter has been
Requisites benefited without
subrogation of
1. Consent of the Consent of: creditor’s rights.
creditor and the
new debtor; 1. Old debtor
(delegante); For subjective novation, it is insufficient
Note: Implied 2. New debtor that the juridical relation between the
consent by the (delegatorio); parties to the original contract is extended
creditor is allowed 3. Creditor to a third person. If the old debtor is not
[Asia Banking Corp. v. (delegado).
Elser, G.R. No. released, no novation occurs and the third
L-30266, (1929)]. person who has assumed the debtor’s obligation
becomes merely a co-debtor or surety or
2. Knowledge or co-surety [Cochingyan, Jr. v. R&B Surety and
consent of the Insurance Company, G.R. No. L-47369, (1987)].

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extinguishing the
An accessory surety may not be released if obligation.
he expressly waives his discharge from the
obligation in case of change or novation in the Defects/vices in the Defects/vices in the
original agreement [Molino v. Security Diners old obligation are old obligation are not
International Corp, G.R. No. 136780, (2001)]. cured. cured.

b. Subrogation Legal Subrogation

Transfers to the person subrogated the credit It takes place by operation of law.
with all the rights thereto appertaining, either
against the debtor or against third persons, be Legal subrogation is not presumed,
they guarantors or possessors of mortgages, except in the following circumstances:
subject to stipulation in a conventional 1. When creditor pays another creditor who is
subrogation [Article 1303, Civil Code]. preferred, even without the debtor’s
knowledge
Effects 2. When a third person, not interested in the
obligation, pays with the express or tacit
Total Partial
approval of the debtor
Transfers to the A creditor, to whom 3. When, even without the knowledge of the
person subrogated, partial payment has debtor, a person interested in the fulfillment
the credit with all the been made, may of the obligation pays, without prejudice to
rights thereto exercise his for the the effects of confusion as to the latter’s
appertaining, either remainder, and shall
share [Article 1302, Civil Code].
against the debtor or be preferred to the
third person. person subrogated in
his place in virtue of Article 1303 of the Civil Code particularly
the partial payment. provides that the effect of legal subrogation is to
transfer to the new creditor the credit and all
the rights and actions that could have been
Conventional Subrogation
exercised by the former creditor either against
It takes place by agreement of parties.
the debtor or against third persons [BDO
Unibank v. Pua, G.R. No. 230923, (2019)].‘
Difference between Conventional
Subrogation and Assignment of Credit
[Licaros v. Gatmaitan, G.R. No. 142838,
(2001)]
Conventional Assignment of
subrogation credit

Debtor’s consent is Debtor’s consent is

necessary. not required.

Extinguishes an Refers to the same

obligation and gives right which passes
rise to a new one. from one person to
another, without
modifying or

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public are necessary simply to make the contract

binding on the third person [Soriano v. Soriano,
CONTRACTS G.R. No. 130348, (2007)].

Requisites for Valid Consent

Article 1305, Civil Code. A contract is a a. It must be manifested by the concurrence
meeting of minds between two persons
of the offer and acceptance [Arts.
whereby one binds himself, with respect
1319-1326, Civil Code].
to the other, to give something or to
b. The contracting parties must possess the
render some service.
necessary legal capacity [Arts.
1327-1329, Civil Code].
I. ESSENTIAL REQUISITES OF A c. It must be intelligent, free,
CONTRACT spontaneous, and real (not vitiated)
[Arts. 1330-1346, Civil Code].
For a contract to be valid, it must have three
essential elements: b. Concurrence of Offer and
1. Consent of the contracting parties; Acceptance
2. Object certain which is the subject
matter of the contract; and A contract is perfected by mere consent. From
3. Cause of the obligation which is the moment of a meeting of the offer and
established [Sps. Lequin v. Sps. Vizconde, the acceptance upon the object and the
G.R. No. 177710, (2009)]. cause that would constitute the contract,
consent arises. However, the offer must be
certain and the acceptance seasonable and
Article 1318, Civil Code. There is no
absolute; if qualified, the acceptance would
contract unless the following requisites
merely constitute a counteroffer [Insular Life v.
concur:
Asset Builders Corp., G.R. No. 147410, (2004)].
(1) Consent of the contracting parties;
(2) Object certain which is the subject
matter of the contract; i. Offer
(3) Cause of the obligation which is A unilateral proposition which one party makes
established. to the other for the celebration of the contract
[Spouses Paderes v. CA, G.R. Nos. 147074 and
147075, (2005)].
A. CONSENT [Articles 1319-1346,
Civil Code]
Requisites of a valid offer
There is an “offer” in the context of Art. 1319
a. Definition
only if the contract can come into existence by
The meeting of the minds of the parties on
the mere acceptance of the of the offeree,
the subject matter and cause of the contract.
without any further act on the part of the
offeror. Hence, the “offer” must be definite,
The fact that the signatures of the witnesses
complete and intentional [Spouses Paderes v.
and the notary public were forged does not
CA, supra].
negate the existence of the contract, as
long as the parties consented to it. The
signatures of the witnesses and the notary

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Invitation to Make Offers such that it does not become operative again
(Advertisements) [Metro Rail Transit Development Corporation v.
1. Business Advertisements of things for Gammon Philippines, Inc., G.R. No. 200401,
sale are NOT definite offers, but just (2018)].
invitations to make an offer, UNLESS the
contrary appears [Article 1325, Civil Code]. Termination of Offer
2. Advertisements for bidders are 1. Rejection by the offeree
invitations to make proposals, the advertiser 2. Incapacity (death, civil interdiction,
is NOT bound to accept the lowest or insanity, or insolvency) of the offeror or
highest bid; UNLESS the contrary offeree before acceptance is conveyed [Art.
appears. The bidder is the offeror [Article 1323, Civil Code].
1326, Civil Code]. 3. Submission of a counter-offer.
4. Lapse of the time stated in the offer
The Terms and Conditions of the bidding without acceptance being conveyed.
disseminated constitutes the advertisement to 5. Revocation of the offer before learning of
bid on the project. The bid proposals or acceptance.
quotations submitted by the prospective 6. Supervening illegality before acceptance
suppliers are the offers. The reply constitutes [Reyes and Puno].
the acceptance or rejection of the respective
offers [Jardine Davies Inc. v. CA, G.R. No. ii. Acceptance
128066, (2000)].
Acceptance must be absolute, unconditional,
3. Statements of intention: No contract and without variance of any sort from the offer.
results even if accepted. In a letter It must also be made known to the offeror.
informing another that the sender was “in a An acceptance not made in the manner
position and is willing to entertain” the prescribed is not effective but constitutes a
purchase of a yacht under some terms, the counter-offer.
word “entertain” applied to an act does not
mean the resolution to perform said act, but Requisites of a Valid Acceptance
simply a position to deliberate for deciding 1. Unqualified and unconditional, i.e. it
to perform or not to perform said act. It was must conform with all the terms of the offer
merely a position to deliberate whether or [Article 1319, Civil Code].
not he would purchase the yacht and 2. Directed and communicated to the offeror
invitation to a proposal being made to him, and learned by him [Article 1319, Civil
which might be accepted by him or not Code]. If made through an agent, the offer
[Rosenstock v. Burke, G.R. No. 20732, is accepted from the time the acceptance is
(1924)]. communicated to such agent [Article 1322,
Civil Code].
Temporary Suspension of Offer 3. Made within the proper time
When a contract is suspended temporarily, it 4. May be express/implied, but is not
provisionally ceases to be operative until presumed [Article 1320, Civil Code]. Time,
the occurrence of a condition or situation that place and manner of acceptance may be
warrants the lifting of the suspension of the fixed by the offeror [Article 1321, Civil
contract. It is different from a cancellation Code].
of a contract which terminates the contract

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Cognition Theory c. Necessary Legal Capacity

Acceptance made by letter or telegram does not
bind the offeror except from the time it came to Two types of void contracts
his knowledge. The contract, in such a case, is a. Those where one of the essential
presumed to have been entered into in the place requisites of a valid contract as provided
where the offer was made [Article 1319 (2), Civil for by Article 1318, Civil Code is totally
Code]. wanting; and
b. Those declared to be so under Art.
Option Contract 1409, Civil Code.
A preparatory contract in which one party grants
to the other, for a fixed period, the option to By contrast, a voidable or annullable contract is
decide whether or not to enter into a principal one in which the essential requisites for validity
contract [Article 1324, Civil Code]. under Art. 1318 are present, but vitiated by
mistake, violence, intimidation, undue influence,
or fraud [Art. 1330, Civil Code].
With consideration Without
consideration
Persons incapacitated to give consent
Offeror cannot Offeror may withdraw [Article 1327, Civil Code]
unilaterally withdraw by communicating
his offer. withdrawal to the I. Minors, except:
offeree before a. Where necessaries are sold or delivered
acceptance. [Art. 1489, Civil Code].
b. Where the minor actively misrepresents
his age (estoppel) [Mercado v. Espiritu, G.R.
General Rule
No. L-11872 (1917)]
When the offerer gives to the offeree a certain
period to accept, the offer may be
Note: There is no estoppel if the
withdrawn at any time before acceptance,
minority was known by the other
[Article 1324, Civil Code].
party, and there was no active
misrepresentation on the part of the
Exception
minors [Bambalan v. Maramba, G.R. No.
For "a promise to buy and sell" specifically
L-27710 (1928)].
[Article 1479, Civil Code], a promise to sell to be
valid and binding must be supported by a
c. When it involves a natural obligation and
consideration distinct from the price. Otherwise,
such obligation is fulfilled voluntarily by the
the option can still be withdrawn, even if
minor [Arts. 1425- 1427, Civil Code]
accepted [Tuazon v. Del Rosario-Suarez, G.R.
d. Contracts entered into by guardians or
No. 168325 (2010)].
legal representatives
e. When upon reaching the age of majority
they ratify the same
f. When a minor opens a savings account
without the assistance of his parents,
provided that the minor is at least seven (7)
years old and can read and write [PD 734].

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II. Insane or demented persons, unless they Vices of Consent

contract during a lucid interval [Art. 1328, 1. Mistake
Civil Code] 2. Intimidation
III. Deaf-mutes who do not know how to read 3. Violence
AND write. 4. Undue Influence
5. Fraud [Article 1330, Civil Code]
Persons Disqualified to Contract
I. Those under civil interdiction for Effect: Renders a contract voidable.
transactions inter vivos [Article 34, RPC]
II. Undischarged insolvents [Section 24, i. Mistake
Insolvency Law] A misunderstanding of the meaning or
III. Husband and wife cannot donate to each implication of something or a wrong action or
other [Article 87, Family Code], nor sell to statement proceeding from a faulty judgment
each other if the marriage is under the [Domingo Realty v. CA, G.R. No. 126236
regime of Absolute Community of Property (2007)].
[Article 1490, Civil Code]
IV. The following cannot purchase, whether in In order that mistake may invalidate consent, it
public or private sale [Article 1491, Civil should refer to the substance of the thing which
Code]: is the object of the contract, or to those
a. Guardian - Property of the ward conditions which have principally moved one or
b. Agent - Property of the Principal both parties to enter into the contract [Art.
c. Executors and Administrators - Property 1331, Civil Code]
under administration
d. Public Officers - Property under their There is no mistake if the party alleging it knew
administration the doubt, contingency or risk affecting the
e. Justices, judges, prosecutors, clerks of object of the contract [Art. 1333, Civil Code].
court, lawyers - property attached in
litigation Requisites [SEM]
1. The error must be substantial regarding:
Incapacity to Give Consent vs. a. The object of the contract (error in re)
Disqualification to Contract which may be:
i. Mistake as to the identity of the
Incapacity to Give Disqualification to
thing (error in corpore)
Consent Contract
ii. Mistake as to the substance of the
Restrains the exercise Restrains the very thing (error in substantia)
of the right to right itself iii. Mistake as to the conditions of te
contract thing provided, or
iv. Mistake as to the quantity of the
Based upon Based upon public
thing (error in quantitate)
subjective policy and morality
circumstances of b. The condition which primarily moved or
certain persons induced one or both parties to enter the
contract.
Voidable Void c. Identity or qualifications of one of the
parties (error in persona), but only if

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such was the principal cause of the ii. Intimidation

contract. One of the contracting parties is compelled by a
2. The error must be excusable reasonable and well-grounded fear of an
3. The error must be a mistake of fact imminent and grave evil upon his person or
and not of law property, or upon the person or property of his
spouse, descendants or ascendants, to give his
Mistake which vitiates consent is an error of consent [Art. 1335, Civil Code].
fact, and not an error of law. Ignorance of the
law excuses no one from compliance therewith To determine the degree of intimidation, the
[Article 3, Civil Code]; but the modern tendency age, sex and condition of the person shall be
is to allow an excusable mistake of law to be borne in mind [Art. 1335, Civil Code]
invoked as vitiating consent [Tolentino]. Requisites
1. One party is compelled to give his consent
On Possession: Mistake upon a doubtful or by a reasonable and well-grounded fear of
difficult question of law may be the basis of an evil;
good faith [Article 526, Civil Code]. 2. The evil must be imminent and grave;
3. The evil must be upon his person, property,
Ignorantia Facti Excusat vs. Ignorantia spouse, descendants or ascendants, and
Legis Neminem Excusat 4. The evil must be unjust
Mistake of Fact Mistake of Law
iii. Violence
One or both One or both parties Serious or irresistible force used to wrest
contracting parties arrive at an consent [Article 1335, Civil Code]
believe that a fact erroneous conclusion
exists when in reality on the interpretation Violence Intimidation
it does not, or vice of a question of law
versa or its legal effects Serious or irresistible Reasonable and well-
force grounded fear of an
Vitiates consent Does not vitiate imminent and grave
consent except when evil upon his person
it involves mutual or property, or person
error as to the effect or property of his
of an agreement spouse, descendants,
when the real or ascendants
purpose is frustrated
Physical compulsion Moral compulsion

Note: The obligation to show that the terms of External or prevents Internal or induces
the contract had been fully explained to the the will to manifest the performance of
party who is unable to read or understand the itself an act
language of the contract, when fraud or mistake
Determined by: Takes into account:
is alleged, devolves on the party seeking to 1. Intention 1. Age
enforce it [Article 1332, Civil Code]. 2. Means employed 2. Sex
3. Condition

1. Physical force 1. Intimidation must

employed must be the
be irresistible, or determining

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Note: By analogy, undue influence employed by

of such degree cause of the
that victim has no contract OR must a third person may annul the contract.
other recourse have caused the
under the consent to be Test of Undue Influence
circumstances given Whether or not the influence exerted has so
but to submit 2. Threatened act overpowered or subjugates the mind of a
2. Such force is the must be unjust or
contracting party as to destroy his free agency,
determining unlawful
cause in giving of 3. The threat must making him express the will of another rather
consent be real and than his own [Coso-Fernandez v. Deza, G.R. No.
serious L-16763 (1921)].
4. Produces a
reasonable and
well-grounded
v. Fraud (Dolo Causante)
fear from the fact
that the person When, through insidious words or machinations
has the necessary of one of the contracting parties, the other is
means or ability induced to enter into a contract which, without
to inflic them, he would not have agreed to [Article
threatened injury. 1338, Civil Code]

Note: Violence or intimidation shall annul the In order that fraud may make a contract
obligation, although it may have been employed voidable, it should be serious and should not
by a third person who did not take part in the have been employed by both contracting parties
contract [Article 1336, Civil Code]. [Article 1344, Civil Code].

iv. Undue Influence Requisites

When a person takes improper advantage of his 1. It must be made in bad faith
power over the will of another, depriving the 2. One party must have employed fraud or
latter of a reasonable freedom of choice [Article insidious words or machinations
1337, Civil Code] 3. Damage or injury resulted to the other
party
Requisites [IPD] 4. It must have been serious
1. Improper advantage 5. It induced the other party to enter into a
2. Power over the will of another contract
3. Deprivation of the latter’s will of a 6. It must have been employed by one
reasonable freedom of choice. contracting party upon the other and
not employed by both contracting parties
Circumstances to consider nor by third persons
1. Relationship of the parties (family, spiritual,
confidential, etc.) Determining the existence of fraud
2. That the person unduly influenced was Not fraudulent
suffering from mental weakness, ignorance 1. Usual exaggerations in trade, when the
or in financial distress [Article 1337, Civil other party had an opportunity to know the
Code] facts [Article 1340, Civil Code]
2. A mere expression of an opinion unless
made by an expert and the other party has

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relied on the former’s special knowledge considered, considering the personal

[Article 1341, Civil Code] conditions of the victim.
3. Misrepresentation made in good faith
[Article 1343, Civil Code] 2. The fraud must be proven by clear and
Note: Not fraudulent, but may constitute error. convincing evidence and not merely by a
preponderance thereof [ECE Realty v.
Fraudulent Mandap, G.R. No. 196182 (2014)].
Failure to disclose facts, when there is a duty to
reveal them, as when the parties are bound by Note: However, fraud in its general sense (false
confidential relations [Article 1339, Civil Code] representation of a fact) coming about in the
consummation stage of the sale, as opposed to
Dolo Causante v. Dolo Incidente the negotiation and perfection stages, entitles
the aggrieved party to the rescission of the sales
Dolo Causante Dolo Incidente contract [Sps. Tongson v. Emergency Pawnshop,
(Causal Fraud) (Incidental Fraud)
G.R. No. 167874 (2010)].
Refers to those Refers to those
deceptions or deceptions or Simulation of Contracts
misrepresentations of misrepresentations Simulation is the declaration of a fictitious will,
a serious character which are not serious deliberately made by agreement of the parties,
employed by one in character and in order to produce, for the purposes of
party and without without which the
deception, the appearances of a judicial act
which the other party other party would
would not have have still entered into which does not exist or is different with that
entered into the the contract [Art. which was really executed [Nautica Canning
contract 1344, Civil Code] Corporation v. Yumul, G.R. No. 164588 (2005)].
There exists an instrument, but there is no
Determines or is the Refers only to some contract.
essential cause of the particular or accident
consent [Tankeh v. of the obligation
DBP, supra] [Tankeh v. DBP, Requisites [OFaD]
supra] 1. An outward declaration of will different
from the will of the parties
Renders the contract Renders the party 2. The false appearance must have been
voidable liable for damages intended by mutual agreement
3. The purpose is to deceive third persons
Requisites for fraud to vitiate consent [Penalosa v. Santos, G.R. No. 133749
1. The fraud must be dolo causante or it (2001)]
must be fraud in obtaining the consent of
the party. The deceit must be serious. The primary consideration in determining the
true nature of a contract is the intention of the
The fraud is serious when it is sufficient parties. Such intention is determined not only
to impress, or to lead an ordinarily from the express terms of their agreement, but
prudent person into error; that which also from the contemporaneous and subsequent
cannot deceive a prudent person cannot acts of the parties [Sps. Lopez v. Sps. Lopez,
be a ground for nullity. The G.R. No. 161925 (2009)]
circumstances of each case should be

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Absolute v. Relative Simulation [Article 4. Determinate or determinable, without

1345, Civil Code] the need of a new contract between the
parties [Articles 1349 and 1460(2), Civil
Code]
Absolute Relative
Simulation Simulation
(Simulados) (Disimulados) General Rule
All things or services may be the object of
The parties have no The parties conceal contracts, which includes future things [Article
intention to be bound their true agreement 1347, Civil Code].
at all
A showing of mere inconvenience, unexpected
Fictitious contract Disguised contract
impediments or increased expenses is not
Void because there is Bound to their real enough to relieve a party of the obligation [De
an absolute lack of agreement, so long Castro v. Longa, G.R. No L- 2152-53 (1951)].
cause [Art. 1346, Civil as it does not
Code] prejudice a third A future thing may be the object of a contract.
person and is not
Such contract may be interpreted as:
contrary to law,
morals, good 1. Conditional contract, where its efficacy
customs, public order should depend upon the future existence of
or public policy [Art. the thing.
1346, Civil Code] 2. Aleatory contract, where one of the
contracting parties assumes the risk that the
If the parties merely state a false cause in the thing will never come into existence, e.g.
contract to conceal their real agreement, the insurance [Tolentino]
contract is relatively simulated and the parties
are still bound by their real agreement. Exceptions [Articles 1347-1349, Civil
Hence, where the essential requisites of a Code] [OIF]
contract are present and the simulation refers 1. Things which are outside the commerce
only to the content or terms of the contract, the of men
agreement is absolutely binding and enforceable 2. Intransmissible rights
between the parties and their successors in 3. Future inheritance except in cases
interest [Valerio v. Refresca, G.R. No. 163687 authorized by law
(2006)].
Requisites of a contract upon future
B. OBJECT inheritance
1. That the succession has not yet been
Requisites opened
1. Within the commerce of men Article 1347, 2. That the object of the contract forms part of
Civil Code] the inheritance
2. Not legally or physically impossible [Article 3. That the promissor has, with respect to the
1348, Civil Code] object, an expectance of a right which is
3. In existence or capable of coming into purely hereditary in nature
existence [Articles 1461, 1493, 1495, Civil
Code]

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Exceptions to the Exception Cause v. Object

1. In case of marriage settlements under
Cause Object
Article 130, Civil Code
2. In case of partition of properties inter vivos As to remuneration
by the deceased under Article 1080, Civil
Code [JLT Agro v. Balansag, G.R. No. The service or benefit The thing which is
141882 (2005)] which is remunerated given in remuneration

As to Donation
C. CAUSE OR CONSIDERATION
The liberality of the Thing which is given
donor or benefactor or donated
Article 1350, Civil Code. In onerous
contracts the cause is understood to be, As to the thing
for each contracting party, the prestation
or promise of a thing or service by the Prestation or promise Thing or service itself
of a thing or service
other; in remuneratory ones, the service
by the other
or benefit which is remunerated; and in
contracts of pure beneficence, the mere As to contracting parties
liberality of the benefactor. (1274)
Different with respect May be the same for
to each part both parties
The essential and impelling reason why a party
assumes an obligation.
Distinguished from Motive
Requisites [ELT] Cause Motive
1. Exists at the time the contract is entered
into [Article 1409 (3), Civil Code] Proximate reason for Remote reason for
2. Lawful [Article 1352, Civil Code] contract the contract
3. True or real [Article 1353, Civil Code]
Objective or juridical Psychological and
reason purely personal
Presumption reason
The law presumes that even if the contract does
not state a cause, one exists and is lawful; and Always the same for Differs for each
it is incumbent on the party impugning the each contracting contracting party
party
contract to prove the contrary. If the cause is
stated in the contract and it is shown to be Illegality affects Illegality does not
false, then it is incumbent upon the party existence or validity affect existence or
enforcing the contract to prove the legality of of the contract validity of contract
the cause [Sepe v. Heirs of Kilang, G.R. No.
199766 (2019)].

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Cause in contracts [Article 1350, Civil Falsity of REVOCABLE/VOIDABLE.

Code] cause –
cause is Parties are given a chance to
Onerous Remunerat Pure
stated but show that a cause really
ory Beneficence
untrue exists, and that said cause is
true and lawful.
The The service Mere
undertaking or benedict liberality of
Lesion or General Rule: NO EFFECT
or the which is the
inadequacy
promise of remunerated benefactor
of cause – Exceptions: Inadequacy of
the thing or
cause is not cause shall invalidate the
service by the
proportionat contract when:
other party
e to object (1) There is fraud,
mistake, undue
influence
Effect of Lack of Cause, Unlawful
(2) When the parties
Cause, False Cause and Lesion intended a donation
[Articles 1352–1355, Civil Code]
Cause Effect D. BASIC PRINCIPLES OF CONTRACT
Lack of VOID.
cause – a. Obligatory force between the
absence or Note: Cause must exist at the parties
total lack of time of the perfection of the
cause contract; it need not exist
later Article 1159, Civil Code. Obligations
arising from contracts have the force of
Contrary to VOID. law between the contracting parties and
law, morals, should be complied with in good faith.
good If parts of a contract are (1091a)
customs, illegal but the rest are
public policy supported by lawful cause,
and public claimant of such has the
order burden of showing proof; Article 1308, Civil Code. The contract
(unlawful otherwise, the whole contract must bind both contracting parties; its
case) is VOID. validity or compliance cannot be left to
the will of one of them. (1256a)
Contracts with illegal cause
may still produce effect in
certain cases where parties General Rule (Freedom to Contract)
are not of equal guilt: The contracting parties may establish
(1) innocent party cannot be stipulations, clauses, terms and conditions as
compelled to perform his they may deem convenient as long as such are
obligation and he may recover
not contrary to law, morals, good customs,
what has already been given;
public order, or public policy [Article 1306, Civil
(2) if both parties are guilty,
neither can sue the other, the Code].
law leaving them as they are
(in pari delicto) [Art. 1411,
Civil Code]

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Exceptions Note: The prohibition shall also apply to judges

1. When it is inequitable and government experts who, in any manner
The Courts shall decide what is inequitable in whatsoever, take part in the sale.
circumstances where the determination of the
performance is evidently inequitable. [Article e. Justices, judges, prosecuting attorneys,
1310] clerks of superior and inferior courts, and
other officers and employees connected with
2. Special Disqualifications the administration of justice - the property
Every donation or grant of gratuitous advantage, and rights in litigation or levied upon an
direct or indirect, between the spouses during execution before the court within whose
the marriage shall be void, except moderate jurisdiction or territory they exercise their
gifts which the spouses may give each other on respective functions.
the occasion of any family rejoicing. The
prohibition shall also apply to persons living Note: This prohibition includes the act of
together as husband and wife without a valid acquiring by assignment and shall apply to
marriage [Art. 87, Family Code]. lawyers, with respect to the property and rights
which may be the object of any litigation in
Husbands and wives cannot sell property to which they may take part by virtue of their
each other except: profession.
a. When there has been a marriage settlement
and a separation of property was agreed f. Any others specially disqualified by law
upon [Article 1491, Civil Code].
b. When there has been a judicial separation of
property under Artcile 191, Civil Code What may not be stipulated
[Article 1490, Civil Code].
Those contrary to law
The following persons cannot acquire by 1. Pactum commisorium - The creditor cannot
purchase, even at a public or judicial auction, appropriate the things given by way of
either in person or through the mediation of pledge or mortgage, or dispose of them.
another: Any stipulation to the contrary is null and
a. Guardian - the property of the person or void [Art. 2088, Civil Code].
persons who may be under his guardianship. 2. Pactum leonina - A stipulation excluding one
b. Agents - the property whose administration or more partners from any share in the
or sale may have been intrusted to them, profits or losses is void [Art. 1799, Civil
unless the consent of the principal has been Code].
given. 3. Pactum de non alienado - A stipulation
c. Executors and administrators - the property forbidding the owner from alienating the
of the estate under administration. immovable mortgaged property is void [Art.
d. Public officers and employees - the property 2130, Civil Code].
of the State or of any subdivision thereof, or 4. Other limitations: Labor Code, Corporation
of any government-owned or controlled Code
corporation, or institution, the administration
of which has been intrusted to them.

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Those contrary to morals, good c. Relativity

customs, public order, and public
policy General Rule:
Article 1311, Civil Code. Contracts take
b. Mutuality effect only between the parties, their
assigns and heirs, except in case where
General Rule: the rights and obligations arising from the
contract are not transmissible by their
Article 1308, Civil Code. The contract nature, or by stipulation or by provision of
must bind both contracting parties; its law. The heir is not liable beyond the
validity or compliance cannot be left to value of the property he received from
the will of one of them. (1256a) the decedent.

Exception: If a contract should contain some

A contract shall be valid even though its stipulation in favor of a third person, he
fulfillment or implementation is left to the will of may demand its fulfillment provided he
either party as long as there is a finding of the communicated his acceptance to the
presence of essential equality of the parties,
obligor before its revocation. A mere
incidental benefit or interest of a person is
which thus prevents the perpetration of injustice
not sufficient. The contracting parties
on the weaker party [GF Equity v. Valenzona,
must have clearly and deliberately
G.R. No. 156841, (2005)].
conferred a favor upon a third person.
(1257a)
Example: Escalation clause
A bank’s unilateral determination and imposition
of the monthly adjustment of interest rates
Exceptions
without the other party’s assent, in the event of 1. Contracts creating real rights
changes in the rates prescribed by law or the Article 1312, Civil Code. In contracts
Bangko Sentral ng Pilipinas, violates the creating real rights, third persons who
principles of mutuality. Such escalation clause come into possession of the object of the
shall be void [Floirendo, Jr. v. Metropolitan Bank contract are bound thereby, subject to the
& Trust Co., G.R. No. 148325, (2007)]. provisions of the Mortgage Law and the
Land Registration Laws. (n)
However, the escalation clause may still be valid
if the creditor has anyway notified the debtor in
2. Contracts in fraud of creditors
order to give the latter the option to reject the
repricing, or if the repricing of the interest rates Article 1313, Civil Code. Creditors are
resulted in a decrease and not an increase of protected in cases of contracts intended
rates [Villa Crista Monte Realty & Dev’t Corp. v. to defraud them. (n)
Equitable PCI Bank, G.R. No. 208336, (2018)].
Stipulations in favor of a third person
(stipulation pour autrui)
Requisites [Article 1311 (2), Civil Code]:
1. The contract should contain some stipulation
in favor of a third person;

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2. The third person communicated his

nature, or by stipulation or by provision of
acceptance to the obligor before its
law. The heir is not liable beyond the
revocation;
value of the property he received from
3. The stipulation is not a mere or incidental
the decedent.
benefit or interest; and
4. The contracting parties clearly and If a contract should contain some
deliberately conferred a favor upon a third stipulation in favor of a third person, he
person. may demand its fulfillment provided he
communicated his acceptance to the
Note: A mere incidental benefit or interest of a obligor before its revocation. A mere
person is not sufficient. incidental benefit or interest of a person is
not sufficient. The contracting parties
Rule: The third person may demand its must have clearly and deliberately
fulfillment [Article 1311 (2), Civil Code]. conferred a favor upon a third person.
(1257a)
d. Freedom to Stipulate (Autonomy
of the Will) and its Limitations Concept: Contracts take effect only
The contracting parties may establish between the parties, their assigns and
stipulations, clauses, terms and conditions as heirs
they may deem convenient as long as such are
Contracts can only bind the parties who entered
not contrary to law, morals, good customs,
into it, and cannot favor or prejudice a
public order, or public policy [Article 1306, Civil
third person, even if he is aware of such
Code].
contract and has acted with knowledge
thereof “Where there is no privity of contract,
Binding Effect of a Contract there is likewise no obligation or liability to
The binding force of a contract is not limited to speak about.” [Philippine National Bank v.
what is expressly stipulated, but extends to all Teresita Tan Dee, et al., G.R. No. 182128,
consequences which are the natural effect of the (2014)].
contract, considering its true purpose, the
stipulations it contains, and the object involved
No one may contract in the name of
[Art. 1315, Civil Code].
another
Unless one has been authorized by the latter, or
Form is generally not necessary for the binding
unless he or she has by law a right to represent
force of a contract, a meeting of the minds
him, he or she cannot contract in the name of
being sufficient [Director of the Bureau of
another [Article 1317, Civil Code].
Commerce v. Rodriguez, G.R. No. 48197,
(1942)].
Stipulations in favor of third persons
See discussed above on Stipulation pour autrui.
Privity of Contract
Article 1311, Civil Code. Contracts take
effect only between the parties, their
assigns and heirs, except in case where
the rights and obligations arising from the
contract are not transmissible by their

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e. Consensuality of Contracts E. REFORMATION OF INSTRUMENTS

In General
Article 1305, Civil Code. A contract is a
Reformation - remedy in equity by means of
meeting of minds between two persons
which a written instrument is made or construed
whereby one binds himself, with respect
so as to express or conform to the real intention
to the other, to give something or to
render some service. (1254a) of the parties when some error or mistake has
been committed [Rosello-Bentir v. Leanda, G.R.
No. 128991, (2000)].
Article 1315, Civil Code. Contracts are
perfected by mere consent, and from that Rationale: It would be unjust and inequitable
moment the parties are bound not only to to allow enforcement of a written instrument
the fulfillment of what has been expressly which does not reflect or disclose the real
stipulated but also to all the meeting of the minds of the parties. However,
consequences which, according to their an action for reformation must be brought
nature, may be in keeping with good within the period prescribed by law,
faith, usage and law. (1258) otherwise, it will be barred by the mere lapse of
time [Rosello-Bentir v. Lenada, supra].
Concept and Coverage
The principle of consensuality provides that Limitation of the Parol Evidence Rule
contracts are generally perfected by mere The right of reformation is necessarily an
consent. invasion or limitation of the parol evidence rule
since, when a writing is performed, the result is
It is not possible to cross out the indispensable that an oral agreement is by court decree made
element of consensuality in the perfection of legally effective. Consequently, the courts, as
contracts [Asuncion v. CA, G.R. No. 109125, the agencies authorized by law to exercise the
(1994)]. power to reform an instrument, must necessarily
exercise that power sparingly and with great
Without mutual consent on the object and on caution and zealous care [Rosello-Bentir v.
the cause, a contract cannot exist [Article 1305, Leanda, supra].
Civil Code]; corollary to it, no one can be forced,
least of all perhaps by a court, into a contract Requisites [Article 1359, Civil Code]
against his will or compelled to perform a. There must be a meeting of the minds of
thereunder [Equatorial Realty Development, Inc. the contracting parties
v. Mayfair Theater, Inc., G.R. No. 106063, b. Their true intention is not expressed in
(1996)]. the instrument;
c. Such failure to express their true intention is
Exceptions: due to mistake, fraud, inequitable
Real contracts, such as deposit, pledge, and conduct, or accident.
commodatum are not perfected until the
delivery of the object of the obligation [Article The appellant’s complaint states no cause of
1316, Civil Code]. action, for it fails to allege that the instrument to
be reformed does not express the real
agreement or intention of the parties. Such an
allegation is essential since the object sought

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in an action for reformation is to make an was executed for valuable consideration. Thus,
instrument conform to the real agreement when there is some error in mistake in the
or intention of the parties. Moreover, courts contract, the onus probandi is upon the party
do not reform instruments merely for the sake of who insists that the contract should be
reforming them, but only to enable some party reformed.
to assert right under them as reformed [Garcia
v. Bisaya, G.R. No. L-8060, (1955)]. While intentions involve a state of mind,
subsequent and contemporaneous acts of the
Note: If mistake, fraud, inequitable conduct, or parties as well as the evidentiary facts as proved
accident has prevented a meeting of the minds and admitted can be reflective of one’s intention
of the parties, the proper remedy is not [Multi-Ventures Capital Management Corporation
reformation of the instrument but annulment of v. Stalwart Management, G.R. No. 157439,
the contract [Article 1359(2), Civil Code]. (2007)].

The action for reformation of instrument should b. Effect of Reformation

not be confused with the action for annulment In granting reformation, the remedy in equity is
of contract [Veluz v. Veluz, G.R. No. L-23261, not making a new contract for the parties, but
(1968)]. establishing and perpetuating the real contract
between the parties which, under the technical
Reformation v. Annulment [Veluz v. rules of law, could not be enforced but for such
Veluz, supra] reformation [Quiros v. Arjona, G.R. No. 158901,
(2004)].
Reformation of Annulment
Instrument
c. Cases where Reformation is
Presupposes a valid Presupposes a Proper
existing contract, in defective contract in
which there had been which the minds of
i. Mistake
a meeting of the the parties did not
minds of the parties, meet, or the consent The mistake should be of fact generally, and not
but the instrument of one was vitiated. of law [BPI v. Fidelity and Surety Co., G.R. No.
drawn up and signed L-26743, (1927)].
by them does not
correctly express the
Mutual
terms of their
agreement. Mutual mistake of parties that causes failure to
disclose real agreement [Article 1361, Civil
Equity of reformation Intended to declare Code].
is ordinarily limited to the inefficiency which Unilateral
written agreements, the contract already
1. One party was mistaken, while the other
and its purpose is to carries in itself and to
acted fraudulently [Article 1362, Civil Code].
establish and render the contract
perpetuate the true inefficacious. 2. One party was mistaken, while the other
agreement. knew or believed that the instrument did not
state their real agreement, but concealed it
from the former [Article 1363, Civil Code].
a. Burden of Proof
The presumption is that an instrument sets out
Note: In (2), only the mistaken party may ask
the true agreement of the parties and that it
for reformation.
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 OBLIGATIONS AND CONTRACTS CIVIL LAW

personal [Article 784, Civil Code], a free act

ii. Fraud [Article 839, Civil Code], and essentially
revocable [Article 828, Civil Code].
Active
If one party was mistaken and the other acted b. When the real agreement is
fraudulently in such a way that the instrument void, there is nothing to reform
does not show their true intention [Article 1362,
Civil Code]. c. Implied ratification / estoppel
The party who has brought an action to enforce
Passive the instrument cannot subsequently ask for its
When one party was mistaken and the other reformation [Article 1367, Civil Code].
knew or believed that the instrument did not
state their real agreement [Art. 1363, Civil d. Simple donations inter vivos -
Code]. wherein no condition is
imposed
a. Inequitable Conduct Donation is an act of liberality [Article 725, Civil
If one party was mistaken and the other acted Code] and cannot be compelled.
fraudulently or inequitably in such a way that
the instrument does not show their true
Prescriptive Period for Reformation
intention [Article 1362, Civil Code].
The prescriptive period for actions based upon a
written contract and for reformation of an
b. Accident instrument is ten (10) years under Art. 1144,
When, through the ignorance, lack of skill, Civil Code [Rosello-Bentir v. Leanda, supra].
negligence, or bad faith on the part of the
person drafting the instrument or of the clerk or
Who may ask for reformation
typist, the instrument does not express the true
intention of the parties [Article 1364, Civil Code]. Trigger Rule

If the mistake was Reformation may be

No fraud exists in the sense that neither of the
mutual ordered at the
parties took part therein. instance of either
party or his
c. Severe Pacto de Retro / successors in interest
Relative Simulation [Art. 1368, Civil
Code].
If two parties agree upon the mortgage or
pledge of real or personal property, but the If the mistake was Reformation may be
instrument states that the property is sold not mutual ordered upon petition
absolutely or with a right of repurchase, of the injured party,
reformation is proper [Article 1365, Civil Code]. or his heirs and
assigns [Art. 1368,
Civil Code].
Cases where reformation is not proper
When through the The courts may order
a. Wills ignorance, lack of that the instrument
skill, negligence or be reformed [Art.
There can be no reformation before the testator
bad faith on the part 1364, Civil Code].
dies because the making of a will is strictly of the person drafting

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the instrument or of Article 1381, Civil Code. The following

the clerk or typist, the contracts are rescissible:
instrument does not
express the true (1) Those which are entered into by
intention of the
guardians whenever the wards whom
parties
they represent suffer lesion by more than
one-fourth of the value of the things
F. DEFECTIVE CONTRACTS which are the object thereof;

(2) Those agreed upon in representation

Rescissible A contract that has caused a of absentees, if the latter suffer the lesion
particular damage to one of
stated in the preceding number;
the parties or to a third
person and which for
equitable reasons may be set (3) Those undertaken in fraud of creditors
aside even if valid. when the latter cannot in any other
manner collect the claims due them;
Annulable A contract in which consent of
or voidable one of the parties is (4) Those which refer to things under
(contrato defective, either because of litigation if they have been entered into
nulo) want of capacity or because it by the defendant without the knowledge
is vitiated, but which contract
and approval of the litigants or of
is valid until judicially set
aside.
competent judicial authority;

Unenforcea A contract that for some (5) All other contracts specially declared
ble reason cannot be enforced, by law to be subject to rescission.
unless ratified in the manner (1291a)
provided by law.

Void or A contract which is an Rescission

inexistent absolute nullity and produces Rescission is a remedy granted to contracting
no effect, as if it had never parties and to third persons, to secure
been executed or entered reparation for damages caused to them by a
into.
contract, by means of the restoration of things
to their condition at the moment prior to the
a. Rescissible Contracts celebration of said contract [Ada v. Baylon, G.R.
No. 182435 (2012)].
General Rule:
A rescissible contract is valid until rescinded. It is a relief to protect one of the parties or a
third person from all injury and damages which
This general principle is not decisive. What is the contract may cause, to protect some
decisive is the civil law rule that ownership is preferential right [Aquino v. Tañedo, G.R. No.
acquired, not by mere agreement, but by L-12457 (1919)].
tradition or delivery.||| [Equatorial Realty
Development, Inc. v. Mayfair Theater, Inc.,
supra]

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Rescission in Article 1380 3. They can only be attacked directly only and
distinguished from rescission in Article not collaterally;
1191 4. They can be attacked only by a contracting
[Universal Food Corp. v. CA, L-29155 (1970)] party or a third person who is injured or
defrauded;
Rescission in Art. Rescission in Art. 5. They are susceptible of convalidation only by
1191 1380
prescription and not ratification; and
Premised on breach Based on economic 6. The action to claim rescission must be
damage or prejudice commenced within four (4) years [Article
1389, Civil Code].
A primary remedy Rescission is
subsidiary Requisites for Rescission under
Articles 1381 (1) and (2)
Lesion Contract was entered into by a guardian in
The injury which one of the parties suffers by behalf of his ward or by a legal representative in
virtue of a contract which is disadvantageous for behalf of an absentee [Article 1381, Civil Code].
him. To give rise to rescission, the lesion must
be known or could have been known at the time Note: A guardian is authorized only to manage
of making of the contract [Camus 205-206, cited the estate of the ward; should he dispose a
by Tolentino]. portion thereof without authority from the court
by way of a contract, the same is unenforceable
Lesion does not invalidate a contract except only under Art. 1403 (1), Civil Code, irrespective of
in special cases provided by law [Article 1355, whether there is lesion or not
Civil Code]
1. It was entered into without judicial approval
Subsidiary Remedy [Article 1386, Civil Code]
Rescission is not a principal remedy, but a 2. Ward or absentee suffered lesion of more
subsidiary one. It can only be availed of only if than one-fourth (1/4) of the value of the
the injured party proves that he has no other property which is the object of the contract
legal means to obtain redress for the damage [Articles 1381 (1) and (2), Civil Code]
caused [Article 1177, Civil Code]. 3. There is no other legal means of obtaining
reparation for the lesion [Article 1383, Civil
Necessary Extent Code].
The rescission shall only be to the extent 4. The person bringing the action must be able
necessary to cover the damages caused, i.e. to return whatever he may be obliged to
partial rescission [Article 1384, Civil Code]. restore [Article 1385 (1), Civil Code].
5. The object of the contract must not be
Characteristics of Rescissible legally in the possession of a third person
who did not act in bad faith [Article 1385
Contracts
(2), Civil Code].
1. The defect consists in injury or damage
either to one of the contracting parties or to
Note: Article 1381 (4), Civil Code: Any
third persons;
disposition of the thing subject of litigation or
2. Before rescission, they are valid, and
any act which tends to render inutile the court’s
therefore, legally effective;
impending disposition in such case without the

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knowledge and approval of the litigants or of the

court, is unmistakably and irrefutably indicative Illustration: While it is necessary that the credit
of bad faith. of the plaintiff in the accion pauliana must exist
prior to the fraudulent alienation, the date of the
However, even without knowledge or approval judgment enforcing it is immaterial. Even if the
from the court, the conveyance of a property judgment is subsequent to the alienation, it is
subject of litigation may still be valid but is merely declaratory, with retroactive effect to the
susceptible for rescission under Article 1381 (4), date when the credit was constituted [Siguan v.
Civil Code. Lim, supra].

A definitive judicial determination with respect to Accion Pauliana

the thing subject of litigation is not a condition The action to rescind contracts in fraud of
sine qua non before the rescissory action creditors. Consequently, accion pauliana
contemplated under Article 1381 (4), Civil Code presupposes a judgment and unsatisfied
may be instituted. The primordial purpose of execution which cannot exist when the debt is
Article 1381 (4), Civil Code is to secure the not yet demandable at the time the rescissory
possible effectivity of the impending judgment action is brought [Planiol & Ripert 264; 2I
by a court with respect to the thing which is the Ruggiero 169, cited by Tolentino].
subject of litigation [Ada v. Baylon, supra].
Note: Even secured creditors are entitled to
Requisites for Rescission of a Contract accion pauliana.
Entered into In Fraud of Creditors May
Be Rescinded under Article 1381 (3) Payments made in a state of insolvency for
1. There is a credit existing prior to the obligations to whose fulfillment the debtor could
celebration of the contract, although not yet not be compelled at the time they were effected,
due or demandable; are also rescissible [Article 1382, Civil Code].
2. There is fraud, or at least, the intent to
commit fraud to the prejudice of the creditor Requisites Before Payment made by
seeking rescission, which may be presumed Insolvent can be Rescinded
or proved [Article 1387, Civil Code] 1. It was made in a state of insolvency;
3. Creditor cannot in any legal manner collect 2. Obligation must have bee one which debtor
his credit; insolvency of the debtor is not could not be compelled to pay at the time
required; and such payment was effect.
4. The object of the contract must not be
legally in the possession of a third person Note: A debtor can be compelled to pay by the
who did not act in bad faith. [Article 1385, creditor even before the expiration of the period
par. 2, Civil Code] since by his insolvency he has already lost his
right to the benefit of such period [Article 1198
General Rule (1), Civil Code]
Rescission requires the existence of creditors at
the time of the alleged fraudulent alienation, Effects of Rescission
and this must be proved as one of the bases of It creates an obligation of mutual restitution or
the judicial pronouncement setting aside the the obligation to return the things which were
contract. Without any prior existing debt, there the object of the contract, together with their
can neither be injury nor fraud. fruits, and the price with its interests.

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Badges of Fraud
However, if the object of the contract is in the A conveyance leaving no property for other
possession of third persons in good faith, creditors to attach is evidence of fraud [China
rescission cannot take place and indemnity for Banking v. CA, G.R. No. 129644 (2000)]:
damages may be demanded from the person 1. Consideration is fictitious or inadequate;
causing the loss [Art. 1385, Civil Code] 2. Transfer was made while suit had begun or
pending;
Prescription 3. Sale was upon credit by insolvent debtor;
Rescission prescribes in a period of four (4) 4. There was large indebtedness or complete
years. For persons under guardianship and for insolvency;
absentees, the period shall not begin until the 5. Transfer consisted of all or nearly all
termination of the former's incapacity, or until property especially when insolvent or
the domicile of the latter is known [Article 1389, greatly;
Civil Code]. 6. The transfer was made between father and
son when other above circumstances
Not all creditors benefit from present; and
rescission 7. There was a failure of vendee to take
The rescission should benefit only the creditor exclusive possession of all property
who obtained the rescission, because the embarrassed financially.
rescission is to repair the injury caused to him
by the fraudulent alienation. If a balance is left Resolution v. Rescission
after satisfying the claim of the creditor who The Civil Code uses the terms synonymously.
brought the action, other creditors who are
qualified to bring an accion pauliana should be Rescission Resolution
given the benefit of rescission, instead of
requiring them to bring other rescissory actions. A subsidiary action As referred to in Art.
However, creditors who only became such after based on injury to the 1191, Civil Code the
the fraudulent alienation, cannot benefit from plaintiff’s economic action is based on the
the rescission. interests as described defendant’s breach of
in Arts. 1380 & 1381, faith, a violation of
Civil Code the reciprocity
Presumption of Fraud between the parties.
When alienation of property presumed in fraud
[Heirs of Sofia Quirong v. Development Bank of
of creditors:
the Philippines, G.R. No. 173441 (2009)]
1. Alienation by gratuitous title if the debtor
has not reserved sufficient property to pay
Differences
all of his debts contracted before alienation
[Article 1387, Civil Code] Rescission Resolution
2. Alienation by onerous title if made by a [Arts. 1380 [Art. 1191]
debtor against whom some judgment has & 1381]
been rendered in any instance or some writ
As to nature Subsidiary Principal
of attachment has been issued [Article 1387, of action Action Action,
Civil Code]. involving retaliatory in
partial nature
resolution

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As to basis Economic Breach of extension

prejudice faith
rendering the As to Four (4) Ten (10)
contract prescriptive years [Art. years.
legally period 1389, Civil
rescissible Code]
[Congregation of the Religious Virgin Mary v.
Note: Not all
forms of
Orola, G.R. No. 169790 (2008)]
economic
prejudice are II. VOIDABLE CONTRACTS
recognized by
law as a
Voidable or annullable contracts are existent,
ground to
rescind valid and binding, although they can be annulled
because of want of capacity or vitiated consent
As to effect The cause of The of one of the parties.
action is reparation of
subordinated damages for However, before such annulment, they are
to the the breach is considered effective and obligatory between
existence of purely
parties. [First Philippine Holdings Corp. v. Trans
an economic secondary
prejudice. H Middle East (Phils.) Equities, Inc., G.R. No.
ence, where 179505 (2009)]
the
defendant
makes good Article 1390, Civil Code. The following
the damages contracts are voidable or annullable, even
causes, the though there may have been no damage
action cannot to the contracting parties:
be
maintained or (1) Those where one of the parties is
continued.
incapable of giving consent to a contract;
As to Prejudiced Only party to
parties-in-i third party the contract (2) Those where the consent is vitiated by
nterest may also may seek mistake, violence, intimidation, undue
seek remedy remedy influence or fraud.

As to Equity Non- These contracts are binding, unless they

grounds compliance or are annulled by a proper action in court.
non- They are susceptible of ratification. (n)
performance

As to action Right to seek May be Characteristics of Voidable Contracts

by courts remedy is not denied if 1. Its defect consists of the vitiation of
affected by court finds
consent of one of the contracting parties;
extension of that there is
time sufficient 2. It is binding until it is annulled
reason to 3. It is susceptible of convalidation by
justify ratification or prescription; once ratified,
they become absolutely valid and can no

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longer be annulled [Article 1392, Civil

Code]; and, Requisites
4. Its defect or voidable character cannot be 1. Plaintiff must have an interest in the
invoked by third persons. contract; and
2. The victim, and not the party responsible
Rescission Annulment for the vice or defect, must assert the
same.
Merely produces the Declares the
inefficacy of the inefficacy which the Exception
contract, which did contract already If a third person is prejudiced in his rights with
not essentially exist in carries in itself
respect to one of the contracting parties and can
the contract
show detriment which would positively result to
Needs ratification to Requires an act of him from the contract in which he had no
be effective ratification to be intervention [Teves v. People’s Homesite and
cured Housing Corp., G.R. No. L-21498 (1968)].

Private interest alone Direct influence of

governs the public interest is Effect of Annulment
involved Contract has been Contract has not
consummated been
May be compatible Based on a vice of
consummated
with the perfect the contract which
validity of the invalidates it The parties shall be Mutual Restitution -
contract released from the the contracting
obligations arising parties shall restore
A remedy A sanction
therefrom. to each other the
things which have
Equity predominates Law predominates
been the subject
matter of the
May be demanded by Can be demanded
contract, with their
third parties affected only by the parties to
fruits, and the price
by the contract the contract
with its interest,
except in cases
Who may institute action for provided by law [Arts.
1398-1402, Civil
annulment
Code].

General Rule
Action for annulment may be instituted by all Mutual Restitution
who are thereby obliged principally or Vitiation of Parties shall restore to each
subsidiarily. Consent other the subject matter of
the contract with its fruits
Exceptions [CG] and the price thereof with
legal interest.
1. Persons capable of giving consent; and
2. Guilty parties who have caused the In obligations to render
vitiation of consent cannot allege the service, the value thereof
incapacity or want of consent of those they shall be the basis for
contracted with [Article 1397, Civil Code] damages [Art. 1398, Civil

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Code
Ratification
Incapacitated person is not
obliged to make any Concept
restitution except insofar as
1. The act or means by virtue of which efficacy
he has been benefited by
the thing or price received is given to a contract which suffers from a
by him [Art. 1399, Civil vice of curable nullity [Articles 1392-1396,
Code]. Civil Code].
2. Ratification is either express or tacit.
Modes of Validating a Voidable
How Ratified
Contract [PRaLt]
When the person who has the right to invoke it,
1. By prescription of the action for
with the knowledge of the reason which renders
annulment [Article 1391, Civil Code]
the contract voidable and such reason having
2. By ratification or confirmation [Articles
ceased, executes an act implying an intention to
1392- 1396, Civil Code]
waive his right [Article 1393, Civil Code].
3. By loss of the thing which is the object of
the contract through the fraud or fault of the
person who is entitled to institute the action
Requisites of Ratification
for the annulment [Article 1401, Civil Code] 1. Contract is tainted with a vice susceptible
of being cured;
2. Confirmation is effected by the person who
Prescription
is entitled to do so under the law;
3. It is effected with knowledge of the vice or
Prescription of the Action for defect of the contract;
Annulment 4. Cause of the nullity or defect has already
Grounds for being Period & disappeared.
voidable Reckoning Point
The right to ratify may be transmitted to the
Intimidation, Four (4) years from heirs of the party entitled to such right. It may
violence, or undue the time the defect of
likewise be exercised by the guardian of the
influence the consent ceases
incapacitated person having such right [Article
Fraud or Mistake Four years from 1394, Civil Code].
discovery thereof
Ratification does not require the conformity of
Minors Four years from the the contracting party who has no right to bring
time the guardianship
an action for annulment [Article 1395, Civil
ceases
Code].

Constructive Notice Effect of Ratification

Discovery or fraud must be reckoned from the It extinguishes the action for annulment of a
time the document was registered in the office voidable contract [Article 1392, Civil Code].
of the Register of Deeds. Registration
constitutes constructive notice to the whole It cleanses the contract from all its defects from
world [Carantes v. CA, G.R. No. L-33360 the moment it was constituted [Article 1396,
(1977)]. Civil Code].

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representation, or who has acted beyond his

Effect if Thing is Loss powers. [Article 1403(1), Civil Code]
2. Those that do not comply with the Statute
Loss of thing by Loss of thing by
of Frauds, which are unenforceable unless
Plaintiff Defendant
in written memorandum and subscribed by
If the loss of the If it is lost through the party charged. [Article 1403(2), Civil
object in his the defendant’s fault, Code]
possession is due to he is liable for fruits a. An agreement not to be performed
his fault or fraud, the received, value of the within a year from the making thereof;
action for annulment thing at the time it
b. A special promise to answer for the
of contracts shall be was lost, with interest
extinguished. He from the same date debt, default, or miscarriage of another;
cannot ask for [Art. 1400, Civil c. An agreement made in consideration of
annulment [Art. Code] marriage, other than a mutual promise
1401, Civil Code]. to marry;
d. An agreement for the sale of goods,
chattels or things in action, priced not
III. UNENFORCEABLE CONTRACTS
less than P500;
e. An agreement for the leasing for a
Unenforceable contracts are those which
longer period than one year, or for the
cannot be enforced by a proper action in
sale of real property or of an interest
court, unless they are ratified, because they are
therein;
either:
f. A representation as to the credit of a
1. entered into without or in excess of
third person.
authority,
3. Those where both parties are incapable
2. not compliant with the statute of frauds,
of giving consent to a contract. [Article
3. or both of the contracting parties do not
1403 (3), Civil Code]
possess the required legal capacity [Article
1403, Civil Code].
How Ratified [Article 1405, Civil Code]
1. By failure to object to the presentation of
An unenforceable contract may be ratified,
oral/parole evidence to prove the same;
expressly or impliedly, by the person in whose
2. By acceptance of benefits under them.
behalf it has been executed, before it is revoked
by the other contracting party. [Mercado v. Allied
Effect of ratification by the parents or
Banking Corp., G.R. No. 171460 (2007)]
guardians of parties who are both
Characteristics incapable of giving consent to a
1. Cannot be enforced by a proper action in contract [Article 1407, Civil Code]
court; 1. By the parent or guardian of one of the
2. Susceptible of ratification; parties: Unenforceable contract becomes
3. Cannot be assailed by third persons [Article VOIDABLE;
1408, Civil Code] 2. By the parent or guardian of both parties:
Unenforceable contract becomes VALID.
Kinds [Article 1403, Civil Code]
1. Unauthorized Contracts - those entered
into in the name of another person by one
who has been given no authority or legal
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 OBLIGATIONS AND CONTRACTS CIVIL LAW

IV. VOID OR INEXISTENT Void vs. Inexistent Contracts

CONTRACTS Void Inexistent

A void or inexistent contract is one which has no Those where all the Those where one or
force and effect from the very beginning. requisites of a some or all of the
contract are present requisites essential
It is as if it has never been entered into and
but the cause, object for the validity of a
cannot be validated either by the passage of or purpose is contrary contract are
time or by ratification. to law, morals, good absolutely lacking.
customs, public order
Types of Void Contracts or public policy; or
1. Those where one of the essential requisites
The contract itself is
of a valid contract as provided for by Article
prohibited or declared
1318 of the Civil Code is totally wanting; void by law.
2. Those declared to be so under Article 1409
of the Civil Code. [Francisco v. Herrera, G.R. Principle of pari Principle of pari
No. 139982 (2002)] delicto is applicable. delicto is inapplicable.

May produce legal Cannot produce any

Characteristics effects. effect.
1. It does not produce any legal effect;
2. It is not susceptible of ratification; Covers Art. 1409 Covers Art. 1409
3. The right to set up the defense of (1), (2), (4), (6) and (1), (2), (4), (6) and
inexistence or absolute nullity cannot be (7), Civil Code (7), Civil Code
waived or renounced;
4. The action or defense for the declaration of Void vs. Voidable Contracts
their inexistence or nullity is imprescriptible.
Void Voidable
[Article 1410, Civil Code];
5. The inexistence or absolute nullity of a Those where one Those where all the
contract cannot be invoked by a person of the essential essential requisites
whose interests are not directly affected. requisites is are present, but
[Article 1421, Civil Code] wanting, either in consent is vitiated by
a. Creditors of a party to an illegal contract fact or in law, or is want of capacity, or
declared void by by error, violence,
may, under the conditions set forth in
statute. intimidation, or
article 1177 exercise the rights and deceit.
actions of the latter.
b. Except only those which are inherent in No contract at all. Valid until annulled.
his person, including therefore, his right
May be assailed Must be assailed
to the annulment of said contract, even
indirectly. through an action for
though such creditors are not affected
that purpose by a
by the same, except indirectly, in the party to the contract,
manner indicated in said legal provision. and never by a third
[Pascual v. Secretary of Public Works, person (direct attack)
G.R. No. L-10405 (1960)].
Nullity may be setup Nullity may only be
against anyone who set-up against a party
asserts a right arising thereto.

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from it. The act in which the unlawful or

forbidden cause consists does not
Not susceptible to May be validly constitute a criminal offense. [Article
ratification. ratified.
1412, Civil Code]
Action to declare Action for annulment When both
nullity does not prescribes. parties are When only one of the
prescribe. [Art. 1410, at fault contracting parties is at
Civil Code] fault

Neither may Guilty Party Innocent

Divisibility of Contracts recover what Party
A contract has separate provisions of which only he has given
one or more provisions is invalid. by virtue of He cannot He may
If the illegal terms can be separated from the the contract, recover what demand the
legal ones, the latter may be enforced. [Article or demand he has given return of
the by reason of what he has
1420, Civil Code]
performance the contract; given;
of the other’s
In Pari Delicto Principle [Article 1411, undertaking. He cannot He is without
Civil Code] ask for the any
Parties to a void agreement cannot expect the fulfillment of obligation to
what has comply with
aid of the law; the courts leave them as they
been his promise.
are, because they are determined in pari delicto
promised to
or “in equal fault” [Menchavez v. Teves, G.R. No. him.
153201 (2005)]

Exceptions to the Principle of In Pari

General Rules
Delicto:
1. Payment of usurious interest paid in excess
Nullity proceeds from the illegality of
of the interest may be recovered by the
the cause or object of the contract, debtor [Article 1413, Civil Code].
and the act constitutes a criminal 2. Payment of money or delivery of property
offense [Art. 1411, Civil Code] for an illegal purpose, where the party who
1. Parties shall have no cause of action against paid or delivered repudiates the contract
each other. before the purpose has been accomplished,
2. Both parties shall be prosecuted. or before any damage has been caused to a
3. Things or price of the contract which are third person. The repudiating party may be
considered as effects or instruments of a allowed to recover money or property
crime are forfeited in favor of the [Article 1414, Civil Code; Hulst v. PR Builders
government. Inc., G.R. No. 156364 (2007)].
3. Payment of money or delivery of property
made by an incapacitated person. It is not
necessary that the illegal purpose has not
been accomplished, or no damage has yet
been caused [Article 1415, Civil Code].
4. Agreement or contract not illegal per se but
merely prohibited by law, and the

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prohibition is designed for the plaintiff’s 3. If public policy is enhanced thereby. [Acabal
protection. Plaintiff may recover as allowing v. Acabal, G.R. No. 148376 (2005)]
recovery enhances public policy [Article
1416, Civil Code].

Note: When the assailed contracts are

void ab initio, Article 1416 cannot be
applied, as in the case of aliens
purchasing property despite knowing
fully well the constitutional prohibition
against foreigners owning land in the
Philippines at the time of purchase
[Frenzel v. Catito, G.R. No. 143958
(2003)].

5. Payment of any amount in excess of the

maximum price of any article or
commodity fixed by law [Article 1417,
Civil Code]
6. Contract whereby a laborer undertakes to
work longer than the maximum number of
hours fixed by law [Article 1418, Civil Code]
7. Contract whereby a laborer accepts a wage
lower than the minimum wage fixed by law.
He may recover the deficiency with legal
interest, and the employer shall be
criminally liable [Article 1419, Civil Code].
8. In case of divisible contracts, the legal
portions/terms may be enforced separately
from the illegal portions/terms. [Article
1420, Civil Code].
9. One who lost in gambling because of
fraudulent schemes practiced on him. He is
allowed to recover his losses [Article 315 (3)
(b), RPC] even if gambling is prohibited.

Admits of an exception under Article

1416
Recovery for what has been paid or delivered
pursuant to an inexistent contract is allowed
only when the following requisites are met:
1. The contract is not illegal per se but merely
prohibited;
2. The prohibition is for the protection of the
plaintiffs; and

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that the party entitled to assert it either has

ESTOPPEL abandoned it or declined to assert it.
[Pangasinan v. Disonglo-Almazora, G.R. No.
Definition 200558 (2015)].
A condition or state by virtue of which an
admission or representation is rendered Elements
conclusive upon the person making it, and 1. Conduct on the part of the defendant, or of
cannot be denied or disproved as against the one under whom he claims, giving rise to
person relying thereon [Article 1431, Civil Code]. the situation of which complaint is made
for which the complaint seeks a remedy;
Estoppel is a bar which precludes a person from 2. Delay in asserting the complainant’s rights,
asserting anything contrary to that which has the complainant having had knowledge or
been established as the truth, either by the acts notice, of the defendant’s conduct and
of judicial or legislative officers or by his own having been afforded an opportunity to
deed or representation, either express or implied institute a suit;
[28 Am. Jur. 2d. 599-600, cited by De Leon]. 3. Lack of knowledge or notice on the part of
the defendant that the complainant would
Kinds of Estoppel assert the right on which he bases his suit;
1. Equitable Estoppel or Estoppel in pais and
[Article 1433, Civil Code] 4. Injury or prejudice to the defendant in the
a. Estoppel by silence [Article 1437, Civil event relief is accorded to the complainant,
Code] or the suit is not held to be barred.
b. Estoppel by acceptance of benefits
2. Technical Estoppels Persons Bound
a. Estoppel by Deed - a party to a deed Estoppel is effective only as between the
is precluded from asserting as against parties thereto or their successors-in interest
the other party, a material fact asserted [Article 1439, Civil Code].
therein; [Article 1433, Civil Code]
b. Estoppel by Record - a party is The government is not estopped by mistake or
precluded from denying the truth of the error on the part of its officials or agents.
matters set forth in a record whether In Manila Lodge No. 761 Benevolent and
judicial or legislative and also to deny Protective Order of the Elks v. CA [G.R. No.
the facts adjudicated by a court of L41001 (1976)], the sale executed by the City of
competent jurisdiction. Manila to Manila Lodge was certainly a contract
3. Estoppel by Judgment – A party to a case is prohibited by law, and that estoppel cannot be
precluded from denying the facts urged even if the City of Manila accepted the
adjudicated by a court of competent benefits of such contract of sale and the Manila
jurisdiction. Lodge No. 761 had performed its part of the
4. Estoppel by Laches – Laches is the failure or agreement, for to apply the doctrine of estoppel
neglect for an unreasonable and against the City of Manila in this case would be
unexplained length of time to do that which, tantamount to enabling it to do indirectly what it
by exercising due diligence, could or should could not do directly.
have been done earlier; it is negligence or
omission to assert a right within a Cases Where Estoppel Applies
reasonable time, warranting a presumption

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1. Sale or alienation of a thing which does not Requisites:

belong to the seller or grantor and later on 1. There must be fraudulent representation or
acquire title thereto [Article 1434, Civil wrongful concealment of facts known to the
Code] party estopped;
2. The party precluded must intend that the
Requisites other should act upon the facts as
1. The seller or grantor is not the owner of a misrepresented
thing. 3. The party misled must have been unaware
2. The person sells or alienates and delivers it of the true facts; and
to another. 4. The party defrauded must have acted in
3. The person later on acquires title to the accordance with the misrepresentation.
thing. Effect
The guilty party is precluded from asserting his
Effect legal title or interest therein, provided all these
Title passes by operation of law to the buyer or requisites are present.
grantee.
5. One who has allowed another to assume
2. Agent sells or alienates a thing [Article 1435, apparent ownership of personal property for
Civil Code] the purpose of making any transfer of it,
cannot, if he received the sum for which a
Requisite pledge has been constituted, set up his own
Person in representation of another sells or title to defeat the pledge of the property,
alienates a thing. made by the other to a pledgee who
received the same in good faith and for
Effect value [Article 1438, Civil Code]
The person cannot set up his own title as
against the buyer or grantee.

3. Title of the lessee or bailee against the

lessor or bailor [Article 1436, Civil Code]

Requisite
There exists a lessor-lessee or bailor-bailee
relationship

Effect
The person cannot set up his own title as
against the buyer or grantee.

4. Contract between third persons concerning

immovable property where one of them is
misled by a person with respect to the
ownership or real right over the real estate
[Article 1437, Civil Code]

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4. Manager has not been tacitly authorized by

QUASI-CONTRACTS the owner.

A quasi-contract is that juridical relation The obligation does not arise

resulting from a lawful, voluntary and unilateral 1. When the property or business is not
act, and which has for its purpose neglected or abandoned; or
the payment of indemnity to the end that no 2. If in fact the manager has not been tacitly
one shall be unjustly enriched or benefited at authorized by the owner.
the expense of another [Article 2142, Civil
Code]. In the first case, the provisions of Articles 1317
(1), 1403, and 1404, Civil Code regarding
Based on presumed will or intent of the obligor unauthorized contracts shall govern. In the
dictated by equity and by the principles of second case, the rules on agency shall be
absolute justice [Padcom v. Ortigas Center, G.R. applicable [Article 2144, Civil Code].
No. 146807 (2002)].
A. OBLIGATIONS OF A GESTOR
There being no express consent, in the sense of
a meeting of minds between the parties, there is 1. Observe the requisite standard of diligence
no contract to speak of. However, in view of the
Art. 2145, Civil Code. The officious
peculiar circumstances or factual environment, manager must perform his duties with all the
consent is presumed to the end that a recipient diligence of a good father of a family, and pay
of benefits or favors resulting from lawful, the damages which through his fault or
voluntary and unilateral acts of another may not negligence may be suffered by the owner of
be unjustly enriched at the expense of another the property or business under management.
[Philippine National Bank v. CA, G.R. No. 97995
The courts may, however, increase or
(1993)].
moderate the indemnity according to the
circumstances of each case.
I. NEGOTIORUM GESTIO
2. Liability in the management of the property
Negotiorum gestio takes place when a person
voluntarily takes charge of another’s abandoned
Solidary Liability
business or property without the owner’s
The officious manager is liable for the acts of
authority [Article 2144, Civil Code].
the persons to whom he delegated all or some
of his duties. The responsibility of two or more
As a rule, reimbursement must be made to the
gestors shall be solidary, unless the
gestor (i.e., one who carried out the business)
management was assumed to save the thing or
for necessary and useful expenses.
business from imminent danger [Article 2146,
Civil Code].
Requisites
1. Person voluntarily takes charge;
Note: This is without prejudice to the direct
2. Takes charge of the agency or management
obligation of the delegate to the owner of the
of a business or property belonging to
business.
another;
3. Property or business is neglected or
abandoned; and

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Liability for fortuitous events 2. 2. Reimburse the gestor for the necessary
The officious manager is liable for any fortuitous and useful expenses and for the damages
event under the following conditions: the latter may have suffered in the
1. If he undertakes risky operations which the performance of his duties
owner was not accustomed to embark upon
2. If he has preferred his own interest to that The above obligations shall be incumbent upon
of the owner the owner if the management had for its
3. If he fails to return the property or business purpose the prevention of an imminent and
after demand of the owner manifest loss, although no benefit may have
4. If he assumed management in bad faith been derived [Article 2150, Civil Code].
[Article 2147, Civil Code]
5. If he is manifestly unfit to carry on the The owner would still be liable, even if the
management owner did not derive any benefit and there was
6. If by his intervention he prevented a more no imminent and manifest danger to the
competent person from taking up the property or business, provided:
management [Article 2148, Civil Code]. 1. The gestor has acted in good faith; and
2. The property or business is intact, ready to
Note: The gestor shall not be liable for (5) and be returned to the owner [Article 2151, Civil
(6) if the management was assumed to save the Code].
property or business from imminent danger.
Effect of Ratification
Personal Liability
Art. 2149, Civil Code. The ratification
Be personally liable for contracts which he
of the management by the owner of the
entered into with third persons, even though he business produces the effects of an
acted in the name of the owner, and there shall express agency, even if the business may
be no right of action between the owner and not have been successful.
third persons.

The gestor shall NOT be personally liable for

C. EXTINGUISHMENT OF
such contracts, provided: MANAGEMENT
1. The owner has expressly or tacitly ratified 1. When the owner repudiated or puts an end
the management, or thereto
2. When the contract refers to things 2. When the gestor withdraws from the
pertaining to the owner of the business management, subject to Article 2144
[Article 2152, Civil Code]. 3. By the death, civil interdiction, insanity or
insolvency of the owner or the gestor
B. OBLIGATIONS OF THE OWNER OF [SOLUTION INDEBITI (UNDUE PAYMENT)]
THE PROPERTY OR BUSINESS
Solutio indebiti takes place when something is
received when there is no right to demand it,
Although the management was not expressly
and it was unduly delivered through mistake.
ratified, the owner who enjoys the advantages
The recipient has the duty to return it [Article
of the same shall:
2154, Civil Code].
1. Be liable for the obligations incurred in his
interest

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Requisites Liability of Payee

1. Something has been unduly delivered
through mistake; and If in bad faith, he shall be liable:
2. Something was received when there was no 1. For legal interest if a sum of money is
right to demand it [Metrobank v. Absolute involved, or
Management Corp., G.R. No. 170498 2. For the fruits received or which should have
(2013)] been received if the thing produces fruits,
and
This situation may cover payment by reason 3. For any loss or impairment of the thing for
of a mistake in the construction or application of any cause, and
a doubtful or difficult question of law [Article 4. For damages to the person who delivered
2155, Civil Code]. the thing, until it is recovered [Article 2159,
The Government also comes within the scope of Civil Code]
solutio indebiti. Tax refunds are based on such
[CIR v. Acesite, G.R. No. 147295 (2007)]. If in good faith, he shall be liable:
1. For the impairment or loss of the thing
When Debt not yet Due certain and determinate or its accessories
If the payer was in doubt whether the debt was and accessions insofar as he has thereby
due, he may recover if he proves that it was not been benefited.
due [Article 2156, Civil Code]. 2. For the return of the price or assign the
action to collect the sum if he has alienated
Responsibility of Two or More Payees the same [Article 2160, Civil Code].
When there has been payment of what is not
due, their responsibility is solidary [Article 2157, Exemption from the Obligation to
Civil Code]. Restore the Payment Unduly Made
A person who, believing in good faith that the
When Money or Thing Delivered is payment was being made of a legitimate and
Owned by Third Person subsisting claim,
The payee cannot demand that the payor prove 1. Destroyed the document, or
his ownership of the thing delivered. 2. Allowed the action to prescribe, or
Nevertheless, should he discover that the thing 3. Gave up the pledges, or
has been stolen and who its true owner is, he 4. Cancelled the guaranties for his right shall
must advise the latter. be exempt from the obligation to restore.

If the owner, in spite of such information, does The person who paid unduly may proceed only
not claim it within the period of one (1) month, against the true debtor or the guarantors with
the payee shall be relieved of all responsibility regard to whom the action is still effective
by returning the thing deposited to the payor. [Article 2162, Civil Code].

If the payee has reasonable grounds to believe Presumption of Payment by Mistake,

that the thing has not been lawfully acquired by Defense
the payor, the former may return the same The presumption of payment by mistake arises if
[Articles 2158 and 1984, Civil Code]. something which had never been due or had
already been paid was delivered; but he from
whom the return is claimed may prove that the
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delivery was made out of liberality or for any has been stolen and who its true owner is, he
other just cause [Art. 2163, Civil Code]. must advise the latter.

II. SOLUTIO INDEBITI (UNDUE If the owner, in spite of such information, does
not claim it within the period of one month, the
PAYMENT)
payee shall be relieved of all responsibility by
returning the thing deposited to the payor.
Solutio indebiti takes place when something is
received when there is no right to demand it,
If the payee has reasonable grounds to believe
and it was unduly delivered through mistake.
that the thing has not been lawfully
The recipient has the duty to return it [Article
acquired by the payor, the former may return
2154, Civil Code].
the same [Articles 2158 & 1984, Civil Code].

Requisites
Liability of Payee
1. Something has been unduly delivered
through mistake; and
If in bad faith, he shall be liable:
2. Something was received when there was no
1. For legal interest if a sum of money is
right to demand it [Metrobank v. Absolute
involved, or
Management Corp., G.R. No. 170498
2. For the fruits received or which should have
(2013)].
been received if the thing produces fruits,
and
This situation may cover payment by reason
3. For any loss or impairment of the thing for
of a mistake in the construction or application of
any cause, and
a doubtful or difficult question of law [Article
4. For damages to the person who delivered
2155, Civil Code].
the thing, until it is recovered [Article 2159,
Civil Code].
The Government also comes within the scope of
solutio indebiti. Tax refunds are based on such
[CIR v. Acesite, G.R. No. 147295 (2007)]. If in good faith, he shall be liable:
1. For the impairment or loss of the thing
certain and determinate or its accessories
When Debt not yet Due
and accessions insofar as he has thereby
If the payer was in doubt whether the debt
been benefited.
was due, he may recover if he proves that it
2. For the return of the price or assign the
was not due [Article 2156, Civil Code].
action to collect the sum if he has alienated
the same [Article 2160, Civil Code].
Responsibility of Two or More Payees
Exemption from the Obligation to
When there has been payment of what is not
due, their responsibility is solidary [Article 2157, Restore the Payment Unduly Made
Civil Code]. A person who, believing in good faith that the
payment was being made of a legitimate and
subsisting claim,
When Money or Thing Delivered is
1. destroyed the document, or
Owned by Third Person
2. allowed the action to prescribe, or
The payee cannot demand that the payor prove
3. gave up the pledges, or
his ownership of the thing delivered.
4. cancelled the guaranties for his right shall
Nevertheless, should he discover that the thing
be exempt from the obligation to restore.

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The person who paid unduly may proceed only 4. When through an accident or other cause a
against the true debtor or the guarantors with person is injured or becomes seriously ill,
regard to whom the action is still effective [Art. and he is treated or helped while he is not
2162, Civil Code]. in a condition to give consent to a contract,
he shall be liable to pay for the services of
Presumption of Payment by Mistake, the physician or other person aiding him,
Defense unless the service has been rendered out of
The presumption of payment by mistake arises if pure generosity [Article 2167, Civil Code].
something which had never been due or had
already been paid was delivered; but he from 5. When during a fire, flood, storm, or other
whom the return is claimed may prove that the calamity, property is saved from
delivery was made out of liberality or for any destruction by another person without
other just cause [Article 2163, Civil Code]. the knowledge of the owner, the latter is
bound to pay the former just compensation
III. OTHER QUASI-CONTRACTS [Article 2168, Civil Code].

6. When the government, upon the failure of

1. When, without the knowledge of the person
any person to comply with health or safety
obliged to give support, it is given by a
regulations concerning property,
stranger, the latter shall have a right to
undertakes to do the necessary work,
claim the same from the former, unless it
even over his objection, he shall be liable to
appears that he gave it out of piety and
pay the expenses [Art. 2169, Civil Code].
without intention of being repaid [Article
2164, Civil Code].
7. When by accident or other fortuitous
event, movables separately pertaining to
2. When the person obliged to support an
two or more persons are commingled or
orphan, or an insane or other indigent
confused, the rules on co-ownership shall
person unjustly refuses to give support
be applicable [Article 2170, Civil Code].
to the latter, any third person may
furnish support to the needy individual,
8. The rights and obligations of the finder of
with the right of reimbursement from the
lost personal property shall be governed
person obliged to give support. The
by Articles 719-720, Civil Code [Article 2171,
provisions of this article apply when the
Civil Code].
father or mother of a child under eighteen
(18) years of age unjustly refuses to support
9. The right of every possessor in good
him [Article 2166, Civil Code].
faith to reimbursement for necessary and
useful expenses is governed by Article
3. When funeral expenses are borne by a
546, Civil Code [Article 2172, Civil Code].
third person, without the knowledge of
those relatives who were obliged to give
Note: Possessor in good faith may retain
support to the deceased, said relatives shall
the thing until he has been reimbursed
reimburse the third person, should the latter
[Casis].
claim reimbursement [Article 2165, Civil
Code].
10. When a third person, without the
knowledge of the debtor, pays the debt,

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the rights of the former are governed by

Articles 1236 and 1237, Civil Code [Article
2173, Civil Code].

Note: Cannot compel the creditor to

subrogate him in his rights.

11. When in a small community, a majority of

the inhabitants of age decide upon a
measure for protection against
lawlessness, fire, flood, storm or other
calamity, anyone who objects to the plan
and refuses to contribute to the expenses
but is benefited by the project as executed
shall be liable to pay his share of said
expenses [Article 2174, Civil Code].

12. Any person who is constrained to pay the

taxes of another shall be entitled to
reimbursement from the latter [Article 2175,
Civil Code].

Note: The list of quasi-contracts in the

Civil Code is not exhaustive. A quasi
contractual relation may be forced upon
the parties to prevent unjust enrichment
[PNB v. CA, supra].

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duty
COMMON PRINCIPLES
Burden of Burden rests The proof of
proof upon the the existence
I. DEFINITION plaintiff to of the
prove contract and
negligence its breach or
Tort
non-performa
A tort consists of the violation of a right given or nce as
the omission of a duty imposed by law. A tort is provided by
a breach of a legal duty. [Naguiat v. NLRC] the plaintiff is
sufficient
Elements proof.
1. Duty
Applicability The doctrine Inapplicable
2. Breach of the of proximate
3. Injury Proximate cause is
4. Proximate Causation Cause applicable
Doctrine only for
quasi-delict,
II. TORTS VS…
not in actions
A. CRIMES involving
breach of
contract.
Crimes Quasi-delicts [Calalas v.
CA, G.R. No.
Affects public interest Concerns private
122039
matters
(2000)]
The basis of a The basis of a
Defense of Diligence in Force
criminal act is the quasi-delict is the
employer for the selection majeure; or
Revised Penal Code Civil Code
employee’s and
negligence supervision of For common
Not as broad as More broad than
the carriers:
quasi-delicts because crimes because
employees Extraordinary
crimes are limited by quasi-delicts include
diligence
the text of the law all acts in which “any
(Art. 1756)
kind of fault or
negligence
intervenes” [Barredo ii. Potential intersection
v. Garcia, G.R. No.
L-48006 (1942)]
The act that breaks the contract may also be a
tort. [Air France v. Carrascoso, G.R. No. L -
B. CONTRACTS 21438 (1966)]
i. Common Distinctions
The mere fact that a person is bound to another
by a contract does not relieve him from
Torts Contracts
extra-contractual liability to such person.
Source Breach or Breach of When such a contractual relation exists, the
omission of contract obligor may break the contract under such

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conditions that the same act which constitutes a

breach of contract would have constituted the NEGLIGENCE
source of an extra-contractual obligation had no
contract existed between the parties. [Cangco v. I. DEFINITION
Manila Railroad, G.R. No. L-12191 (1918)]
Conduct is said to be negligent when a prudent
C. QUASI-DELICT man in the position of the tortfeasor would have
foreseen that an effect harmful to another was
Article 2176, Civil Code. Whoever by sufficiently probable to warrant his foregoing
act or omission causes damage to conduct or guarding against its consequences.
another, there being fault or negligence, [Picart v. Smith, G.R. No. L-12219 (1918)]
is obliged to pay for the damage done.
Such fault or negligence, if there is no II. DEGREES OF DILIGENCE AND
pre-existing contractual relation between NEGLIGENCE;
the parties, is called a quasi-delict and is
governed by the provisions of this PRESUMPTIONS
Chapter.
A. DEGREE OF DILIGENCE
REQUIRED
Quasi-delict, as a source of obligation, is
governed by Arts. 2176-2194 of the Civil Code.
Article 1173, Civil Code. The fault or
According to Art. 2176, the elements of a negligence of the obligor consists in the
quasi-delict are: omission of that diligence which is
1. Act or omission required by the nature of the obligation
2. Damage to another and corresponds with the circumstances
3. Fault or negligence of the persons, of the time and of the
4. Causal connection between the damage place. When negligence shows bad faith,
caused and the negligence the provisions of articles 1171 and 2201,
5. No pre-existing contractual relationship paragraph 2, shall apply.
between the parties
If the law or contract does not state the
diligence which is to be observed in the
performance, that which is expected of a
good father of a family shall be required.

According to Art. 1173, what determines the

diligence required are the following factors: (a)
the nature of the obligation; and (b) the
circumstances of the persons, of the time and of
the place.

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General rule/Default standard always having in mind the fiduciary nature of

In the absence of a specified diligence to be their relationship. [Simex International v. Court
observed, it is the diligence of a good father of a of Appeals, G.R. No. 88013 (1990)]
family that is to be expected.
d. Children
Prudent man test
Did the defendant in doing the alleged negligent Children must be held by the standard of
act use that reasonable care and caution which conduct and degree of care ordinarily
an ordinarily prudent person would have used in exercised by children of the same age,
the same situation? [Picart v. Smith, supra] capacity, discretion, knowledge, and
experience, under the same or similar
Specific instances circumstances. [Ylarde v. Aquino, G.R. No.
L-33722 (1988)]
a. Experts (in general)
e. Motorists vis-a-vis bicyclists
In all these employments where peculiar
skill is requisite, if one offers his services While the duty of using reasonable care falls
he is understood as holding himself out to alike on a motorist and a bicyclist, due to the
the public as possessing the degree of skill inherent differences in the two vehicles, more
commonly possessed by others in the care is required from the motorist to fully
same employment, and if his pretensions are discharge the duty than from the bicyclist.
unfounded he commits a species of fraud on [Heirs of Completo v. Albayda, G.R. No. 172200
every man who employs him in reliance on his (2010)]
public profession. [Far Eastern Shipping v. Court
of Appeals, G.R. No. 130068 (1998)] f. Firearm handlers

b. Pharmacists A higher degree of care is required of

someone who has in his possession or under his
Druggists must exercise the highest control an instrumentality extremely dangerous
practicable degree of prudence and in character, such as dangerous weapons or
vigilance, and the most exact and reliable substances. [Pacis v. Morales, G.R. No. 169467
safeguards consistent with the reasonable (2010)]
conduct of the business. [Mercury Drug v. De
Leon, G.R. No. 165622 (2008)] g. Medical professionals

c. Banks Whether or not a physician has committed an

"inexcusable lack of precaution" in the treatment
The State recognizes the "fiduciary nature of of his patient is based on the standard of care
banking that requires high standards of that other members of the profession in
integrity and performance.” [Section 2, good standing would observe in similar
Republic Act No. 8791] circumstances. Also important are the
advanced state of the profession at the time of
The bank is under obligation to treat the treatment or the present state of medical
accounts of its depositors with meticulous care, science.

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disputably presumed that a driver was

This is why expert testimony is important in
negligent, if he had been found guilty of
medical malpractice cases; it helps in
reckless driving or violating traffic
establishing the standard of care required in
regulations at least twice within the next
such a profession, and whether or not the preceding two months.
accused in these cases met that standard. [Cruz
v. Court of Appeals, G.R. No. 122445 (1997)]
Article 2185, Civil Code. Unless there
The standard must be established via expert is proof to the contrary, it is presumed
testimony. Specifically, the plaintiff must prove: that a person driving a motor vehicle has
(1) the duty of the health professional, (2) been negligent if at the time of the
breach of said duty, (3) injury to the patient, mishap, he was violating any traffic
and (4) proximate causation between the breach regulation.
and the injury. [Our Lady of Lourdes Hospital v. Violation of traffic regulations =
Spouses Capanzana, G.R. No. 189218 (2017)] negligence per se
The test to see if negligence per se can apply in
B. DEGREES OF NEGLIGENCE cases if the violation of the statute or ordinance
is not rendered remote as the cause of injury by
Degree of Defined the intervention of another party if the
negligence occurrence of said incident was the very thing
the statute or ordinance was intended to
Slight Failure to use great protect. Simply put, the violation of the
care or absence of that statute must have something to do with
degree of care and
why the accident happened (most likely
vigilance which persons
what said statute was trying to prevent) for the
of extraordinary
prudence and foresight party to be held liable for negligence per se.
are accustomed to use
Negligence per se, arising from the mere
Ordinary Failure to use ordinary violation of a traffic statute, might not be
care sufficient in itself in establishing liability for
Gross/Notorious Failure to use even damages, and is without legal consequence
slight care; very great unless shown to have contributed to the cause
negligence, or want of of injury. [Añonuevo v. Court of Appeals, G.R.
even slight or scant care; No. 130003 (2004)]
or failure to exercise
even that care which a
Driver’s testimony given greater
careless person would
use. weight over passenger’s testimony
In cases of conflicting testimonies between
drivers and passengers, the testimony of the
C. PRESUMPTIONS
driver generally prevails, as the driver is more
focused on the road than the passenger. [Tison
i. In motor vehicle mishaps v. Spouses Pomasin, G.R. No. 173180 (2011)]

Article 2184, Civil Code [...] It is

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Rear vehicles presumed to be cause Extraordinary diligence of common

Drivers of vehicles who bump the rear of carriers
another vehicle are presumed to be the cause of Common carriers, from the nature of their
the accident, unless contradicted by other business and for reasons of public policy, are
evidence. [Travel & Tours Advisers v. Cruz, G.R. bound to observe extraordinary diligence in the
No. 199282 (2016)] vigilance over the goods and for the safety of
the passengers transported by them, according
ii. Possession of dangerous to all the circumstances of each case. [Art.
weapons 1733, CC]

iv. Res ipsa loquitur

Article 2188. There is prima facie
presumption of negligence on the part of
the defendant if the death or injury Definition
results from his possession of dangerous Literally translated as “the thing or the
weapons or substances, such as firearms transaction speaks for itself.”
and poison, except when the possession
or use thereof is indispensable in his
occupation or business. Statement of the rule
"Where the thing which causes injury is shown
to be under the management of the defendant
iii. Common carriers
and the accident is such as in the ordinary
course of things does not happen if those who
Article 1735, Civil Code. In all cases have the management use proper care, it
other than those mentioned in Nos. 1, 2, affords reasonable evidence, in the absence of
3, 4, and 5 of the preceding article, if the an explanation by the defendant, that the
goods are lost, destroyed or deteriorated, accident arose from want of care." [Solidum v.
common carriers are presumed to have People, G.R. No. 192123 (2014)]
been at fault or to have acted negligently,
unless they prove that they observed Elements of res ipsa loquitur (NEN)
1. Nature of the accident;
extraordinary diligence as required in
a. The accident is of such a
article 1733.
character as to warrant an
inference that it would not have
happened without the
Article 1756. In case of death of or
defendant’s negligence;
injuries to passengers, common carriers 2. Exclusive control over the cause
are presumed to have been at fault or to 3. No contribution to the injury from the
have acted negligently, unless they prove injured.
that they observed extraordinary diligence
as prescribed in articles 1733 and 1755. Effect of rule
The invocation of res ipsa loquitur does not
dispense with the requirement of proof of
negligence, but is merely a step in the process
of proving the same. The invocation of this

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doctrine creates an inference or presumption of to the patient is readily apparent to a

negligence, thus shifting the burden of evidence layperson, and within the exclusive control
to the defendant to prove that no negligence of the erring physician, can res ipsa loquitur
was indeed committed by them. be invoked. [Ramos v. Court of Appeals, G.R.
No. 124354 (1999)]
It permits the plaintiff to present, along with the
proof of the accident, enough of the attending Examples:
circumstances to invoke the doctrine. [Tan v. 1. Brain damage before gall bladder
JAM Transit, G.R. No. 183198 (2009)] operation [Ramos v. CA, supra]
2. Screws cut by hand during mandibular
Res ipsa loquitur does not create an operation causing pain to molars [Rosit
independent ground of liability – it is merely a v. Davao Doctors Hospital and Gestuvo,
mode of proof/procedural convenience as it G.R. No. 210445 (2015)]
relieves a plaintiff of the burden of producing
direct proof of negligence. [Josefa v. Meralco, B. WHY NOT CULPA
G.R. No. 182705 (2014)] CONTRACTUAL?

The mere fact that a physician-patient

Effect of direct evidence relationship is consensual does not necessarily
The existence of direct evidence bars the make it a contractual relation. The
application of the doctrine – direct evidence physician-patient relationship is more than just
establishes beyond reasonable doubt the any other transaction involving exchange of
negligence of one of the parties. Hence, there is money for services, as the medical profession is
no need for the application of res ipsa loquitur affected with public interest, and once a
since it only creates a presumption. [Layugan v. physician-patient relationship is established the
Intermediate Appellate Court, G.R. No. 73998 legal duty of care follows.
(1988)]
Thus, a mere reference to an implied contract
III. MEDICAL NEGLIGENCE AND between the physician and the patient in general
MALPRACTICE is insufficient for pleading a cause of action
under the contract theory of professional
A. APPLICATION OF RES IPSA malpractice. An action for medical malpractice
based on contract must allege an express
LOQUITUR
promise to provide medical treatment or achieve
a specific result. [De Jesus v. Dr. Uyloan, G.R.
General rule
No. 234851 (2022)]
Recall: An expert witness is the one who
establishes what a competent doctor would have
done under the same circumstances (standard
of care) and whether the doctor had conformed
to said standards.

Exception
Only in exceptional circumstances where the
failure to observe due care which caused injury

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concurring with one or more efficient causes

other than the plaintiff’s, is the proximate cause
PROXIMATE CAUSE
of the injury.

Article 2179, Civil Code. When the B. REMOTE

plaintiff’s own negligence was the
immediate and proximate cause of his A remote cause is one, which would have been
injury, he cannot recover damages. But if a proximate cause, had there been no efficient
his negligence was only contributory, the intervening cause after it and prior to the injury.
immediate and proximate cause of the
injury being the defendant’s lack of due It cannot be made the basis of an action if such
care, the plaintiff may recover damages, remote cause did nothing more than furnish the
but the courts shall mitigate the damages condition or give rise to the occasion by which
to be awarded. the injury was made possible, if there intervened
between such prior or remote cause and the
I. DEFINITION injury a distinct, successive, unrelated, and
efficient cause of the injury, even though such
That cause, which, in natural and continuous injury would not have happened but for such
sequence, unbroken by any efficient intervening condition or occasion [Manila Electric v.
cause, produces the injury, and without which Remoquillo, G.R. No. L-8328 (1956)].
the result would not have occurred [Bataclan v.
Medina, G.R. No. L-10126 (1957)]. C. INTERVENING

A cause is still proximate, although farther in An intervening cause is an event that takes
time to the injury, if the happening of it set place after the first cause and before the injury.
other foreseeable events into motion resulting
ultimately in the damage [Abrogar v. Cosmos III. TESTS
Bottling Co., G.R. No. 164749 (2017)].
A. “BUT FOR” TEST
II. PROXIMATE CAUSE VS.
Otherwise known as “sine qua non” test.
A. CONCURRENT
That cause, which, in natural and continuous
A concurrent cause is one, which along with sequence, unbroken by any efficient intervening
other causes, produces the injury. cause, produces the injury, and without which
the result would not have occurred [Bataclan v.
Each cause is an efficient cause without which Medina, supra].
the injury would not have happened. Injury is
attributed to any or all the causes, and recovery B. SUFFICIENT LINK TEST
may be had against any or all of those
responsible. Plaintiff must establish a sufficient link between
the act or omission and the damage or injury.
As a general rule, negligence in order to render That link must not be remote or farfetched;
a person liable need not be the sole cause of an otherwise, no liability will attach. The damage or
injury. It is sufficient that his negligence, injury must be a natural and probable result of
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the act or omission [Dy Teban Trading, Inc. v. Rationale

Ching, G.R. No. 185647 (2017)]. The antecedent negligence of a person does not
preclude recovery of damages caused by the
C. MIXED CONSIDERATIONS supervening negligence of the latter, who had
the last fair chance to prevent the impending
There is no exact mathematical formula to harm by the exercise of due diligence [Canlas v.
determine proximate cause. It is based upon CA, G.R. No. 112160 (2000)].
mixed considerations of logic, common sense,
policy and precedent [Dy Teban Trading, Inc. v.
Ching, supra].

D. SUBSTANTIAL FACTOR

It is the rule under the substantial factor test

that if the actor’s conduct is a substantial factor
in bringing about harm to another, the fact that
the actor neither foresaw nor should have
foreseen the extent of the harm or the manner
in which it occurred does not prevent him from
being liable [Philippine Rabbit Bus Lines, Inc. v.
IAC, G.R. Nos. L-66102-04 (1990)].

Note: In the case of Philippine Rabbit Bus Lines,

the test was discussed by the appellate court
but not made part of the ratio decidendi of the
Supreme Court. Thus, it cannot be said to have
been adopted in our jurisdiction.

E. LAST CLEAR CHANCE

Statement of the rule

The doctrine of last clear chance means that
even though a person’s own acts may have
placed him in a position of peril, and an injury
results, the injured person is entitled to
recovery. As the doctrine is usually stated, a
person who has the last clear chance or
opportunity of avoiding an accident,
notwithstanding the negligent acts of his
opponent or that of a third person imputed to
the opponent, is considered in law solely
responsible for the consequences of the accident
[Bustamante v. CA, G.R. No. 89880 (1991)].

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In other words, the direct tortfeasor is liable for

LIABILITIES quasi-delict. Liability consists in the payment of
damages for the injury suffered.

I. THE TORTFEASOR; JOINT Note: Damage under the 2nd requisite pertains
AND DIRECT to injury [PNR v. Brunty, G.R. No. 169891
(2006)]
Joint tortfeasors
Article 2194, Civil Code. The II. PERSONS SPECIFICALLY
responsibility of two or more persons who LIABLE
are liable for quasi-delict is solidary.
A. POSSESSOR OR USER OF
When the concurrent or successive negligent ANIMALS
acts or omissions of two or more persons,
although acting independently, are together the
Article 2183, Civil Code. The possessor
direct and proximate cause of a single injury to
of an animal or whoever may make use of
a third person, and it is impossible to determine
the same is responsible for the damage
in what proportion each contributed to the injury
which it may cause, although it may
and either of them is responsible for the whole escape or be lost. This responsibility shall
injury. Where their concurring negligence cease only in case the damage should
resulted in injury or damage to a third party, come from force majeure or from the
they become joint tortfeasors and are solidarily fault of the person who has suffered
liable for the resulting damage [Far Eastern damage.
Shipping v. CA, G.R. No. 130068 (1998)]
Art. 2183 of the Civil Code holds the possessor
Direct tortfeasors liable even if the animal should "escape or be
Article 2176, Civil Code. Whoever by lost" and so be removed from his control. It
act or omission causes damage to does not matter either that, as the petitioners
another, there being fault or negligence, also contend, the dog was tame and was merely
is obliged to pay for the damage done. provoked by the child into biting her. The law
Such fault or negligence, if there is no does not speak only of vicious animals but
pre-existing contractual relation between covers even tame ones as long as they cause
the parties, is called a quasi-delict and is injury [Vestil v. IAC, G.R. No. 74431 (1989)].
governed by the provisions of this
Chapter. The same provision is not based on the
negligence or on the presumed lack of vigilance
In order for one to be liable as a direct of the possessor or user of the animal causing
tortfeasor, the requisites of Art. 2176 must be the damage. It is based on natural equity and
fulfilled: on the principle of social interest that he who
1. Act or omission possesses animals for his utility, pleasure, or
2. Damage to another service must answer for the damage which such
3. Fault or negligence animal may cause [Vestil v. IAC, supra].
4. No pre-existing contractual relation

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The owner of an animal is not liable for injury commonplace to another [Caedo v. Yu Khe Thai,
caused by it to its caretaker, where the caretaker G.R. No. L-20392 (1968)].
has the custody and control of the animal and is
therefore the one in a position to prevent it from The owner of the motor vehicle is not liable for
causing damage [Afialda v. Hisole, G.R. No. the misfortune, unless the negligent acts of the
L-2075 (1949)]. driver are continued for such a length of time as
to give the owner a reasonable opportunity to
B. OWNER OF MOTOR VEHICLES observe them and to direct his driver to desist
therefrom. The act complained of must be
continued in the presence of the owner for such
Article 2184, Civil Code. In motor a length a time that the owner, by his
vehicle mishaps, the owner is solidarily
acquiescence, makes his driver’s act his own
liable with his driver, if the former, who
[Chapman v. Underwood, G.R. No. L-9010
was in the vehicle, could have, by the use
(1914)]
of the due diligence, prevented the
misfortune. It is disputably presumed that
a driver was negligent, if he had been C. PROVINCES, CITIES, AND
found guilty of reckless driving or MUNICIPALITIES
violating traffic regulations at least twice
within the next preceding two months.
Article 2189, Civil Code. Provinces,
cities and municipalities shall be liable for
If the owner was not in the motor vehicle,
damages for the death of, or injuries
the provisions of article 2180 are
suffered by, any person by reason of the
applicable.
defective condition of roads, streets,
bridges, public buildings, and other public
The registered owner of a motor vehicle is works under their control or supervision.
primarily liable for the damage or injury caused
to another, but he has a right to be indemnified
Under Art. 2189 of the Civil Code, it is not
by the real owner of the amount he was
necessary for the liability therein established to
required to pay. This rule applies both to private
attach that the defective roads or streets belong
and to common carriers with respect to their
to the province, city or municipality from which
passengers [Tamayo v. Aquino, G.R. No. L-12634
responsibility is exacted. What said article
(1959)].
requires is that the province, city or municipality
have either "control or supervision" over said
The law does not require that a person must
street or road [City of Manila v. Teotico, G.R. No.
possess a certain measure of skill or proficiency
L-23052 (1968)].
either in the mechanics of driving or in the
observance of traffic rules before he may own a
D. PROPRIETOR OF BUILDINGS
motor vehicle. The test of his negligence, within
the meaning of Art. 2184, is his omission to do
that which the evidence of his own senses tells Article 2190, Civil Code. The proprietor
him he should do to avoid the accident. And as of a building or structure is responsible
far as perception is concerned, absent a for the damages resulting from its total or
minimum level imposed by law, a maneuver that partial collapse, if it should be due to the
appears to be fraught with danger to one lack of necessary repairs.
passenger may appear to be entirely safe and

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E. ENGINEER/ARCHITECT OF 3. Collapse was due to:

COLLAPSED BUILDING a. A defect in the plans and
specifications; or
b. Defects in the ground
Article 2192, Civil Code. If damage
referred to in the two preceding articles
Contractor; When Liable
should be the result of any defect in the
1. An edifice falls
construction mentioned in article 1723,
2. Fall occurs within fifteen (15) years of
the third person suffering damages may
completion
proceed only against the engineer or
architect or contractor in accordance with 3. Which was a result of:
said article, within the period therein a. Defects in the construction; or
fixed. b. The use of materials of inferior
quality furnished by the
contractor; or
Article 1723, Civil Code. The engineer c. Due to any violation of the
or architect who drew up the plans and terms of the contract
specifications for a building is liable for
damages if within fifteen years from the Engineer and Contractor; When
completion of the structure, the same Solidarily Liable
should collapse by reason of a defect in If the engineer or architect supervised the
those plans and specifications, or due to construction, then the contractor is solidarily
the defects in the ground. The contractor
liable with the engineer.
is likewise responsible for the damages if
the edifice falls, within the same period,
on account of defects in the construction Acceptance of Building After
or the use of materials of inferior quality Completion does not Imply Waiver
furnished by him, or due to any violation Art. 1723 pertinently states: “Acceptance of the
of the terms of the contract. If the building, after completion, does not imply waiver
engineer or architect supervises the of any of the cause of action by reason of any
construction, he shall be solidarily liable defect mentioned in the preceding paragraph.”
with the contractor.
F. HEAD OF A FAMILY FOR THINGS
Acceptance of the building, after THROWN/FALLING
completion, does not imply waiver of any
of the cause of action by reason of any
defect mentioned in the preceding Article 2193, Civil Code. The head of a
paragraph. family that lives in a building or a part
thereof, is responsible for damages
The action must be brought within ten caused by things thrown or falling from
years following the collapse of the the same.
building.
Who is Responsible
Engineer; When Liable 1. Head of a family who lives in:
1. A building collapses a. A building, or
2. Collapse occurs within fifteen (15) years b. A part thereof
of completion

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When Responsibility Attaches H. MANUFACTURER/PRODUCERS

1. A thing is
a. Thrown, or
Article 2187, Civil Code. Manufacturers
b. Falls
and processors of foodstuffs, drinks, toilet
2. From the window of a
articles and similar goods shall be liable
a. Building, or
for death or injuries caused by any
b. A part thereof, noxious or harmful substances used,
c. And causes damage by such fall although no contractual relation exists
or throwing between them and the consumers.

G. OWNERS OF
Consumer Act of the Philippines (R.A.
ENTERPRISES/OTHER
7394)
EMPLOYERS
Who are Responsible
Article 1711, Civil Code. Owners of 1. Any Filipino or foreign manufacturer,
enterprises and other employers are producer, and any importer, for
obliged to pay compensation for the damages caused to consumers by
death of or injuries to their laborers, defects resulting from design,
workmen, mechanics or other employees, manufacture, construction, assembly
even though the event may have been and erection, formulas and handling and
purely accidental or entirely due to a making up, presentation or packing of
fortuitous cause, if the death or personal their products, as well as for the
injury arose out of and in the course of
insufficient or inadequate information on
the employment. The employer is also
the use and hazards thereof (Art. 97,
liable for compensation if the employee
R.A. 7394);
contracts any illness or disease caused by
2. The tradesman/seller, pursuant to
such employment or as the result of the
Art. 97, when:
nature of the employment. If the mishap
was due to the employee's own notorious a. it is not possible to identify the
negligence, or voluntary act, or manufacturer, builder, producer
drunkenness, the employer shall not be or importer;
liable for compensation. When the b. the product is supplied, without
employee’s lack of due care contributed to clear identification of the
his death or injury, the compensation manufacturer, producer, builder
shall be equitably reduced. or importer; or
c. he does not adequately
preserve perishable goods (Art.
Other Employers; How Construed
98, R.A. 7394);
The "other employers" mentioned in Art. 1711 of
3. The service supplier, for damages
the Civil Code must be construed to refer to
caused to consumers by defects relating
persons who belong to a class analogous to
to the rendering of the services, as well
"owners of enterprises", such as those operating
as for insufficient or inadequate
a business or engaged in a particular industry or
information on the fruition and hazards
trade, requiring its managers to contract the
thereof (Art. 99, R.A. 7394);
services of laborers, workers and/or employees
[Alarcon v. Alarcon, G.R. No. L-15692 (1961)]

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4. The suppliers of durable or therefrom [Lagon v. CA, G.R. No. 119107

non-durable consumer products, for (2005)].
imperfections in quality that render the
products unfit or inadequate for Elements of tort interference:
consumption for which they are 1. Existence of a valid contract;
designed or decrease their value, and 2. Knowledge on the part of the third
for those resulting from inconsistency person of the existence of contract; and
with the information provided on the 3. Interference of the third person is
container, packaging, labels or publicity without legal justification or excuse [So
messages/advertisement, with due Ping Bun v. CA, G.R. No. 120554
regard to the variations resulting from (1999)]
their nature, the consumer being able to
demand replacement to the imperfect As to knowledge on the part of the third person
parts (Art. 100, R.A. 7394); of the existence of the contract, while it is not
5. The suppliers, for imperfections in the necessary to prove actual knowledge, he must
quantity of the product when, in due nonetheless be aware of the facts which, if
regard for variations inherent thereto, followed by a reasonable inquiry, will lead to a
their net content is less than that complete disclosure of the contractual relations
indicated on the container, packaging, and rights of the parties in the contract [Lagon
labeling or advertisement (Art. 101, R.A. v. CA, supra].
7394); and
6. The service supplier, for any quality Bad faith/malice is required to make the
imperfections that render the services defendant liable for damages in cases of
improper for consumption or decrease tortuous interference [So Ping Bun v. CA, supra].
their value, and for those resulting from
inconsistency with the information III. VICARIOUS LIABILITY
contained in the offer or advertisement
(Art. 102, R.A. 7394).
Article 2180, par. 1, Civil Code. The
I. PERSONS WHO INTERFERE obligation imposed by article 2176 is
WITH CONTRACTUAL demandable not only for one’s own acts
or omissions, but also for those of
RELATIONS
persons for whom one is responsible.

Article 1314, Civil Code. Any third

For Damages
person who induces another to violate his Persons Vicariously
Caused By:
contract shall be liable for damages to the Liable
(Actor)
other contracting party.
Parents Minor children living
The tort recognized in Art. 1314 of the Civil (Art. 221 of the Family in their company and
Code) under their parental
Code is known as interference with contractual
authority
relations. The interference is penalized because
it violates the property rights of a party in a Guardians Minors or
contract to reap the benefits that should result incapacitated persons
under their authority

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or those who live in B. PARENTS

their company
Parental liability is a natural or logical
Teachers or heads of Pupils and students consequence of the duties and responsibilities of
establishments of arts or apprentices, so parents which includes the instructing,
and trades long as they remain
controlling and disciplining of the child.
in their custody
[Tamargo v. CA, G.R. No. 85044 (1992)]
Owners and managers Employees in the
of an establishment or service of the i. Civil Code vs. Family Code
enterprise branches in which
they are employed or
on the occasion of Article 2180, Civil Code. [...] The
their functions father and, in case of his death or
incapacity, the mother, are responsible for
Employers Employees and the damages caused by the minor
household helpers
children who live in their company.
acting within the
scope of their
assigned tasks, even
though the Article 221, Family Code. Parents and
employers are not other persons exercising parental
engaged in any authority shall be civilly liable for the
business or industry injuries and damages caused by the acts
or omissions of their unemancipated
State Special agent children living in their company and under
their parental authority subject to the
When the actor commits a quasi-delict, the appropriate defenses provided by law.
person who is vicariously liable is solidarily liable
with the actor. Under Article 2180 of the Civil Code, it is the
father who is responsible for quasi-delicts
The responsibility of the person vicariously liable committed by his minor children who live in his
shall cease when they prove that they observed company. The mother shall only be vicariously
all the diligence of a good father of a family to liable in case of the death or incapacity of the
prevent damage. (Art. 2180, CC) father.

A. EXERCISING PARENTAL However, Article 2215 of the Family Code

AUTHORITY amended Article 2180 such that now both
parents are liable. The provision adds the
Persons Exercising Parental Authority: requirement that the minor must not only be
1. Parents (Art. 221, Family Code & Art. living in the parent’s company but also under
2180 (2), CC) the parent’s parental authority.
2. Guardians (Art. 2180 (3), CC)
3. Other Persons (Articles 216, 217, 221, The diligence of a good father of a family
Family Code) required by law in a parent and child relationship
consists of the instruction and supervision of the
child. [Libi v. IAC, G.R. No. 70890 (1992)]

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C. GUARDIANS
Article 221, Family Code. Parents and
other persons exercising parental
Article 2180, par. 3, Civil Code. authority shall be civilly liable for the
Guardians are liable for damages caused injuries and damages caused by the acts
by the minors or incapacitated persons or omissions of their unemancipated
who are under their authority and live in children living in their company and under
their company. their parental authority subject to the
appropriate defenses provided by law.
Under Article 2180, guardians are liable for
quasi-delicts caused by minors or incapacitated Article 216 of the Family Code lays down the
persons who are under their authority and live in general rule that in the absence of the parents
their company. or a judicially appointed guardian, the following
persons exercise substitute parental
D. OTHER PERSONS authority over the child in the following order:
(1) Surviving grandparent
(2) Oldest brother or sister, over 21 years of
Article 216, Family Code. In default of age, unless unfit or disqualified; and
parents or a judicially appointed guardian, (3) Child's actual custodian, over 21 years
the following person shall exercise of age, unless unfit or disqualified.
substitute parental authority over the
child in the order indicated: Article 217 of the Family Code provides that for
The surviving grandparent, as provided in foundlings, abandoned, neglected or abused
Art. 214;
children and other children similarly situated,
The oldest brother or sister, over
parental authority shall be entrusted in summary
twenty-one years of age, unless unfit or
judicial proceedings to heads of:
disqualified; and
(1) Children's homes,
The child’s actual custodian, over
twenty-one years of age, unless unfit or (2) Orphanages and
disqualified. (3) Other similar institutions duly accredited
by the proper government agency.
Whenever the appointment or a judicial
guardian over the property of the child E. TEACHERS AND SCHOOLS
becomes necessary, the same order of
preference shall be observed. i. Civil Code vs. Family Code

Article 217, Family Code. In case of Article 2180 par. 7, Civil Code. [...]
foundlings, abandoned neglected or Teachers or heads of establishments of
abused children and other children arts and trades shall be liable for
similarly situated, parental authority shall damages caused by their pupils and
be entrusted in summary judicial students or apprentices, so long as they
proceedings to heads of children’s homes, remain in their custody.
orphanages and similar institutions duly
accredited by the proper government The basis of the liability of school heads and
agency. teachers for the tortious acts of their pupils and
students is that they stand, to a certain extent,

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as to their pupils and students, in loco parentis.

all authorized activities whether inside or
They must exercise reasonable supervision over
outside the premises of the school, entity
the conduct of the child. [Palisoc v. Brillantes,
or institution.
G.R. No. L-29025 (1971)]

Under Article 218 of the Family Code, the

Custody
The student is in the custody of the school following have special parental authority and
authorities as long as he is under the control responsibility over the minor child while under
and influence of the school and within its their supervision, instruction or custody:
premises, whether the semester has not yet (1) School;
begun or has already ended. (2) School administrators;
(3) Teachers; or
Custody does not connote immediate and actual (4) The individual, entity or institution
physical control but refers more to the influence engaged in child care.
exerted on the child and the discipline instilled in
him as a result of such influence. [Amadora v. There must be a finding that the act or omission
CA, G.R. No. L-47745 (1988)] considered as negligent was the proximate
cause of the injury because the negligence must
have a causal connection to the accident. [St.
Academic and Non-Academic
Mary's Academy v. Carpitanos, G.R. No. 143363
Institutions
(2002)]
Article 2180 applies to all schools, academic and
non-academic. When the school is an academic
one, the responsibility for the tort committed by Under the Civil Code (Art. 2180)
the student will attach to the teacher in charge
Teachers Heads
of the student. On the other hand, in the case of
establishments of arts and trades, it is only the Institution Academic Arts and trades
head who shall be held liable. institutions establishments

The general rule is that teachers in general shall Person Teacher in Head of
be liable for the acts of their students except Liable charge establishment
where the school is technical in nature, in which
Custody Required
case it is the head thereof who shall be
answerable. [Id.]
Under the Family Code
Special Parental Authority
School, Parents,
Article 218, Family Code. The school, Administrat Guardians,
its administrators and teachers, or the ors, etc.
individual, entity or institution engaged in Teachers (Art. 219)
child are shall have special parental (Art. 218)
authority and responsibility over the
Authority Special Parental
minor child while under their supervision,
required parental authority or
instruction or custody. authority substitute
parental
Authority and responsibility shall apply to authority

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Liability when Principal and Subsidiary occasion of their

tort is solidary functions
committed in
school Par. 5 - Employers Damages caused by
even though not their employees and
engaged in any household helpers
Students Covered business/industry acting within their
Arts. 218 & 219 Art. 2180 assigned tasks
Family Code Civil Code
Paragraph 5 is an
Minor students All students as long expansion of
as they remain in Paragraph 4. [Castilex
custody of the v. Vasquez, G.R. No.
persons liable. 132266 (1999)]

“Manager” Defined
F. OWNERS/MANAGERS OF
The term “manager” under paragraph 4 of Art.
ESTABLISHMENTS/EMPLOYEES 2180 is used in the sense of an employer. The
manager of a corporation is not included
i. 2180(4) and (5); how because he is only an employee. [Phil Rabbit v.
distinguished Phil American, G.R. No. L-25142 (1975)]

“Employer” Defined
Article 2180, par. 4, Civil Code. The
owners and managers of an “Employers,” under Art. 2180, also includes
establishment or enterprise are likewise principals engaged in “labor-only” contracting.
responsible for damages caused by their The labor-only contractor is deemed only an
employees in the service of the branches agent of the principal. [NPC v. CA, G.R. No.
in which the latter are employed or on the 119121 (1998)]
occasion of their functions.
ii. When applicable

Article 2180, par. 5, Civil Code. 1. ER-EE relationship

Employers shall be liable for the damages
caused by their employees and household To hold the employer liable, the plaintiff must
helpers acting within the scope of their
establish the employer-employee relationship.
assigned tasks, even though the former
[Castilex v. Vasquez, supra]
are not engaged in any business or
industry.
As to hospitals
Employer-employee relationship exists if
Persons hospitals control both means and details
Act Responsible For
Responsible of the process by which physician is to
accomplish his tasks. [Professional Services, Inc.
Par. 4 - Owners and Damages caused by v. Agana, G.R. No. 126297 (2007)]
managers of their employees in the
establishments/enter service of the branches
prises in which they are
employed or on the

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2. Within scope of assigned Difference between Art. 2180 of the Civil

tasks Code and the Registered-Owner Rule as to
the proof required
To make the employer vicariously liable, it must
be established that the quasi-delict was Art. 2180 Registered-Owner
committed while the employee was acting within Rule
the scope of his assigned task. [Castilex v.
Vasquez, supra] Requires proof of: Only requires the
1. Employment plaintiff to prove that
relationship the
“Within the scope of their assigned tasks” between the defendant-employer
includes any act done by an employee, in driver and is the registered
furtherance of the interests of the employer or the owner; owner of the vehicle
for the account of the employer at the time of and
the infliction of the injury or damage [Filamer v. 2. The driver
IAC, G.R. No. 75112 (1992)] must have
acted within
the scope of
3. In cases of registered owner his or her
rule assigned
tasks
Caravan Travel v. Abejar [G.R. No. 170631
(2016)] harmonized the registered owner rule iii. Rebuttal: Diligence of a good
with Art. 2180 of the Civil Code. father of a family in the
1. Where both the registered-owner rule selection and supervision:
and Article 2180 apply, the plaintiff must
first establish that the employer is the Once an employee is found liable for quasi-delict
registered owner of the vehicle in while acting within the scope of his assigned
question. task, a presumption of negligence arises on the
2. Once the plaintiff proves ownership, a part of his employer. To rebut the presumption
disputable presumption that the of negligence, the employer must present
requirements of Art. 2180 have been adequate and convincing proof that he exercised
proven arises. care and diligence in the selection and
3. As a consequence, the burden of proof supervision of his employees. [Lampesa v. De
shifts to the defendant to show that Vera, G.R. No. 155111 (2008)]
there is no liability in line with Art. 2180.
4. The disputable presumption, insofar as The negligence of the employee does not
the registered owner of the vehicle in become the negligence of the employer. The
relation to the actual driver is latter has his own separate negligence. [Cangco
concerned, recognizes that between the v. Manila Railroad, supra]
owner and the victim, it is the owner
that should carry the costs of moving
1. Selection
forward with the evidence.

In the selection of its prospective employees,

the employer must examine their qualifications,

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experiences, and service records. [Mercury Drug functions. [Spouses Jayme v.

v. Huang, G.R. No. 172122 (2007)] Apostol, G.R. No. 163609
(2008)]
To establish compliance, the employer must 2. Private or proprietary - the State shall
submit concrete proof, including documentary be liable as an employer. This concerns
evidence. [Id.] services where the government collects
revenue.
2. Supervision a. Illustration: A government
agency with a juridical
In the supervision of employees, the law does personality separate and distinct
not require the employer to supervise every from the government
aspect of employment. Evidence proving that performing proprietary functions
the employer exercised diligent supervision may be held liable for damages
during the performance of the employee of his caused by an employee who
assigned task is sufficient. [Valenzuela v. CA, was not a special agent.
G.R. No. 115024 (1996)] [Fontanilla v. Maliaman, G.R.
No. L-55963 (1989)
G. State

The responsibility of the state is limited to that

of a special agent duly empowered by a definite
order or commission to perform some act or
charged with some definite purpose.

Consequently, if a State agent discharging the

functions of his office causes the injury to the
private individual, there is no presumption of
negligence on the State. [Merritt v. Government,
G.R. No. L-11154 (1916)]

Special Agent
A special agent is one who receives a definite
and fixed order or commission, foreign to the
exercise of the duties of his office if he is a
special official. [Id.]

Two Aspects of State Liability

1. Public or governmental - the State shall
only be liable for acts of special agents.
This concerns functions which can be
fulfilled only by the government.
a. Illustration: A municipality
cannot be sued because it is an
agency of the State which is
engaged in governmental

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A. DEFINITION
DEFENSES IN TORT
ACTIONS "The act or omission amounting to want of
ordinary care on the part of the person injured
which, concurring with the defendant's
I. PLAINTIFF’S NEGLIGENCE IS negligence, is the proximate cause of the
PROXIMATE CAUSE injury." [Ma-Ao Sugar Central Co. and Araneta v.
Court of Appeals and Famoso, G.R. No. 83491
(1990)]
Article 2179, Civil Code. When the
plaintiff's own negligence was the
Test
immediate and proximate cause of
It must be shown that the injured party
his injury, he cannot recover
performed an act that brought about his injuries
damages. But if his negligence was only
in disregard of warnings or signs of an
contributory, the immediate and
impending danger to himself. [Mao-Ao Sugar
proximate cause of the injury being the
defendant's lack of due care, the plaintiff Central v. CA, supra]
may recover damages, but the courts
shall mitigate the damages to be B. CONTRIBUTORY VS.
awarded. PROXIMATE CAUSE

Where the plaintiff in a negligence action, by his 1. Negligence is part of principal

own carelessness contributes to the principal occurrence: Where one contributes
occurrence, that is, to the accident, as one of to the principal occurrence as one of
the determining causes thereof, he cannot its determining factors, one cannot
recover. [Bernardo v. Legaspi, G.R. No. L-9308 recover damages.
(1914)] 2. Negligence adds to the party’s
injury: Where, in conjunction with the
occurrence, one contributes only to
II. CONTRIBUTORY
his own injury, one may recover a
NEGLIGENCE mitigated amount of damages. [M.H.
Rakes v. Atlantic, G.R. No. 1719 (1907)]
Article 2179, Civil Code. When the
plaintiff's own negligence was the C. EFFECT
immediate and proximate cause of his
injury, he cannot recover damages. But if General Rule
his negligence was only The plaintiff may still recover damage, but the
contributory, the immediate and Court shall mitigate the damages to be
proximate cause of the injury being awarded. [Art. 2179, CC]
the defendant's lack of due care, the
plaintiff may recover damages, but
Exceptions
the courts shall mitigate the
1. Criminal liability: The defendant’s
damages to be awarded.
defense of contributory negligence is
not applicable in criminal cases
committed through reckless imprudence.
One cannot allege the negligence of
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another to evade the effects of his own. the parties or, though foreseen, was
[Genobiagon v. Court of Appeals, G.R. inevitable?
No. 40452 (1989)] 2. Determine if it falls under an
2. No relationship between person exception: Is this a case expressly
contributorily negligent and injured specified by the law where the defense
party: The record is, likewise, bereft of is not available? Is there a stipulation
any allegation and proof as to the that renders the defense unavailable?
relationship between Mercelita (the Does the nature of the obligation
driver) and Rhonda Brunty. Hence, the require the assumption of risk?
earlier finding of contributory negligence 3. Determine if the requisites are
on the part of Mercelita, which generally present:
has the effect of mitigation of liability, a. Was the cause of the
does not apply. [PNR v. Brunty, supra] unforeseen and unexpected
occurrence independent of
III. FORTUITOUS EVENT human will?
b. Was the event impossible to
A. DEFINITION foresee, or if it can be foreseen,
was inevitable?
c. Did the occurrence of such an
Article 1174, Civil Code. Except in event render it impossible for
cases expressly specified by the law, or the debtor to fulfill obligations in
when it is otherwise declared by a normal manner?
stipulation, or when the nature of the d. Did the obligor participate in
obligation requires the assumption of risk, aggravating the injury or loss?
no person shall be responsible for those
events which could not be foreseen, or
Occurrence of fortuitous event does
which, though foreseen, were inevitable.
not automatically mean availability of
defense
B. ELEMENTS Saying that a fortuitous event is present is not
the same as saying the defense of casa fortuito
1. Cause of the unforeseen occurrence is applicable. In most cases, the defense is
must be independent of human will; reduced to a determination of whether or not
2. Impossible to foresee the event, or if it there was negligence on the part of the
can be foreseen, is inevitable; person claiming the defense; once proven,
3. Occurrence must be such as to render the defense may no longer lie.
it impossible for the debtor to fulfill
obligations in a normal manner; and
IV. ASSUMPTION OF
4. Obligor should not have participated in
aggravating the injury or loss RISK/VOLENTI NON FIT
INJURIA
C. THREE-STEP ANALYSIS (OER)
Article 1174, Civil Code. Except in
1. Determine the occurrence of an cases expressly specified by the law, or
event: Was there an extraordinary when it is otherwise declared by
event which could not be foreseen by stipulation, or when the nature of the

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Electric Company v. Court of Appeals,

obligation requires the assumption of risk,
G.R. No. L-53401 (1989)]
no person shall be responsible for those
4. When the cause of action is based on
events which could not be foreseen, or
Articles 19 and 21 [Nikko Hotel Manila
which, though foreseen, were inevitable.
Garden and Ruby Lim v. Reyes, supra]
a. Even if respondent Reyes
A. DEFINITION assumed the risk of being asked
to leave the party, petitioners
Literal translation: “To a willing person, it is not were still under the obligation of
a wrong” Articles 19 and 21 to treat him
fairly in order not to expose him
The doctrine of volenti non fit injuria (“to which to unnecessary ridicule and
a person assents is not esteemed in law as shame.
injury”) refers to self-inflicted injury or to the
consent to injury which precludes recovery of
V. PRESCRIPTION
damages by one who has knowingly and
voluntarily exposed himself to danger, even if he
A. IN GENERAL
is not negligent in doing so. [Nikko Hotel Manila
Garden and Ruby Lim v. Reyes, G.R. No. 154259
(2005)] Article 1146, Civil Code. The following
actions must be instituted within four years:
B. EFFECT Upon an injury to the rights of the
plaintiff;
Upon a quasi-delict;
If someone willingly places themselves in a
position where harm might result, knowing that
some degree of harm might result, they are not When period begins
able to bring a claim against the other party. The 4-year prescriptive period for an action
based on a quasi-delict runs from the day the
act/omission violative of the plaintiff’s
C. TEST OR STANDARD
right was committed. [Kramer v. CA, G.R. No.
L-83524 (1989)]
Standard to be applied is subjective and should
be geared to the particular plaintiff and his
situation, rather than that of the reasonable B. IN SUBROGEE-SUBROGOR
person of ordinary prudence who appears in RELATIONSHIPS
contributory negligence. [Abrogar v. Cosmos
Bottling Company and Intergames, supra] No new obligation is created
Legal subrogation produces the same effects as
D. WHEN ASSUMPTION DOES assignment, so no new obligation is created
between the subrogee, or new creditor, and
NOT APPLY
debtor. This is also in line with the insurance
principle that the rights of the insurer against
1. An emergency exists
the wrongdoer cannot rise higher than the rights
2. The life or property of another is in peril
of the insured against such wrongdoer.
3. When a person seeks to rescue his
endangered property [Ilocos Norte

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The Court held that the doctrine in Vector must the insured occurred only upon or
be abandoned. Instead of the prescription after the finality of this Decision: 4
period starting to run from the moment of years from the time the tort is
subrogation, the insurer inherits the remaining committed against the insured by
period within which the insured may file an the wrongdoer. [Henson, Jr. v. UCPB
action against the wrongdoer—that is, from the General Insurance Co., Inc., supra]
moment of loss or injury. [Henson, Jr. v. UCPB
General Insurance Co., Inc., G.R. No. 223134 PERIOD PRESCRIPTIVE
(2019)] PERIOD FOR
SUBROGEE-INSURE
New prescriptive periods to be followed RS
1. Cases that were filed by the
Before Vector (Before 4
subrogee-insurer during the August 15, 2013)
applicability of the Vector ruling (i.e.,
from Vector's finality on August 15, 2013 During Vector’s 10
up until the finality of this Decision): 10 applicability until
years from the time of payment by finality of Henson
the insurer to the insured, which (August 15, 2013 →
gave rise to an obligation created August 14, 2019)
by law.
After Henson (August 4
2. Cases that were filed by the
14, 2019 onwards)
subrogee-insurer prior to the
applicability of the Vector ruling (i.e.,
before August 15, 2013): 4 years from
the time the tort is committed
against the insured by the
wrongdoer.
a. For cases where the tort was
committed and the
consequent loss/injury
against the insured occurred
prior to the finality of this
Decision, the subrogee-insurer
is given a period not
exceeding four (4) years
from the time of the finality
of this Decision to file the
action against the
wrongdoer; provided, that in
all instances, the total period
to file such case shall not
exceed ten (10) years from
the time the insurer is
subrogated to the rights of
the insured.
3. Cases where the tort was committed
and the consequent loss/injury against
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III. ACTS CONTRA BONUS MORES

HUMAN RELATIONS TORTS
Article 21, Civil Code. Any person who
I. ABUSE OF RIGHTS willfully causes loss or injury to another in
a manner that is contrary to morals, good
customs, or public policy shall
Article 19, Civil Code. Every person compensate the latter for damages.
must, in the exercise of his rights and in
the performance of duties, act with
justice, give everyone his due, and A. IN GENERAL
observe honesty and good faith.
Art. 21 is intended to prevent a situation where
a person suffers damage or loss at the hands of
Elements
another but has no legal remedy because the
[Andrade v. CA, G.R. No. 127932 (2001)]
situation is not covered by any law.
1. A legal right or duty;
2. Exercised in bad faith;
Proof Required
3. For the sole intent of prejudicing or
1. Existence of intent
injuring another.
2. The manner by which the defendant
carries out such intent
A. DAMNUM ABSQUE INJURIA
Elements
The legitimate exercise of a person’s rights, [Albenson v. CA, G.R. No. 88694 (1993)]
even if it causes loss to another, does not
1. There is an act which is legal;
automatically result in an actionable injury.
2. But which is contrary to morals, good
customs, public order, or public policy;
II. ILLEGAL ACTS 3. And it is done with intent to injure.

Article 20, Civil Code. Every person B. MORAL SEDUCTION

who, contrary to law, willfully or
negligently causes damage to another, There must in all cases be some sufficient
shall indemnify the latter for the same. promise or inducement and the woman must
yield because of the promise of other
inducement. If she consents merely from carnal
In Art. 20, the person must establish that he
list and the intercourse is from mutual desire,
belongs to the class of person sought to be
there is no seduction [Tanjanco v. CA, G.R. No.
protected by the statute and provide that there
L-18630 (1966)].
must be an invasion of a particular interest the
law seeks to protect.
C. PUBLIC HUMILIATION
General Rule
It is against morals, good customs and public
Art. 20 should not apply to all violations of law,
policy to humiliate, embarrass and degrade the
especially if they have their own civil indemnity.
dignity of a person. Everyone must respect the
dignity, personality, privacy and peace of mind of

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his neighbors and other persons [Grand Union v. acts of oppression by either capital or labor
Espino, G.R. No. L-48250 (1979)]. against the other, and Art. 21, which makes a
person liable for damages if he willfully causes
D. MALICIOUS PROSECUTION loss or injury to another in a manner contrary to
morals, good customs, or public policy [Quisaba
i. Definition v. Sta. Ines, G.R. No. L-38088 (1972)].

Malicious prosecution is the institution of any IV. VIOLATION OF HUMAN

action or proceeding, either civil or criminal, DIGNITY
maliciously and without probable cause.

ii. Elements (DAAM) Article 26, Civil Code. Every person

shall respect the dignity, personality,
[Magbanua v. Junsay, G.R. No.
privacy and peace of mind of his
132659 (2007)]
neighbors and other persons. The
following and similar acts, though they
1. Prosecution of the plaintiff by may not constitute a criminal offense,
defendant; shall produce a cause of action for
2. Termination of prosecution in acquittal; damages, prevention and other relief:
3. Absence of probable cause; Prying into the privacy of another’s
4. Prosecution motivated by malice - that residence;
is improper or sinister motive. Meddling with or disturbing the
private life or family relations of
The mere dismissal of the criminal complaint by another;
the fiscal’s office did not create a cause of action Intriguing to cause another to be
for malicious prosecution because the alienated from his friends;
proceedings therein did not involve exhaustive Vexing or humiliating another on
examination of the elements of malicious the account of his religious beliefs,
prosecution. To constitute such, there must be lowly station in life, place of birth,
proof that the prosecution was prompted by a
physical defect, or other personal
condition.
sinister design to vex and humiliate a person
and that it was initiated deliberately by the
defendant knowing that his charges were false Art. 26 specifically applies to intentional acts
and groundless [Que v. IAC, G.R. No. L-66865 which fall short of being criminal offenses. It
(1989)]. itself expressly refers to tortious conduct which
“may not constitute criminal offenses.”
E. OPPRESSIVE DISMISSAL
Purpose
The right of an employer to dismiss an employee Fill a gap or lacuna in the law where a person
is not to be confused with the manner in which who suffers injury because of a wrongful act not
this right is to be exercised and the effects constituting a crime is left without any redress.
flowing therefrom.
Art. 26 seeks to eliminate cases of damnum
If the dismissal was done anti-socially or absque injuria in human relations [MVRS
oppressively, as the complaint alleges then the Publications v. Islamic Da’wah Council, G.R. No.
respondents violated Art. 1701 which prohibits 135306 (2003)].
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The following principal rights are covered by the B. RIGHT TO PERSONAL SECURITY
protective mantle of this provision:
1. Right to personal dignity Freedom from apprehension of a harmful or
2. Right to personal security offensive contact with the person, as
3. Right to family relations distinguished from the contact itself.
4. Right to social intercourse
5. Right to privacy Defendant must have intended to interfere with
6. Right to peace of mind the plaintiff’s personal dignity.
● Assault cannot be committed through
Note: Coverage of Art. 26 is not limited to those negligence.
enumerated therein, the enumeration being
merely examples of acts violative of a person’s C. RIGHT TO SOCIAL RELATIONS
rights to dignity, personality, privacy and peace
of mind. Other “similar acts” are also covered Liability for intriguing to cause another to be
within the scope of the article. alienated from his friends.

A. RIGHT TO PERSONAL DIGNITY Malice Required

Intrigue implies malice or ill-will.
Violation of the right to personal dignity is
analogous to the American law concept of D. RIGHT TO FAMILY RELATIONS
defamation.
i. Husband and Wife
Defamation is an invasion of a person’s right to
The law expressly recognizes the right of either
enjoy a reputation and good name unimpaired
spouse to sue the other without any limitations
by false attacks which tend to diminish the
as to the subject matter of litigation.
esteem in which a person is held by men whose
standard of opinion the court can properly
ii. Interference by Third Persons
recognize.
The right of family relations includes the right to
● Libel consists of the publication of
consortium and to recover damages for breach
defamatory matter by written or printed
thereof.
words.
● Slander is all other defamation.
Consortium is a bundle of legal rights namely:
● Services
Libel and slander are crimes in the Philippines.
● Society
● Sexual Intercourse
Requirement of Malice
● Conjugal Affection

General Rule: Malice is not essential.

Examples of Form of Interferences
a. Adultery - Husband may maintain an
Exception: Malice or ill-will remains important
action against the 3rd party, where
where there is exercise of qualified privilege is in
or not the wife consented to it.
question.
b. Alienation of Affection - Required to
prove that:
a. Wrongful conduct of the
defendant: intentional and
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malicious enticing of a spouse the feelings and sensibilities of the injured party,
away from the other spouse. and a corporation has none of those.
b. Loss of affection or consortium.
c. Causal connection between such Exception
conduct and loss. The right of privacy is invoked along with the
right against unreasonable searches and
iii. Parent and Child seizures [Sps. Hing v. Choachuy, G.R. No.
Nowhere in Philippine law is there prohibition 179736 (2013)].
against a child suing the parent.
F. RIGHT TO PEACE OF MIND
Parents must also be allowed to institute a
personal tort action against the child under Art. Parallel to American tort of intentional infliction
26, like an action for assault or battery. of mental distress.

iv. Enticement V. DERELICTION OF DUTY

A parent may institute tort action against a
person who entices a child away from home.
Article 26, Civil Code. Any person
E. RIGHT OF PRIVACY suffering material or moral loss because a
public servant or employee refused or
neglects, without just cause, to perform
The right to be let alone.
his official duty, may file an action for
damages and other relief against the
Type of Tort Involved latter, without prejudice to any disciplinary
1. Intrusion upon the plaintiff’s physical administrative action that may be taken.
and mental solitude.
2. Public disclosure of private facts/
3. Placing the plaintiff in a false light in the This applies only to acts of nonfeasance or the
public eye nonperformance of some acts which a person is
4. Commercial appropriation of the obliged or has responsibility to perform. The
plaintiff’s name or likeness. duty of the public servant must be ministerial in
character. If the duty is discretionary, he is not
liable unless he acted in a notoriously arbitrary
Reasonableness of Expectation of
manner.
Privacy Test [Ople v. Torres, G.R. No.
127685 (1998)] The defense of good faith is not available
a. Whether by one’s conduct, the individual because an officer is under constant obligation
has exhibited an expectation of privacy. to discharge the duties of his office, and it is not
b. Where this expectation is one that necessary to show that his failure to act was due
society recognizes and accepts as to malice or willfulness.
reasonable.
Requisites [Amaro v. Sumanguit, G.R. No.
General Rule
L-14986 (1962)]
The right to privacy may only be invoked by
1. Defendant is a public officer charged
natural persons. Juridical person cannot invoke
with a performance of a duty in favor of
this because the basis to this right is an injury to
the plaintiff;

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2. He refused or neglected without just

Sec. 3, Rule 111, Rules of Court. In
cause to perform the duty;
the cases provided for in Articles 32, 33,
3. Plaintiff sustained material or moral loss
34 and 2176 of the CC of the Philippines,
as a consequence of such
the independent civil action may be
non-performance; brought by the offended party. It shall
4. The amount of such damages, if proceed independently of the criminal
material action and shall require only a
preponderance of evidence. In no case,
VI. UNFAIR COMPETITION however, may the offended party recover
damages twice for the same act or
omission charged in the criminal action.
Article 27, Civil Code. Unfair
competition in agricultural, commercial or
industrial enterprise or in labor thru the I. VIOLATION OF CIVIL AND
use of force, intimidation, deceit, POLITICAL RIGHTS
machination or any other unjust,
oppressive or highhanded method shall
give rise to a right of action by the person Article 32, Civil Code. Any public officer
who thereby suffers damage. or employee, or any private individual,
who directly or indirectly obstructs,
defeats, violates or in any manner
impedes or impairs any of the following
rights and liberties of another person shall
be liable to the latter for damages:

1. Freedom of religion;
2. Freedom of speech;
3. Freedom to write for the press or to
maintain a periodical publication;
4. Freedom from arbitrary or illegal
detention;
5. Freedom of suffrage;
6. The right against deprivation of
property without due process of
law;
7. The right to a just compensation
when private property is taken for
public use;
8. The right to the equal protection of
the laws;
INDEPENDENT CIVIL 9. The right to be secure in one's
person, house, papers, and effects
ACTIONS
against unreasonable searches and
seizures;

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10. The liberty of abode and of In any of the cases referred to in this
changing the same; article, whether or not the defendant's act
11. The privacy of communication and or omission constitutes a criminal offense,
the aggrieved party has a right to
correspondence;
commence an entirely separate and
12. The right to become a member of distinct civil action for damages, and for
associations or societies for other relief. Such civil action shall proceed
purposes not contrary to law; independently of any criminal prosecution
13. The right to take part in a peaceable (if the latter be instituted).
assembly to petition the
Government for redress of Art. 32 speaks of a particular species of an “act”
grievances; that may give rise to an action for damages
14. The right to be a free from against a public officer, and that is tort for
involuntary servitude in any form; impairment or rights and liberties
15. The right of the accused against [Vinzons-Chato v. Fortune, G.R. No. 141309
(2007)].
excessive bail;
16. The right of the accused to be heard
Both public officers and private individuals can
by himself and counsel, to be
incur civil liability for violation of rights
informed of the nature and cause of enumerated therein. The provision speaks of an
the accusation against him, to have officer, employee or person “directly or
a speedy and public trial, to meet indirectly” responsible for the violation of the
the witnesses face to face, and to constitutional rights and liberties of another, it is
have compulsory process to secure not the actor alone who must answer for
the attendance of witness in his damages under Art. 32. It is not necessary that
behalf; the defendant should have acted with malice or
bad faith, otherwise, it would defeat its main
17. Freedom from being compelled to
purpose, which is the effective protection of
be a witness against one's self, or
individual rights [Silahis v. Soluta, G.R. No.
from being forced to confess guilt,
163087 (2006)].
or from being induced by a promise
of immunity or reward to make such This provides a sanction to the deeply cherished
confession, except when the person rights and freedoms enshrined in the
confessing becomes a State Constitution [Aberca et al., v. Ver et al., G.R. No.
witness; L-69866 (1988)].
18. Freedom from excessive fines, or
cruel and unusual punishment,
unless the same is imposed or
inflicted in accordance with a II. DEFAMATION, FRAUD,
statute which has not been judicially AND PHYSICAL INJURIES
declared unconstitutional; and
19. Freedom of access to the courts. Article 333, Civil Code. In cases of
defamation, fraud, and physical injuries, a
civil action for damages, entirely separate

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prove that the defamatory statement was

and distinct from the criminal action, may
specifically pointed to him [MVRS Publications,
be brought by the injured party. Such civil
Inc. v. Islamic, supra].
action shall proceed independently of the
criminal prosecution, and shall require
only a preponderance of evidence. B. FRAUD

Estafa under Art. 315, RPC; Violations of B.P. 22

The civil action for damages that Art. 33 allowed
are not covered.
to be instituted is ex-delicto.

C. PHYSICAL INJURIES
This provision is an exception to the general rule
that the civil action for recovery of civil liability
Should be understood to mean bodily injury, not
arising from the offense charged is impliedly
the crime of physical injuries, because the terms
instituted with the criminal action.
used with the latter are general terms.
Where the offense is defamation, fraud, or
physical injuries, a civil action may be filed III. NEGLECT OF DUTY
independently of the criminal action, even
though no reservation is made [Madeja v. Caro, Article 34, Civil Code. When a member
G.R. No. L-51183 (1983)]. of a city or municipal police force refuses
or fail to render aid or protection to any
A. DEFAMATION person in case of danger to life or
property, such peace officer shall be
The offense of injuring a person’s character, primarily liable for damages, and the city
fame or reputation through false or malicious or municipality shall be subsidiary
statements. responsible therefor. The civil action
herein recognized shall be independent of
Invasion of a relation interest since it involves any criminal proceedings, and a
the opinion which others in the community may preponderance of evidence shall suffice to
have, or tend to have, of the plaintiff. support such action.

Elements of Libel [Art. 353, RPC] Coverage

1. An allegation or imputation of a 1. There is danger to the life or property of
discreditable act or condition concerning a person;
another. 2. A member of a city or municipal police
2. Publication of the imputation. force who is present in the scene
3. Identity of the person defamed. refused or failed to render aid or
4. Existence of malice. protection to the person; and
3. Damages are caused whether to the
Where the defamation is alleged to have been point person and/or property of the
directed at a group or class, it is essential that victim.
the statement must be so sweeping or
all-embracing as to apply to every individual in Nature of Liability
that group or class, or sufficiently specific so a. Of the police officer - Primary
that each individual in the class or group can b. City or municipality - Subsidiary

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violation of some right [People v. Ballesteros,

The defense of having observed the diligence of G.R. No. 120921 (1998)].
a good father of a family to prevent the damage
is not available to the city/municipality. I. WHEN ALLOWED

IV. CATCH-ALL INDEPENDENT The obligation to repair the damages exists

CIVIL ACTION whether done intentionally or negligently and
whether or not punishable by law [Occena v.
Icamina, G.R. No. 82146 (1990)].
Article 35, Civil Code. When a person,
claiming by a criminal offense, charges
Wrong without damage, or damage without
another with the same, for which no
wrong, does not constitute a cause of action,
independent civil action is granted in this
since damages are merely part of the remedy
Code or any special law, but the justice of
allowed for the injury caused by a breach or
the peace finds no reasonable grounds to
believe that a crime has been committed, wrong [Custodio v. CA, G.R. No. 116100
or the prosecuting attorney refuses or fail (1996)].
to institute criminal proceedings, the
complaint may bring a civil action for Injury vs. Damage vs. Damages [Custodio v.
damages against the alleged offender. CA, supra]
Such civil action may be supported by a
INJURY DAMAGE DAMAGES
preponderance of evidence. Upon the
defendant's motion, the court may require The illegal The loss, The
the plaintiff to file a bond to indemnify invasion of a hurt, or recompense
the defendant in case the complaint legal right harm, which or
should be found to be malicious. results from compensation
If during the pendency of the civil action, the injury awarded for
an information should be presented by the damage
the prosecuting attorney, the civil action suffered
shall be suspended until the termination
of the criminal proceedings. II. DUTY OF INJURED PARTY

Article 2203, Civil Code. The party

suffering loss or injury must exercise the
diligence of a good father of a family to
minimize the damages resulting from the
act or omission in question.
Art. 2203 exhorts parties suffering from loss or
DAMAGES injury to exercise the diligence of a good father
of a family to minimize the damages resulting
from the act or omission in question.
Damages may be defined as the pecuniary
compensation, recompense, or satisfaction for
an injury sustained, or as otherwise expressed, III. TYPES OF DAMAGES
the pecuniary consequences which the law
imposes for the breach of some duty or the

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Article 2197, Civil Code. Damages may Article 2200, Civil Code.
be: Indemnification for damages shall
Actual or compensatory; comprehend not only the value of the loss
Moral; suffered, but also that of the profits which
Nominal; the obligee failed to obtain.
Temperate or moderate;
Liquidated; or
Two kinds of actual damages [PNOC v. CA,
Exemplary or corrective.
G.R. No. 107518 (1998)]:
1. Damnum emergens or daño
A. ACTUAL AND COMPENSATORY emergente - actual loss or loss of what
DAMAGES a person already possesses
2. Lucrum cessans or lucro cesante - a
i. Purpose cession of gain or amount of profit lost
or loss of which would have pertained to
Damages in satisfaction of, or in recompense for, a person
loss or injury sustained. The phrase “actual
damages” is sometimes used as a synonym of Only net earnings, and not gross earnings, are
compensatory damages. to be considered, that is, the total of the
earnings less expenses necessary in the creation
ii. Proof required of such earnings or income and less living and
other incidental expenses [Candano Shipping
Lines, Inc. v. Sugata-on, G.R. No. 163212
Article 2199, Civil Code. Except as (2007)].
provided by law or by stipulation, one is
entitled to an adequate compensation
iv. Damages in case of death
only for such pecuniary loss suffered by
him as he has duly proved. Such
compensation is referred to as actual or Article 2206, Civil Code. The amount
compensatory damages. of damages for death caused by a crime
or quasi-delict shall be at least three
The burden of proof of the damage suffered is thousand pesos, even though there may
imposed on the party claiming the same. have been mitigating circumstances. In
Self-serving statements are not sufficient basis addition:
for an award of actual damages [Oceaneering 1. The defendant shall be liable for
Contractors v. Barretto, G.R. No. 18425 (2011)]. the loss of the earning capacity of
the deceased, and the indemnity
Actual or compensatory damages cannot be shall be paid to the heirs of the
presumed, but must be proven with a latter; such indemnity shall in
reasonable degree of certainty [MCC Industrial every case be assessed and
Sales Corp. v. Ssangyong Corp., G.R. No. 170633 awarded by the court, unless the
(2007)].
deceased on account of
permanent physical disability not
iii. Loss covered
caused by the defendant, had no

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This may be recovered even by the

earning capacity at the time of his
illegitimate descendants and ascendants
death; of the deceased;
2. If the deceased was obliged to 3. Exemplary damages, when the
give support according to the crime is attended by one or more
provisions of Article 291, the aggravating circumstances — an
recipient who is not an heir called amount to be fixed in the discretion of
to the decedent's inheritance by the court, the same to be considered
the law of testate or intestate separate from fines;
succession, may demand support 4. Attorney's fees and expenses of
litigation — the actual amount thereof
from the person causing the
(but only when a separate civil action to
death, for a period not exceeding
recover civil liability has been filed or
five years, the exact duration to when exemplary damages are
be fixed by the court; awarded);
3. The spouse, legitimate and 5. Interests in the proper cases.
illegitimate descendants and [Heirs of Raymundo Castro v. Bustos, G.R. No.
ascendants of the deceased may L-25913 (19690].
demand moral damages for
mental anguish by reason of the v. Attorney’s fees
death of the deceased.
Article 2208, Civil Code. In the
When death occurs as a result of a crime, the absence of stipulation, attorney's fees
heirs of the deceased are entitled to the and expenses of litigation, other than
following items of damages: judicial costs, cannot be recovered,
1. Indemnity for the loss of earning except:
capacity of the deceased — an When exemplary damages are
amount to be fixed by the Court awarded;
according to the circumstances of the When the defendant's act or
deceased related to his actual income at
omission has compelled the
plaintiff to litigate with third
the time of death and his probable life
persons or to incur expenses to
expectancy, the said indemnity to be
protect his interest;
assessed and awarded by the court as a
In criminal cases of malicious
matter of duty, unless the deceased had
prosecution against the plaintiff;
no earning capacity at said time on In case of a clearly unfounded civil
account of permanent disability not action or proceeding against the
caused by the accused. If the deceased plaintiff;
was obliged to give support, under Art. Where the defendant acted in
291, Civil Code, the recipient who is not gross and evident bad faith in
an heir, may demand support from the refusing to satisfy the plaintiff's
accused for not more than five (5) plainly valid, just and
years, the exact duration to be fixed by demandable claim;
the court; In actions for legal support;
2. Moral damages for mental anguish
— an amount to be fixed by the court.
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4. By reason of equity
In actions for the recovery of
● Where the defendant’s act
wages of household helpers,
compelled plaintiff to litigate
laborers and skilled workers;
with third persons
In actions for indemnity under
workmen's compensation and ● Where the Court deems it just
employer's liability laws; and equitable
In a separate civil action to recover
civil liability arising from a Note: In all cases, attorney’s fees and costs of
crime; litigation must be reasonable. Even if expressly
When at least double judicial costs stipulated, attorney’s fees are subject to control
are awarded; by the Courts.
Where the court deems it just and
equitable that attorney's fees Two kinds of attorney’s fees:
and expenses of litigation 1. Ordinary - reasonable compensation
should be recovered. paid to a lawyer for services rendered
In all cases, the attorney's fees and 2. Extraordinary - awarded to a
expenses of litigation must be successful litigant; to be paid by the
reasonable. losing party as indemnity for damages
[Aquino v. Casabar, G.R. No. 191470
General Rule: Attorney’s fees and costs of (2015)]
litigation are recoverable IF stipulated.
Attorney’s fees and expenses of litigation are
Exceptions: recoverable only in the concept of actual
If there is no stipulation, they are recoverable damages, not as moral damages nor judicial
only in the following cases: costs. Hence, such must be specifically prayed
1. By reason of malice or bad faith for and may not be deemed incorporated within
● When exemplary damages are a general prayer for "such other relief and
awarded remedy as this court may deem just and
● In case of a clearly unfounded equitable” [Briones v. Macabagdal, G.R. No.
civil action 150666 (2010)].
● Where defendant acted in gross
and evident bad faith Even when a claimant is compelled to litigate
● When at least double judicial with third persons or to incur expenses to
costs are awarded protect his rights, still attorney’s fees may not be
2. By reason of plaintiff’s indigence in awarded where no sufficient showing of bad
● Actions for legal support faith could be reflected in a party’s persistence
● Actions for recovery of wages of in a case other than an erroneous conviction of
laborers, etc. the righteousness of his cause [Bank of America
● Actions for workmen’s v. Philippine Racing Club, G.R. No. 150228
compensation (2009)].
3. By reason of crimes in
● Criminal cases of malicious vi. Interest
prosecution
● Separate actions to recover civil
liability arising from crime
Article 2209, Civil Code. If the

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demand can be established with reasonable

obligation consists in the payment of a
certainty [Lara’s Gifts & Decors, Inc., v. Midtown
sum of money, and the debtor incurs in
Industrial Sales Inc., G.R. No. 225433 (2019)].
delay, the indemnity for damages, there
being no stipulation to the contrary, shall
be the payment of the interest agreed Determination of legal interest
upon, and in the absence of stipulation, 1. When an obligation, regardless of its
the legal interest, which is six per cent source (i.e., law, contracts,
per annum. quasi-contracts, delicts or quasi-delicts)
is breached, the contravenor can be
held liable for damages.
Article 2210, Civil Code. Interest may, 2. With regard to an award of in the
in the discretion of the court, be allowed concept of actual and compensatory
upon damages awarded for breach of damages, the rate of interest, as well as
contract. the accrual thereof, is imposed, as
follows [Lara’s Gifts & Decors, Inc. v.
Midtown Industrial Sales Inc., supra]:
Article 2211, Civil Code. In crimes and
quasi-delicts, interest as a part of the
damages may, in a proper case, be BASE RATE ACCRUAL
adjudicated in the discretion of the court.
When the obligation is breached and it
consists in the payment of sum of money
Article 2212, Civil Code. Interest due (i.e, a loan or forbearance of money, goods,
credits or judgments):
shall earn legal interest from the time it is
judicially demanded, although the Interest due a. That which In the
obligation may be silent upon this point. may have absence of a
been stipulated
stipulated in reckoning
Article 2213, Civil Code. Interest writing, date, shall be
cannot be recovered upon unliquidated provided it is computed
claims or damages, except when the not excessive from default,
demand can be established with or (i.e., from
reasonable certainty. unconscionab extrajudicial
le or judicial
demand in
Interest accrues in the concept of accordance
with Art.
damages when:
1169) until
1. The obligation consists in the payment full payment
of a sum of money; without
2. Debtor incurs in delay; and compounding
3. There is no stipulation to the contrary. any interest,
Interest on the amount of damages awarded unless
may be imposed at the discretion of the court compounded
interest is
and in the prevailing legal interest.
expressly
stipulated by
No interest, however, shall be adjudged on the parties,
unliquidated claims or damages until the

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by law or When 6% per From the

regulation demand is annum (legal date of the
not interest) judgment
b. In the From established of the trial
absence of extrajudicia with court (at
stipulation, l or judicial reasonable which time
the rate of demand in certainty the
interest, it accordance quantification
shall be 6% with Art. of damages
per annum 1169 of the may be
(legal Civil Code, deemed to
interest) until full have been
payment, reasonably
without ascertained),
compounding until full
any interest, payment
unless
compounded No legal interest will be added after the
interest is judgment becomes final and executory unlike
expressly in Eastern Shipping Lines v. CA, supra and
stipulated by Nacar v. Gallery Frames, supra
law or
regulation.
Note: The new rate of legal interest (6%) in
Interest due 6% per From the Nacar v. Gallery Frames, supra, does not apply
on the annum (legal time of to judgments that have become final and
principal interest) judicial executory prior to July 1, 2013.
amount demand
accruing as until full
of judicial payment vii. Duty to minimize
demand shall
separately
earn legal
Article 2203, Civil Code. The party
interest suffering loss or injury must exercise the
diligence of a good father of a family to
No legal interest will be added after the minimize the damages resulting from the
judgment becomes final and executory unlike act or omission in question.
in Eastern Shipping Lines v. CA and Nacar v.
Gallery Frames
Art. 2203 exhorts parties suffering from loss or
When an obligation, not constituting a loan injury to exercise the diligence of a good father
or forbearance of money, is breached: of a family to minimize the damages resulting
from the act or omission in question.
When 6% per From the
viii. When mitigated
demand is annum (legal time the
established interest) claim is made
with extrajudicia Article 2214, Civil Code. In
reasonable lly or
quasi-delicts, the contributory negligence
certainty judicially,
until full of the plaintiff shall reduce the damages
payment that he may recover.

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Moral damages are emphatically not intended to

Article 2215, Civil Code. In contracts,
enrich a complainant at the expense of the
quasi-contracts, and quasi-delicts, the
defendant. Its award is aimed at the restoration,
court may equitably mitigate the
within the limits of the possible, of the spiritual
damages under circumstances other than
the case referred to in the preceding status quo ante, and it must be proportional to
article, as in the following instances: the suffering inflicted [Visayan Sawmill v. CA,
1. That the plaintiff himself has G.R. No. 83851 (1993)].
contravened the terms of the
Mental suffering means distress or serious pain
contract;
as distinguished from annoyance, regret or
2. That the plaintiff has derived some
vexation [Bagumbayan Corp. v. IAC, G.R. No.
benefit as as result of the contract;
L-66274 (1984)].
3. In cases where exemplary
damages are to be awarded, that Requisites for awarding moral
the defendant acted upon the damages
advice of counsel; The conditions for awarding moral damages are
4. That the loss would have resulted [InAP-2219]
in any event; 1. There must be an Injury, whether
5. That since the filing of the action, physical, mental, or psychological,
the defendant has done his best to clearly substantiated by the claimant;
lessen the plaintiff's loss or injury. 2. There must be a culpable Act or
omission factually established;
3. The wrongful act or omission of the
B. MORAL DAMAGES defendant must be the Proximate cause
of the injury sustained by the claimant;
Article 2217, Civil Code. Moral and
damages include physical suffering, 4. The award of damages is predicated on
mental anguish, fright, serious anxiety, any of the cases stated in Art. 2219 of
besmirched reputation, wounded feelings, the Civil Code [Sulpicio Lines v. Curso,
moral shock, social humiliation, and G.R. No. 157009 (2010)].
similar injury. Though incapable of
pecuniary computation, moral damages ii. When recoverable
may be recovered if they are the
proximate result of the defendant's
wrongful act or omission. Article 2219, Civil Code. Moral
damages may be recovered in the
following and analogous cases:
1. A criminal offense resulting in
Article 2218, Civil Code. In the physical injuries;
adjudication of moral damages, the 2. Quasi-delicts causing physical
sentimental value of property, real or injuries;
personal, may be considered. 3. Seduction, abduction, rape, or
other lascivious acts;
i. Purpose 4. Adultery or concubinage;

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An employer that is vicariously liable with its

5. Illegal or arbitrary detention or
employee-driver may also be held liable for
arrest; moral damages to the injured plaintiff [B.F.
6. Illegal search; Metal v. Lomotan, G.R. No. 170813 (2008)].
7. Libel, slander or any other form of
defamation; 3. In seduction, abduction, rape, and
8. Malicious prosecution; other lascivious acts
9. Acts mentioned in article 309; Anent the award of damages, civil indemnity ex
10. Acts and actions referred to in delicto is mandatory upon finding of the fact of
articles 21, 26, 27, 28, 29, 30, 32, rape, while moral damages is automatically
34, and 35. awarded upon such finding without need of
further proof, because it is assumed that a rape
The parents of the female seduced, victim has actually suffered moral injuries,
abducted, raped, or abused, referred to entitling the victim to such award [People v.
in No. 3 of this article, may also recover Lizano, G.R. No. 174470 (2007)].
moral damages.
The award of moral damages in a conviction for
The spouse, descendants, ascendants, simple rape should equal the award of moral
and brothers and sisters may bring the damages in convictions for qualified rape
action mentioned in No. 9 of this article, [People v. Bartolini, G.R. No. 176498 (2010)].
in the order named.
Where there are multiple counts of rape and
1. In Criminal Offense resulting in other lascivious acts, the court awarded moral
physical injuries and death damages for each count of lascivious acts and
Under Art. 2219 (1) of the Civil Code, moral each count of rape [People v. Abadies, G.R. Nos.
damages may be recovered in a criminal offense 139346-50 (2002)]
resulting in physical injuries. In its generic
sense, "physical injuries" includes death [People Note: Recovery may be had by the offended
v. Villaver, G.R. No. 133381 (2001)]. party and also by her parents.

Moral damages can be awarded despite the 4. In illegal or arbitrary detention or

absence of proof of mental and emotional arrest
suffering of the victim’s heirs, since a violent Since the crime committed in this case is
death necessarily brings about emotional pain kidnapping and failure to return a minor under
and anguish on the part of the victim’s family Art. 270 of the RPC, the crime was clearly
[People v. Villarmea, G.R. No. 200029 (2013)]. analogous to illegal and arbitrary detention or
arrest. Therefore, the award of moral damages
2. In Quasi-delicts resulting in physical is justified [People v. Bernardo, G.R. No. 144316
injuries (2002)].
In culpa aquiliana, or quasi-delict, moral 5. In case of libel, slander, or any
damages may be recovered (a) when an act or other form of defamation
omission causes physical injuries, or (b) where The court ruled that the commission of Slight
the defendant is guilty of intentional tort. Oral Defamation caused injury to the petitioner’s
feelings and reputation as a barangay captain.
Hence, the petitioner is entitled to moral
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 TORTS AND DAMAGES CIVIL LAW

damages in the sum of ₱5,000.00 [Occena v.

life or family relations of another;
Icamina, supra].
Intriguing to cause another to be
alienated from his friends;
6. In case of malicious prosecution Vexing or humiliating another on account
A person's right to litigate, as a rule, should not of his religious beliefs, lowly station in life,
be penalized. This right, however, must be place of birth, physical defect, or other
exercised in good faith [Industrial Insurance v. personal condition.
Bondad, G.R. No. 136722 (2000)].
Violation of Human Dignity
Moral damages cannot be recovered from a
The law seeks to protect a person from being
person who has filed a complaint against
unjustly humiliated, so the court awarded moral
another in good faith, or without malice or bad
damages to the plaintiff who was accused by the
faith. If damage results from the filing of the
respondent of having an adulterous relationship
complaint, it is damnum absque injuria [Mijares
with another woman in the presence of his wife,
v. CA, G.R. No. 113558 (1997)].
children, neighbors and friends [Concepcion v.
CA, G.R. No. 120706 (2000)].
7. In acts referred to in Arts. 21, 26,
27, 28, 29, 32, 34 and 35, Civil Code
Article 27, Civil Code. Any person
Article 21, Civil Code. Any person who suffering material or moral loss because a
wilfully causes loss or injury to another in public servant or employee refuses or
a manner that is contrary to morals, good neglects, without just cause, to perform
customs or public policy shall compensate his official duty may file an action for
the latter for the damage. damages and other relief against the
latter, without prejudice to any disciplinary
Acts Contra Bonus Mores administrative action that may be taken.
Moral damages are recoverable where the
dismissal of the employee was attended by bad Refusal or Neglect of Duty
faith or fraud, constituted an act oppressive to Under Art. 27, in relation to Arts. 2219 and
labor, or was done in a manner contrary to 2217, a public officer may be liable for moral
morals, good customs, or public policy [Triple damages for as long as the moral damages
Eight v. NLRC, G.R. No. 129584 (1998)] suffered by [the plaintiff] were the proximate
result of [defendant’s] refusal to perform an
official duty or neglect in the performance
Article 26, Civil Code. Every person
thereof.
shall respect the dignity, personality,
privacy and peace of mind of his Under Arts. 19 and 27 of the Civil Code, a public
neighbors and other persons. The official may be made to pay damages for
following and similar acts, though they performing a perfectly legal act, albeit done in
may not constitute a criminal offense, bad faith or in violation of the "abuse of right"
shall produce a cause of action for doctrine.
damages, prevention and other relief:
Article 28, Civil Code. Unfair
Prying into the privacy of another's
competition in agricultural, commercial or
residence;
industrial enterprises or in labor through
Meddling with or disturbing the private

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the use of force, intimidation, deceit, 6. The right against deprivation of

machination or any other unjust, property without due process of
oppressive or highhanded method shall law;
give rise to a right of action by the person
7. The right to a just compensation
who thereby suffers damage.
when private property is taken for
public use;
Article 29, Civil Code. When the 8. The right to the equal protection of
accused in a criminal prosecution is the laws;
acquitted on the ground that his guilt has 9. The right to be secure in one's
not been proved beyond reasonable person, house, papers, and effects
doubt, a civil action for damages for the
against unreasonable searches and
same act or omission may be instituted.
Such action requires only a seizures;
preponderance of evidence. Upon motion 10. The liberty of abode and of
of the defendant, the court may require changing the same;
the plaintiff to file a bond to answer for 11. The privacy of communication and
damages in case the complaint should be correspondence;
found to be malicious.
12. The right to become a member of
If in a criminal case the judgment of associations or societies for
acquittal is based upon reasonable doubt, purposes not contrary to law;
the court shall so declare. In the absence 13. The right to take part in a peaceable
of any declaration to that effect, it may assembly to petition the
be inferred from the text of the decision Government for redress of
whether or not the acquittal is due to grievances;
that ground.
14. The right to be a free from
involuntary servitude in any form;
Article 32, Civil Code. Any public officer 15. The right of the accused against
or employee, or any private individual, excessive bail;
who directly or indirectly obstructs, 16. The right of the accused to be heard
defeats, violates or in any manner by himself and counsel, to be
impedes or impairs any of the following
informed of the nature and cause of
rights and liberties of another person shall
be liable to the latter for damages: the accusation against him, to have
a speedy and public trial, to meet
1. Freedom of religion; the witnesses face to face, and to
2. Freedom of speech; have compulsory process to secure
3. Freedom to write for the press or to the attendance of witness in his
maintain a periodical publication; behalf;
4. Freedom from arbitrary or illegal 17. Freedom from being compelled to
detention; be a witness against one's self, or
5. Freedom of suffrage; from being forced to confess guilt,
or from being induced by a promise

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of immunity or reward to make such should find that, under the circumstances,
confession, except when the person such damages are justly due. The same
confessing becomes a State rule applies to breaches of contract where
the defendant acted fraudulently or in bad
witness;
faith.
18. Freedom from excessive fines, or
cruel and unusual punishment,
unless the same is imposed or Article 34, Civil Code. When a member
inflicted in accordance with a of a city or municipal police force refuses
statute which has not been judicially or fails to render aid or protection to any
declared unconstitutional; and person in case of danger to life or
property, such peace officer shall be
19. Freedom of access to the courts.
primarily liable for damages, and the city
or municipality shall be subsidiarily
In any of the cases referred to in this responsible therefor. The civil action
article, whether or not the defendant's act herein recognized shall be independent of
or omission constitutes a criminal offense, any criminal proceedings, and a
the aggrieved party has a right to preponderance of evidence shall suffice to
commence an entirely separate and support such action.
distinct civil action for damages, and for
other relief. Such civil action shall proceed
independently of any criminal prosecution Article 35, Civil Code. When a person,
(if the latter be instituted). claiming to be injured by a criminal
offense, charges another with the same,
Violation of Civil and Political Rights for which no independent civil action is
The purpose of Art. 32 is to provide a sanction granted in this Code or any special law,
to the deeply cherished rights and freedoms but the justice of the peace finds no
reasonable grounds to believe that a
enshrined in the Constitution. It is not necessary
crime has been committed, or the
that the public officer acted with malice or bad
prosecuting attorney refuses or fails to
faith. To be liable, it is enough that there was a
institute criminal proceedings, the
violation of the constitutional rights of the
complaint may bring a civil action for
[plaintiff], even on the pretext of justifiable
damages against the alleged offender.
motives or good faith in the performance of Such civil action may be supported by a
one's duties [Cojuangco v. CA, G.R. No. 119398 preponderance of evidence. Upon the
(1999)]. defendant's motion, the court may
require the plaintiff to file a bond to
Moral damages are proper when the rights of indemnify the defendant in case the
individuals, including the right against complaint should be found to be
deprivation of property without due process of malicious.
law, are violated [Meralco v. Spouses Chua, G.R.
No. 160422 (2010)]. If during the pendency of the civil action,
an information should be presented by
the prosecuting attorney, the civil action
Article 2220, Civil Code. Willful injury shall be suspended until the termination
to property may be a legal ground for of the criminal proceedings.
awarding moral damages if the court

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In Willful Injury to Property The omission of brothers and sisters of the

To sustain an award of damages, the damage deceased passenger in Art. 2206 (3) reveals the
inflicted upon plaintiff’s property must be legislative intent to exclude them from the
malicious or willful, an element crucial to merit persons authorized to recover moral damages
an award of moral damages under Art. 2220 of for mental anguish by reason of the death of the
the Civil Code [Regala v. Carin, G.R. No. 188715 deceased (inclusio unius est exclusio alterius).
(2011)]. The usage of the phrase “analogous cases” in
the provision means simply that the situation
In Breach of Contract in Bad Faith must be held similar to those expressly
To recover moral damages in an action for enumerated in the law in question [Sulpicio
breach of contract, the breach must be palpably Lines v. Curso, supra].
wanton, reckless, malicious, in bad faith,
oppressive, or abusive. Art. 233 of the Family Code states that the
person exercising substitute parental authority
Bad faith imports a dishonest purpose and shall have the same authority over the child as
conscious doing of a wrong. The person claiming the parents.
moral damages must thus prove bad faith by
clear and convincing evidence, because good Persons exercising substitute parental authority
faith is always presumed [Francisco v. Ferrer, are to be considered ascendants for the purpose
G.R. No. 142029 (2001)]. of awarding moral damages [Caravan Travel and
Tours International, Inc. v. Abejar, supra].
A conscious or intentional design need not
always be present to award moral damages Juridical Persons
since negligence may occasionally be so gross The award of moral damages cannot be granted
as to amount to malice or bad faith. Bad faith, in in favor of a corporation because, being an
the context of Art. 2220 of the Civil Code, artificial person and having existence only in
includes gross negligence [Bankard, Inc. v. legal contemplation, it has no feelings, no
Feliciano, G.R. No. 141761 (2006)]. emotions, no senses [ABS-CBN v. CA, G.R. No.
128690 (1999)].
Factors in determining amount
The amount of damages awarded in this appeal Although the general rule is that a juridical
has been determined by adequately considering person is not entitled to moral damages since it
the official, political, social, and financial cannot experience the same suffering that a
standing of the offended parties on one hand, natural person does, Art. 2219 (7) expressly
and the business and financial position of the authorizes the recovery of moral damages in
offender on the other. The SC further considered cases of libel, slander, or any other form of
the present rate of exchange and the terms at defamation.
which the amount of damages awarded would
approximately be in U.S. dollars, the defendant Art. 2219 (7) does not qualify whether the
being an international airline [Lopez v. Pan plaintiff is a natural or juridical person.
American, G.R. No. L-22415 (1966)]. Therefore, a corporation can validly file a
complaint for libel or any other form of
iii. Who may recover defamation and claim for moral damages
[Filipinas Broadcasting v. Ago, G.R. No. 141994
(2005)].
Relatives of Injured Persons
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damages whatsoever have been or can be

C. NOMINAL DAMAGES shown.
c. Under Consideration of
Equity
Article 2221, Civil Code. Nominal
damages are adjudicated in order that a
right of the plaintiff, which has been Nominal damages ruling is based on equity and
violated or invaded by the defendant, not on law.
may be vindicated or recognized, and not
for the purpose of indemnifying the Factors in Determining Amount
plaintiff for any loss suffered by him. Assessment of amount is left to the discretion of
the trial court according to the circumstances of
the case [Gonzales v. People, G.R. No. 159950
Article 2221, Civil Code. The court may (2007)].
award nominal damages in every 1. Small but Substantial
obligation arising from any source a. Small Sum - Should not be
enumerated in article 1157, or in every based on extent of harm to
case where any property right has been injured party
invaded. b. Substantial Claim - The law
presumes a damage, although
Nominal damages is damages in name only, not actual or compensatory
in fact. It is not an equivalent of wrong inflicted damages not proven.
but simple in recognition of the existence of a 2. Commensurate to Injury Suffered
technical injury. Amount should not be equivalent to a
wrong inflicted but merely recognition of
i. Purpose the existence of a technical injury.
3. Effect of Award
For the vindication or recognition of a right
violated or invaded.
Article 2223, Civil Code. The
adjudication of nominal damages shall
ii. When Recoverable preclude further contest upon the right
involved and all accessory questions, as
a. Violation of Rights between the parties to the suit, or their
respective heirs and assigns.
Nominal damages are punitive in nature. It is
not intended for indemnification of loss but
D. TEMPERATE OR MODERATE
vindication of right violated.
DAMAGES
b. No Actual Loss Caused or
Within the context of compensatory damages
Proven
i. Purpose
Nominal damages recoverable where a legal
right is technically violated and must be
More than Nominal damages, but less than
vindicated against an invasion that has produced
Compensatory damages which is awarded when
no actual present loss or any kind, or breach of
pecuniary loss cannot be proved with certainty.
contract and no substantial injury or actual
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damages were awarded [People v. Yrat, G.R. No.

ii. When Recoverable 130415 (2001)].

Nature of Case Prevents ● In Addition to Other Actual Damages

Determination of Actual Loss Proven

Funeral, burial and other expenses lacked

Article 2224, Civil Code. Temperate or evidentiary basis so Court awarded temperate
moderate damages, which are more than damages because it was shown that family
nominal but less than compensatory suffered pecuniary loss but amount cannot be
damages, may be recovered when the certain [People v. Magalona, G.R. No. 143294
court finds that some pecuniary loss has
(2003)].
been suffered but its amount can not,
from the nature of the case, be provided
with certainty. Factors in Determining Amount

1. In General
Article 2225, Civil Code. Temperate Temperate damage is more than nominal but
damages must be reasonable under the less than compensatory.
circumstances.
2. Receipts Amounting to Less Than
Cases Where Amount of Loss Not P25,000
Proved Some cases provide that if the amount of actual
Jurisprudence allows temperate damages where damages proven by receipts is less than P25k,
the actual amount of loss was not proven with the award of temperate damages for P25k is
certainty, even if the nature of the case allows justified. But if actual damages are proven to be
for possibility of pecuniary loss being proven more than P25k, then temperate damage will no
with certainty. longer be awarded [People v. Del Rosario, G.R.
No. 189580 (2011)].
In criminal cases, the Court has awarded
temperate damages to heirs of victims where
the amount of actual damages was not proven
due to inadequacy of evidence [Republic v. 3. No Receipts Provided
Tuvera, G.R. No. 148246 (2007)]. Some cases provide for an award of temperate
damage of P25k even where no receipts are
In Addition to Actual Damages presented in evidence.
● Chronic and Continuing Injury
● In Addition to Civil Indemnity E. LIQUIDATED DAMAGES
Civil indemnity for death is a type of actual
damages provided for in Art. 2206. However, i. Purpose
temperate damages may be awarded in
addition.
Article 2227, Civil Code. Liquidated
damages, whether intended as an
In lieu of actual damages because funeral
indemnity or a penalty, shall be equitably
expenses lacked evidentiary basis, temperate reduced if they are iniquitous or

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Amount and character of the services rendered,

unconscionable.
the nature and importance of the litigation, and
the professional character and the social
The sum of money stipulated can either be standing of the attorney may be an aid in the
intended to compensate the non-breaching party determination of the iniquity or
for the injury caused by the other party’s breach unconscionableness of attorney’s fees [Polytrade
(breach) or punish the breaching party v. Blanco, G.R. No. L-27033 (1969)].
(penalty).
c. Applying Precedent
ii. When Recoverable
The Court reviewed recent jurisprudence to
Article 2226, Civil Code. Liquidated determine whether the award of liquidated
damages are those agreed upon by the damages was iniquitous or unconscionable
parties to a contract, to be paid in case of [Polytrade v. Blanco, supra].
breach thereof.
d. “Proportionality to Purpose”
Test
Article 2228, Civil Code. When the
breach of the contract committed by the If the purpose is to compensate, the amount
defendant is not the one contemplated by must correspond to the actual injury suffered.
the parties in agreeing upon the liquidated
damages, the law shall determine the
Test: Is the stipulated amount justified by the
measure of damages, and not the
injury suffered by the innocent party?
stipulation.
If the purpose is punitive, it becomes a policy
Liquidated damages can only exist if there is a decision and injury suffered by the innocent part
contract or an agreement between the partners. need not be taken into consideration.
It is common for liquidated damages to be
referred to as “attorney’s fees.” Test: What is the proper penalty for this kind of
breach?
Liquidated damages do not necessarily answer e. Necessity Test
for all types of breach but only those
contemplated by the parties. Test: Given the other stipulations in the contract,
is the amount stipulated as liquidated damages
When Reduced necessary as indemnity or penalty?
Liquidated damages is reduced when it is
iniquitous or unconscionable. f. When in pari delicto

Possible Tests If both parties were guilty of breach then it may

be argued that both are entitled to liquidated
a. Apply Rules on Penalty Clauses damages, which would mean that neither should
receive the stipulated amount not unless the
b. “Attorney's Fees” Test amount stipulated may be reduced in proportion
to the nature of breach.

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g. Consider Actual Damages b. In Addition to Other

Types
A court may very well take into account the
actual damages sustained by a creditor who was Exemplary damages cannot be awarded if moral,
compelled to sue the defaulting debtor, which temperate, or compensatory damages are not
actual damages would include the interest and awarded.
penalties the creditor may have had to pay on
its own from its funding source [Domel Trading In liquidated damages, the plaintiff must show
v. CA, G.R. No. 84813 (1999)]. that he would be entitled to moral, temperate,
or compensatory damages were it not for the
F. EXEMPLARY OR CORRECTIVE stipulation for liquidated damages.
DAMAGES
c. Renunciation in Advance

Article 2229, Civil Code. Exemplary or

Since the award is meant to serve as a deterrent
corrective damages are imposed, by way
to similar acts, there is a public interest element
of example or correction for the public
to the award, which therefore cannot be
good, in addition to the moral, temperate,
stipulated away by parties to a contract.
liquidated or compensatory damages.

d. In Crimes
i. Purpose

Exemplary damages are imposed by way of Article 2230, Civil Code. In criminal
example or correction for the public good. offenses, exemplary damages as a part of
the civil liability may be imposed when
The rationalization of exemplary damages is the the crime was committed with one or
identification of obnoxious behavior and the
more aggravating circumstances. Such
damages are separate and distinct from
expression that such behavior must not be
fines and shall be paid to the offended
tolerated.
party.
It is intended to serve as a deterrent to serious
wrongdoings and as a vindication of undue Exemplary damages are separate and distinct
sufferings and wanton invasion of the rights of from fines and shall be paid to the offended
an injured person or a punishment for those party.
guilty of outrageous conduct.
Aggravating circumstances in Art. 2230 should
ii. When Recoverable be interpreted in its broad or generic sense
[People v. Catubig, G.R. no. 137842 (2001)].
a. In General
e. In Quasi-Delicts
Exemplary damages cannot be recovered as a
matter of right. Article 2231, Civil Code. In
quasi-delicts, exemplary damages may be
granted if the defendant acted with gross

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negligence.

It is the duty of the claimant to prove that there

was gross negligence on the part of the
defendant in order to be entitled to exemplary
damages [Kapalaran Bus Line v. Coronado, G.R.
No. 85331 (1989)].

The Court applied the rule applicable to

quasi-delicts to an action based on Art. 19, 20,
and 21 even though these provisions do not
refer to quasi-delicts [Globe Mackay v. CA, G.R.
No. 81262 (1989)].

f. In Contracts and
Quasi-Contracts

Article 2232, Civil Code. In contracts

and quasi-contracts, the court may award
exemplary damages if the defendant
acted in a wanton, fraudulent, reckless,
oppressive, or malevolent manner.

FROWN [According to Aves]

● Fraudulent
● Reckless
● Oppressive
● Wanton
● Malevolent

No explicit rule on what constitutes wanton,

fraudulent, reckless, oppressive, or malevolent
manner although it is often associated with bad
faith.

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Contract of Sale Contract to Sell

SALES, LEASE, AND AGENCY
v. CA, G.R. No.
I. CONTRACT OF SALE 119255 (2003)].

A. NATURE AND FORM (CIVIL CODE, Vendor loses Title is retained by

ARTS. 1458-1488) ownership over the the vendor until full
property and cannot payment of the price
a. Contract of Sale vs. Contract to recover it until and [Chua v. CA, supra].
Sell unless the contract is
resolved or rescinded
Contract of Sale [Chua v. CA, supra].

Art. 1458, Civil Code. By the contract

of sale, one of the contracting parties Non-payment is a Full payment is a
obligates himself to transfer the resolutory condition, positive suspensive
ownership of and to deliver a determinate which puts an end to condition; but non-
thing, and the other to pay therefor a the transaction. payment is not a
price certain in money or its equivalent. breach of the
contract but simply
an event that
A contract of sale may be absolute or
prevents the
conditional. obligation of the
vendor to convey title
from acquiring a
Art. 1478, Civil Code. The parties may binding force [Manuel
stipulate that ownership in the thing shall Uy & Sons, Inc. v.
not pass to the purchaser until he has Valbueco, Inc., G.R.
fully paid the price. No. 179594, (2013)]

Contract of Sale and Contract to Sell In case of In case of

Contract of Sale Contract to Sell non-payment of non-payment of price
price, the seller may and the thing is in the
Ownership is Ownership is, by file an action for possession of the
transferred upon the agreement, reserved specific performance buyer, the seller may
delivery of the thing to the vendor and is or rescission, with the file an action to
sold [Art. 1496, NCC]. not to pass to the payment of damages recover possession.
vendee until full in either case [Art.
payment of the 1191, NCC]
purchase price (on
the assumption that
the buyer is already
in possession) [Chua

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 SALES, LEASE, AND AGENCY CIVIL LAW

Conditional Contract of Sale and and to the buyer’s consent to pay the price
Contract to Sell certain in money or its equivalent.

Conditional Contract to Sell If the sale involves conjugal property, both

Contract of Sale spouses must give consent. [Art. 166, NCC]

Sale is perfected No perfected sale.

Sales Without the Element of Consent
upon the happening Need for express
1. Expropriation [Art. 1488, NCC]
of the condition. reservation of
2. Ordinary execution sale [Rule 39, Sec.
ownership.
15, Rules of Court]
3. Judicial foreclosure sale [Rule 68, Rules
If the suspensive Ownership will not of Court], and
condition is fulfilled, automatically transfer 4. Extra-judicial foreclosure sale [Act No.
ownership thereto to the buyer although 3135, as amended]
automatically the thing may have
transfers to the buyer been previously Rules on Offer and Acceptance
by operation of law delivered to him [Id]. The person making the offer may fix the time,
without any further place, and manner of acceptance, all of which
act having to be must be complied with [Art. 1321, NCC].
performed by the
seller [Reyes v. An offer becomes ineffective upon the death,
Tuparan, G.R. No. civil interdiction, insanity, or insolvency of either
188064 (2011)]. party before acceptance is conveyed [Art. 1323,
NCC].
In both cases, the seller may reserve the title
to property until fulfillment of the suspensive When the offeror has allowed the offeree a
condition [Serrano v. Caguiat, G.R. No. certain period to accept, the offer may be
139173 (2007)]. withdrawn at any time before acceptance by
communicating such withdrawal, except when
the option is founded upon a consideration, as
b. Essential Requisites of a Valid
something paid or promised [Art. 1324, NCC].
Contract of Sale
Unless it appears otherwise, business
i. Consent advertisements of things for sale are not definite
Art. 1319(1), Civil Code. Consent is offers, but mere invitations to make an offer
manifested by the meeting of the offer [Art. 1325, NCC].
and the acceptance upon the thing and
the cause which are to constitute the ii. Object
contract. The offer must be certain and The object of the sale must be:
the acceptance absolute. A qualified a. licit [Art. 1459, NCC];
acceptance constitutes a counter-offer. b. within the commerce of men [Art. 1347,
NCC];
Consent refers to the seller’s consent to transfer c. not impossible [Art. 1348, NCC]; and
ownership of, and deliver, a determinate thing, d. determinate/determinable [Art. 1349,
Art. 1460, NCC].
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1. Licit [Art. 1459, NCC] [Sibal v. Valdez, G.R. No. L-26278

The object of the contract is licit if it is not (1927)].
contrary to law, morals, good customs, public
order or public policy [Art. 1409(1), NCC]. Future Goods
A sale of future goods, even though the contract
Illicit Things is in the form of a present sale, is valid only as
1. per se - due to their nature an executory contract to be fulfilled by the
2. per accidens - due to provisions of law acquisition and delivery of the goods specified.
[De Leon]
Examples of Illicit Things Per Accidens
Exception
(Due to Provisions of Law)
Par. 1 of Art. 1462, NCC does not apply if the
1. Sale of animals if the use or service for
goods are to be manufactured especially for the
which they are acquired has been stated
buyer and not readily saleable to others in the
in the contract, and they are found to be
manufacturer’s regular course of business. The
unfit therefore [Art. 1575, NCC]
contract, in such case, must be considered as
2. Sale of animals suffering from
one for a piece of work. [Art. 1467, NCC].
contagious diseases [Art. 1575, NCC]
3. Sale of future inheritance is void, except
in cases expressly authorized by law Art. 1461, Civil Code. Things having a
[Art. 1347, NCC] potential existence may be the object of
4. Sale of land in violation of Constitutional the contract of sale. The efficacy of the
prohibition against the transfer of lands sale of a mere hope or expectancy is
to aliens. [Sec. 7, Art. XII of deemed subject to the condition that the
Constitution] thing will come into existence. The sale
of a vain hope or expectancy is void.
2. Within the commerce of men
All things which are not outside the commerce Sale of Things Having Potential
of men, including future things, may be the
Existence
object of a contract [Art. 1347, NCC].
The following may be objects of a contract of Emptio Rei Emptio spei
sale: Speratei
1. Existing goods owned or possessed by
Sale of a thing not Sale of the hope or
the seller [Art. 1462, NCC];
yet in existence expectancy itself that
2. Goods to be manufactured, raised, OR subject to the the thing
acquired by the seller – “Future Goods” condition that the will come into
[Art. 1462, NCC]; thing will exist and on existence, where it is
3. Things having a potential existence [Art. failure of the agreed that the buyer
1461, NCC] – A sale may be made of a condition, the will pay
thing which, though not yet actually in contract becomes the price even if the
ineffective and hence, thing does not
existence, is reasonably certain to come
the buyer has no eventually exist. [De
into existence as the natural increment obligation to pay the Leon]
or usual incident of something in price. [De Leon]
existence already belonging to the seller

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indeterminate, so long as it can be located.

The future thing is It is not certain that
certain as to itself the thing itself (e.g. [Camacho v. CA, G.R. No. 127520 (2007)]
but uncertain as to its winning a prize) will
quantity and quality. exist, much less its iii. Cause/Consideration
quantity and quality. This refers to the “price certain in money or its
equivalent” [Art. 1458, NCC]. It does not
The sale is subject to It produces effect
the condition that the even though the generally include goods or merchandise
thing should exist, so thing does not come although they have their own value in money.
that if it does not, into existence
there will be no because the object of Distinguished with Barter
contract by reason of the contract is the By the contract of barter or exchange, one of
the absence of an hope itself, unless it is
the parties binds himself to give one thing in
essential element. a vain hope or
expectancy (e.g. the consideration of the other's promise to give
sale of a falsified another thing (Art. 1638). Here, payment is the
sweepstake ticket thing itself, and not its value in money or its
which can never win), equivalent. Whereas, by the contract of sale,
in which case the sale one of the parties binds himself to deliver a
shall be void. thing in consideration of the other's undertaking
to pay the price in money or its equivalent. (Art.
In case of doubt, the presumption is in favor 1458).
of emptio rei speratae which is more in
keeping with the commutative character of the Requisites for a Valid Price
contract. (see 10 Manresa 29-30.) 1. Certain or ascertainable at the time of
perfection
3. Not impossible 2. In money or its equivalent — pecuniary
● If price is partly in money and
Art. 1348, Civil Code. Impossible things
partly in another thing:
or services cannot be the object of
determine manifest intention of
contracts.
the parties to see whether it is
barter or sale.
4. Determinate/Determinable ● If intention does not clearly
A thing is: appear, it shall be considered a
● Determinate when the subject of sale is barter if the value of the thing
particularly designated or physically exceeds the amount of money
segregated from all others of the same or its equivalent. [Art. 1468,
class. [Art. 1460, NCC] NCC]
● Determinable when at the time the 3. Real
contract was entered into, it is capable of ● When the buyer intends to pay
being made determinate without the and the seller intends to receive
necessity of a new or further agreement the price
between the parties. [Art. 1460, NCC] ● If the price is simulated: Sale is
VOID; BUT the act may be
Failure to state the exact location of the land shown to have been a donation
does not make the subject matter or some other act or contract.
[Art. 1471, NCC]

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● If price is false (i.e., when the Exception: When the thing or any part thereof
price stated in the contract is has been already delivered to and appropriated
different from the price agreed): by the buyer, the buyer must pay a reasonable
Sale is valid but the underlying price therefor [Art. 1474, NCC]
deed is subject to reformation
to indicate the real price agreed Inadequacy of Price
upon [Art. 1359, NCC]. General Rule: Gross inadequacy of price does
not affect a contract of sale [Art. 1470, NCC].
How Price Is Determined/When The sale remains valid.
Certain
1. Fixed by agreement of the parties and Exception: If the gross inadequacy of price
cannot be left to the discretion of one of indicates a defect in the consent, or that the
the parties, BUT if such is accepted by parties really intended a donation or some other
the other, sale is perfected. [Art. 1473, act or contract [Art. 1470, NCC]. If there is a
NCC] defect in the consent, the contract of sale may
2. Determination is left to the judgment of be voidable. If the parties intended another
a special person or persons. [Art. 1469, contract, the contract of sale is void but the
NCC] contract intended by the parties may be valid.

General Rule: Price fixed by 3rd persons False Price vs Simulated Price
designated by the parties is binding upon them
False Price Simulated Price

Exceptions [Art. 1469, NCC] Price stated in the Price stated in the
● If 3rd person is unable or unwilling to fix contract is not the contract is not
price: Sale is inefficacious unless parties true price. intended to be paid.
subsequently agree on the price.
Parties intended to be Parties never
● If 3rd person fixed the price in bad
bound. intended to be
faith/by mistake: Courts may fix price bound.
(but mere error in judgment cannot
serve as basis for impugning price Effect: Binds the Effect: Contract void
fixed). parties to their real for lack of cause or
● If 3rd person is prevented from fixing agreement when it consideration, but
does not prejudice can be shown as a
price by fault of seller or buyer:
3rd persons and is donation or some
Innocent party may avail of remedies not intended for any other contract.
(rescission or fulfillment of obligation, purpose contrary to Parties may recover
with damages) law, morals, public from each other what
● If 3rd person disregards specific policy, etc. Contract they may have given
instructions/data/procedure, thereby subject to under the contract.
reformation.
fixing an arbitrary price.

General Rule: Where the price cannot be Perfection

determined, the contract is inefficacious. [Art. Being a consensual contract, the contract of sale
1474, NCC] is perfected at the moment there is a “meeting
of the minds” upon the thing which is the object

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of the contract and upon the price. [Art. 1475, Consideration

NCC] Consideration for an option contract is just as
important as the consideration for any other
Option Contract kind of contract. If there was no consideration
for the contract of option, then it cannot be
Art. 1479, Civil Code. A promise to buy
enforced any more than any other contract
and sell a determinate thing for a price
where no consideration exists. [Enriquez dela
certain is reciprocally demandable.
Cavada v. Diaz, G.R. No. 11668 (1918)]
An accepted unilateral promise to buy or
to sell a determinate thing for a price Binding Effect
certain is binding upon the promisor if the ● When an offer is supported by a
promise is supported by a consideration separate consideration, a valid option
distinct from the price. contract exists, i.e., there is a contracted
offer which the offeror cannot withdraw
from without incurring liability in
Nature and Definition
damages.
An option is a preparatory contract in which one
party grants to the other, for a fixed period and ● When the offer is not supported by a
under specified conditions, the power to decide, separate consideration, the offer stands
whether or not to enter into a principal contract. but, in absence of a binding contract,
the offeror may withdraw it any time.
It binds the party who has given the option, not ● In either case, once the acceptance of
to enter into the principal contract with any
the offer is duly communicated before
other person during the period designated, and,
within that period, to enter into such contract the withdrawal of the offer, a bilateral
with the one to whom the option was granted, if contract to buy and sell is generated
the latter should decide to use the option. which, under the first paragraph of
Article 1479 of the Civil Code, becomes
It is a separate agreement distinct from the reciprocally demandable [PNOC v.
contract which the parties may enter into upon Keppel Philippines, G.R. No. 202050
the consummation of the option.
(2016); Sanchez v. Rigos, G.R. No.
In other words, the acceptance or exercise of L-25494 (1972)].
the option must still be made within the option
period to give rise to a valid and binding sale, Right of First Refusal
and it is only then that the principle of
substantial compliance would have relevance.
[Carceller v. Court of Appeals, G.R. No. 124791, Nature and Definition
Feb. 10, 1999] A right of first refusal is a contractual grant, not
of the sale of the real property involved, but of
Option Contract Not a Contract of Sale the right of first refusal over the property sought
The option is not the contract of sale itself. The to be sold. [Equatorial Realty Development, Inc.
optionee has the right, but not the obligation, to vs. Mayfair Theater, Inc., G.R. No. 106063
buy. Once the option is exercised timely, i.e., the (1996)]. When a lease contract contains a right
offer is accepted before a breach of the option, of first refusal, the lessor is under a legal duty to
a bilateral promise to sell and to buy ensues and
the lessee not to sell to anybody at any price
both parties are then reciprocally bound to
comply with their respective undertakings. [Ang until after he has made an offer to sell to the
Yu v. CA, G.R. No. 109125 (1994)] latter at a certain price and the lessee has failed

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to accept it. The lessee has a right that the seller to bind the contract. Under the Civil Code,
lessor’s first offer shall be in his favor. [Osmeña earnest money is considered part of the
III v. PSALM, G.R. No. 212686 (2015)] purchase price and as proof of the perfection of
the contract [Topacio v. CA, G.R. No. 102606
The basis of the right of first refusal must be the (1992)]. Since earnest money constitutes an
current offer to sell of the seller or offer to advance payment, it must be deducted from the
purchase of any prospective buyer. Only after total price.
the grantee fails to exercise its right of first
priority under the same terms and within
the period contemplated, could the owner b. In a Contract to Sell
validly offer to sell the property to a third In a contract to sell, earnest money is generally
person, again, under the same terms as offered intended to compensate the seller for the
to the grantee. [Parañaque Kings Enterprises, opportunity cost of not looking for any other
Inc. v. Court of Appeals, G.R. No. 111538, Feb.
buyers. There is no unjust enrichment on the
26, 1997]
part of the seller should the initial payment be
Applicability of Statute of Frauds deemed forfeited. The earnest money given by
A right of first refusal is not among those respondents is the cost of holding this
listed as unenforceable under the statute search in abeyance. [Racelis v. Sps. Javier,
of frauds. Furthermore, the application of G.R. No. 189609, Jan. 29, 2018]
Article 1403, par. 2(e) of the New Civil Code
presupposes the existence of a perfected, albeit
unwritten, contract of sale. [Rosencor Option Money and Earnest Money
Development Corp. v. Inquing, G.R. No. 140479, Option Money Earnest Money
Mar. 8, 2001]
Separate and distinct Part of purchase price
Remedies when ROFR is violated consideration from [Art. 1482, NCC]
A contract of sale entered into in violation of a the purchase price
right of first refusal of another person, while
valid, is rescissible, provided that the vendee is Given when sale is May be given when
in bad faith. This doctrine, however, cannot be not yet perfected there is already a sale
applied in cases where the vendee is in good [Art. 1482] or even
faith i.e. they were not aware of the right of first when there is only a
refusal when they purchased the property. The contract to sell
right holder’s remedy is to sue for damages [Racelis v. Sps.
instead. [Rosencor Development Corp. v. Javier]
Inquing, supra]
When given, the When given, the
Earnest Money would-be-buyer is not buyer is bound to pay
required to buy, but the balance [Limson
a. In a Contract of Sale
may even forfeit it v. CA, G.R. No.
Art. 1482, Civil Code. Whenever depending on the 135929 (2001)]
earnest money is given in a contract of terms of the option
sale it shall be considered as part of the
Grantee of option is Buyer manifests his
price and as proof of the perfection of the still undecided earnest desire to buy
contract. whether or not to buy the property
Earnest money is something of value to show or sell the property
that the buyer was really in earnest, paid in [Baviera]
advance of the purchase price, and given to the

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B. CAPACITY TO BUY OR SELL

(2) When there has been a judicial
separation of property under Article 191.
Capacity of Parties, in General
Art. 1489, Civil Code. All persons who
are authorized in this Code to obligate Art. 1491, Civil Code. The following
themselves, may enter into a contract of persons cannot acquire by purchase, even
sale, saving the modifications contained in at a public or judicial auction, either in
the following articles. person or through the mediation of
another:
Where necessaries are sold and delivered
to a minor or other person without (1) The guardian, the property of the
capacity to act, he must pay a reasonable person or persons who may be under his
price therefor. Necessaries are those guardianship;
referred to in article 290. (2) Agents, the property whose
administration or sale may have been
General Rule: Any person who has capacity intrusted to them, unless the consent of
to act, or the power to do acts with legal effects, the principal has been given;
or with the power to obligate himself may enter (3) Executors and administrators, the
into a contract of sale. property of the estate under
administration;
Exception: Persons disqualified by law (4) Public officers and employees, the
property of the State or of any subdivision
thereof, or of any government-owned or
Kinds of Incapacity
controlled corporation, or institution, the
1. Absolute – persons who cannot bind administration of which has been
themselves intrusted to them; this provision shall
2. Relative – exists only with reference to apply to judges and government experts
certain persons or certain classes of who, in any manner whatsoever, take part
property [Art. 1490 – 1491, NCC] in the sale;
(5) Justices, judges, prosecuting
There are no incapacities except those provided attorneys, clerks of superior and inferior
by law and such incapacities cannot be extended courts, and other officers and employees
to other cases by implication for the reason that connected with the administration of
such construction would be in conflict with the justice, the property and rights in
very nature of Art. 1489 [Wolfson vs. Estate of litigation or levied upon an execution
Martinez, G.R. No. L-5970 (1911)]. before the court within whose jurisdiction
or territory they exercise their respective
functions; this prohibition includes the act
Limitations/Disqualifications
of acquiring by assignment and shall
Art. 1490, Civil Code. The husband and apply to lawyers, with respect to the
the wife cannot sell property to each property and rights which may be the
other, except: object of any litigation in which they may
take part by virtue of their profession;
(1) When a separation of property was (6) Any others specially disqualified by
agreed upon in the marriage settlements; law.
or

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Art. 1492, Civil Code. The prohibitions and subject to the requirements of
in the two preceding articles are agrarian reform, the Congress shall
applicable to sales in legal redemption, determine, by law, the size of lands of the
compromises and renunciations. public domain which may be acquired,
developed, held, or leased and the
conditions therefor.
Art. 1327, Civil Code. The following
cannot give consent to a contract:
Absolute Incapacity
(1) Unemancipated minors; 1. Minors
2. Insane and demented persons, and
(2) Insane or demented persons, and 3. Deaf-mutes
deaf-mutes who do not know how to
write. Relative Incapacities
1. Married persons
a. Contract with third Parties
Art. 1874, Civil Code. When a sale of a b. Between spouses
piece of land or any interest therein is c. Applicability to common law
through an agent, the authority of the spouses
latter shall be in writing; otherwise, the
sale shall be void.
Special Disqualifications
1. Guardians, agents and administrators
CONST., Art. XIII, SECTION 3. Lands 2. Judges and lawyers
of the public domain are classified into 3. Public officers
agricultural, forest or timber, mineral
lands, and national parks. Agricultural C. OBLIGATIONS OF THE VENDOR
lands of the public domain may be further
classified by law according to the uses 1. Deliver, and transfer the ownership of,
which they may be devoted. Alienable the thing to the vendee [Art. 1459,
lands of the public domain shall be limited NCC]
to agricultural lands. Private corporations 2. Deliver the thing, with its accessions
or associations may not hold such and accessories, if any, in the condition
alienable lands of the public domain in which they were upon the perfection
except by lease, for a period not of the contract [Art. 1537, NCC]
exceeding twenty-five years, renewable 3. Warrant against eviction and against
for not more than twenty-five years, and
hidden defects [Art. 1495, Art. 1547,
not to exceed one thousand hectares in
NCC]
area. Citizens of the Philippines may lease
4. Take care of the thing, pending delivery,
not more than five hundred hectares, or
with proper diligence of a good father of
acquire not more than twelve hectares
a family [Art. 1163, NCC]
thereof by purchase, homestead, or
grant. 5. Pay for the expenses for the execution
and registration of the sale, unless there
Taking into account the requirements of is a stipulation to the contrary [Art.
conservation, ecology, and development, 1487, NCC]

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D. DOUBLE SALE ● The two contracts involved are not both

contracts of sale [Desiderio v. CA, G.R.
Requisites: No. 201883 (2013)]. However, the
1. Two or more valid sales; Supreme Court has applied the
2. Same subject matter; principles in Article 1544 to a contract to
3. Two or more buyers with conflicting sell [Cheng V. Genato, G.R. No. 129760
interests over the rightful ownership of (1998)].
the thing sold;
4. Same seller [Cheng v. Genato, G.R. No. Art. 1544 does not apply when:
129760 (1998)] ● When the property was already
registered under the Torrens system,
the first buyer’s registration of the sale
Rules on Preference: under Act No. 3344 is not effective for
a. Personal Property purposes of Art. 1544. Thus, the second
● First possessor in good faith buyer prevails over the first if the
second buyer recorded the sale in good
b. Real Property
faith with the Register of Deeds in
● First registrant in good faith accordance with P.D. No. 1529 [Spouses
● First possessor in good faith Abrigo vs. De Vera]
● Person with oldest title in good faith ● When one sale is subject to a
suspensive condition not complied with
and the other is an absolute sale
For the second buyer to displace the
[Mendoza vs. Kalaw, G.R. No. L-16420
first buyer:
(1921)]
The second buyer must show continuing ● When one sale is absolute and the other
good faith and innocence or lack of is a pacto de retro sale and the period
knowledge of the first sale until his contract to redeem has not yet expired [Teodosio
ripens into full ownership. [Cheng v. v. Sabala, G.R. No. L-11522 (1957)]
Genato, G.R. No. 129760 (1998)] ● When one of the sale is totally
abhorrent and repugnant to the
Article 1544 requires the second buyer to Philippine Constitution (i.e. to
acquire the immovable in good faith and circumvent prohibition on foreign
to register it in good faith. Mere registration ownership of land), and is thus, void ab
of title is not enough; good faith must concur initio, it stands to reason that there can
with the registration. This Court has consistently be no double sale to speak of.
held as regards registered land that a purchaser [Manigque-Stone vs. Cattleya Land, G.R.
in good faith acquires a good title as against all No. 195975 (2016)]
the transferees thereof whose rights are not
recorded in the Registry of Deeds at the time of E. EFFECTS OF THE THING SOLD
the sale. [Spouses Abrigo vs. De Vera, G.R. No.
154409, Jun. 21, 2004] Res Perit Domino
As a rule, the owner bears the risk of loss and
There is no double sale when: deterioration of the thing sold. The ownership is
Not all the elements of a sale are present. transferred only upon delivery. [Arts. 1263, and
● The two different contracts of sale are 1189 NCC]
made by two different persons, one of a. Prior to Perfection of the
them not being the owner of the Contract
property sold.
The seller bears risk of loss and deterioration.

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When there is no proof that the parties have

agreed as to the thing which should be the
Total Loss Partial Loss (or
subject of the contract and that one has
loss which
accepted the terms proposed by the other, it
results in
cannot be said that the contracting parties have substantial
given their mutual consent as to the subject and change in
consideration of the contract. The disappearance character
or loss of property which the owner intended or
attempted to sell can only interest the owner, Contract is void Buyer may withdraw
who should suffer the loss, and not a third party because the object from the contract OR
who has acquired no rights nor incurred any did not exist at the buy the remainder at
time of the a proportionate price
liability with respect thereto. [Roman v. Grimalt,
transaction.
G.R. No. L-2412 (1906)]
Art. 1496 of the Civil Code which provides that
“in the absence of an express assumption of risk
b. At Time of Perfection
by the buyer, the things sold remain at seller’s
The seller bears risk of loss and deterioration.
risk until the ownership thereof is transferred to
Art. 1493, Civil Code. If at the time the the buyer,” is applicable to this case, for there
contract of sale is perfected, the thing was neither an actual nor constructive delivery
which is the object of the contract has of the thing sold, hence, the risk of loss should
been entirely lost, the contract shall be be borne by the seller, Norkis, which was still the
without any effect. owner and possessor of the motorcycle when it
was wrecked. This is in accordance with the
But if the thing should have been lost in well-known doctrine of res perit domino [Norkis
part only, the vendee may choose v. CA, G.R. No. 91029 (1991)].
between withdrawing from the contract
and demanding the remaining part,
paying its price in proportion to the total c. After Perfection but Before
sum agreed upon. Delivery
● Res perit creditori or the buyer
bears the risk of loss
Art. 1494, Civil Code. Where the This is an exception to the rule of res perit
parties purport a sale of specific goods, domino. (see Arts. 1480, 1163 to 1165, 1198,
and the goods without the knowledge of 1262, 1538, NCC)
the seller have perished in part or have
wholly or in a material part so
● Res perit domino or the seller
deteriorated in quality as to be
substantially changed in character, the bears the risk of loss
buyer may at his option treat the sale: Under Article 1504, the seller bears risk of loss
(1) As avoided; or of goods.
(2) As valid in all of the existing goods or
in so much thereof as have not Note: In several rulings, the Supreme Court
deteriorated, and as binding the buyer to applied Article 1504 and held that the seller
pay the agreed price for the goods in bears risk of loss of goods (see Norkis; Chrysler)
which the ownership will pass, if the sale
was divisible. Norkis v. CA: In this case, the court ruled in
favor of the buyer, stating that ownership is not
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 SALES, LEASE, AND AGENCY CIVIL LAW

equivalent to delivery and that the buyer cannot

failure to pay cover two or more
bear the risk of loss or damage to the subject
installments;
matter of the sale until delivery is made. Since
(3) Foreclose the chattel mortgage on the
the buyer did not actually receive the
thing sold, if one has been constituted,
motorcycle, he cannot bear the risk of its loss or should the vendee’s failure to pay cover
damage. The seller bears the risk of loss. two or more installments. In this case, he
● Chrysler v. CA, GR. No. L-55684 (1984): shall have no further action against the
The general rule of res perit domino was purchaser to recover any unpaid balance
applied since the merchandise was of the price. Any agreement to the
never placed in the possession of the contrary shall be void.
buyer.
Alternative and Exclusive Remedies
The exercise of one remedy bars the exercise of
Risk of deterioration: When the thing
the others. [Art. 1484, NCC]
deteriorates without the fault of the seller, the
impairment is to be borne by the buyer [Art.
a. Specific Performance
1538, 1189].
General Rule: When the seller has chosen
specific performance, he can no longer seek
d. After Delivery
rescission or foreclosure of the chattel mortgage
General Rule: The buyer bears risk of loss and
[Art. 1484]. Note: The Personal Property
deterioration.
Security Act repealed the Civil Code provisions
on chattel mortgages.
Exception: Where actual delivery has been
delayed through the fault of either the buyer or
Exception: If specific performance has become
seller, the goods are at the risk of the party in
impossible, the seller may still choose rescission
fault [Art. 1504(2), NCC].
[Art. 1191, NCC].

Note: Where delivery has been made either to

b. Cancellation of sale if
the buyer or to the bailee for the buyer, but
ownership in the goods has been retained by vendee fails to pay 2 or
the seller merely to secure performance by the more installments
buyer of his obligations under the contract, the When the seller cancels the sale, he is barred
buyer still bears the risk of loss [Art. 1504(1), from exacting payment for its price.
NCC].
Note: It can only be carried out when he who
F. RECTO LAW demands rescission can return whatever he may
be obliged to restore [Art. 1385, NCC].

Art. 1484, Civil Code. In a contract of

c. Foreclosure of Chattel
sale of personal property the price of
which is payable in installments, the Mortgage if vendee fails
vendor may exercise any of the following to pay 2 or more
remedies: installments
(1) Exact fulfillment of the obligation,
should the vendee fail to pay; GR: If the seller chooses foreclosure, he shall
(2) Cancel the sale, should the vendee’s have no further action to recover any unpaid

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balance, and any stipulation to the contrary shall ● Sale of lands payable in straight terms
be void. [Sec. 3, RA 6552]

XPN: If there has been no foreclosure of the Rights of the Buyer

chattel mortgage nor a foreclosure sale, i.e. the The law imposes additional requirements on the
seller opted for the exact fulfillment of the part of the seller for a valid rescission.
obligation under the contract, the prohibition
against further collection does not apply. a. If the Buyer Has Paid at Least 2
[Tajanlangit v. Southern Motors, Inc., G.R. No. Years of Installments Then
L-10789, May 28, 1957]
Defaults
● The buyer has right to a grace period
Applicability of Recto Law of 1 month per year of installment
a. Sale of movables in installment payment made BUT the buyer may
The rule is intended to apply to sales of only avail of the grace period once
movables, the price of which is payable in 2 or every 5 years.
more installments, but not to straight-term sales ● The buyer has right to the refund of
where the price is payable in full, after making a the Cash Surrender Value (CSV):
down payment because the law aims to protect 50% of total amount paid + 5% for
improvident buyers who may be tempted to buy every year after the first 5 years of
beyond their means [Levy Hermanos v. installments BUT total CSV should
Gervacio, G.R. No. L-46306 (1939)]. not be greater than 90% of total
b. Lease of personal property with amount paid.
option to buy ● After the lapse of the grace period,
● When lessor has deprived the lessee of the buyer is given a notice of
the possession or enjoyment of the cancellation or demand for rescission
thing. [Art. 1485, NCC] by notarial act, effective 30 days
● Also applies when seller assigns his from the buyer’s receipt thereof AND
credit to someone else [Filipinas only upon full payment of CSV.
Investment vs. Vitug, G.R. No. L-25951
(1969)]. b. If the Buyer Has Paid Less Than
2 Years of Installments
G. MACEDA LAW ● Grace period of not less than 60 days
● After the lapse of the grace period,
Applicability without the buyer having paid the
The Maceda law applies only to residential installments due, the buyer is given a
properties. Industrial and commercial buyers are notice of cancellation or demand for
not protected under this law. [Royal Plains v. rescission by notarial act, effective 30
Meija, G.R. No. 230832 (2018)] days upon receipt thereof.

RA 6552 does NOT apply to: c. In Both Cases, During the Grace
● Industrial lots Period, the Buyer Shall Also
● Commercial buildings Have the Right:
● Sale to tenants under Agricultural ● To sell or assign his rights, evidenced
Reform Code [RA 3844] in a notarial instrument;

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● To reinstate the contract by updating b. When a bill of exchange or other

his account during the grace period negotiable instrument has been received
and before actual cancellation of the as conditional payment, and the
contract; or condition on which it was received has
● To pay in advance any installment, or been broken by reason of the dishonor
the full unpaid balance of the price, of the instrument, the insolvency of the
without any interest, and to have buyer, or otherwise [Art. 1525, NCC].
such full payment of the purchase
price annotated in the certificate of Unpaid Seller also includes:
title covering the property. a. The agent of the seller to whom the bill
of lading was endorsed;
If the conditions above are not present, Maceda b. The consignor or agent who had paid
Law will not apply. Art. 1592 should apply the price or is responsible for the price;
instead: c. Any other person who is in the position
Art. 1592, Civil Code. In the sale of of a seller (i.e. buyer who paid the price
immovable property, even though it may and had a right to return the goods)
have been stipulated that upon failure to [Art. 1525, NCC].
pay the price at the time agreed upon the
rescission of the contract shall of right a. Possessory Lien
take place, the vendee may pay, even Right to retain possession of goods until
after the expiration of the period, as long payment or tender of the whole price, or unless
as no demand for rescission of the he agrees to sell on credit [Arts. 1503
contract has been made upon him either 1526-1529, 1535, NCC].
judicially or by a notarial act. After the
demand, the court may not grant him a
When Lien Available
new term.
1. The seller is unpaid.
2. The unpaid seller has possession over
H. RIGHTS OF UNPAID SELLER the goods.
1. Possessory lien 3. Ownership of the goods has passed to
2. Stoppage in transitu the buyer.
3. Special right of resale 4. Any of the following: [Art 1527, NCC]
4. Special right to rescind a. Goods are sold without
stipulation as to credit;
Note: These special remedies have a hierarchical b. Goods are sold on credit, but
application. The special rights to resell and to term of credit has expired;
rescind can be availed of by the unpaid seller c. The buyer becomes insolvent.
only when either of the two (2) prior rights of
possessory lien or stoppage in transitu have The seller may exercise his right of lien
been exercised by the unpaid seller. notwithstanding that he is in possession of the
goods as agent or bailee for the buyer [par. 2,
Definition of an Unpaid Seller Art. 1527, NCC].
a. When the whole of the price has not
been paid or tendered; When Unpaid Seller Loses His Lien
[Art. 1529, NCC]

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1. The seller delivers goods to carrier or The unpaid seller may resume possession of the
other bailee for transmission to the goods while they are in transit as if he had
buyer without reserving ownership or never parted with the possession when the
right of possession (i.e. under a straight buyer of the goods is or becomes insolvent
or non-negotiable bill of lading) [Arts. 1530-1532, 1535, 1636(2) NCC].
2. The buyer or his agent lawfully obtains
possession of goods Requisites for the Exercise of
3. The seller waives the lien Stoppage in Transitu
a. But it is not lost with respect to 1. The seller is unpaid.
the remainder of the goods 2. The buyer is insolvent.
when only partial delivery is 3. The goods are in transit.
made (unless such is symbolic 4. The seller either takes actual
delivery of the whole) possession, or gives notice of claim to
b. It is not lost by the mere fact the carrier or other person possessing
that the seller obtained a the goods.
judgment for the price 5. The seller must surrender the negotiable
instrument or title, if any, issued by the
When Lien May Be Revived After carrier/bailee.
Delivery 6. The seller must bear the expenses of
1. If the buyer refuses to receive the goods the delivery of the goods after exercise
after the same are delivered to the of such right.
carrier or other bailee on his behalf,
though the seller has parted with both When Goods Are In Transit [par. 1, Art
ownership and possession. Here, the 1531, NCC]
seller may reclaim the goods and revest 1. From the time of delivery to the carrier
the lien [par. 1 (2). Art 1531, NCC]. or other bailee by the seller, for the
2. If the buyer returns the goods in purpose of transmission to the buyer,
wrongful repudiation of the sale, and until the buyer or his agent takes such
the seller, in accepting the goods from delivery from the carrier.
the buyer, says he does not assent to 2. Even when goods have reached their
the rescission. ultimate destination, if buyer rejects
them and carrier retains possession.
Note: Possessory lien is lost after the seller loses
possession (i.e. seller delivers goods to carrier
When Goods are No Longer in Transit
without reserving ownership or right of
[par. 2, Art. 1531, NCC]
possession) but his lien as an unpaid seller
1. The buyer obtained delivery of the
remains under Art. 2241; hence, he is still an
goods before they have reached their
unpaid creditor with respect to the price of the
appointed destination.
specific good sold. His preference can only be
2. The goods have arrived at the appointed
defeated by the government’s claim to the
destination, and the carrier/bailee
specific tax on the goods [Arts. 2241, 2247,
acknowledges to hold the goods on
NCC].
behalf of the buyer.
3. The goods have arrived at the appointed
b. Stoppage in Transitu
destination, but the carrier wrongfully

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 SALES, LEASE, AND AGENCY CIVIL LAW

refuses to deliver to the buyer/his Available to an unpaid seller who has a right of
agent. lien or who has stopped the goods in transitu
[Art. 1533, NCC].
Note: If the goods are delivered to a ship,
freight train, truck, or airplane chartered by the When Available
buyer, it is a question depending on the When the unpaid seller has either a right of lien
circumstances of the particular case, whether or has stopped the goods in transitu and under
they are in the possession of the carrier as such any of the following conditions:
or as agent of the buyer. 1. The goods are perishable in nature;
2. The right to resell is expressly reserved
How Right is Exercised [Art. 1532, in case the buyer should default; and
NCC] 3. The buyer delays in paying the price for
1. By obtaining actual possession of the an unreasonable time [Art. 1533, NCC].
goods
2. By giving notice of his claim to the the Note: The right to resell the goods is not
carrier/other bailee who has possession mandatory, but permissive.
of the goods
a. The carrier must redeliver the How Exercised
goods to the seller, or according 1. The unpaid seller must do so within a
to his instructions. reasonable time after the breach. The
b. The carrier is not obliged to seller must also exercise reasonable
redeliver until the negotiable care and judgment in making the resale.
document of title, if any, has [Art. 1533, NCC]
been surrendered for 2. The place of sale shall be at the place of
cancellation. delivery, except if the seller cannot sell
the thing at a fair price at the place of
Effect When Buyer Has Sold the Goods delivery. [De Leon]
[Art. 1535, NCC] 3. Resale is deemed to be a fair sale if it is
undertaken in accordance with
General Rule: The seller’s right to stoppage in established business practices, with no
transitu is not affected even if the buyer has attempt to take advantage of the
sold or disposed of the goods. original buyer. [De Leon]
4. Resale may be in a private or public
sale, but the seller cannot buy directly
Exceptions
or indirectly. [Art. 1533, NCC]
1. When the seller has given consent
5. For resale to be valid, the buyer need
thereto
not be notified of an intention to resell
2. When a negotiable document of title has
or the time and place of the resale. [Art.
been issued for the goods and such
1533, NCC]
document is negotiated to a purchaser
for value in good faith.
Exception
If the ground for resale is failure to pay for an
c. Special Right to Resale
unreasonable amount of time:
● The giving or failure to give such notice
is relevant to the question on whether
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 SALES, LEASE, AND AGENCY CIVIL LAW

the buyer had been in default for an Rescission for anticipatory breach [Art. 1591,
unreasonable time before the resale was NCC]
made. [Art. 1533, NCC]
Note: This is applicable to both cash sales and
Effects of Resale: sales in installments.
1. The seller is no longer liable to the
original buyer upon the contract of sale Requisites
or for any profit made by the resale. 1. There is delivery of immovable property
2. The buyer at resale acquires good title to the buyer;
as against the original owner. 2. The buyer has not yet paid the price;
3. Seller may recover from the buyer and
damages for any loss occasioned by the 3. The seller has reasonable grounds to
breach of the contract of sale. fear the loss of property and the loss of
4. The seller may recover damages from price.
the original buyer for breach of contract
[Art. 1533, NCC] If there is no such reasonable ground, Art. 1191
applies (specific performance or rescission with
d. Special Right to Rescind damages). [Art. 1534, NCC]
Return of the title over the goods to the seller,
and right to recover damages for breach of Specific Performance + Damages or
contract [Art. 1534, NCC] Rescission + Damages [Art. 1191,
NCC]
When Available The seller may choose between specific
When the unpaid seller has either a right of lien performance and rescission, with damages in
or has stopped the goods in transitu and under either case. The court has discretion, for a just
any of the following conditions: cause, to give the buyer more time to pay even
1. The seller expressly reserved his right to if the seller chooses rescission.
rescind in case the buyer defaults; and
2. The buyer has been in default in If the seller chose specific performance, and
payment for an unreasonable time. [Art. such becomes impossible, he may still avail of
1534, NCC] rescission.

Transfer of title shall not be held to have been Necessity of Demand

rescinded by the unpaid seller until he manifests In the sale of immovable property, even though
by notice to the buyer or some other overt act it may be stipulated that there will be automatic
an intention to rescind. [Art. 1534, NCC] rescission upon the failure of the buyer to pay
Communication of rescission to the buyer is not the price, the seller must make a demand for
always necessary (it can be an overt act). But rescission:
giving/failure to give notice is relevant in (1) Judicially, or
determining reasonableness of time given to the (2) By a notarial act [Art. 1592, NCC]
buyer to make good his obligation under
contract. [Art. 1534, NCC] 1. Effects: Effect of lack of demand: The
buyer can still pay (even after the
Sale of Immovables expiration of the period).

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 SALES, LEASE, AND AGENCY CIVIL LAW

2. Effect of demand: The court may not 10. Resolutory condition fulfilled
grant the buyer a new term. [Art. 1592, 11. Redemption (Conventional or Legal)
NCC].
b. Conventional Redemption [Arts.
Non-forfeiture of Payments (PD 957, 1601 and 1606-1618 of the NCC]
Sec. 23 and 24) Conventional redemption exists when the seller
No installment payment made by a buyer in a reserves the right to repurchase the thing sold,
subdivision or condominium project for the lot or with the obligation to return:
unit he contracted to buy shall be forfeited in ● The price of the sale
favor of the owner or developer when the buyer, ● Expenses of the contract
after due notice to the owner or developer, ● Any other legitimate payments by
desists from further payment due to the failure reason of the sale
of the owner or developer to develop the ● Necessary and useful expenses [Arts.
subdivision or condominium project according to 1601 and 1616, NCC]
the approved plans and within the time limit for
complying with the same. i. Period
General Rule
Buyer’s Remedy Follow period stipulated in contract, but should
At the buyer’s option, he may be reimbursed the not exceed ten (10) years. Otherwise,
total amount paid including amortization interest automatically reduced to ten (10) years.
but excluding delinquency interests, with
interest thereon at the legal rate [Sec. 23, PD Exceptions
957]. ● In the absence of express agreement,
the right must be exercised within four
If the buyer fails to pay the installments for (4) years from the date of contract.
reasons other than the failure of the owner or ● If no period stipulated but the parties
developer to develop the project, his rights shall intended a period, then it shall be ten
be governed by RA 6552. (10) years from the date of the contract.
● But the seller may still exercise the right
I. EXTINGUISHMENT OF SALE to repurchase within thirty days from
the time final judgment was rendered in
a civil action on the basis that the
a. In General
contract was a true sale with right to
Generally, a sale is extinguished by the same
repurchase [Art. 1606, NCC].
causes as all other obligations [Arts. 1600, 1231,
NCC]
1. Payment/performance ii. By Whom Exercised
2. Prescription ● The seller, after returning to the buyer
3. Loss of thing due the price of sale plus expenses of the
4. Annulment contract, other legitimate payments
5. Novation made by reason of sale, and
6. Condonation/remission necessary and useful expenses made
7. Confusion/merger on the thing sold [Art. 1616, NCC]
8. Compensation ● His heirs, assigns or agents
9. Rescission

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 SALES, LEASE, AND AGENCY CIVIL LAW

● Creditor, after he has exhausted the General Rule: It is not sufficient that a person
property of the seller [Art. 1610, NCC] offering to redeem manifests his desire to do so.
● Co-owners of an immovable, if they The statement of intention must be
sold their interests to the same accompanied by an actual and simultaneous
person, may only redeem their tender of payment for the full amount of the
respective shares [Arts. 1612, 1613, repurchase price [BPI Family Savings Bank, Inc.
1614, NCC] v. Sps. Veloso, G.R. No. 141974 (2004)].
● Co-heirs of an immovable [Art. 1612,
NCC] Effect of Redemption
1. The sale is extinguished.
Note: The buyer cannot be compelled to agree 2. The seller shall receive the thing free
to a partial redemption and can compel all from all charges or mortgages
sellers to redeem the entire property or for only constituted by the buyer BUT he shall
one of them to redeem it [Art. 1613, NCC]. respect leases executed by the buyer in
good faith and in accordance with local
iii. From Whom to Redeem custom [Art. 1618, NCC.]
● The vendee a retro 3. As to fruits:
● His heirs, assigns or agents [see Art. a. If parties agreed on a
1608, NCC] If there are several heirs, distribution, the fruits shall be
then the right of redemption can be distributed according to the
exercised against each heir for his share agreement;
of the property [Art. 1615, NCC] b. If parties did not agree on a
● Subsequent purchaser of property, even distribution:
if the right to redeem was not i. If there are growing fruits at the time
mentioned in the subsequent contract; of sale and at the time of redemption:
for registered land, the right to redeem 1. The buyer receives
must be annotated on the title [Art. reimbursement if the buyer paid
1608, NCC]. indemnity at the time of the sale.
2. The buyer receives no
iv. How Exercised reimbursement or prorating if the
1. By returning the following to buyer did not pay indemnity at
the time of sale.
the buyer:
ii. If there were no growing fruits at the
● Price of the sale, except if the
time of sale, but some exist at the time
parties agreed on a redemption
of redemption: fruits prorated (the
price;
buyer entitled to part corresponding to
● Expenses of the contract and
time he possessed the land in the last
other legitimate payments made
year, counted from the anniversary of
by reason of the sale;
the date of sale) [Art. 1617, NCC.]
● Necessary and useful expenses
made on the thing sold. [Art.
1616, NCC] Effect of Non-redemption
Ownership is consolidated in the buyer BUT the
2. Complying with any other consolidation shall not be recorded in the
Registry of Property without a judicial order,
stipulation agreed upon, if any.

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after the seller has been duly heard [Art. 1607, Period to Redeem
NCC]. ● Within 30 days from the notice in
writing by the prospective vendor, or by
Right to Redeem v. Option to the vendor, as the case may be. [Art.
Purchase 1630, NCC]
● The deed of sale shall not be recorded
Right to Redeem Option to in the Registry of Property, unless
Purchase accompanied by an affidavit of the
Not a separate Generally a principal vendor that he has given written notice
contract but part of a contract and may be thereof to all possible redemptioners.
main contract of sale, created independent [Art. 1630, NCC]
and cannot exist of another contract
unless reserved at Who May Exercise
the time of the
perfection of the i. Co-owners [Art. 1620, NCC]
main contract of sale ● When the shares of all the other co-
owners, or of any of them are sold
Does not need a Must have a to a third person.
separate consideration ● If the price of the alienation is
consideration to be separate and distinct
grossly excessive, the redemptioner
valid and effective from the purchase
price to be valid and shall pay only a reasonable one.
effective Two or more co-owners desiring to exercise the
right of redemption may only do so in proportion
The maximum period The period of the to the share they may respectively have in the
for the exercise of the option contract may thing owned in common.
right to repurchase go beyond the 10-
cannot exceed 10 year period
years ii. Adjoining landowners of rural
land [Art. 1621, NCC].
Requires in addition a May be exercised by There is right of redemption among adjoining
tender of payment of notice of its exercise landowners of rural land when:
the amount required to the offeror
1. A piece of rural land is alienated.
by law, including
consignment thereof 2. Both the land of the one exercising the
if tender of payment right of redemption and the land sought
cannot be made to be redeemed must be rural.
effectively on the 3. The lands must be adjacent and must
buyer not be separated by brooks, drains,
ravines, roads, and other apparent
c. Legal Redemption servitudes for the benefit of other
estates.
Definition [Art. 1619, NCC]
4. The area of the alienated rural land
Legal redemption is the right to be subrogated,
does not exceed one hectare.
upon the same terms and conditions stipulated
5. The grantee or the vendee must already
in the contract, in the place of one who acquires
own rural land.
a thing by purchase or dation in payment, or by
any other transaction whereby ownership is
transmitted by onerous title.

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 SALES, LEASE, AND AGENCY CIVIL LAW

When two or more adjoining owners desire to The contract shall be presumed to be an
exercise the right of redemption at the same equitable mortgage, in any of the following
time: cases: [Art. 1602, NCC]
● Owner of the adjoining land of smaller 1. Price of a sale with right to repurchase
area shall be preferred; unusually inadequate;
● If both lands have the same area, the 2. Possession retained by the seller as
one who first requested the redemption lessee or otherwise;
shall be preferred. 3. Period of redemption extended (or
granted anew) upon or after the
iii. Adjoining Landowners of expiration of the right to repurchase;
Urban Land 4. Part of the purchase price retained by
Right of pre-emption or right of redemption, at a the seller;
reasonable price, when a piece of urban land: 5. Payment of taxes on the thing sold
1. Which is so small and so situated that a borne by the seller;
major portion thereof cannot be used 6. Any other case where it may be fairly
for any practical purpose within a inferred that the real intention of the
reasonable time parties is for the transaction to secure a
2. Having been bought merely for debt or other obligation.
speculation
3. Is about to be, or has been, resold. Note: A contract shall be presumed as an
equitable mortgage when any of the
When two or more owners of adjoining lands circumstances in Art. 1602 is present. However,
wish to exercise the right of pre-emption or as earlier mentioned, the decisive factor is the
redemption, the owner whose intended use of intention of the parties. [see Roberts v. Papio,
the land is best justified shall be preferred. G.R. No. 166714 (2007)].

In case of doubt, a contract purporting to be a

d. Equitable Mortgage
sale with right to repurchase shall be construed
An equitable mortgage is defined as one which,
as an equitable mortgage [Art. 1603, NCC].
although lacking in some formality, or form or
words, or other requisites demanded by a
Mere tolerated possession is not enough to
statute, nevertheless reveals the intention of the
prove that the transaction was an equitable
parties to charge real property as security for a
mortgage [Kings Properties Corporation, Inc. v.
debt, and contains nothing impossible or
Galido, G.R. No. 170023 (2009)].
contrary to law [Molina v. CA, G.R. No. 125755
(2003)].
Art. 1602 also applies to a contract purporting to
be a deed of absolute sale. [Art. 1604, NCC.]
Requisites for Presumption of an Remedy
Equitable Mortgage Reformation of the instrument [must be brought
1. The parties entered into a contract within 10 years]
denominated as a contract of sale, and 1. If the agreement is construed to be an
2. Their intention was to secure an existing equitable mortgage, any money or other
debt by way of a mortgage [Molina v. benefit received as “rents,” shall be
CA, supra]. considered as “interest” (and subject to
usury laws) [Art. 1601, NCC.]

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 SALES, LEASE, AND AGENCY CIVIL LAW

2. The court may decree that the vendor- and absolute owner of the land [Heirs of Arches
debtor to pay the outstanding loan to v. Diaz, G.R. No. L-27136 (1973)].
the vendee-creditor
3. Where the agreement is upheld as a Where the petition of the vendee in a pacto de
pacto de retro sale, the vendor may still retro sale is for a judicial order pursuant to
exercise the right within 30 days from Article 1607 of the Civil Code, so that
the time the judgment becomes final. consolidation of ownership by virtue of the
[Art. 1606, NCC.] failure of the vendor to redeem may be recorded
in the Registry of Property, the right of action to
The right of repurchase is not a right granted to foreclose the mortgage or to collect the
the seller by the buyer in a subsequent indebtedness arises from the judgment of the
instrument, but one reserved by the seller in the court declaring the contract as equitable
same instrument as the sale contract. Any right mortgage. [Heirs of Jose Arches vs. Vda. de
granted after the execution of the sale Diaz, G.R. No. L-27136 (1973)]
instrument is not a right to repurchase, but
some other right like an option to buy [Roberts II. CONTRACT OF LEASE
v. Papio, G.R. No. 166714 (2007)].
A. GENERAL PROVISIONS
Rationale Behind Provision on
Equitable Mortgage Definition
1. Circumvention of usury law
2. Circumvention of prohibition against Art. 1642, Civil Code. The contract of
pactum commissorium – creditor cannot lease may be of things, or of work and
appropriate the things given by way of
service.
pledge or mortgage since remedy is
foreclosure.
Art. 1643, Civil Code. In the lease of
things, one of the parties binds himself to
Remedies of Apparent Vendor give to another the enjoyment or use of a
1. If the instrument does not reflect the thing for a price certain, and for a period
true agreement: remedy is reformation which may be definite or indefinite.
2. If decreed to be an equitable mortgage: However, no lease for more than
any money, fruits or other benefit to be ninety-nine years shall be valid.
received by the buyer as rent or
otherwise considered as interest.
3. If decreed as a true sale with right to Art. 1644, Civil Code. In the lease of
purchase: seller may redeem within 30 work or service, one of the parties binds
days from finality of judgment, even if himself to execute a piece of work or to
the period for redemption has expired. render to the other some service for a
price certain, but the relation of principal
When an unrecorded pacto de retro sale was and agent does not exist between them.
construed as an equitable mortgage, the plaintiff
had the right to enforce his lien in a separate It is a consensual, bilateral, onerous and
proceeding notwithstanding the fact that he had commutative contract by which the owner
failed to obtain judgment declaring him the sole temporarily grants the use of his property or the

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 SALES, LEASE, AND AGENCY CIVIL LAW

rendering of some service to another who 2. Lease of Work - one of the parties
undertakes to pay some rent, compensation or binds himself to execute a piece of work
price [Padilla; Kilosbayan vs. Morato, G.R. No. for a price certain, but the relation of
11890 (1995)] principal and agent does not exist
between them. [Art. 1644, NCC]
Limitation
Consumable goods cannot be the subject matter 3. Lease of Service - one of the parties
of a contract of lease, except when they are binds himself to render to the other
merely to be exhibited or when they are some service for a price certain, but the
accessory to an industrial establishment [Art. relation of principal and agent does not
1645, NCC]. exist between them. [Art. 1644, NCC]

Persons Disqualified as Lessees B. RIGHTS AND OBLIGATIONS OF

See discussion on Capacity to Buy or Sell under LESSOR AND LESSEE
the topic Contract of Sale.
a. Obligations of a Lessor
Place and Time for Payment of Lease
a. As to Place [Art. 1251, NCC] Three Principal Obligations of the
Payment shall be made in the place designated Lessor
in the obligation. 1. Delivery of the property
2. Making of necessary repairs
In any other case the place of payment shall be 3. Keeping lessee in peaceful and adequate
the domicile of the debtor. enjoyment

If the debtor changes his domicile in bad faith or Note: The lessor is not obliged to answer for a
after he has incurred in delay, the additional mere act of trespass which a third person may
expenses shall be borne by him. cause on the use of the thing leased; but the
lessee shall have a direct action against the
b. As to Time intruder.
The custom of the place shall be followed unless
there is a contrary stipulation in the contract. There is a mere act of trespass when the third
person claims no right whatever. [Art. 1664,
Kinds of Lease According to Subject NCC]
Matter
if the act of trespass is not accompanied or
1. Lease of Things - one of the parties
preceded by anything which reveals a really
binds himself to give to another the
juridic intention on the part of the trespasser, in
enjoyment or use of a thing for a price
such wise that the lessee can only distinguish
certain, and for a period which may be
the material fact, stripped of all legal form or
definite or indefinite.
reasons, we understand it to be trespass in fact
only. [Goldstein vs. Roces, G.R. No. 8967
No lease of things for more than
(1916)]
ninety-nine years shall be valid. [Art.
1643, NCC]

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 SALES, LEASE, AND AGENCY CIVIL LAW

Additional note: The lessee may suspend the eject the lessee until the end of the period for
payment of the rent in case the lessor fails to the redemption. [Art. 1677, NCC]. He may,
make the necessary repairs or to maintain the however, make use of the power to oust the
lessee in peaceful and adequate enjoyment of lessee if any of the grounds for ejectment under
the property leased. [Art. 1658, NCC] Article 1673 is present.

Additional Obligations: Grounds for Judicial Ejectment [Art.

1. No alteration of the form of the thing 1673, NCC]
leased [Art. 1661, NCC] 1. When the period agreed upon, or that
2. If the lessee makes useful which is fixed for the duration of leases
improvements in good faith, without under Articles 1682 and 1687, has
altering form or substance, the lessor, expired;
upon the termination of the lease, shall 2. Lack of payment of the price stipulated;
pay the lessee one-half of the value of 3. Violation of any of the conditions agreed
the improvements at that time. [Art. upon; or
1678, par. 1, NCC] 4. Improper use of the leased property.

Note: Should the lessor refuse to reimburse said Note: The ejectment of tenants of agricultural
amount, the lessee may remove the lands is governed by special laws.
improvements, even though the principal thing
may suffer damage thereby. He shall not, Provisional remedy: Preliminary Mandatory
however, cause any more impairment upon the Injunction to Restore Possession Pending Appeal
property leased than is necessary. [Art. 1678,
par. 1, NCC] c. Obligations of a Lessee
Three Principal Obligations of the
For Ornamental Expenses [Art. 1678, Lessee
par. 2, NCC] 1. Payment of agreed price of lease
The lessee shall not be entitled to any 2. Proper use of the thing leased
reimbursement, but he may remove the 3. Payment of expenses for deed of lease
ornamental objects, provided:
a. No damage is caused to the principal Additional Obligations:
thing; and
1. To notify the lessor of usurpation or
b. Lessor does not choose to retain them
untoward act which any third person
by paying their value at the time of
may or will commit [Art. 1663, par. 1,
lease
NCC]

b. Rights of a Lessor 2. To advise the lessor of need for repairs

1. To continue same business or [Art. 1663, par. 2, NCC]
industry engaged in by a lessee
2. To eject the lessee Note: In both cases the lessee shall be liable for
the damages which, through his negligence,
Limitation may be suffered by the proprietor. [Art. 1663,
The purchaser in a sale with the right of par. 3, NCC]
redemption cannot make use of the power to

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If the lessor fails to make urgent repairs, the General Rule: The lessee is responsible for the
lessee, in order to avoid imminent danger, may deterioration or loss of the thing leased.
order the repairs at the lessor’s cost. [Art. 1663,
par. 4, NCC] Exception: Unless he proves that it took place
without his fault. Note: This burden of proof
3. To tolerate urgent repairs does not apply when destruction is due to
natural calamity.
General Rule: The lessee is obliged to tolerate
the work, although it may be very annoying to 6. To be liable for any deterioration caused
him, and although during the same, he may be by members of his household, guests or
deprived of a part of the premises. [Art. 1662, visitors [Art. 1668, NCC]
par. 1, NCC]
d. Rights of a Lessee
Exception: When the work is of such a nature 1. To sublease [Art. 1650, NCC]
that the portion which the lessee and his family 2. To reduce or rescind in case of
need for their dwelling becomes uninhabitable, fortuitous event [Art. 1655, NCC]
he may rescind the contract if the main purpose a. Total Destruction - If the thing
of the lease is to provide a dwelling place for the leased is totally destroyed by a
lessee. [Art. 1662, par. 3, NCC] fortuitous event, the lease is
extinguished.
Note: If the repairs last more than forty days, b. Partial Destruction - If the
rent may be reduced. [Art. 1662, par. 2, NCC] destruction is partial, the lessee
may choose between:
4. To return the thing leased upon i. Proportional reduction of
termination of lease [Art. 1665, NCC] the rent and;
ii. Rescission of the lease
General Rule: The lessee shall return the thing
leased upon the termination of the lease, as he Note: Once the choice of the lessee has been
received it. communicated to the lessor, the former cannot
change it. [Art. 1201, NCC]
Exception: What has been lost or impaired by 3. To make use of the period
the lapse of time, or by ordinary wear and tear,
or from an inevitable cause General Rule: The lessee has the right to make
use of the periods established in Arts. 1682 and
Note: Under Art. 1666, in the absence of a 1687.
statement concerning the condition of the thing
at the time the lease was constituted, the law Exceptions: Judicial ejectment [Art. 1673,
presumes that the lessee received it in good NCC]
condition, unless there is proof to the contrary.
4. To not be ejected during redemption
5. To be responsible for the deterioration period
or loss of the thing leased [Art. 1667,
NCC] Right to Repurchase
The Purchaser in a Sale With the Right of
Redemption Cannot Make Use of the Power to

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Eject the Lessee Until the End of the Period for assignee takes the place of the assignor,
the Redemption [Art. 1677, NCC] continuing the lease under the same conditions
and the lessee, by virtue of the assignment of
C. SUBLEASE AND ASSIGNMENT OF his right, is completely freed from responsibility
LEASE with the lessor. [Manlapat v. Salazar, G.R. No.
L-8221 (1956)]
a. Assignment of lease by lessee
[Art. 1649, NCC] D. GROUNDS FOR TERMINATION OF
THE LEASE
General Rule: The lessee cannot assign the
lease without the consent of the lessor. a. Expiration of the Period [Art.
1669, NCC]
Exception: Unless there is a stipulation to the
contrary.
Implied New Lease [Art. 1670, NCC]
Requisites
In an assignment of lease, the lessee makes an
1. Original contract has expired;
absolute transfer of his interest as such lessee,
2. Either party has not previously given a
thus dissociating himself from the original
notice to vacate; and
contract of lease, so that his personality
3. Lessee continued enjoying the thing
disappeared and there remains only in the
leased for fifteen days with the
juridical relation two persons, the lessor and the
acquiescence of the lessor.
assignee, who is converted into a lessee;
whereas, if he retains a reversionary interest,
Note: If the lessee continues enjoying the thing
however small, the transfer is deemed a mere
after the expiration of the contract, over the
sublease. [Manlapat v. Salazar, G.R. No. L-8221
lessor’s objection, the former shall be subject to
(1956)]
the responsibilities of a possessor in bad faith.
[Art. 1672, NCC]
b. Sublease
Effects
Liability of Sublessee 1. The period of the new lease is not of the
original contract but for the time
General Rule: The sublessee is not a party to established in Articles 1682 and 1687;
the contract between the lessor and the lessee; 2. The obligations contracted by a third
hence, under the general rule in contracts, the person for the security of the principal
sublessee can only be held liable directly to the contract shall cease with respect to the
sublessor. new lease [Art. 1672, NCC]; and
3. The other terms of the original contract
Exceptions: shall be revived.
1. Direct liability of sublessee to lessor
2. Subsidiary liability of sublessee to lessor b. Total loss of the thing [Art. 1655,
NCC]
The sublease involves a new lease, turning the c. Non-performance of the
tenant into a landlord, but without the sublessor obligations of one of the parties
completely separating himself from the original [Art. 1659, NCC]
lease; while in the assignment of the lease, the

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 SALES, LEASE, AND AGENCY CIVIL LAW

Note: The aggrieved party may ask for the to be fictitious if at the time the supposed
rescission of the contract and indemnification for vendee demands the termination of the lease,
damages, or only the latter, allowing the the sale is not recorded in the Registry of
contract to remain in force. Property. [Art. 1676, par. 3, NCC]

d. If a dwelling place or any other III. AGENCY

building intended for human
habitation is in such a condition A. NATURE, FORM, AND KINDS
that its use brings imminent and
serious danger to life or health a. Nature and Elements
[Art. 1660, NCC]
Art. 1642, Civil Code. By the contract
Note: The lessee may terminate the lease at of agency a person binds himself to
render some service or to do something
once by notifying the lessor, even if at the time
in representation or on behalf of another,
the contract was perfected the former knew of
with the consent or authority of the latter.
the dangerous condition or waived the right to
rescind the lease on account of this condition.
Parties to an Agency Contract
e. Will of the purchaser or 1. The agent, who binds himself to
transferee of the thing [Art. represent another; and
1676, par. 1, NCC] 2. The principal, who is represented by the
agent.
General Rule: The purchaser of a piece of land
which is under a lease that is not recorded in Elements
the Registry of Property may terminate the 1. There is consent, express or implied of
lease. the parties to establish the relationship;
2. The object is the execution of a juridical
Exceptions: act in relation to a third person;
1. When there is a stipulation to the 3. The agents acts as a representative and
contrary in the contract of sale, or not for himself, and
2. When the purchaser knows of the 4. The agent acts within the scope of his
existence of the lease. authority [Rallos v. Felix Go Chan, G.R.
No. L-24332 (1978)].
Note: If the buyer makes use of this right, the
lessee may demand that he be allowed to gather b. Form of an Agency Contract
the fruits of the harvest which corresponds to
the current agricultural year and that the vendor General Rule: Agency may be written or oral,
indemnify him for damages suffered. [Art. 1676, unless the law requires a specific form [Art.
par. 2, NCC] 1869, NCC].

If the sale is fictitious, for the purpose of Exception:

extinguishing the lease, the supposed vendee 1. In an agency to sell a piece of land or
cannot make use of the right granted in the first any interest therein, the authority of the
paragraph of Article 1676. The sale is presumed

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 SALES, LEASE, AND AGENCY CIVIL LAW

agent shall be in writing. Otherwise, the All unsold units at the end of the year shall be
sale shall be void [Art. 1874, NCC]. bought back by the manufacturer at the same
2. A corporation may act only through its price they were ordered. The manufacturer shall
board of directors or, when authorized hold the distributor free and harmless from any
either by its bylaws or by its board claim for defects in the units. Is the agreement
resolution, through its officers or agents one for sale or agency? (2000 Bar)
in the normal course of business [San
Juan Structural Steel v. CA, G.R. No. A: The contract is one of agency, not sale. The
129549 (1998)]. notion of sale is negated by the following
indicia: (1) the price is fixed by the
Rules on the Acceptance of the Agent manufacturer with the 10% mark up constituting
Acceptance by the agent can be express or the commission; (2) the manufacturer
implied: reacquires the unsold units at exactly the same
1. Express: oral or written price; and (3) warranty for the units was borne
2. Implied from: by the manufacturer. The foregoing indicia
a. His acts which carry out the agency, or negate sale because they indicate that
b. His silence or inaction according to the ownership over the units was never intended to
circumstances [Art. 1870, NCC]. transfer to the distributor.

Between persons who are present, the c. Kinds

acceptance of the agency may also be implied if A contract of agency may be classified:
the principal delivers his power of attorney to 1. As to manner of creation: express and
the agent and the latter receives it without any implied [Arts. 1869-1873, NCC]
objection [Art. 1871, NCC] 2. As to scope of business: general and
special [Art. 1876, NCC]
Between persons who are absent, the 3. As to authority conferred: couched in
acceptance of the agency cannot be implied general terms and couched in specific
from the silence of the agent, except: terms [Art. 1877-1880, NCC]
a. When the principal transmits his power 4. As to consideration: gratuitous or
of attorney to the agent, who receives it onerous [Art. 1875, NCC]
without any objection;
b. When the principal entrusts to him by i. As to Manner of Creation
letter or telegram a power of attorney An agency may be express or implied [Art. 1869,
with respect to the business in which he NCC].
is habitually engaged as an agent, and 1. Express: an express agency contract
he did not reply to the letter or telegram may be oral or written
[Art. 1872, NCC]. 2. Implied: an agency may be implied
from:
Contract of Sale vs. Agency a. the acts of the principal
Q: A foreign manufacturer of computers and a b. his silence or lack of action, or
Philippine distributor entered into a contract c. his failure to repudiate the
whereby the distributor agreed to order 1,000 agency, knowing that another
units of the manufacturer’s computers every person is acting on his behalf
month and to resell them in the Philippines at without authority [Art. 1869,
the manufacturer’s suggested prices plus 10%. NCC].
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 SALES, LEASE, AND AGENCY CIVIL LAW

immovable is transmitted or
ii. As to Scope of Business: acquired either gratuitously or
An agency is either general or special [Art. 1876, for a valuable consideration;
NCC]: f. To make gifts, except customary
1. General: comprises all the business of ones for charity or those made
the principal to employees in the business
2. Special: comprises one or more specific managed by the agent;
transactions g. To loan or borrow money, unless
the latter act be urgent and
indispensable for the
iii. As to Authority Conferred
preservation of the things which
An agency may also be couched in general
are under administration;
terms or specific terms [Art. 1877, NCC]:
h. To lease any real property to
1. Couched in general terms: comprises
another person for more than
only acts of administration, even if:
one year;
a. The principal should state that
i. To bind the principal to render
he withholds no power or that
some service without
the agent may execute such
compensation;
acts as he may consider
j. To bind the principal in a
appropriate, or
contract of partnership;
b. Even though the agency should
k. To obligate the principal as a
authorize a general and
guarantor or surety;
unlimited management [Art.
l. To create or convey real rights
1877, NCC].
over immovable property;
m. To accept or repudiate an
2. Couched in specific terms: comprises
inheritance;
acts of strict dominion, such as
n. To ratify or recognize obligations
circumstances enumerated in Art. 1878:
contracted before the agency;
a. To make such payments as are
o. Any other act of strict dominion.
not usually considered as acts of
administration;
b. To effect novations which put an Other Kinds of Agency
end to obligations already in
existence at the time the i. Agency by Estoppel
agency was constituted;
c. To compromise, to submit General Rule: No presumption of agency and
questions to arbitration, to proving its existence, nature, and extent is
renounce the right to appeal incumbent upon the person alleging it.
from a judgment, to waive
objections to the venue of an Exception: In an agency by estoppel, there is
action or to abandon a no agency at all, but the one assuming to act as
prescription already acquired; agent has apparent or ostensible, although not
d. To waive any obligation real, authority to represent another.
gratuitously;
e. To enter into any contract by To establish agency by estoppel, the following
which the ownership of an elements must be shown:
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 SALES, LEASE, AND AGENCY CIVIL LAW

1. The principal manifested representation An act is within the scope of his authority if it is:
of the agent’s authority or knowingly a. An act which may be conducive to the
allowed the agent to assume such accomplishment of the purpose of the
authority; agency [Art. 1881, NCC]
2. The third person, in good faith, relied b. An act performed in a manner more
upon such representation; and advantageous to the principal than that
3. Relying upon such representation, such specified by him
third person has changed his position to c. So far as third persons are concerned,
his detriment [Litonjua v. Eternit acts within the terms of the written
Corporation, G.R. No. 144805 (2006)]. power of attorney, even if the agent has
in fact exceeded the limits of his
ii. Agency by Operation of Law authority according to an understanding
The Civil Code provides several exceptions to the between the principal and the agent
general rule that an agency is contractual, [Art. 1900, NCC]
namely:
1. The agent must finish the business Note: Under the Civil Code, the special power to
already begun on the death of the sell excludes the power to mortgage; and a
principal, should delay entail any danger special power to mortgage does not include the
[Par. 2, Art. 1884, NCC]. power to sell [Art. 1879, NCC]. The power to
2. The agent, even if he should withdraw compromise does not authorize submission to
from the agency for a valid reason, must arbitration [Art. 1880, NCC].
continue to act until the principal has
had reasonable opportunity to take the b. Carry Out the Agency
necessary steps to meet the situation a. To pay damages caused to the principal
[Art. 1929, NCC]. by the agent’s non-performance [Art.
3. The agency shall remain in full force and 1884, NCC];
effect even after the death of the b. To finish the business already begun on
principal, if it has been constituted in the death of the principal, should delay
the common interest of the latter and of entail danger [Art. 1884, NCC];
the agent, or in the interest of a third c. To continue to act as an agent, even if
person who has accepted the stipulation he withdraws for a valid reason, until
in his favor [Art. 1930, NCC]. the principal has had reasonable
4. Anything done by the agent, without opportunity to take the necessary steps
knowledge of the death of the principal to meet the situation [Art. 1929, NCC].
or of any other cause which
extinguishes the agency, is valid and c. Not to Carry Out the Agency
shall be fully effective with respect to The agent has the obligation to not carry out the
third persons who may have contracted agency if its execution would manifestly result in
with him in good faith [Art. 1931, NCC] loss or damage to the principal [Art. 1888, NCC].

B. OBLIGATIONS OF THE AGENT d. Loyalty

The agent’s obligation to remain loyal is required
a. Act Within the Scope of by the Civil Code as seen in the following cases:
Authority 1. An agent shall be liable for damages if,
there being a conflict between his
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 SALES, LEASE, AND AGENCY CIVIL LAW

interests and those of the principal, he principal [Art. 1891, NCC]. A stipulation
should prefer his own [Art. 1889, NCC]. exempting the agent from the obligation to
2. An agent, who has been authorized to render an account shall be void [Art. 1891,NCC].
lend money, may not borrow it without
the consent of the principal [Art. 1890, g. Solidary Liability
NCC]. General Rule: The responsibility of two or
3. An agent cannot acquire by purchase more agents is not solidary, even if
the property whose administration or simultaneously appointed.
sale may have been entrusted to them,
even by public or judicial auction, either Exception: Express stipulation [Art. 1894,
in person or through the mediation of NCC].
another, unless the consent of the
principal has been given [Art. 1491 (1),
Liability of Co-agents
NCC].
General Rule: Each of the Agents Is
Responsible for the Non-fulfillment of Agency,
e. Diligence and for the Fault or Negligence of His Fellow
Declining an Agency Agents.
A person who declines an agency is bound to
observe the diligence of a good father of a Exception: When the fellow agents acted
family in the custody and preservation of the beyond the scope of their authority. [Art. 1895,
goods forwarded to him by the owner until the NCC].
latter should appoint an agent or take charge of
the goods. [Art. 1885, NCC]. h. Pay Interest
The agent owes interest on the sums he has
Execution and Default applied to his own use from the day on which he
In the execution of an agency, the agent shall did so, and on those which he still owes after
act in accordance with the instructions of the the extinguishment of the agency. [Art. 1896,
principal. In default thereof, he shall do all that a NCC].
good father of a family would do, as required by
the nature of the business. i. Specific Obligations of
[Art. 1887, NCC]. Commission Agents

Fraud and Negligence Responsibility for Goods Received

The agent is responsible not only for fraud, but General Rule: The commission agent shall be
also for negligence, which shall be judged with responsible for the goods received by him in the
more or less rigor by the courts, according to terms and conditions and as described in the
whether the agency was or was not for a consignment.
compensation. [Art. 1909, NCC].
Exception: When upon receipt, he discovers
f. Account/Deliver damage and deterioration. In such a case, he
An agent must render an account of his should make a written statement of such
transactions and deliver to the principal damage and deterioration. [Art. 1903, NCC].
whatever he may have received by virtue of the
agency, even though it may not be owing to the

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Responsibility for Goods Belonging to

Different Owners Note: In both exceptions above, the principal
Agents handling goods of the same kind and may bring an action against the substitute with
mark belonging to different owners shall respect to the obligations the substitute has
distinguish them by countermarks and designate contracted under the said substitution [Art.
the merchandise respectively belonging to each 1893, NCC].
principal. [Art. 1904, NCC].
C. OBLIGATIONS OF THE PRINCIPAL
Responsibility in Case of Failure to
Collect Credits a. Comply With the Obligations
General Rule: The agent who does not collect Contracted by the Agent
the credits of his principal at the time when they The principal must comply with all the
become due and demandable shall be liable for obligations which the agent may have
damages. contracted within the scope of his authority [Art.
1910(1), NCC].
Exception: Upon proof that he exercised due
diligence for that purpose. [Art. 1904, NCC]. Doctrine of Representation
Under this doctrine, transactions entered into by
j. Responsibility for Acts of the agent on behalf of the principal within the
Substitutes scope of his authority are binding on the
principal as though he himself had entered into
Appointment of a Substitute them directly [Eurotech v. Cuizon, G.R. No.
General Rule: An agent may appoint a 167552 (2007].
substitute.
b. Advance or Reimburse Sums
Exception: When principal expressly prohibits Necessary
an appointment. In such case, all of the General Rule: The Principal Must Advance to
substitute’s acts shall be void. [Art. 1892, NCC]. the Agent, Should the Latter so Request, the
Sums Necessary for the Execution of the
Liability of the Agent for His Agency. [Art. 1912, NCC].
Substitutes
No Reimbursement For:
General Rule: The Agent Shall Not Be 1. Expenses incurred through acts which
Responsible for the Acts of the Substitute. contravene the principal’s instructions,
and the principal does not want to
Exceptions: An agent is liable for the acts of derive benefit therefrom
the substitute in the following cases: 2. Expenses due to the fault of the agent
1. When the agent was not given the 3. Expenses incurred by the agent with the
power to appoint one; knowledge that an unfavorable result
2. When the agent was given such power, would ensue, and the principal was
but without designating the person, and unaware
the person appointed was notoriously 4. If there is a stipulation that expenses
incompetent or insolvent. [Art. 1892, would be borne by the agent or that he
NCC]. would be allowed only a certain sum

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 SALES, LEASE, AND AGENCY CIVIL LAW

5. Expenses incurred from acts outside the Entitlement to a Commission

authority of the agent. [Art. 1918, NCC]. The agent must be the efficient procuring cause
of a sale in order to be entitled to commission
If the agent has paid in advance, the principal [Danon v. Brimo & Co., G.R. No. 15823 (1921)].
must reimburse him for the same, provided that
the agent was free from any fault. The f. Agent’s Lien
reimbursement should include interest on the
Trigger
sums advanced, from the day on which the
Agent has advanced payment but the principal
advance was made. [Art. 1912, NCC].
has yet to reimburse him for the same.

c. Indemnify the Agent for Injury Rule

The principal has the obligation to indemnify the Agent can retain in pledge the things which are
agent for all the damages which the execution the object of the agency until the principal
of the agency may have caused the latter, effects the reimbursement and pays the
without fault or negligence on his part. [Art. indemnity. [Art. 1914, NCC]
1913, NCC].
D. EXTINGUISHMENT
d. Solidary Liability
The principal is bound and liable for the acts of Summary
the agent done within the scope of his authority, Agency Is Extinguished [Art. 1919, NCC]:
for unauthorized acts which the principal has 1. By its revocation;
ratified, and for acts which he is estopped from 2. By the withdrawal of the agent;
denying [Art. 1911, NCC] 3. By the death, civil interdiction, insanity
or insolvency of the principal or of the
For such liability to apply, the following agent;
requisites must be met: 4. By the dissolution of the firm or
a. Agency relationship exists; corporation which entrusted or accepted
b. The agent acts in excess of his the agency;
authority; and 5. By the accomplishment of the object or
c. The principal allowed the agent to act as purpose of the agency;
though he had full powers 6. By the expiration of the period for which
the agency was constituted.
e. Compensation
Presumption Modes of Extinguishment may Be Classified
Agency is presumed to be for compensation, into Three:
unless there is proof to the contrary [Art. 1875, 1. By agreement [par. 5 and 6];
NCC]. 2. By subsequent acts of the parties:
a. By the act of both parties or by
Agency Not for Compensation mutual consent; or
The fact that the agency was for compensation b. By the unilateral act of one of
or not, shall be considered by the court in them [par. 1 and 2]
determining the extent of liability of an agent for 3. By operation of law [par. 3 and 4]
fraud or negligence [Art. 1909, NCC].
a. Revocation

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 SALES, LEASE, AND AGENCY CIVIL LAW

i. In General the principal [Coleongco vs. Claparols, G.R. No.

L-18616 (1964)].
Art. 1920, Civil Code. The principal may
revoke the agency at will, and compel the
ii. When Revocation Is Not
agent to return the document evidencing
the agency. Such revocation may be Binding on Third Persons
express or implied. If the agency has been entrusted for the
purpose of contracting with specified persons,
General Rule: The principal may revoke the
its revocation shall not prejudice the latter if
agency at will.
they were not given notice thereof [Art. 1921,
NCC].
Exception: Agency cannot be revoked if it is
coupled with an interest, such that:
Notice of Revocation Required
a. A bilateral contract depends upon it;
The agency does not prejudice third persons
b. It is the means of fulfilling an obligation
who acted in good faith and without knowledge
already contracted; or
of the revocation. Notice of the revocation in a
c. A partner is appointed manager of a
newspaper of general circulation is a sufficient
partnership in the contract of
warning to third persons [Art. 1922, NCC].
partnership and his removal from the
management is unjustifiable [Art. 1927,
NCC] iii. Appointment of New Agent
Art. 1923, Civil Code. The appointment
The principal can revoke the agency even if the of a new agent for the same business or
period fixed in the contract has not yet expired transaction revokes the previous agency
[CMS Logging v. CA, G.R. No. L- 41420 (1992)]. from the day on which notice thereof was
When two or more principals have granted a given to the former agent, without
power of attorney for a common transaction, prejudice to the provisions of the two
any one of them may revoke the same without preceding articles.
the consent of the others [Art. 1925, NCC]. Revocation takes effect when notice is given to
the former agent, not when the new agent is
Note: The right of the principal to terminate the appointed [Rallos v. Felix Go Chan, supra].
authority of his agent is absolute and
unrestricted, except that he is liable for damages
iv. Direct Management by the
in case:
Principal
1. When revocation was done in bad faith
[Danon v. Brimo, supra] Art. 1924, Civil Code. The agency is
2. When revocation was done before the revoked if the principal directly manages
expiration of the period stipulated in the the business entrusted to the agent,
contract. dealing directly with third persons.
If the principal believes that the agent is in
Revocation of Agency Coupled With an breach of the contract and thereby decides to
Interest deal with the business directly, then the agency
Coupled with interest or not, the authority is said to be revoked [CMS Logging v. CA,
certainly can be revoked for just cause, such as supra]. The mere act of direct management by
when the attorney-in-fact betrays the interest of the principal is not enough to revoke the agency
without such intention.

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v. General Authority Via Grant cause which extinguishes the agency, is valid
of Special Authority and shall be fully effective with respect to third
persons who may have contracted with him in
Art. 1926, Civil Code. A general power good faith. [Art. 1931, NCC]
of attorney is revoked by a special one
granted to another agent, as regards the iii. Unfinished business
special matter involved in the latter.
Art. 1884(2), NCC provides that the agent must
finish the business already begun on the death
b. Withdrawal by the Agent of the principal, should delay entail any danger.
General Rule: An agent may withdraw from
the agency by giving due notice. If his Obligation of the Heirs in Case of
withdrawal might cause damages to be suffered Death of the Agent
by the principal, he must indemnify him for the If the agent dies, his heirs must:
same. a. Notify the principal thereof; and
b. In the meantime, adopt such measures
Exception: If the withdrawal is premised on the as the circumstances may demand in
impossibility of continuing with the obligation the interest of the latter [Art. 1932,
without grave detriment to himself [Art. 1928, NCC].
NCC]
d. Dissolution, Accomplishment, or
c. Death, Civil Interdiction, Expiration
Insanity or Insolvency
General Rule: Agency may also be terminated Dissolution
upon the death, civil interdiction, insanity, or Dissolution in this case, refers to the end of the
insolvency of either the principal or the agent legal existence of the firm or corporation which
[Art. 1919(c), NCC]. This occurs because the entrusted, as principal, or accepted the agency
principal loses the legal capacity to fulfill as an agent. It is parallel to the death of a
personal civil obligations. principal.

Exceptions:
Accomplishment
i. Agency coupled with interest
The accomplishment of the object or purpose of
An agency remains in full force, even after death
the agency dissolves the agency [Art. 1919(5),
when it was constituted:
NCC].
a. For the common interest of the principal
and the agent
b. For the interest of a third person who Expiration
has accepted the stipulation in his favor. An agency created for a fixed period is
[Art. 1931, NCC] extinguished after the expiration of such period
even if the purpose was not accomplished [Art.
ii. In cases of contracts between 1919(6), NCC]
agents without knowledge of death
of principal and a third person in If no time is specified, but a period was
good faith intended, the courts may fix the period as under
Anything done by the agent, without knowledge the circumstances have been probably
of the death of the principal or of any other contemplated by the parties [Art. 1197, NCC].

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or on lands by the owner of the immovable

CLASSIFICATION OF in such a manner that it reveals the
PROPERTY intention to attach them permanently to the
tenements;
Classification of Property
5. Machinery, receptacles, instruments or
Property, defined
implements intended by the owner of the
Property refers to any thing which is already
tenement for an industry or works which
appropriated or possessed by man.
may be carried out in a building or on a
piece of land, and which tend directly to
A thing is any object that exists and can satisfy
meet the needs of the said industry or
human wants and needs. However, not all things
works;
can be appropriated and such cannot be
6. Animal houses, pigeon-houses, beehives,
considered as “property.” It is more
fish ponds or breeding places of similar
comprehensive as a concept.
nature, in case their owner has placed them
or preserves them with the intention to have
Characteristics of property them permanently attached to the land, and
a. Satisfaction of certain human needs
forming a permanent part of it; the animals
b. Can be possessed, appropriated,
in these places are included;
acquired or defended
7. Fertilizer actually used on a piece of land;
8. Mines, quarries, and slag cumps, while the
Requisites of property matter thereof forms part of the bed, and
1. Utility or satisfaction of certain human waters either running or stagnant;
needs 9. Docks and structures which, though
2. Substantivity floating, are intended by their nature and
3. Appropriability object to remain at a fixed place on a river,
lake or coast;
I. IMMOVABLES AND 10. Contracts for public works, and servitudes
MOVABLES and other real rights over immovable
property.
A. IMMOVABLES OR REAL
1. Lands and Buildings
PROPERTY
[Art. 415, par. 1]
[La-T-A-S-M-Aho-Fe-M-Do-Co]

Buildings are always immovable under the Code.

1. Land, buildings, roads and constructions of
The mere fact that the parties to a contract treat
all kinds adhered to the soil.
the building as separate does not change its
2. Trees, plants, and growing fruits, while they
character as immovable property [Punsalan v.
are attached to the land or form an integral
Lacsamana, GR No. L-55729 (1983)].
part of an immovable;
3. Everything Attached to an immovable in a
A building is immovable provided it is more or
fixed manner, in such a way that it cannot
less of a permanent structure independent of
be separated therefrom without breaking
and regardless of the ownership of the land on
the material or deterioration of the object;
which it is erected since the law makes no
4. Statues, reliefs, paintings or other objects
distinction [De Leon].
for use or ornamentation, placed in buildings
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 PROPERTY CIVIL LAW

Art. 415 enumerates lands and buildings 4. Trees and plants while attached to
separately. This can only mean that a building, the land are immovable [Art. 415,
by itself, and separate from land, is considered par. 2]
an immovable [Soriano v. Spouses Galit, G.R.
No. 156295 (1983)].
Exception
When trees and plants are removed or detached
This classification holds true regardless of the
from the land and put in pots (with soil in the
fact that the house may be situated on land
pots), they are classified as movables because
belonging to a different owner. But once the
they can then be transported from place to
house is demolished, as in this case, it ceases to
place. Besides, potted trees and plants are no
exist as such and hence its character as an
longer covered by Art. 415, par. 2 which requires
immovable likewise ceases [Bicerra v. Teneza,
attachment to the land. Therefore, movable by
GR No. L16218 (1962)].
virtue of Art. 416 pars. 1 and 4.

Exception
5. Growing crops while attached to
If contracting parties stipulate that a real
property be considered personal, they are
the land or form an integral part of
consequently estopped from claiming otherwise. an immovable
However, third persons acting in good faith are
not affected by the stipulation characterizing the Exception
subject machinery as personal [Serg’s Products Those mobilized by anticipation. Growing fruits
v. PCI Leasing, GR No. 137705 (2000)]. forming an integral part of the tree (immovable)
become mobilized by anticipation or classified as
Exceptions are quatter shanties, nipa huts, movable or personal property when the same
barong-barong, which are not buildings but are marked (covered in plastic bags) or
constructions, and the like. Therefore, so long identified for the harvest time in the future.
as the structure is not adhered to the soil, the
structures do not fall under Art 415, par. 1, last This classification is also recognized under the
phrase. Chattel Mortgage Law – therefore covered by
Art. 416, par. 2 as Movable Property [Sibal v.
2. Roads [Art. 415, par. 1] Valdez, G.R. No. L-262278 (1927)].

Roads are immovables regardless of whether 6. Mines, quarries, and slag dumps,
they are public or private. while matter forms part of the bed
[Art. 415, par. 8]
3. Constructions of all kinds adhered
to the soil [Art. 415, par. 1] Like Trees and Plants that must be attached to
the land (not adhered to the soil), the “matter”
The Code does not require that the attachment referred to are the minerals – metallic,
or incorporation be made by the owner of the non-metallic, in large or miniscule quantities
land, the only criterion being the union or such as those extracted in mines and quarries,
incorporation with the soil [Navarro v. Pineda, and mine waste or slag dumps – which while
G.R. No. L-18456 (1963)]. forming “part of the bed” are immovable by
nature.

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The word “bed” in this context may refer to the 9. Statues, reliefs, paintings, or other
river bed where gold nuggets and grains, and objects for use or ornamentation,
sand and gravel are located. placed in buildings or on land [Art.
415, par. 4]
Once the “matter” from the mines, quarries and
slag dumps are removed from the bed, they
Requisites
become movable.
1. Placed by the owner of the immovable
(not the object) or his agent;
7. Waters, either running or stagnant
2. Intent to attach them Permanently to
[Art. 415, par. 8]
the tenements [Art. 415, par. 4, Civil
Code]
The word used is “waters” with an “s” because
“waters” when put in containers or receptacles Note: When the improvement is introduced by a
are referred to as “water” – without the “s” - lessee or usufructuary, the object may not be
become movable property. considered immovable unless the person acts as
agent of the owner.
Note: Trees and plants are immovable by
nature if they are the spontaneous products of
10.Animal houses, pigeon houses,
the soil.
beehives, fishponds, or breeding
places of similar nature [Art. 415,
8. Everything attached to an
par. 6]
immovable in a fixed manner [Art.
415, par. 3]
This includes the animals found therein.
Requisites
Requisites
1. Placed by the owner of the immovable
1. Intent to attach permanently is
(not the object) or his agent;
essential. Once the movable property is
2. Intent to attach them permanently to
permanently attached to an immovable,
the tenements [Art. 415, par. 6, Civil
the movable property becomes an
Code]
immovable property if requisite no. 2
3. Structure must permanently form part of
also exists:
the land and so intended by the owner
2. The movable property will break or
[De Leon]
deteriorate if it is subsequently detached
from the immovable property [Art. 415,
Note: Cages are not included and are
par. 3, Civil Code].
considered movables since they can be moved
from one place to another.

Paragraphs 3 and 4 of Article 415,

distinguished
Paragraph 3 Paragraph 4

(3) Everything (4) Statues, reliefs,

attached to an paintings or other

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 PROPERTY CIVIL LAW

4. Machines must tend Directly to meet the

immovable in a fixed objects for use or
manner; ornamentation, needs of said industry or works
placed in buildings or (adaptability) [Art. 415, par. 5, Civil Code].
on lands by the
owner of the Note: For real property tax purposes, the
immovable in such a definition of Machinery under the Local
manner that it reveals Government Code is controlling. Therefore, road
the intention to
equipment and mini haulers in a palm oil
attach them
permanently to the plantation which are actually, directly, and
tenements; exclusively used in the operation of the business
are classified as machinery subject to real
Cannot be separated Can be separated property tax [Provincial Assessor of Agusan del
from the immovable from the immovable Sur v. Filipinas Palm Oil Plantation, G.R. No.
without breaking or without breaking or
183416 (2016)].
deterioration. deterioration

Need not be placed Must be placed by the 12.Fertilizer actually used on a piece
by the owner or his owner of the
of land [Art. 415, par. 7]
agent. immovable, or by his
agent.
Fertilizers still in the barn or still wrapped inside
some newspaper even though already on the
11.Machinery, receptacles, ground are still movables.
instruments, or implements [Art.
415, par. 5] 13.Docks and structures which,
though floating, are intended by
Machinery is immobilized if placed by the owner their nature and object to remain
of a plant or property; not so if placed by a at a fixed place on a river, lake, or
tenant or usufructuary or any person having any
coast [Art. 415, par. 9]
temporary right [Davao Sawmill Co. v. Castillo,
GR No. L40411 (1935)].
Docks and structures which, though floating, are
intended by their nature and object to remain at
Equipment destined only to repair or service a
a fixed place on a river, lake, or coast are
transportation business may not be deemed real
considered immovable [Art. 415, par. 9, Civil
property [Mindanao Bus v. City Assessor, GR No.
Code].
L-17870 (1962)].

Note: A boathouse which, by its nature, is a

Requisites vessel and, therefore, a personal property but, if
1. Industry or works must be Carried on inside it is tied to the shore and used as a residence,
the building or on the land; and since it floats on waters which is
2. Placed by the Owner of the building or immovable, is considered real property [Capitol
property or his agent; Wireless v. Prov. Treasurer of Batangas et al.,
3. Machines must be Essential and principal G.R. No. 180110 (2016)].
elements in carrying out the industry; and

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Vessels are considered personal property [Phil leased land do not form part of the immovable
Refining Co. v. Jarque, G.R. No. 41506 (1935); [Sibal v. Valdes, G.R. No. L-26278, (1927)].
definition of vessel as used for water
transportation denotes movement – P.D. 474 s. The small 2-storey house made of light materials
1974]. (barong-barong) is a building or a construction
adhered to the soil therefore immovable
B. MOVABLES OR PERSONAL property under Art. 415 par. 1, but it was
PROPERTY considered movable between the parties
because of the chattel mortgage law and the law
on contracts - binding only as movable property
Movables Under Articles 416 and 417
between the parties of the chattel mortgage
1. Those susceptible of appropriation
contract. With respect to third persons, esp. in
which are not included in Art. 415.
execution proceedings, the house is immovable
2. Real property considered by a special
property [Navarro v. Pineda, Reyes, et al., G.R.
provision of law as personalty.
No. L-18456 (1963)].
3. Forces of nature which are brought
under the control of science.
Forces of Nature
4. All things which can be transported from
Electricity, gas, rays, heat, light, oxygen, atomic
place to place without impairment of the
energy, water, and power, among others, are
real property to which they are fixed.
forces of nature. Electricity, the same as gas, is
5. Obligations and actions which have for
an article bought and sold like other personal
their object movables or demandable
property and is capable of appropriation by
sums; and
another [United States v. Carlos, GR No. 6295
6. Shares of stock of agricultural,
(1911)].
commercial, and industrial entities,
although they have real estate.
Special Kinds of Personal Property
7. Other incorporeal personal property.
The author, composer, painter, sculptor, and
Examples are intellectual property such
inventor have rights over their works. These
as copyrights, patents, trademarks,
rights are personal property.
rights to invention, etc. Intellectual
creation is recognized in the Civil Code
With regard to the nature of the property
as a mode of acquiring ownership. [Art.
mortgages, which is one-half interest in the
721, Civil Code]
business, such interest is a personal property
capable of appropriation and not included in the
Movables Designated By a Special
enumeration of real properties in the Civil Code,
Provision of Law
and may be the subject of mortgage
Growing crops are considered immovable under
[Strochecker v. Ramirez, G.R. No. 18700
Art. 415, par. 2 but personal property under the
(1922)].
Spanish Mortgage Law, which provides that the
mortgage of a piece of land does not include the
fruits existing thereon. Mobilization by II. PUBLIC DOMINION;
anticipation is a right on the growing crop, to PATRIMONIAL; PRIVATE
gather or harvest them in advance, treating
them as movables. Likewise, crops raised on Property is either of:
1. Public dominion; or
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 PROPERTY CIVIL LAW

2. Private ownership [Art. 419, Civil Code]

it is not necessary that it must actually be
used as such.
Note: Churches and other consecrated objects
are outside the commerce of man; they are Public Domain
considered neither public nor private property
[Barlin v. Ramirez, G.R. No. L-2832 (1906)]. Regalian Doctrine
All lands of the public domain, waters,
minerals, coal, petroleum, and other mineral
A. PROPERTY OF PUBLIC oils, all forces of potential energy, fisheries,
DOMINION forests or timber, wildlife, flora and fauna, and
Property of public dominion is owned by the other natural resources are owned by the
public in general, in that not even the State or State. With the exception of agricultural lands
all other natural resources shall not be
subdivisions of the state may make them the
alienated (Sec. 2, Art. XII, 1987 Constitution).
object of commerce as long as they remain
properties for public use. Note: The Constitution allows the State to
enter into co-production, joint ventures, or
Property of public dominion is outside the production-sharing agreements with private
commerce of man [Republic v. Pasig Rizal Co., individuals or corporations for their
exploration, development, and utilization.
Inc., G.R. No. 213207 (2022)]. Thus:
1. It is not alienable or disposable; Public Lands
2. It is not subject to registration under PD
1529 (Property Registration Decree) and Public Land Act, Sec. 2 provides that the
cannot be the subject of a Torrens title; statute applies to lands of the public domain.
3. It is not susceptible to prescription [Art.
1113, Civil Code]; B. PATRIMONIAL PROPERTY
4. It cannot be leased, sold, or otherwise Property owned by the State and its political
be the object of a contract; subdivisions in their proprietary and private
5. It is not subject to attachment and capacity, and all property of the State not
execution; and included in Art. 420 of the Civil Code [Arts.
6. It cannot be burdened by any voluntary 421-424, Civil Code].
easements [Alolino v. Flores, G.R. No.
198774 (2016)] Unlike property of public dominion, patrimonial
property is subject to prescription. To be subject
Public Dominion considered as patrimonial property:
1. the land must be classified as
As enumerated by Art. 420: alienable and disposable; and
1. Property intended for public use 2. it must be expressly declared by the
2. Property intended for some specific State that it is no longer intended for
public service
public use [Republic v. Ching, G.R. No.
3. Property intended for the
development of the national 186166 (2010)].
wealth
Note: In P.D. 1529 (Property Registration
Note: In order to be classified as property of Decree) Section 14(2), the alienable and
public dominion, an intention to devote it to disposable character of the land, as well as its
public use or to public service is sufficient and
declaration as patrimonial property of the State,

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 PROPERTY CIVIL LAW

must exist at the beginning of the relevant C. PRIVATE PROPERTY

period of possession [Republic v. Philippine All properties not belonging to the State or its
National Police, G.R. No. 198277 (2021)] political subdivisions are properties of private
The sewage system is a property of the city, ownership pertaining to private persons, either
purchased with private funds and not devoted to individually or collection (Art. 425.)
public use (it is for profit.) It is therefore
patrimonial under the Civil Code. Nor can the All lands not otherwise appearing to be clearly
system be considered “public works for public within private ownership are presumed to be
service under art. 424 because such owned by the State.
classification is qualified by ejusdem generis; it
must be of the same character as the preceding
items [City of Cebu v. NAWASA, G.R. No. 12892 OWNERSHIP
(1960)]. Ownership
I. RIGHTS INCLUDED IN
Note: The change in classification from public
OWNERSHIP
dominion to patrimonial property enables
acquisition by private persons, natural or
juridical. Patrimonial property may therefore be
Ownership
the object of private commercial transactions Ownership may be exercised over things or
like usufruct, lease, or sale. rights [Art. 427, Civil Code].

However, the transition from public dominion to The owner has the right to enjoy and dispose of
patrimonial property is not immediately the thing, without other limitations than those
executory. There must be a formal established by law. The owner also has a right
declaration/positive act by the President , his of action against the holder and possessor of the
alter egos or the legislature that such property is thing in order to recover it [Art. 428, Civil Code].
no longer needed for public use or service
before it changes its classification to patrimonial. Possession is an essential attribute of ownership.
Above declaration or act declaring the land as Whoever owns the property has the right to
alienable and disposable is a requirement, which possess it. Adjudication of ownership includes
could be in the form of: a) Executive Order; b) the delivery of possession if the defeated party
Administrative Action; c) Statute; or d) A court has not shown any right to possess the land
judgment declaring the change of classification. independently of her rejected claim of ownership
[Pascual vs. Daquioag, GR No. 162063 (2014)].
Distinctions between Public Lands and
Right to Hidden Treasure
Government Lands
Hidden treasure belongs to the owner of the
a. Public lands involve the public domain
land, building, or other property where it is
and cannot include lands owned by
found. In the interest of science or arts, the
government except for those open to
State may acquire the treasure subject to just
the public for sale or acquisition;
compensation [Art. 438, Civil Code].
b. Government lands include public lands
and other properties which are being
used or reserved for public use including
patrimonial lands.

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Right to Self-Help with the use of just compensation. Manner of taking may be
immediate Reasonable Force Against through negotiated sale (interest included only if
Trespassers and Squatters stipulated) or if the purchase price is contested,
The owner or lawful possessor of a thing has the through expropriation [RP-DPWH v. Gamir-Diaz
right to exclude any person from the enjoyment Heirs, G.R. No. 218732 (2018)].
and disposal thereof. He may use reasonable
force necessary to repel or prevent an actual or Seven Rights of Ownership
threatened unlawful physical invasion or 1. Jus Possidendi (right to possess)
usurpation of his property [Art. 429, Civil Code]. ● Right to hold the thing and does not
necessarily include the right to use
Exception (e.g., contract of deposit)
State of Necessity; The owner has no right to 2. Jus Utendi (right to use and enjoy)
prohibit the interference of another if it is ● Includes the right to exclude any
necessary to avert an imminent danger and person from the enjoyment and
threatened damage much greater than the disposal thereof
damage arising from the interference [Art. 432, ● Limitation: use in such a manner as
Civil Code]. not to injure the rights of a third
person
Court action if occupation already 3. Jus Fruendi (right to the fruits)
established by the intruder. ● Right to the fruits
If no immediate action was taken by the owner ● Kinds of Fruits:
against the intruder who has occupied the i. Natural
property, the owner must go to court. ii. Industrial
iii. Civil
Actual possession under claim of ownership 4. Jus Abutendi (right to consume)
raises a disputable presumption of ownership. ● Includes the right to transform or
The true owner must resort to judicial process abuse or destroy by its use
for the recovery of the property [Art. 430, Civil 5. Jus Disponendi (right to dispose)
Code]. ● Also includes the right not to dispose,
or to alienate
The right of action based on ownership to 6. Jus Vindicandi (right to vindicate or
recover property from the holder and possessor recover)
is an action for reconveyance or accion ● Includes the right of action against
reivindicatoria. the holder and possessor of the thing
in order to recover it b. Must resort
to judicial process for the recovery of
Police Power to condemn property.
the property
When the property is condemned in the interest
7. Jus Accesionis (right to accessories)
of health, safety and security, the owner is not
entitled to just compensation [Art. 436, Civil
Code]. Note: Some commentaries include an eight
right in the enumeration; Jus Tresauris or the
Eminent Domain right to hidden treasure.
The State has the right to take private property
for public use (road building or widening) with
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PROPERTY CIVIL LAW

II. LIMITATIONS ON THE RIGHT

RIGHT OF ACCESSION,
OF OWNERSHIP
MOVABLES AND
1. Those arising from conflicts of
IMMOVABLES
private rights (e.g., those which take Right of Accession
place in accession continua) The ownership of property gives the right by
2. Those imposed by law (e.g., Legal accession to everything which is produced
easements) thereby (accession discreta), or which is
3. Those imposed by the owner incorporated or attached thereto, either naturally
himself (e.g., Voluntary easement, or artificially (accession continua) [Art. 440, Civil
pledge, lease) Code].
4. Those imposed by the grantor of
the property on the grantee To the owner belongs:
a. by contract (e.g., donation) 1. Natural fruits, spontaneous products of
b. by last will the soil, and the young and other
5. Those imposed in general by the products of animals [Art. 441, 442, Civil
State [Art. 435, Civil Code] Code]
a. Power of eminent domain 2. Industrial fruits are those produced by
b. Police power lands of any kind through cultivation or
c. Power of taxation labor [Art. 441, 442, Civil Code].
6. Specific Limitations 3. Civil fruits are rents of buildings, the
● Aliens have no right to acquire price of leases of lands and other
any public or private property and the amount of perpetual or
agricultural, commercial, or life annuities or other similar income
residential lands in the [Art. 441, 442, Civil Code].
Philippines. Aliens may only
acquire such lands by hereditary Right of Accession with Respect To
succession [Krivenko v. Registry Immovable property
of Deeds, G.R. No. L-630 Whatever is built, planted or sown on the land
(1947)]. of another and the improvements or repairs
● The owner of a thing has no made thereon, belong to the owner of the land
right to prohibit the interference [Art. 445, Civil Code].
of another with the same, if the
interference is necessary to Presumption of Ownership in Favor Of
avert an imminent danger and Owner
the threatened damage, All works, sowing, and planting are presumed
compared to the damage arising made by the owner and at his expense until the
to the owner from the contrary is proved [Art. 446, Civil Code].
interference, is much greater.
The owner may demand from There must be two properties owned by two
the person benefited, indemnity different persons. There is no accession if there
for the damage to him [Art. is only one owner.
432, Civil Code].
● Nuisances [Art. 694, Civil Code]
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 PROPERTY CIVIL LAW

The following discussion assumes there are When a LandOwner

three persons with three different undertakings Builder/Planter/Sower (LO-BPS)
or rights, and who own separate properties: makes Constructions/Plantings with
Materials of Another (OM)
Land Owner Builder/ Supplier-
LO-BPS Owner of Materials
Planter Owner
GF GF
Land Labor Materials
LO-BPS can acquire OM is entitled to full
the materials payment or OM may
Kinds of Expenses provided there is full remove the materials
1. Necessary - incurred for the payment. provided there is no
preservation of the thing substantial injury to
2. Useful - increases the value or work done.
augments the income of the property
GF BF
3. Luxurious - expenses for pure luxury or
mere pleasure LO-BPS can acquire OM loses the
the materials for free materials and will be
Rules and will be entitled to liable for damages
damages due to due to defects or
1. Necessary expenses shall be refunded to
defects or inferior inferior quality of the
every possessor; but only the possessor quality of the materials
in good faith may retain the thing until materials
he has been reimbursed therefor.
2. Useful expenses shall be refunded only BF GF
to the possessor in good faith with the
LO-BPS can acquire OM is entitled to full
same right of retention, the person who
the materials payment for the
has defeated him in the possession provided there is full materials plus
having the option of refunding the payment plus damages or OM may
amount of the expenses or of paying the damages. remove the materials
increase in value which the thing may even if there is
have acquired by reason thereof [Art. substantial injury to
546, Civil Code]. the work done plus
damages.
3. Expenses for pure luxury or mere
pleasure shall not be refunded to the BF BF
possessor in good faith; but he may
remove the ornaments with which he Same as when both are in good faith.
has embellished the principal thing if it
suffers no injury thereby, and if his
successor in the possession does not
prefer to refund the amount expended
[Art. 548, Civil Code].

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Rights of the Builder/Planter/Sower

(BPS) in relation to the Landowner If BPS cannot pay the rent,
(LO) LO can eject BPS from the
land
LO Builder/Planter/Sower
(BPS)

GF GF GF BF

Option 1: To To receive payment for the Option 1: To Loses whatever has been
acquire value of the land and acquire built, planted or sown and
whatever has necessary, useful and whatever has liable to pay damages.
been built, luxurious expenses (if LO been built,
planted or wants to get luxurious planted or Entitled to payment for
sown and improvements) with right of sown for free necessary expenses for
payment of retention without any but must pay preservation without right of
the necessary obligation to pay rent until necessary retention.
expenses, full payment. expenses and
useful luxurious Not entitled to payment for
expenses and To remove the useful expenses (if useful expenses and cannot
luxurious improvements provided it LO wants to remove even if removal will
expenses (if does not cause any injury get the not cause injury.
the LO wants (this is part of right of luxurious
to get the retention). improvements If LO wants luxurious
luxurious ) plus improvements, BPS is
improvements If LO does not get the damages. entitled to payment. The
). luxurious improvements, BPS value of the luxurious
can remove the same improvements will be as of
provided there is no injury to the date LO obtains
the land or the building. possession. If LO does not
want luxurious
Option 2: To To purchase land at fair improvements, BPS may
oblige the BP market value provided its remove luxurious
to buy the value is not considerably improvements if it will not
land or the S more than that of the cause injury.
to pay rent building or trees.
unless the Option 2: To Obliged to pay for land or to
value of the If BP cannot pay purchase oblige BP to pay rent plus damages
land is price of the land or the S buy land or S regardless whether the value
considerably cannot pay the rent, LO can to pay rent of the land is considerably
more than require BPS to remove plus damages more than that of the
that of the whatever has been built, regardless building or the trees.
building or planted or sown. whether the
trees. value of the
If the value of land is land is
considerably more than that considerably
of the building or trees, BPS more than
cannot be compelled to buy that of the
the land. In such case, BPS building or the
will pay reasonable rent. trees.

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● Art. 448 does not apply to cases which are

Option 3: To Obliged to remove or
compel BPS to demolish work done plus governed by other provisions of law such
remove or damages as co-ownership, usufruct, agency, lease.
demolish work ● The provision on indemnity in Art. 448 may
done plus be applied by analogy considering that the
damages. primary intent of the law is to avoid a state
of forced co-ownership especially where
BF GF the parties in the main agree that Arts. 448
and 546 are applicable and indemnity for
To pay for Option 1: To receive the improvements may be paid although
whatever has payment for whatever has they differ as to the basis of the indemnity
been built, been built, planted or sown [Pecson vs. CA, G.R. No. 115814 (1995)].
planted or plus damages.
sown plus
damages. Option 2: To remove I. ACCESSION DISCRETA
whatever has been built,
planted or sown even if it The right to the ownership of the fruits
will cause injury plus produced by one’s property.
damages.

BPS has no option to acquire General Rule

or buy the land The right of the owner to the products of his
property or to the fruits of the same regardless
BF if it is natural, industrial or civil fruits.
Same as when both are in good faith.
Exceptions
1. In usufruct: The usufructuary is
● The landowner may not refuse both to pay
entitled not only to the enjoyment of the
for the building and to sell the land and
property subject matter thereof but also
instead seek to compel the owner of the
to its fruits
building to remove the building from the
2. In lease of rural lands: The lessee is
land. He is entitled to such removal ONLY
entitled to the natural and industrial
when, after having chosen to sell the land,
fruits of the thing leased while the lessor
the other party fails to pay for said land
is entitled to civil fruits in the form of
[Ignacio vs. Hilario, G.R. No. L-175 (1946)].
the rent paid by the lessee.
● Should no other arrangement be agreed 3. In antichresis: The creditor acquires
upon, the owner of the land does not the right to receive the fruits of an
automatically become the owner of the immovable loan from his debtor, with
improvement [Filipinas Colleges, Inc. vs. the obligation to apply them to the
Timbang, G.R. Nos. L-12812-13 (1959)]. payment of the interest, if owing, and
● Art. 448 is not applicable where a person thereafter to the principal of his credit
constructs a house on his own land and 4. In possession in good faith: A
then sells the land, not the building. possessor in good faith is entitled to the
[Coleongco vs. Regalado, G.R. No. L-4529 fruits received by him before his
(1952)]. possession is legally interrupted.

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5. Fruits naturally falling: Fruits unborn – beginning of

naturally falling upon adjacent land maximum ordinary period of
belong to the owner of the said land gestation.
and not to the owner of the tree. d. Fowls: from the time of
incubation.
Kinds of fruits 2. Pay expenses to third person
1. Natural fruits possessor in good faith – He who
Spontaneous products of the soil that receives the fruits has the obligation to
appear without the intervention of pay the expenses incurred by a third
human labor, and the young and other person in the production, gathering and
products of animals. preservation of the fruits [Art. 443, Civil
Code].
Requirement: It is necessary that a. Exception: Owner does not
there must be no human labor which have to pay if land is recovered
has intervened in its generation. before gathering from a
possessor in bad faith. Note:
About the young and the animal But if the owner recovers land
products – If there is no stipulation as to from possessor in bad faith, he
who is the owner of the young, “the may choose to acquire the land
young belongs to the owner of the and he can make the possessor,
female parent.” builder, planter, sower account
for the fruits that have been
2. Industrial fruits gathered, with the obligation to
Those produced by lands of any kind deduct the expenses for
through cultivation and labor. producing, harvesting and
preservation of the fruits.
Requirement: Must come from the
soil. II. ACCESSION CONTINUA

3. Civil fruits The right of the owner to anything which is

Rents of buildings, price of leases of incorporated or attached to his property,
lands, and other property and the whether the attachment is by reason of natural
amount of perpetual or life annuities or or artificial causes.
other similar income [Art. 442, par. 3.,
Civil Code].
A. ACCESSION INDUSTRIAL

Applicable principles
General Principles
1. Time of accrual depending on kind:
1. Accessory follows the principal.
a. Annuals: from the time
2. The incorporation or union must be
seedlings appear on the ground.
intimate that removal or separation
b. Perennials: from the time fruits
cannot be effected without substantial
actually appear on the plants.
injury to either or both.
c. Young of animals: from the time
they are in the womb, although

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3. Good faith exonerates a person from b. Avulsion

punitive liability, but bad faith may give Whenever the current of a river, creek or torrent
rise to dire consequences. segregates from an estate on its bank a known
4. Bad faith of one party neutralizes the portion of land and transfers it to another
bad faith of the other. estate, the owner of the land to which the
5. No one should enrich himself at the segregated portion belonged retains the
expense of another. ownership of it, provided that he removes the
6. He who is in bad faith may be penalized. same within two years [Art. 459, Civil Code].

B. ACCESSION NATURAL Requisites

1. Segregation and transfer must be
Accretion or accession involving lands caused by the current of a river,
adjacent to rivers, ponds or lagoons creek or torrent [Art. 459, Civil Code].
To the owners of lands adjoining the banks of 2. Segregation and transfer must be
rivers belong the accretion which they gradually sudden or abrupt [Canas v. Tuason, 5
receive from the effects of the current of the Phil. 688 (1929)].
waters [Art. 457, Civil Code]. 3. The portion of land transported must be
known or identifiable [Art. 459, Civil
Riparian owners are owners of lands adjacent to Code].
river banks.
Alluvion Avulsion
a. Alluvion
The slow, gradual, almost imperceptible Deposit of soil is Deposit of soil is
gradual and sudden or abrupt.
accretion or deposit of land mass attached to
imperceptible.
the river banks is called alluvion.
Soil cannot be Soil is identifiable and
Note that an alluvial deposit must be registered identified. verifiable
under the Torrens system by the riparian owner
to prevent third parties from invoking Deposit of soil belongs Deposit of soil belongs
to the owner of the to the owner from
prescription based on occupation [Delos Reyes v
property to which it is whose property it was
Kalibo, Aklan, G.R. No. 214587 (2018)]. attached. detached provided he
removes the same
Requisites within two years.
1. Deposit or accumulation of soil or
sediment must be gradual and c. Uprooted Trees
imperceptible [Art. 457, Civil Code]. Refer to trees uprooted and carried away by the
2. Accretion results from the effects or current of the waters [Art. 460, Civil Code].
action of the current of the waters of
the river [Gov’t of the Phils. v. Cabangis,
Rule on uprooted trees
53 Phil. 112 (1929)].
The uprooted trees must be claimed by the
3. The land where accretion takes place
original owner within six months; otherwise, he
must be adjacent to the bank of a river
will lose ownership and the law will transfer
[Art. 457, Civil Code].

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ownership to the owner of the land upon which e. Division of river into branches
the uprooted trees are found.
Three kinds of islands
Note: The law only requires the original owner 1. Island formed under Art. 463 – The
to claim the uprooted trees within six months, current of a river simply divides itself
unlike a chunk of land which the law requires into branches, leaving a piece of land or
the original owner to remove or take it back part thereof isolated, thereby forming an
within two years to retain ownership. island. Since the land has not been
permanently invaded by the waters of
d. Abandoned river bed due to the river, no natural expropriation will
change of course of river occur.
2. Island formed under Art. 464 – An
Requisites island is formed on a sea, lake or
1. River bed is abandoned and becomes navigable or floatable river through
dry land. whatever cause.
2. There must be a natural change in the a. Clearly speaks of an addition to
course of the waters of the river. the property of the State since
3. The change must be abrupt or sudden. the island thus formed is
[Art. 461, Civil Code] expressly declared to be
property of the latter.
Rights of Owner of Land Occupied by 3. Island formed under Art. 465 – An
the New River Course island formed in non-navigable or
1. Right to old bed ipso facto in proportion non-floatable rivers through successive
to area lost; accumulation of deposits in the same
2. Owner of adjoining land to old bed: manner as alluvion.
right to acquire the same by paying its a. Formed in a navigable or
value – Value not to exceed the value of floatable river → Art. 464, NCC
area occupied by new bed. [Art. 461, applies here.
Civil Code] b. Formed through a sudden and
abrupt process due to
Whenever a river, changing its course by natural segregation of identifiable
causes, opens a new bed through a private portions of land from an estate
estate, this bed shall become of public dominion → Art. 463, NCC applies here.
[Art. 462, Civil Code].
Requisites
Owners will get back this previous property if 1. It shall belong to the owner of the
the course of the river reverts to its original margins or banks nearest to the island;
place [Sanchez v. Pascual, 11 Phil. 395 (1969)]. 2. If the island is in the middle of the river,
the same shall be owned by the owners
of both margins, which case it shall be
divided longitudinally in halves; or
3. If the island is more distant from one
margin than from the other, the owner

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of the nearer margin shall be the sole When they belong to the owners of the
owner. nearest margins of banks
1. through successive accumulation of
Rationale: The owners of the bank nearer the alluvial deposits; and
islands are in the best position to cultivate and 2. on non-navigable and non-floatable
attend to the exploitation of the same. rivers.

f. Formation of islands Note: If the island is in the middle of the river,

divide longitudinally in half. If it is nearer to one
Islands Formed in Non-navigable or margin or bank, to the nearer riparian owner
Non-Floatable Rivers (Art. 465)
1. Belong to the owners of the margins or
banks of the river nearest to each of Note: If a landowner allows the sea or a lake to
them. eat up his land completely, it is a case of natural
2. If equidistant, i.e. divided longitudinally expropriation and if the land later reappears, he
in halves, each bank getting half [Art. does not regain ownership thereof [Republic v.
465, Civil Code] Cabangis, G.R. No. L28379 (1929)].

Note: Riverbeds that dry up continue to belong For movables

to the State as its property of public dominion, a. Conjunction/Adjunction
unless there is an express law that provides that Conjunction
the dried up riverbeds should belong to some Union, without bad faith, of two (2) movable
other person [Republic vs. Santos III, GR No. things belonging to different owners in such a
160453 (2012)]. way that they form a single object. The owner of
the principal thing acquires the accessory after
Test of navigability is whether it can be used as indemnifying the owner of the latter for its value
a highway of commerce, trade, and travel. [Art. 466, Civil Code].

When they belong to the State Adjunction

1. Formed on the seas within the The union of two (2) movable things belonging
jurisdiction of the Philippines; to different owners in such a way that they form
2. Formed on lakes; or a single object, but each of the component
3. Formed on navigable or floatable rivers: things preserves its value.
a. Capable of affording a channel
or passage for ships and General Rule: When the things united can be
vessels; separated without injury, their respective owners
b. Must be sufficient not only to may demand their separation [Art. 469(1), Civil
float bancas and light boats, but Code].
also bigger watercraft;
c. Deep enough to allow Exception: The owner of the accessory may
unobstructed movements of demand the separation of the things united even
ships and vessels. [Art. 464, if there will be injury if the accessory is more
Civil Code] precious than the principal thing [Art. 467 and
469(2), Civil Code].

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b. the accessory be separated

Note: Under Art. 469(2), an accessory is the even if it would be necessary to
thing united with the principal for the latter’s destroy the principal.
use, embellishment, or perfection. There is indemnity for damages in either
case [Art. 470, par. 2, Civil Code]
Requisites 3. Owner of Accessory in Good Faith
1. There are two (2) movables belonging Has a right to demand separation even
to different owners; though there may be damage if the
2. They are united in such a way that they accessory is more valuable.
form a single object; and 4. Both in Bad Faith
3. They are so inseparable that their By analogy, they are treated as if they
separation would impair their nature or were both in good faith [Art. 453, Civil
result in substantial injury to the other Code]
component. 5. Either of the owners made the
Rules in determining the principal incorporation with the knowledge
thing and without exception of the other
1. That which the other has been united as Treat owners as if both acted in good
an ornament or for its use or perfection faith [Art. 470, par. 3, Civil Code].
2. If it cannot be determined by applying
#1, the one with the greater value b. Commixtion/Confusion
3. If the values are equal, the one with 1. Mixture
greater volume Two or more things belonging to
4. The thing of greater merits, taking into different owners are combined with the
consideration all the pertinent legal respective identities of the component
provisions, as well as the comparative parts destroyed or lost.
merits, utility and volume of their 2. Commixtion
respective things [Arts. 467-468, Civil Mixture of solid things.
Code]. 3. Confusion
Mixture of liquid things.
Ownership of New Object Formed by
Adjunction Rules
1. Owner of Principal Object in Good 1. Co-ownership based on proportional
Faith value if caused by:
Acquires the thing with the duty to a. the will of the parties;
indemnify the owner of the accessory b. chance, and injury will result if
[Art. 466, Civil Code] things are separated; or
2. Owner of Principal Object in Bad c. will of only one owner, but in
Faith good faith.
The owner of the accessory has the 2. If caused by the will of one party in bad
right to choose between: faith:
a. receiving payment from the a. He forfeits the thing belonging
owner of the principal (value of to him
the accessory; or b. He must pay damages

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3. If the mixture is made with the

knowledge, but without the objection, of 1. Appropriate the work to himself
the other owner the parties will be without paying the maker.
considered as if they acted in good
faith. Exception
If the value of the work, for artistic or
Note: Good faith in accession does not scientific reasons, is considerably more
necessarily exclude negligence, which gives rise than that of the material [in this case,
to damages [Art. 456, Civil Code]. only option 2 is available]; or

Legal effects 2. Demand the maker to indemnify him

● Worker/maker in good faith (Art. for the value of the material and
474) damages.
General Rule: The worker in good faith
who employs the material of another to ● Worker/maker made use of
make a thing of a different kind material without consent and
appropriates the thing thus transformed without objection of owner
after indemnifying the owner of the Rights shall be determined as though
materials for the value of the material both acted in good faith [Art. 474, par.
[Art. 474, par. 1, Civil Code]. 1, Civil Code].

Exception: If the material is more Note: For the right of accession with
value or more precious than the new regards to moveable property,
thing, the owner of the material may: sentimental value is duly appreciated
1. Appropriate the new thing to himself [Art. 475, Civil Code].
after paying indemnity for the of the
work; or
2. Demand indemnity for the material QUIETING OF TITLE
[Art. 474, par. 2, Civil Code] Quieting of Title
Action for Quieting of Title
● If the owner of the material was in Whenever there is a cloud on title to real
bad faith, the maker in good faith property or any interest therein, by reason of
may: any instrument, record, claim encumbrance or
1. Appropriate the new thing without proceeding which is apparently valid or effective
paying the owner of the material; but is in truth and in fact invalid, ineffective,
2. Require the owner to pay him the voidable or unenforceable, and may be
value of the thing, his work, or labor, prejudicial to said title, an action may be
with damages [Applying Art. 470, par. 2] brought to remove such cloud or to quiet the
title. An action may also be brought to prevent
● Worker/maker in bad faith (Art. a cloud from being cast upon the title to real
474, par. 3) property or any interest therein [Art. 476, Civil
If the maker was in bad faith, but the Code].
owner of the materials was in good
faith, the owner may:

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I. REQUISITES OF AN ACTION or terminated, or has been barred by

TO QUIET TITLE [Art. extinctive prescription.
4. Such instrument, etc. may be prejudicial
476-477, NCC]
to the plaintiff's title.

1. Plaintiff has a legal or an equitable

Purpose of Action
title to or interest in the real property
To procure the cancellation, delivery, release of
subject of the action; and he need not
an instrument, encumbrance or claim, which
be in possession of said property.
constitutes a claim in the plaintiff’s title, and
● Legal Title - denotes registered
which may be used to injure or vex him in his
ownership
enjoyment of his title.
● Equitable Title - beneficial
ownership [Art. 476, Civil Code]
There exists a claim where the plaintiff
2. There must be a cloud on such title.
declares his own claim and title, and at the
3. Such cloud must be due to some
same time indicates the source and nature of
instrument, record, claim,
the defendant's claim, pointing out its
encumbrance or proceeding which is
defects and praying for the declaration of
apparently valid or effective but is in
its invalidity. Action is preventive in nature.
truth invalid, ineffective, voidable or
unenforceable, and is prejudicial to the
plaintiff’s title.
III. REQUISITES FOR AN ACTION
TO PREVENT A CLOUD ON
Purpose of Action TITLE
To put an end to vexatious litigation with respect
to the property involved. 1. Plaintiff has a title to a real property or
interest therein;
There exists a claim where the plaintiff 2. Defendant is bent on creating a cloud
asserts own claim and declares that the on the title or interest therein. The
claim of the defendant is unfounded and danger must not be merely speculative
calls on the defendant to justify his claim on the or imaginary but imminent.
property for the court to determine the same. 3. Unless the defendant is restrained or
Action is remedial in nature. stopped, the title or interest of the
plaintiff will be prejudiced or adversely
II. REQUISITES FOR EXISTENCE affected.
OF CLOUD ON TITLE [Art. 476
and 478, NCC] Purpose of Action
To remove possible foundation of a future
hostile claim. No present claim exists, but there
1. There is an instrument, record, claim,
is the imminent danger that the defendant
encumbrance or proceeding.
creates a cloud on the title. Action is
2. The instrument, etc. is apparently
preventive in nature.
valid or effective.
3. The instrument, etc. is in truth and in
fact invalid, ineffective, voidable or
unenforceable, or has been extinguished
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When Inapplicable declaration of his rights or duties, thereunder

The action to prevent a cloud on title is [Bar Matter No. 803, 17 February 1998].
inapplicable to:
1. Questions involving interpretation of IV. PRESCRIPTION OR
documents; NON-PRESCRIPTION OF
2. Mere written or oral assertions of claim,
ACTION
except if made in a legal proceeding or
asserts that an instrument or entry in
plaintiff’s favor is not what it purports to 1. If the plaintiff is in possession of the
be; property – action does not prescribe.
3. Boundary disputes; 2. If plaintiff is not in possession of
4. Deeds by strangers to the title unless property
purporting to convey the property of the a. Plaintiff is a possessor with real
plaintiff; right – action prescribes in 10
5. Instruments invalid on their face; or years.
6. Cases where the validity of the instrument b. Plaintiff is owner of the property
involves a pure question of law. – action prescribes in 30 years.

Plaintiff must return to the defendant all benefits An action to quiet title may be defeated by claim
he may have received from the latter, or of ordinary or extraordinary acquisitive
reimburse him for expenses that may have prescription by the defendant.
redounded to his benefit [Art. 479, Civil Code].
The possession of the actual possessor must be
respected during the pendency of the case for
General Rule
quieting of title [Balbecino v. Judge Ortega, G.R.
An action to quiet title applies only to real
No. L-14231, April 28, 1962].
property.

Exception
Except to some personal properties like vessels CO-OWNERSHIP
or stock certificates which partake of the nature
Co-Ownership
of real property, or when they are considered as
There is co-ownership whenever the ownership
real property because of special registration
of an undivided thing or right belongs to
requirements.
different persons [Art. 484, Civil Code].

Who May File

I. REQUISITES
Any person interested under a deed, will,
contract or other written instrument, or whose
1. Plurality of owners;
rights are affected by a statute, executive order
2. Object must be an undivided thing or
or regulation, ordinance, or any other
right; and
governmental regulation may, before breach or
3. Each co-owner’s right must be limited
violation thereof, bring an action in the
only to his ideal or abstract share of the
appropriate RTC to determine any question of
physical whole [De Leon].
construction or validity arising, and for a

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What Governs Co-Ownership d. Condominium Law: co-ownership of

(Art. 484, par. 2) the common areas by holders of units
1. Contracts; [Sec. 6(c), RA 4726]
2. Special laws; and
3. The Civil Code. B. CONTRACT
a. In general [Art. 494, Civil Code]
Characteristics b. Universal partnership [Art. 1779, Civil
1. There are two (2) or more co-owners. Code]
2. There is a single object which is not c. Associations [Art. 1775, Civil Code]
materially or physically divided and his
ideal share of the whole. C. INTESTATE SUCCESSION
3. There is no mutual representation by Co-ownership between the heirs before
the co- owners. partition of the estate [Art. 1078, Civil Code]
4. It exists for the common enjoyment of
the co-owners. D. TESTAMENTARY DISPOSITION OR
5. It has no distinct legal personality. DONATION INTER VIVOS
6. It is governed first of all by the contract
of the parties; otherwise, by special
Donations Made to Several Persons
legal provisions, and in default of such
Jointly
provisions, by the provisions of Title III
General Rule: When a donation is made to
on Co-Ownership.
several persons jointly, it is understood to be in
equal shares, and there shall be no right of
Only Limitation
accretion among them.
Each of the co-owners holds the property pro
indiviso and exercises his or her rights with the
Exception: When the donor has otherwise
entire property; thus, each co-owner may use
provided [Art. 753, Civil Code]
and enjoy the property with no other limitation
than that he shall not injure the interests of his
co-owners [Silva v. Lo, G.R. No. 206667 (2021)]. Donations Made to Spouses Jointly
General Rule: In donations to spouses jointly,
right of accretion is presumed.
II. SOURCES OF
CO-OWNERSHIP Exception: The donor provides otherwise [Art.
753, par. 2., Civil Code].
A. LAW
a. Cohabitation: co-ownership between Prohibition against partition: A donor or
common law spouses [Arts. 147-148, testator may prohibit partition for a period which
90, Family Code] shall not exceed 20 years [Art. 494, par. 3., Civil
b. Purchase creating implied trust Code].
[Art. 1452, Civil Code]
c. Easement of party wall:
co-ownership of part- owners of a party
wall [Art. 658, Civil Code]

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E. BY FORTUITOUS EVENT OF BY
CHANCE Each co-owner is at the same time absolute
1. Co-ownership between owners of 2 owner of his own ideal but definite share which
things that are mixed by chance or by determines his rights and obligations in the
will of the owners [Art. 472, Civil Code]. co-ownership. [Cruz v. CA, G.R. No. 122904,
2. Hidden Treasure - When the discovery is 2005].
made on the property of another, or of
the State or any of its subdivisions, and b. Presumption of Equal Share
by chance, one half shall be allowed to The portions belonging to the co-owners in the
the finder [Art. 438, Civil Code]. co-ownership shall be presumed equal, unless
the contrary is proved [Art. 485(2), Civil Code].
F. BY OCCUPANCY
Harvesting and fishing: co-ownership by two (2) B. RIGHT TO USE THE THING OWNED
or more persons who have seized a res nullius IN COMMON [Art. 486, Civil Code]
thing [Art. 713, Civil Code].

C. RIGHT TO FULL OWNERSHIP OF

III. RIGHTS OF CO-OWNERSHIP HIS PART AND OF THE FRUITS AND
BENEFITS PERTAINING THERETO
a. Right to Share in the Benefits as well as the [Art. 493, Civil Code]
Charges
b. Right to Use the Thing owned in Common
Distinctions between Right to Property
c. Right to Full Ownership of his part and of
the Fruits and Benefits pertaining thereto
Owned in Common and Full Ownership
d. Right to bring an Action in Ejectment over the Ideal Share
e. Right to compel other Co-owner to Property Owned in Full Ownership
contribute to the Expenses of Preservation Common Over the Ideal
and to the Taxes Share
f. Right to Reimbursement for Necessary
Repairs
g. Right to Oppose Alterations Rights Involved
h. Right to Partition
i. Right to Redemption Right to use the thing A co-owner has the
j. Right to Participate in Administration of owned in common right to:
Property Owned in Common [Art. 486, Civil Code] 1. Alienate;
2. Assign;
3. Mortgage; and
A. RIGHT TO SHARE IN THE BENEFITS 4. Substitute another
AS WELL AS THE CHARGES [Art. person in its
485, Civil Code] enjoyment.

Exception: When
a. Proportionality personal rights are
The share of the co-owners shall be proportional involved [Art. 493]
to their respective interests. Any stipulation to
Limitations
the contrary is void [Art. 485(1), Civil Code].

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accion publiciana, replevin, accion

Use of the thing The rights above can
owned in common only pertain to the reivindicatoria).
must be: co-owner’s ideal
share prior to The Action is considered filed for the benefit of
1. in accordance with partition. all the co-owners.
the purpose for which
the co-ownership is Co-owners are free to
A co-owner may bring such an action without
intended. The dispose of their
purpose of the undivided aliquot joining all the other co-owners as co-plaintiffs
co-ownership may be shares therein, because the suit is presumed to have been filed
changed by limited to the portion to benefit his co-owners. If the
agreement, express allotted to them upon plaintiff/co-owner claims to be the sole owner,
or implied. partition. If the sale is the action should be dismissed [Clemente v.
of a definite portion Republic, G.R. No. 220008 (2019)].
2. in such a way as to of the common
not injure the interest property, the consent
of the co-ownership; of all co-owners is E. RIGHT TO COMPEL OTHER
required because it CO-OWNERS TO CONTRIBUTE TO
3. in such a way as operates as a
THE EXPENSES OF PRESERVATION
not to prevent the partition [Spouses Rol
other co-owners from v. Racho, G.R. No. AND TO THE TAXES [Art. 488, Civil
using it according to 246096 (2021)]. Code]
their right [Art. 486]
General Rule
A sale made before the partition of the property Each co-owner shall have a right to compel the
among the coheirs does not annul or invalidate other co-owners to contribute:
the deed of sale [Lipa Agricultural Development 1. To the necessary expenses (incurred for
Corp. v. Salas, G.R. No. 242646, (2021)]. Only preservation of the thing or right). If
the rights of the co-owner/seller are transferred, practicable, he must first notify his
thereby making the buyer a co-owner of the co-owners of the necessity for such
property. repairs [Art. 489, Civil Code]
2. To the taxes [Art. 488, Civil Code]
The proper action in such a case is not for the
nullification of the sale, or for the recovery of Exception to paying necessary
possession of the property owned in common expenses and taxes
from the third person, but for division or Co-owner no longer has to pay if he renounces
partition of the entire property if it continued to his undivided interest as equivalent to his share
remain in the possession of the co-owners who of expenses and taxes [Art. 488, Civil Code].
possessed and administered it. [Tomas Claudio This means that his/her renunciation does not
Memorial College, Inc. v. Court of Appeals, G.R. cover all of his/her interest in the property
No. 124262, (1999)]. co-owned.

D. RIGHT TO BRING AN ACTION IN Exception to the Exception

EJECTMENT [Art. 487, Civil Code] No waiver shall be made if prejudicial to
Actions contemplated: All cases for recovery of co-ownership [Art. 488, Civil Code].
possession (forcible entry, unlawful detainer,

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1. Expenses to improve or embellish the

thing shall be decided upon by a Rationale: Alteration is an act of ownership.
majority as determined in Art. 492, Civil
Code. Alteration – a change in the nature or use of a
2. As for the expenses for pure luxury or thing; it contemplates a permanent change.
mere pleasure, these are not refundable
for not serving purposes of preservation Examples:
[Art. 548, Civil Code]. 1. Change of the thing from the state or
essence in which the others believe it
F. RIGHT TO REIMBURSEMENT FOR should remain. Withdrawal of the thing
NECESSARY REPAIRS [Arts. from the use to which they wish it to be
488-489, Civil Code] intended
2. Any other transformation which
prejudices the condition or substance of
General Rule: A co-owner has the right to
the thing or its enjoyment by the others
compel the other co-owners to contribute to the
[Manresa].
expenses of preservation, maintenance, or
necessary repairs of the thing or right owned in
common and to the taxes [Art. 488, Civil Code]. Examples of Alterations
1. The construction of a house on the
Requirement of notice: If practicable, the co-owned property is an act of
co-owner must first notify the co-owners of the dominion. It is an alteration of the
necessity for the repairs [Art. 489, Civil Code]. property owned in common [Cruz v.
Catapang, G.R. No. 164110 (2008)].
Exception to the requirement of notice: If 2. Mortgage, donation, or sale of a portion
impracticable or where the repairs are very or the whole of the property co-owned
urgent, and the other co-owners are in remote 3. Allowing or entering into an easement
places and cannot be reached by an ordinary
means of communication. This means that Exception: If the withholding of the consent by
his/her renunciation does not cover all his/her one or more of the co-owners is clearly
interest in the property co-owned. prejudicial to the common interest, the courts
may afford adequate relief.
Lack of notice even if practicable: Does not
exempt other co-owners to contribute. The H. RIGHT TO PARTITION [Art. 494,
co-owner who advanced them has the burden of Civil Code]
proving that they were properly incurred.
Partition is the separation, division and
G. RIGHT TO OPPOSE ALTERATIONS assignment of a thing held in common among
[Art. 491, Civil Code] those to whom it may belong. Every act which is
intended to put an end to indivision among
General Rule: Unanimous Consent - None co-heirs and legatees or devisees is deemed to
of the co-owners shall, without the consent of be a partition. Partition may be inferred from
the others, make alterations in the thing owned circumstances sufficiently strong to support the
in common, even though benefits for all would presumption. Thus, after a long possession in
result therefrom. severalty, a deed of partition may be presumed

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[Spouses Marcos v. Heirs of Bangi, G.R. No. not exceeding ten (10) years, shall be
185745 (2014)]. valid [Art. 494, Civil Code].
2. A donor or testator may prohibit
An oral partition by the heirs is valid if no partition for a period which shall not
creditors are affected. Even the requirement of a exceed twenty (20) years [Art. 494, Civil
written memorandum under the statute of Code].
frauds does not apply considering that such a 3. Neither shall there be any partition
transaction is not a conveyance of property when it is prohibited by law [Art. 494,
resulting in change of ownership but merely a Civil Code].
designation and segregation of that part which 4. When physical partition would render
belongs to each heir. [Lipa Agricultural the thing unserviceable for the use for
Development Corp. v. Salas, G.R. No. 242646 which it is intended [Art. 495, Civil
(2021)]. Code].

General Rule: Note: If the thing owned in common is

1. No co-owner shall be obliged to remain indivisible:
in the co-ownership; and 1. The co-owners can agree that it be
2. Each co-owner may demand at any time alloted to one of them, and the latter
the partition of the thing owned in will indemnify the others; or
common, insofar as his share is 2. If they cannot agree, the thing shall be
concerned [Art. 494(1), Civil Code]. sold and its proceeds distributed [Art.
498, Civil Code]
The fact that an agreement for partition lacks
technical description of the parties’ respective Elements for Prescription to Run in
portions or that the subject property is still Favor of Co-Owner:
embraced by a single certificate of title could not 1. He has performed unequivocal acts of
legally prevent a partition, where the different repudiation amounting to an ouster of
portions allotted to each are determined and the other co-owners;
separately identifiable [Leoverzo v. Valdez, G.R. 2. Such positive acts of repudiation have
No. 169985(2011)]. been made known to the other
co-owners; and
Note: A creditor or assignee of a co-owner may 3. The evidence thereon must be clear and
take part in the division of the thing owned in convincing [Salvador v. CA, G.R. No.
common and object to its being effected without 109910 (1995)].
their concurrence. But they cannot impugn any 4. He has been in possession through
partition already executed unless there has been open, continuous, exclusive, and
fraud or in case it was made notwithstanding a notorious possession of the property for
formal opposition to prevent it, without the period required by law [Figuracion v.
prejudice to the right of the debtor or assignor Figuracion-Gerilla, G.R. No. 151334
to maintain its validity [Art. 497, Civil Code]. (2013)].

Exceptions: Sample of Acts of Repudiation

1. An agreement to keep the thing 1. Filing of actions in court like quieting of title,
undivided for a certain period of time, accion reivindicatoria and other similar suit

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2. Co-owner who causes cancellation of the [Verdad v. Court of Appeals, G.R. No. 109972,
existing title and petitions for an issuance of a (1996)].
new title in his favor
3. Co-owner who permanently fences the J. RIGHT TO PARTICIPATE IN
property and hires security personnel to prevent ADMINISTRATION OF PROPERTY
other co-owners from entering the property OWNED IN COMMON [Art. 492,
Civil Code]
I. RIGHT TO REDEMPTION [Art. 1619,
Civil Code]
General Rule:
1. For the administration and better
Legal redemption – the right to be enjoyment of the thing owned in
subrogated, upon the same terms and common, the resolutions of the majority
conditions stipulated in the contract, in the place of the co-owners shall be binding [Art.
of one who acquires a thing by purchase or 492(1), Civil Code].
dation in payment, or by any other transaction 2. There shall be no majority unless the
whereby ownership is transmitted by onerous resolution is approved by the co-owners
title [Art. 1619, Civil Code]. who represent the controlling interest in
the object of the co-ownership [Art.
General Rule: A co-owner of a thing may 492(2), Civil Code].
exercise the right of redemption in case the
shares of all the other co-owners or of any of
Exceptions to Acts of Administration
them are sold to third person [Art. 1620, Civil
Only by Majority:
Code].
1. If there be no majority; or
2. If the resolution of the majority is
As legal redemption is intended to minimize
seriously prejudicial to those interested
co-ownership, once a property is subdivided and
in the property owned in common.
distributed among the co-owners, the
community ceases to exist and there is no more
In which case, the court will intervene: the
reason to sustain any right of legal redemption.
court, at the instance of an interested party,
Every act intended to put an end to indivision
shall order such measures as it may deem
among co-heirs is deemed to be a partition
proper, including the appointment of an
[Avila v. Sps. Barabat, G.R. No. 141993 (2006)].
administrator.

When exercised
Examples of Acts Seriously Prejudicial
Within 30 days from the notice in writing by the
1. Call for a substantial change of the thing
selling co-owner [Art. 1623, Civil Code]
2. Authorizing leases, loans, and other
contracts without the necessary security,
The written notice of sale is mandatory.
thereby exposing the property to serious
Notwithstanding actual knowledge of a coowner,
danger
he is still entitled to a written notice from the
3. Continued employment of an
selling co-owner in order to remove all
administrator who is guilty of fraud or
uncertainties about the sale, its terms and
negligence in his management
conditions, as well as its efficacy and status.
[Manresa]

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Note: A co-owner is entitled to a written notice

cracks in the walls, given to others [Arts.
from a selling co-owner in order to remove all electrical wiring 488 and 489, Civil
uncertainties about the sale, its terms and system which renders Code].
conditions, as well as its efficacy and status property unsafe/
[Verdad v. CA, G.R. No. 109972 (2000)]. unhealthy to live in)

Alterations (ex. Sale, Consensus of all

IV. RULES mortgage, co-owners [Art. 491,
assignment) Civil Code]
A. ON RENUNCIATION OF SHARE
Lease for more than Consensus of all
one (1) year co-owners
A co-owner may exempt himself from the (considered an act of
payment of expenses of preservation by alteration, see
renouncing his undivided interest in the Tolentino)
co-ownership as may be equivalent to his share
Acts of administration Majority of co-owners
in the necessary expenses and taxes [Art. 488, (ex. Payment of [Art. 492, Civil Code]
Civil Code]. taxes/association
dues, hiring
A co-owner who has not waived his share in the contractors to do
co-ownership may be compelled to pay his share minor repairs)
in the cost of its maintenance, but he may not
Improvement/ Majority of co-owners
be compelled to renounce. Embellishing the [Arts. 489 and 492,
Thing/ Useful Civil Code]
Waiver of renunciation is not allowed if it is expenses (ex.
prejudicial to the co-ownership [Art. 488, Civil Swimming pool,
Code]. CCTV, landscaped
gardens, etc.)

B. REPAIRS FOR PRESERVATION

EMBELLISHMENTS OR C. RULES ON MULTI-STORY HOUSE
IMPROVEMENTS [ART. 490, CIVIL CODE]

Requires consent of majority of co-owners Applies when:

representing the controlling interest in the 1. The different stories of a house belong
undivided thing [Arts. 489 and 492, Civil Code]. to different owners;
2. The titles of ownership do not specify
Note: The rules under Art. 492 are applicable, the terms under which they should
so judicial intervention may be resorted to. contribute to the necessary expenses;
and
Summary 3. There exists no agreement on the
subject.
Act of Co-Owner Consent Needed

Preservation (ex. May be made at will

Critical maintenance by any co-owner, but
work – roof leaks, preferably notice is

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Manner of Contribution based on the B. MERGER OF ALL INTERESTS IN

Part of the House ONE PERSON
1. Main and party walls, the roof, and the
other things used in common - All This may take place by any of the causes which
owners contribute in proportion to the are sufficient to transmit title to an obligation,
value of the story belonging to each. either by assignment, subrogation, and sale of
2. Floor of the entrance, front door, inheritance.
common yard, and sanitary works
common to all - All owners contribute C. ACQUISITIVE PRESCRIPTION
pro rata or equally
3. The floor of each co-owner’s story -
This is a mode of acquiring ownership by a
Each owner bears the cost of
possessor through the requisite lapse of time. It
maintaining the floor of his story
may be ordinary or extraordinary [Art. 1117,
4. Stairs - For stairs from the first entrance
Civil Code].
to the first story, contribution is through
pro rata sharing of all owners except the
Ordinary acquisitive prescription requires
owner of the ground floor. For stairs possession of things in good faith and with a
from the first to the second story, just title for the time fixed by the law.
contribution is through pro rata sharing
of all owners except the owner of the Extraordinary prescription is the opposite. No
ground floor and that of the first story; good faith or just title is required, but long
and so on. possession under Art. 1132 (2) [De Leon].

V. TERMINATION OR In this case between step-siblings about

EXTINGUISHMENT property inherited from their common mother
but different fathers, the deed of partition was
proven to have been implemented in 1920,
Means of Termination [STAMPD]:
leaving some properties in co-ownership.
1. Total Destruction of the thing owned in
Prescription started to run on the date of
common
repudiation of the co-owned properties which
2. Merger of all interests in one person
already prescribed when the complaint was filed
3. Acquisitive prescription
in 1973. However, one property was assigned to
4. Partition
Sixto Hallasgo in exchange for the house in the
5. Sale of property co-owned
poblacion. The heirs of Jardin may still recover
6. Termination of period agreed upon in
that if there was a violation of trust; the action
co-ownership
has not prescribed [Heirs of Jardin v. Heirs of
Hallasgo, G.R. No. L-55225 (1982)].
A. TOTAL DESTRUCTION OF THING
OR LOSS OF THE PROPERTY
D. PARTITION OR DIVISION
CO-OWNED

Modes:
Exception: If the building is destroyed, there is
1. Extrajudicial partition – The
still co-ownership over the land and the debris
agreement may be oral or written, done
[Tolentino].

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outside of court [Vda. de Reyes v. CA, 5. The co-heirs shall not be liable for the
G.R. No. 92436 (1991)]. subsequent insolvency of the debtor of
2. Judicial partition – Governed by the the estate, but only for his insolvency at
Rules of Court insofar as they are the time the partition is made [Art.
consistent with the Civil Code [Art. 496, 1095, Civil Code].
Civil Code].
Rights of Third Parties in Partition
Action for Partition Will Determine: 1. The partition of a thing owned in
[Heirs of Cesar Marasigan v. Marasigan, G.R. No. common shall not prejudice third
156078 (2008)] persons, who shall retain the rights of
1. Whether or not the plaintiff is indeed a mortgage, servitude, or any real rights
co-owner of the property belonging to them before the division
2. How the property will be divided was made [Art. 499, Civil Code].
between the plaintiff and defendant
Note: A “third person” is defined as all
Incidents of Partition those who did not in any way participate
1. Mutual accounting for benefits received or intervene in the partition [Paras citing
and reimbursement for expenses made 3 Manresa 54 and Gonzaga v. Martinez,
[Art. 500, Civil Code]. G.R. No. L-3196 (1908)].
2. Payment of damages by each co-owner
caused by reason of his negligence or 2. The creditors or assignees of the
fraud [Art. 500, Civil Code]. co-owners may take part in the division
3. Liability of each co-owner for defects of of the thing owned in common and
title and quality of the portion assigned object to its being effected without their
to each of the co-owners [Art. 501, Civil concurrence [Art. 497, Civil Code].
Code].
All kinds of creditors, whether preferred or
Effects of Partition ordinary, are included within the scope of
1. Confers exclusive ownership of the creditors; but they must have become creditors
property adjudicated to a co-heir [Art. during the existence of the co-ownership and
1091, Civil Code]. not before or after [Paras citing 3 Manresa
2. Co-heirs shall be reciprocally bound to 528-529].
warrant the title to, and the quality of
each property adjudicated [Art. 1092, Exception
Civil Code]. If the partition was already executed, the
3. Reciprocal obligation of warranty shall creditors/assignees cannot impugn the same.
be proportionate to the respective
hereditary shares of co-heirs [Art. 1093, Exception to the Exception
Civil Code]. There was fraud or a previous formal opposition
4. An action to enforce the warranty must against the partition, without prejudice to the
be brought within ten (10) years from right of the debtor or assignor to maintain its
the date the right of action accrues [Art. validity [Art. 497, Civil Code].
1094, Civil Code].

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The law does not expressly require previous by a new agreement. A donor or testator may
notice to the creditors and assignees before a prohibit partition for a period which shall not
partition [Tolentino]. exceed twenty (20) years.

If notice is not given, the partition is not binding VI. THE CONDOMINIUM ACT
on the creditors and assignees.
[R.A. 4726, AS AMENDED]
But once notice has been given, it is the duty of
creditors and assignees to intervene and make A. DEFINITIONS
known their stand. If they fail to do so, they Condominium - an interest in real property
cannot question the division made, except in consisting of separate interest in a unit in a
cases of fraud. residential, industrial or commercial building and
an undivided interest in common, directly or
Partition of an Indivisible Thing [Art. indirectly, in the land on which it is located and
in other common areas of the building.
498, Civil Code]
1. 1st option: The co-owners can agree
that one of them shall be the sole owner Condominium Corporation
by paying the value of the other A corporation specially formed for the purpose in
co-owners’ shares. which the holders of separate interest shall
2. 2nd option: If they cannot agree who automatically be members or shareholders, to
among them shall be the sole owner, the exclusion of others, in proportion to the
the property will be sold to a 3rd person appurtenant interest of their respective units in
and the proceeds will be distributed the common areas.
among them.
Unit
A part of the condominium project intended for
E. SALE OF PROPERTY CO-OWNED
any type of independent use or ownership,
[Art. 498, Civil Code]
including one or more rooms or spaces located
in one or more floors (or part or parts of floors)
The sale shall be resorted to only if:
in a building or buildings and such accessories
1. The property is essentially indivisible.
as may be appended thereto.
2. The co-owners cannot agree that the
entire property be allotted or assigned
Project
to one of them, who shall reimburse the
The entire parcel of real property divided or to
other co-owners of their shares.
be divided in condominiums, including all
structures thereon.

Common areas
F. TERMINATION OF PERIOD AGREED The entire project excepting all units separately
UPON BY THE CO-OWNERS [Art. granted or held or reserved.
494, Civil Code]
R.A. 4726 Sec. 6. Unless otherwise expressly
An agreement to keep the thing undivided for a provided in the enabling Master Deed or the
certain period of time, not exceeding ten (10)
years, shall be valid. This term may be extended
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Declaration of Restrictions, the incidents of a proportion as their interests in the common

condominium grant are as follows: areas [Sec. 8, R.A. 4726].

a. The following are not part of the unit: Partition shall be made only upon showing:
bearing walls, columns, floors, roofs, 1. That three years after damage or
foundations, and other common destruction to the project in which the
structural elements of the buildings; corporation owns or holds the common
lobbies, stairways, hallways and other areas, which damage or destruction
areas of common use, elevator renders a material part thereof unfit for
equipment and shafts, central heating, its use prior thereto, the project has not
central refrigeration and central air been rebuilt or repaired
conditioning equipment, reservoir, tanks, substantially to its state prior to its
pumps and other central services and damage or destruction; or
facilities, pipes, ducts, flues, chutes, 2. That damage or destruction to the
conduits wires and other utility project has rendered one-half or more
installations, wherever located, except of the units untenantable and that
the outlets thereof when located within condominium owners holding in
the unit. aggregate more than thirty percent
interest in the common areas are
The Master Deed provided that all repairs and opposed to repair or restoration of the
maintenance of the common areas not project; or
necessitated by the negligence of a unit owner 3. That the project has been in existence
shall be made and at the expense of the in excess of fifty years, that it is
Condominium Corporation. Moreover, the obsolete and uneconomic, and that
electrical main panel, although located inside the condominium owners holding in
unit, forms part of the electrical supply system aggregate more than fifty percent
of the condominium, an integral component of interest in the common areas are
the power utility installation, which is considered opposed to repair or restoration or
a common area under the Condominium Act. remodeling or modernizing of the
[Limson v Wack Wack Condominium, G.R. No. project; or
188802 (2011)]. 4. That the project or a material part
thereof has been condemned or
B. RULES ON JUDICIAL PARTITION expropriated and that the project is no
longer viable, or that the
General Rule: Common areas shall remain condominium owners holding in
undivided, and there shall be no judicial partition aggregate more than seventy percent
thereof [Sec. 7, R.A. 4726]. interest in the common areas are
opposed to continuation of the
Exceptions: An action may be brought by one condominium regime after expropriation
or more such persons for partition thereof by or condemnation of a material portion
sale of the entire project, as if the owners of all thereof; or
of the condominiums in such project were 5. That the conditions for such
co-owners of the entire project in the same partition by sale set forth in the
declaration of restrictions, duly

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registered in accordance with the terms conditioned upon failure of the

of this Act, have been met. condominium owners to rebuild within a
certain period or upon specified
C. ALLOWABLE RESTRICTIONS inadequacy of insurance proceeds, or
upon specified percentage of damage to
A declaration of restrictions must be the building, or upon a decision of an
registered and annotated by the Register of arbitrator, or upon any other reasonable
Deeds, and such declaration shall constitute a condition.
lien upon and is binding upon condominium
owners in the project. D. TERM AND DISSOLUTION OF A
CONDOMINIUM CORPORATION
Such declaration of restrictions may
provide: The term of a condominium corporation shall be
1. Provisions regarding the management co-terminus with the duration of the
body’s powers, maintenance of condominium project, the provisions of the
insurance policies, maintenance of Corporation Law to the contrary notwithstanding
common areas, purchase of materials [Sec. 11, R.A. 4726].
for common areas, payment of taxes
and special assessments, reconstruction Dissolution of a Condominium
of portion/s of the project, manner of
Corporation may be through:
delegation of power, entry by officers
1. Voluntary Dissolution
and agents into units when necessary,
2. Involuntary Dissolution
and power of attorney to sell the entire
project.
2. The manner and procedure for
Voluntary Dissolution
General Rule: Until the enabling or the master
amending such restrictions: Provided,
deed of the project in which the condominium
That the vote of not less than a majority
corporation owns or holds the common area is
in interest of the owners is obtained.
revoked, the corporation shall not be voluntarily
3. For independent audit of the accounts of
dissolved through an action for dissolution under
the management body;
Rule 104 of the Rules of Court.
4. For reasonable assessments to meet
authorized expenditures, each
condominium unit to be assessed Exception: Upon showing:
separately for its share of such expenses 1. That three years after damage or
in proportion (unless otherwise destruction to the project in which the
provided) to its owners fractional corporation owns or holds the common
interest in any common areas; areas, which damage or destruction
5. For the subordination of the liens renders a material part thereof unfit for
securing such assessments to other liens its use prior thereto, the project has not
either generally or specifically described; been rebuilt or repaired substantially to
6. For conditions upon which partition of its state prior to its damage or
the project (except as specified in Sec. destruction; or
8) and dissolution of the condominium 2. That damage or destruction to the
corporation may be made. Such right to project has rendered one-half or more
partition or dissolution may be of the units therein untenantable and
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that more than thirty percent of the A corporation may be dissolved by the Securities
members of the corporation, if and Exchange Commission upon filing of a
non-stock, or the shareholders verified complaint and after proper notice and
representing more than thirty percent of hearing on the grounds provided by existing
the capital stock entitled to vote, if a laws, rules and regulations [Sec. 121, Title VIV,
stock corporation, are opposed to the Corporation Code].
repair or reconstruction of the project,
or Effect of Involuntary Dissolution
3. That the project has been in existence The common areas owned or held by the
in excess of fifty years, that it is corporation shall be liquidated and transferred
obsolete and uneconomical, and that pro-indiviso and in proportion to their interest in
more than fifty percent of the members the corporation to the members or stockholders
of the corporation, if non-stock, or the thereof, subject to the superior rights of the
stockholders representing more than corporation creditors. After such transfer or
fifty percent of the capital stock entitled conveyance, the provisions of this Act governing
to vote, if a stock corporation, are undivided co-ownership of, or undivided interest
opposed to the repair or restoration or in, the common areas in condominium projects
remodeling or modernizing of the shall fully apply.
project; or
4. That the project or a material part
thereof has been condemned or POSSESSION
expropriated and that the project is no Possession
longer viable, or that the members What is possession?
holding in aggregate more than seventy Possession is the holding of a thing or
percent interest in the corporation, if enjoyment of a right [Art. 523, Civil Code].
non-stock, or the stockholders
representing more than seventy percent
What are the elements of possession?
of the capital stock entitled to vote, if a
(OIR)
stock corporation, are opposed to the
1. Occupancy or control of the thing or right –
continuation of the condominium regime
actual or constructive (corpus)
after expropriation or condemnation of a
2. Intent to Possess (animus possidendi)
material portion thereof; or
3. Must be by virtue of one’s own Right
5. That the conditions for such a
dissolution set forth in the declaration of
restrictions of the project in which the I. KINDS OF POSSESSION
corporation owns or holds the common
areas, have been met. Possession in the Concept of a Holder:
Acknowledges in another a superior right which
Dissolution may also be done through the he believes to be ownership, whether his belief
affirmative vote of all the stockholders or be right or wrong [Carlos v. Republic, G.R. No.
members thereof at a general or special 164823 (2005)]
meeting duly called for the purpose: Provided,
That all the requirements of Section sixty-two of
the Corporation Law are complied with. Examples:
Involuntary Dissolution 1. Lessees;
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 PROPERTY CIVIL LAW

2. Trustees, including parents over the a. Voluntary - by virtue of agreement (e.g.

properties of their children; and possession of an agent)
husband and wife over each other’s b. Legal - by virtue of law (e.g. possession
property; in behalf of an incapacitated person)
3. Antichretic creditors;
4. Agents; Negotiorum gestio
5. Attorney’s with regard to their clients Whoever voluntarily takes charge of the agency
properties; or management of the business or property of
6. Depositaries; and another, without any power from the latter, is
7. Co-owners. [De Leon, 2015] obliged to continue the same until the
termination of the affair and its incidents, or to
Possession in the Concept of an require the person concerned to substitute him,
Owner: if the owner is in a position to do so. This
Refers to one’s overt acts which tend to induce juridical relation does not arise in either of these
the belief on the part of others that they are the instances:
owner 1. When the property or business is not
neglected or abandoned; (unauthorized
Possession in the concept of an owner is jus contracts)
possidendi. 2. If in fact the manager has been tacitly
authorized by the owner. (agency) [Art.
If a person possesses the concept of owner — 2144, Civil Code]
he may eventually become the owner by
prescription. Thus, a possessor merely in the Relevance of Good Faith and Bad Faith
concept of holder cannot acquire property by
acquisitive prescription—one cannot recognize Possession in Good Faith: possessor is not
the right of another and at the same time claim aware of the flaw or defect in his title or mode
adverse possession. of acquisition [Art. 526, Civil Code]

Requisites (FUT):
Possession may be exercised in one's
1. There is a Flaw or defect in said title or
own name or in that of another (Art
mode which invalidates it;
524, NCC); 2. The possessor is Unaware of the flaw
or defect, or believes that the thing
Possession in one’s own name: belongs to him
Possessor claims the thing for himself [Article 3. The possessor has a Title or mode of
524, Civil Code] acquisition;

Possession in another’s name: Note: Good faith is always presumed; the

Held by the person for another; agent, subject burden of proof of bad faith is on the person
to authority and ratification; if not authorized, who alleges bad faith [Art. 527, Civil Code]. It
negotiorum gestio. ceases when the possessor has knowledge of
facts regarding a flaw, weakness, or defect in his
May be: title.
Rights of a Possessor in Good Faith

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1. Fruits [Art. 544, Civil Code] that of a mere holder, except that which
2. Refund of necessary expenses [Art. 546, constitutes a crime.
Civil Code] 15. Lawful possessors can employ self-help
3. Refund of useful expenses [Art. 546, [Art. 429, Civil Code]
Civil Code] 16. Possession of an immovable extends to
4. Right of retention when there are the movables within or inside [Arts. 542
unpaid necessary or useful expenses and 426, Civil Code] (Exception: When it
[Art. 546, Civil Code] is shown or proven that such movables
5. Removal of useful/ornamental should be excluded)
improvements without damage to the
principal thing [Arts. 546-547, Civil Possession in Bad Faith: possesses in any
Code] case contrary to the foregoing (definition of
6. No liability for deterioration or loss, good faith) [Art. 526, Civil Code]
except in cases of fraudulent intent or It begins from the time the possessor becomes
negligence [Art. 552, Civil Code] aware that there is something improper in his
7. May acquire full ownership by possession.
prescription [Arts. 1117-1138, Civil
Code]
II. WAYS OF ACQUIRING
8. Presumption of just title [Art. 541, Civil
Code]
POSSESSION
9. Can ask for the inscription of possession
in the Registry of Property [Art 708, Civil Modes of Acquisition (MSA)
Code] 1. By the Material occupation of a thing or
10. Generally, he/she can do on the things exercise of a right;
possessed everything that the law 2. By Subjecting a thing or right to the
authorizes an owner to do until he/she action of our will; or
is ousted by one who has a better right 3. By proper Action and legal formalities.
11. Can exercise the right of pre-emption (De Leon, 2015)
and is entitled to indemnity in case of
appropriation A. BY THE MATERIAL
12. Has presumption of continuity of good OCCUPATION OF A THING OR
faith [Arts. 528-529, Civil Code]
THE EXERCISE OF A RIGHT
13. Non-interruption of possession
(possession during intermediate period)
Possession is acquired through the
[Arts. 554 and 561, Civil Code]
14. Right to be respected and protected/ following modes of constructive
restored in his/her possession by the delivery:
means established by the laws and the 1. Traditio brevi manu – If the
Rules of Court [Art. 539, Civil Code]. transferee/buyer already had possession of the
These include summary actions (forcible object under a different title even before the
entry and unlawful detainer), accion sale (e.g., lessee, depositary subsequently buys
publiciana, and action for replevin. the property)
Accion reivindicatoria is not included. 2. Traditio constitutum possessorium – the
“Every possessor” – includes all kinds of transferor/seller continues in the possession of
possession, from that of an owner to the object, but not in the concept of an owner
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(e.g., owner sells the property and becomes Requisites of Doctrine of Irrevindicability
lessee) (GO):
● The movable property must be acquired
B. BY THE FACT THAT THE THING in Good faith; and
IS SUBJECT TO THE ACTION OF ● The possession must be in the concept
of an Owner [Art. 559, Civil Code].
OUR WILL
Exception
Possession is acquired through the following
1. The owner has lost the thing;
modes of constructive delivery:
2. The owner has been unlawfully deprived
1. Traditio simbolica – delivering an object
of the thing [Art. 559, NCC].
or symbol, and placing the thing under the
control of the transferee (ex. Giving a key where
the thing or object is stored, kept or under Rules in Loss or unlawful deprivation
custody. Since the key is with the vendee, then of a movable (RCC):
it means that the latter can gain access to the 1. One who has lost any movable or has
object) been unlawfully deprived thereof, may
2. Traditio longa manu – the transferor points Recover it from the person in possession
out to the transferee the things which are being of the same [Art. 559, Civil Code];
transferred, or they merely agree or consent 2. If the possessor of a movable lost or
that delivery has been effected which the owner has been unlawfully
deprived, has acquired it in good faith at
a public sale, the owner Cannot obtain
C. BY THE PROPER ACTS AND
its return without reimbursing the price
LEGAL FORMALITIES
paid therefor [Art. 559, Civil Code); and
ESTABLISHED FOR ACQUIRING 3. The possession of movables is not
SUCH RIGHT deemed lost so long as they remain
Acquisition by virtue of a just title such as when under the Control of the possessor, even
property is transmitted by succession, donation, though for the time being he may not
contract, or execution of a public instrument, know their whereabouts [Art. 556, Civil
etc. Code].

III. EFFECTS OF POSSESSION Possessor of a Movable Property

Possession in good faith is equivalent to a title.
Rules For Movables Nevertheless, one who has lost any movable or
has been unlawfully deprived thereof, may
recover it from the person in possession of the
Possession of Movables same [Art. 559, Civil Code]. The right of the
Possession is not deemed lost so long as they owner cannot be defeated even by proof that
remain under the control of the possessor, even there was good faith in the acquisition by the
if whereabouts are unknown [Art. 556, Civil possessor. [Dizon v. Suntay, G.R. No. L-30817
Code].
(1972)].

General Rule: Possession of movables acquired

Exception: When there is acquisition in good
in good faith is equivalent to a title (Art. 559,
faith of the possessor at a public sale, in which
NCC)
case the owner cannot obtain its return without

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reimbursing the price. The owner’s right is based

4. Threats, and permission or
on his being dispossessed without his consent 5. Stealth tolerance)
[Dizon v. Suntay, supra]. becomes
unlawful upon
failure to vacate
ACTIONS TO RECOVER
Period 1 year from 1 year from last
OWNERSHIP AND to bring dispossession demand to
POSSESSION OF REAL action (force, vacate
intimidation,
PROPERTY threats) or from
Actions to Recover Ownership and Knowledge of
Possession dispossession
I. ACCION INTERDICTAL (strategy,
stealth)

Action for Ejectment (Forcible Entry &

Unlawful Detainer; FE-UD) II. ACCION PUBLICIANA

A summary action for recovery of actual, Accion publiciana, also known as accion plenaria
material or de facto physical possession through de posesion, is an ordinary civil proceeding to
an action for forcible entry or unlawful determine the better right of possession of
detainer. It must be filed in the MTC or MeTC realty independently of title.
[Sec. 1, Rule 70, Rules of Court].
It refers to an ejectment suit filed after the
Difference between Forcible Entry & expiration of one (1) year from the accrual
Unlawful Detainer of the cause of action or from the unlawful
withholding of possession of the realty.
Forcible Entry Unlawful The objective of the plaintiffs in accion
Detainer
publiciana is to recover possession only, not
As to The possession The possession ownership. However, where the parties raise the
unlawful was already was first lawful, issue of ownership, the courts may pass upon
-ness of unlawful from but became the issue to determine who between or among
possessi the time of illegal. (e.g. a the parties has the right to possess the property.
on entry. lessee refuses However, such adjudication is not conclusive on
to vacate the
the issue of ownership [Madrid v. Spouses
property after
the lease Mapoy, G.R. No. 150887 (2009)].
contract has
expired) Note: Actions for ejectment/accion interdictal
not filed within one (1) year must be filed as
As to Lawful Possessor accion publiciana.
manner possessor refused to
of deprived vacate upon
disposse through FISTS: demand by III. ACCION REIVINDICATORIA
-ssion 1. Force owner
2. Intimidation Note: Legal Accion reivindicatoria seeks the recovery of
3. Strategy possession (by
ownership and includes the jus utendi and the
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jus fruendi brought in the proper RTC. Accion Being an ancillary remedy, injunction can be
reivindicatoria is an action whereby plaintiff utilized to recover possession subject to the
alleges ownership over a parcel of land following limitations/restrictions:
and seeks recovery of its full possession a. It only maintains the status quo;
[Spouses Cañezo v. Bautista, G.R. No. 170189 b. It cannot transfer the control of the
(2010)]. property to another person or entity
when there is no control or possession
It must be brought in the proper RTC established in the first place; and
(depending on the assessed value of the c. It cannot be used as an alternative
property) in an ordinary civil proceeding [Heirs remedy for proper actions to recover
La Madrid v. Tumaliuan, G.R. No. 243799 possession.
(2021)].
Exception: When injunction is allowed:
Requisites for Accion Reivindicatoria 1. Actions for forcible entry
1. The property must be identified; and a. Writ of preliminary injunction
2. The plaintiff must rely on the strength of within 10 days from filing of the
his title (E incumbit probatio qui dicit, complaint to restore plaintiff in
non qui negat – “He who asserts, not he possession
who denies, must prove”) [Art. 434, Civil b. Courts shall decide within 30
Code]. days
2. Ejectment
a. If possessor is a possessor in
IV. WRIT OF POSSESSION
concept of an owner
An order directing the sheriff to place a
(possession de jure) for over a
successful registrant under the Torrens system
year and being disturbed by
in possession of the property covered by a
repeated intrusions of a
decree of the court.
stranger
b. If an owner, still in possession,
When is a Writ of Possession proper?
desires to prevent repeated
(FEEEL) intrusions by a stranger
a. Foreclosure, judicial or extrajudicial, of c. If the possessor is clearly not
mortgage. Provided that the mortgagor entitled to property
has possession, and no third party has
intervened
b. Ejectment
c. Execution sales
d. Eminent domain proceedings
e. Land registration cases

EASEMENTS
V. INJUNCTION
Easements

General Rule: Not available as a remedy

I. CHARACTERISTICS
(Reason: The presumption is that the one in
possession disputably has the better right)

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1. A real right – an action in rem is immovable. Two the benefit of a

possible against the possessor of the distinct community, or
servient estate immovable — of one or more
2. Imposable only on another’s property required. (Art. persons to
613,NCC) whom the
3. Jus in re aliena – real right that may encumbered
be alienated although the naked estate does not
ownership is maintained belong. (Art.
614, NCC)
4. Limitation or encumbrance on the
servient estate for another’s benefit As to its Legal Voluntary
5. There is inherence or inseparability source - imposed by law - by will or
from the estate to which it belongs and may be agreement of
established the parties.
a. Easements are inseparable from against the will of (Art. 619, NCC)
the estate to which they actively the owner of the - only the
or passively belong (Art. 617); servient estate. owner can
they are transmissible, cannot (Art. 619, NCC) create a
servitude that
be alienated or mortgaged will bind the
independently of the estate, or servient estate.
assigned to another immovable. (RABUYA,
2021)
6. It is indivisible (even if the tenement
be divided) As to its Continuous and Discontinuous
a. a. Partition of either the servient mode of Apparent - by and
or dominant estate between two virtue of a title or, Continuous
acquisiti prescription of 10 non-apparent -
or more persons does not affect on years. (ART. 620, acquired only
the existence of the easement NCC) by virtue of
7. It is intransmissible (unless the title. (Art.
tenement affected also be transmitted) 622,NCC)

8. It is perpetual (as long as the Positive Negative

dominant and servient estate exists - from the day on - from the day
unless sooner extinguished by the which the owner the owner of
of the dominant the dominant
causes enumerated in the law).
estate, or person estate forbade,
9. It grants no title to the dominant who made use of by a public
estate holder so the establishment of an the easement, instrument, the
easement is proof that the property is commenced to owner of the
exercise it upon servient estate
not his or hers. the servient from executing
estate. 621, NCC an act which
would be
lawful without
the easement.
(Art. 621, NCC)
II. KINDS OF EASEMENTS
Legal Easements

As to Real (Praedial) Personal

Legal vs Voluntary Easements
recipient - encumbrance is - encumbrance
imposed on an is imposed on
of the immovable for the an immovable
Legal Voluntary
benefit benefit of another property for Easements Easements

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Created by law, Created by the will of

whether for public the owners of the a. Natural Drainage (Art 637, NCC)
use or for the interest estate through Lower estates are obliged to receive the waters
of private persons. contract, last will or which naturally and without the intervention of
Art. 619 and 634, donation. (Art. 619, man descend from the higher estates (as well as
Civil Code) Civil Code)
the stones or earth which they carry with them).

A legal easement is one mandated by law, The owner of the lower estate cannot construct
constituted for public use or for private interest works which will impede this easement; neither
and becomes a continuing property right unless can the owner of the higher estate make works
its removal is provided for in a title of which will increase the burden.
conveyance or the sign of the easement is
removed before the execution of the Refer to Art. 46 of the Water Code which states
conveyance. Essential requisites for an that “when artificial means are employed to
easement to be compulsory are: drain water from higher to lower land, the
1. the dominant estate is surrounded by owner of the highest land shall select the routes
other immovables and has no adequate and methods of drainage that will cause the
outlet to a public highway; minimum damage to the lower lands, subject to
2. proper indemnity has been paid; the requirements of just compensation.”
3. The isolation was not due to acts of the
proprietor of the dominant estate; b. Riparian Banks
4. The right of way claimed is at point least The banks of rivers and streams, even in case
prejudicial to the servient estate; and they are of private ownership, are subject
5. To the extent consistent with the throughout their entire length and within a zone
foregoing rule, where the distance from of three (3) meters for urban areas, twenty (20)
the dominant estate to a public highway meters for agricultural areas and forty (40)
may be the shortest. meters for forest areas [Art.51, Water Code]
(Villanueva v. Velasco, G.R. No. 130845, 2000) along their margins, to the easement of public
use in the general interest of navigation,
Easements cannot be created by courts. The floatage, fishing, recreation and salvage.
court’s role is only to declare the existence of an Estates adjoining the banks of navigable or
easement if in reality one exists by virtue of law floatable rivers are subject to the easement of
or will of the parties. Thus, there are no judicial towpath for the exclusive service of river
easements (Castro v. Monsod, G.R. No. 183719, navigation and floatage. If it is necessary to
2011) occupy lands of private ownership, the proper
indemnity shall first be paid.
NOTE: Voluntary easements must be recorded
in the Registry of Property to prejudice third c. Abutment of a Dam (Art. 639,
persons. (Art. 708, Civil Code) NCC)
Whenever for the diversion or taking of water
Kinds of Legal Easements from a river or brook, or for the use of any other
continuous or discontinuous stream, it should be
necessary to build a dam, and the person who is
Relating to Waters
to construct it is not the owner of the banks, or
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lands which must support it, he may establish 3. To indemnify the owner of the servient
the easement of abutment of a dam, after estate in the manner determined by the
payment of the proper indemnity. laws and regulations.
4. Acquire a water permit [Art. 13, Water
Note: The Water Code requires a water permit Code]
for the establishment of a dam [Art. 18, Water
Code]. What it cannot be imposed on
Easement of aqueducts for private interest
d. Drawing Water and Watering cannot be imposed on buildings, courtyards,
Animals (Arts. 640-641, NCC) annexes, or outhouses, or on orchards or
Compulsory easements for drawing water or for gardens already existing [Art. 644, Civil Code].
watering animals can be imposed only for
reasons of public use in favor of a town or Right of servient estate owner
village, after payment of the proper indemnity This easement does not prevent the owner of
[Art. 640, Civil Code]. the servient estate from closing or fencing it, or
from building over the aqueduct in such a
Easements for drawing water and for watering manner as not to cause the latter any damage,
animals carry with them the obligation of the or render necessary repairs and cleanings
owners of the servient estates to allow passage impossible [Art. 645, Civil Code].
to persons and animals to the place where such
easements are to be used, and the indemnity Treatment under law
shall include this service [Art. 641, Civil Code]. This easement is considered as continuous and
apparent, even though the flow of the water
The width of the easement must not exceed ten may not be continuous, or its use depends upon
(10) meters [Art. 657, Civil Code]. the needs of the dominant estate, or upon a
schedule of alternate days or hours [Art. 646,
e. Aqueduct Civil Code].
Any person who may wish to use upon his own
estate any water of which he can dispose shall In the appropriation of water, there is a need to
have the right to make it flow through the apply for water rights.
intervening estates, with the obligation to
indemnify their owners, as well as the owners of Any person having an easement for an aqueduct
the lower estates upon which the waters may may enter upon the servient land for the
filter or descend [Art. 642, Civil Code]. purpose of cleaning, repairing or replacing the
aqueduct or the removal of obstructions
therefrom [Art. 49, Water Code].
Requisites to Establish Easement of Water legally appropriated shall be subject to
the control of the appropriator from the moment
Aqueduct [Art. 643, Civil Code]:
it reaches the appropriator’s canal or aqueduct
1. To prove that he can dispose of the
leading to the place where the water will be
water and that it is sufficient for the use
used or stored and, thereafter, so long as it is
for which it is intended;
being beneficially used for the purposes for
2. To show that the proposed right of way
which it was appropriated [Art. 8, Water Code].
is the most convenient and the least
onerous to third persons;
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f. Stop Lock or Sluice Gate 3. There must be payment of the proper

A person may construct a stop lock or sluice indemnity.
gate in the bed of the stream from which the 4. That the right of way claimed is at the
water is to be taken, for the purpose of point least prejudicial to the servient
irrigating or improving an estate. estate; and in so far as consistent with
this rule, where the distance from the
He may demand that the owners of the banks dominant estate to a public highway
permit its construction, after payment of may be the shortest. (Art. 649)
damages, including those caused by the new
easement to such owners and to the other Note: A lessee cannot demand such easement,
irrigators. because the lessor is the one bound to maintain
him in the enjoyment of the property.
g. Right of Way
A right of way can be established through the
will of parties as well, and the provisions on the
What is the Easement of Right of Way?
legal easement of right of way will not govern.
This is the easement or privilege by which one
person or a particular class of persons is allowed
Legal Easement for National
to pass over another’s land, usually through one
particular path or line. (Art. 649, Civil Code) Government Infrastructure Projects
R.A. 10752 provided for the guidelines in
establishing a LEGAL EASEMENT for RIGHT of
Who May Demand [Art. 649, Civil
WAY for national government infrastructure
Code]
projects which may be through donation,
1. The owner of the dominant estate; or
negotiated sale, expropriation, or any other
2. Any person with the real right to
mode of acquisition as provided by law.
cultivate or use the dominant estate e.g.
a usufructuary, a de jure possessor.
Sec. 4. When the project involves subsurface or
subterranean installations more than 50 meters
What are the requisites for easement
from the surface, the entry into the portions of
of right of way? the private or government lands cannot be
1. The property is surrounded by estates of prevented by the surface owners.
others, Sec. 6 In case of expropriation, the court shall
2. There is no adequate outlet to a public issue the Writ of Possession in favor of the
highway government agency implementing the project
a. An adequate outlet is one that is seven days after the required deposit of the
sufficient for the purpose and value of the land is made to the court, ex parte.
needs of the dominant owner, Sec. 15. R.A. 8974 is repealed; thereby
and can be established at a removing the prohibition for TROs and
reasonable expense. preliminary injunctions issued by lower courts.
b. Even if there is access, it is
difficult or dangerous to use, or
Notes on Extinguishment
grossly insufficient;
Extinguishment is not automatic. The owner of
c. Mere inconvenience in the use
the servient estate must ask for such
of an outlet does not render the
extinguishment.
easement a necessity.
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commenced from executing

Indemnity paid to the servient owner must be to exercise it an act which
returned without interest. Interest on account of upon the would be lawful
indemnity is deemed to be rent for use of servient without the
easement. estate easement

An easement continues by operation of law.

i. Power Lines
Alienation of the dominant and subservient
R.A. 11361 (Aug. 18, 2019) established the
estates to different persons is not a ground for
easement of power lines to ensure the
extinguishment of easements absent a
continuous and uninterrupted transmission and
statement extinguishing it. (Tañedo v. Bernad,
distribution of electricity and protect the
G.R. No. L-66520, 1988)
integrity and reliability of power lines.

h. Light and View Sec. 6. Planting tall growing plants and installing
other structures that breach the height of the
How Acquired power line corridor are prohibited.
Through a period of prescription of ten (10)
years, counted depending on whether it was Sec. 8. Pruning of trees shall not be prevented
positive or negative in nature. subject to prior notice to the owner of the
property.
Kind of Positive Negative
Easement Easement Easement Sec. 15. The power of eminent domain is
granted to power supply franchisees.
Nature Imposes Prohibits the
upon the servient owner
servient from doing
III. MODES OF ACQUIRING
owner the something EASEMENTS
obligation of which he could
allowing lawfully do if the
Easements; How Acquired. (TPDFAS)
something easement did
to be done, not exist [Art. 1. By Title - through judicial acts like law,
or doing it 616, Civil Code] donation, contract, and will (Art. 620,
himself [Art. Civil Code)
616, Civil
Code] 2. By Prescription - acquired after 10
years of adverse possession or frequent
Computation From the From the day on
of Time day on which the owner exercises.
Possession which the of the dominant
(Art. 621) owner of the estate forbade, NOTE: This applies only to continuous
dominant by an and apparent easement, either:
estate, or instrument (a) Positive from the day the
the person acknowledged
dominant owner begins to
who have before a notary
exercise it (e.g., party wall)
made use of public, the
the the owner of the (b) Negative from the day in
easement, servient estate, which notarial prohibition is

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made on servient owner (e.g.,

Discontinuous and YES NO
not to obstruct the passage Apparent (CA)
light)
Discontinuous Non- YES NO
3. Deed of Recognition - by an affidavit apparent (CNA)
or a formal deed acknowledging the
servitude by servient owner. NOTE: All easements may be acquired by title,
but only continuous and apparent
4. Final Judgment - when a court easements may be acquired by
declares the existence of an easement prescription.
in an action filed for the purpose.

IV. EFFECTS OF EASEMENT

NOTE: Resultantly, when the court says
that an easement exists, it is not
creating one. For, even an injunction Rights and Obligations of the Owners
cannot be used to create one as there is of the Dominant and Servient Estates
no such thing as a judicial easement.
The court merely declares the existence Rights of Dominant Estate Owner
of an easement created by the parties. 1. To make on the servient estate all the
(La Vista Association v. CA, GR No. works necessary for the use and
95252, 1997) Preservation of the servitude, provided:
a. This must be at his own
5. Apparent Sign - established by an expense
owner of two adjoining estates. Then b. He must notify the servient
one estate is alienated and the owner
easement continuous actively or c. Select convenient time and
passively unless at the time of division, manner
it is provided that the easement will d. He must not alter the easement
cease, or the sign removed before nor render it more burdensome
execution of deed (Art. 624) [See case (Art. 627, NCC)
of Sps. Garcia v. Santos (2019), G.R No. 2. To ask for mandatory Injunction to
228334] prevent impairment of his use of the
easement;
3. To Renounce totally the easement if he
desires to exempt himself from
contribution to necessary expenses (Art.
Kind of How Acquired 628, NCC); and
Easement 4. To exercise all the rights Necessary for
Title Prescription
the use of the easement (Art. 625,
Continuous and YES YES NCC).
Apparent (CA)
Obligations of Dominant Estate Owner
Continuous Non- YES NO
1. He cannot Alter the easement or render
apparent (CNA)
it more burdensome (Art. 627, NCC);

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2. He cannot use the easement except for is an agreement to the contrary (Art.
the Benefit of the immovable originally 628, NCC).
contemplated (Art. 626, NCC);
3. He cannot exercise the easement in any Requisites for a Servient Owner to
other manner than that previously Change the Place or Manner of
Established (Art. 626, NCC);
Easement (IAIO)
4. He may make any works or construct
1. The place or manner has become very
anything which is necessary for the use
Inconvenient to the servient owner or
and Preservation of the servitude (Art.
prevents him from making important
627, NCC);
works thereon;
5. He shall Notify the servient owner of the
2. He offers Another place or manner
works necessary for the use and
equally convenient;
preservation (Art. 627, NCC);
3. No Injury is caused by the change to
6. He must choose the most Convenient
the dominant owner or to whoever may
time and manner in making the
have right to the use of the easement;
necessary works as to cause the least
and
inconvenience to the servient owner
4. The expenses that will be incurred in the
(Art. 627, NCC); and
process shall be borne by the Owner of
7. He must contribute to the necessary
the servient estate (Art. 629, NCC).
Expenses if there are several dominant
estates (Art. 628, NCC).
V. EXTINGUISHMENT OF
Rights of a Servient Owner (URC)
EASEMENT
1. To make Use of the easement (Art. 628,
NCC); An easement may be extinguished by:
2. To Retain ownership and possession of 1. Redemption agreed upon between the
the portion of the estate on which the owners of the dominant and servient
easement was established (Art. 630, estates;
NCC); and
3. To Change the place or manner of the NOTE: Pertains to voluntary redemption
easement, provided it be equally
convenient (Art. 629, NCC). 2. Expiration of the term or fulfilment of
the resolutory condition;
3. Merger of the ownership of the
Obligations of a Servient Estate Owner
dominant and servient estates;
(PIRC)
4. Annulment of the title to the servitude;
1. He cannot Impair the use of the
5. Permanent Impossibility to use the
easement (Art. 629, NCC);
easement;
2. In case of impairment, to Restore
6. Non-use for 10 years;
conditions to the status quo at his
a. Discontinuous Easement: from
expense, plus damages; and
day not used
3. To Pay for the expenses incurred for the
b. Continuous Easement: from day
change of location (Art. 629, NCC);
an act contrary to easement
4. Contribute to the necessary expenses in
happens
case he uses the easement, unless there

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7. Bad condition – when either or both Wong, G.R. No. 192861, June 30, 2014)
estates fall into such a condition that (Art. 694); or
the easement could not be used; 5. Obstructs or interferes with the free
8. Resolution of the right to create the passage of any public highway or street,
servitude estate; or any body of water (e.g. Permanent
9. Expropriation of the servient estate; and obstructions on barrio roads, such as
10. Waiver or renunciation by the dominant illegally constructed houses, are
owner (Art. 631, NCC); injurious to public welfare and
11. Abandonment of the Servient Estate; convenience. The occupation and use of
12. Eminent Domain; private individuals of public places
13. Annulment or Rescission of title devoted to public use constitute public
constituting the easement; and private nuisances and nuisance per
14. Termination of the right of the grantor. se [Alolino v. Flores, G.R. No. 198774
(RABUYA, 2021) (2016)];

Difference between Nuisance and

NUISANCE Negligence
Nuisance Negligence is penalized because of lack of
I. CLASSES OF NUISANCE proper care but a nuisance is wrong not because
of the presence or absence of care, but because
A nuisance is any act, omission, establishment, of the injury caused [Paras quoting 39 AmJur
business, condition of property, or anything 282].
else which: (ISAOH)
Public Nuisance vs Private Nuisance
1. Injures or endangers the health or Public Private
safety of others (e.g. House in danger of
falling, fireworks or explosives factory, A public nuisance A private nuisance is
houses without building permits and affects a community one that is not
without provisions for disposal of waste or neighborhood or included in the
matter) [Ayala v. Barretto, G.R. No. any considerable foregoing definition.
number of persons,
L-9966 (1916)]; or
although the extent
2. Annoys or offends the senses; (e.g. of the annoyance,
leather factory, garbage cans, pumping danger or damage
station with a high chimney, smoke, upon individuals may
noise) [Bengzon v. Prov. of Pangasinan, be unequal.
G.R. No. L-41941 (1936)]; or Nuisance per se vs. Nuisance per
3. Shocks, defies or disregards decency or accidens
morality (e.g. Movie actress strips nude
in the lobby of a movie house for sake Nuisance per se Nuisance per
of publicity for a movie) [Paras]; or accidens
4. Hinders or impairs the use of property. It is an act, Nuisance becomes
(backfilling, weakening perimeter wall occupation or such under certain
which may cause it to collapse – Rana v structure which by its conditions and
very nature, circumstances (Salao

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unquestionably is a v. Santos, G.R. No.

nuisance regardless L-45519, 1939). General Rule: A swimming pool or water tank
of its location or is not an attractive nuisance, for while it is
surroundings. attractive, it is merely an imitation of the
work of nature. Hence, if small children are
As a matter of law As a matter of fact drowned in an attractive water tank of another,
the owner is not liable even if there be no
Need only be proved Depends upon its
in any locality location and guards in the premises. (Hidalgo Enterprises v.
surroundings, the Balandan, et. al, G.R. No. L-3422 June 13, 1952)
manner of its conduct
or other Exception: There is some unusual
circumstances condition or artificial feature other than the
mere water and its location.
May be summarily May be abated only
abated under the law with reasonable
of necessity notice to the person Rationale: Children are earlier instructed
alleged to be so that they are sufficiently presumed to know
maintaining or doing the danger [nature has created streams, lakes,
such nuisance and pools which attract children]

II. DOCTRINE OF ATTRACTIVE III. LIABILITY OF NUISANCE

NUISANCE
Who are Liable in Case of Nuisance
1. Person responsible for creating the
What is the Doctrine of Attractive
nuisance; If the prejudice exceeds the
Nuisance?
inconveniences that such proximity
One who maintains on his premises dangerous
habitually brings, the neighbor who
instrumentalities or appliances of a character
causes such disturbance is held
likely to attract children at play, and who fails to
responsible for the resulting damage,
exercise ordinary care to prevent children from
being guilty of causing nuisance
playing therewith or resorting thereto, is liable to
[Velasco v. Manila Electric Co., G.R. No.
a child of tender years who is injured thereby,
L-18390 (1971)].
even if the child is technically a trespasser in the
2. Every successive owner or possessor of
premises [Jarco Marketing Corp. v. CA, G.R. No.
property who fails or refuses to abate a
129792 (1999)].
nuisance in that property started by a
former owner or possessor is liable
Reason for Doctrine: therefore in the same manner as the
Although the danger is apparent to those of age, one who created it [Art. 696, Civil
it is so enticing or alluring to children of tender Code];
years as to induce them to approach [Ibid]. a. Provided that he knew of the
Elements of attractive nuisance nuisance and must knowingly
1. It must be attractive; and fail or refuse to abate the
2. Dangerous to children of tender years. nuisance [Paras citing Lambs v.
Roberts, 196 Ala. 679].
Q: Is a swimming pool an attractive nuisance?

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b. To render the new owner or 2. To enjoin the sale or destruction of the

possessor liable, it is necessary property;
that he has actual knowledge of 3. An action for the proceeds of its sale
the existence of the nuisance, and damages if it has been sold; or
and that it is within his power to 4. To enjoin private parties from
abate the same. proceeding to abate a supposed
c. If he cannot physically abate nuisance.
the nuisance without legal
action against another person, Public Nuisance
then he shall not be liable for
such nuisance. Remedies Against a Public Nuisance
1. A prosecution under the Penal Code or
IV. REGULATION OF NUISANCES any local ordinance; or
2. A civil action; or
General Rule 3. Abatement, without judicial proceedings
Lapse of time cannot legalize any nuisance, [Art. 699, Civil Code].
whether public or private [Art. 698, Civil Code].
Note: The three remedies against a public
Note: Arts. 698 and 1143 (2) do not apply to nuisance enumerated under Art. 699 are not
easements which are extinguished by exclusive but cumulative [De Leon].
obstruction or non-use for ten (10) years under
Art. 631 [Ongsiako v. Ongsiako, G.R. No. L-7510 Criminal Prosecution is Remedy Only
(1957)]. for Public Nuisance
Criminal prosecution is instituted only for “public
The abatement of a nuisance does not preclude nuisance” and not for a private nuisance. The
the right of any person injured to recover action is brought in the name of the “People of
damages for its past existence [Art. 697, Civil the Philippines” since public nuisances are
Code]. considered as offenses against the State [De
Leon].
Extinctive Prescription
No Extinctive Prescription to abate a nuisance or Judgment with Abatement as a
Acquisitive Prescription for the right to use of Remedy
the property that creates such nuisance. The a. If a civil action is brought by reason of
action to abate a public or private the maintenance of a public nuisance,
nuisance is not extinguished by such action shall be commenced by the
prescription [Art. 1143 (2), Civil Code]. city or municipal mayor [Art. 701, Civil
Code].
Defenses to Action Remedies of the b. A private person may file an action on
Property Owner account of a public nuisance if it is
A person whose property is seized or destroyed especially injurious to him [Art. 703,
as a nuisance may resort to the courts to Civil Code].
determine whether or not it was in fact a
nuisance. Requisites of the Right of a Private
1. An action for replevin; Individual to Bring a Civil Action to
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Abate a Public Nuisance [Art. 704, Civil structures, dangerous zones to ensure public
Code] safety. (sec. 477, R.A. 7160 Local Government
1. That demand be first made upon the Code; Sitchon v. Aquino [G.R. No. L-8191
owner or possessor of the property to (1956)], where the Manila charter authorized
abate the nuisance; the City Engineer to do so.)
2. That such demand has been
rejected; NOTE: It is the mayor who issues the ORDER to
3. That the abatement be approved by abate the nuisance, either an ORDER to
the district health officer and executed demolish or to remove the structure; not the
with the assistance of the local police; district health officer or the city engineer, whose
and duties are only to recommend abatement to the
mayor.
4. That the value of the destruction does
not exceed P3,000.
Nuisances per se
Extrajudicial Abatement as a Remedy Since they affect the immediate safety of
persons and property, they may be summarily
1. It must be reasonably and efficiently
abated under the undefined law of necessity
exercised.
[Monteverde v. Generoso, supra].
2. Means employed must not be unduly
oppressive on individuals.
3. No more injury must be done to them Squatter houses as nuisance per se
property or rights of individuals than is Squatters who built houses of second-class
necessary to accomplish the abatement. materials without the knowledge and consent of
4. No right to compensation if property the city, without the necessary permits have
taken or destroyed is a nuisance. occupied property whenever and wherever
convenient to their interests, and even against
Process for Extrajudicial Abatement: the will of the owner. They know that intrusion
1. The district health officer shall take care into property, government or private, is wrong.
that one or all of the remedies against a In this situation, the houses and constructions
public nuisance are availed of [Art. 700, constitute public nuisance per se, which hinders
Civil Code]. and impairs the use of the property for the
2. The district health officer shall construction of a school building to the prejudice
determine whether or not abatement, of the education of the youth. The public
without judicial proceedings, is the best nuisance could be summarily abated by the city
remedy against a public nuisance [Art. authorities, even without the aid of the courts.
702, Civil Code]. (City of Manila v Gerardo Garcia, G.R. No.
3. The city or municipal mayor has the L-26053, 1967)
authority to abate the nuisance through
summary proceedings without judicial NOTE: Due process in the eviction of squatters
proceedings. must be observed in accordance with R.A. 7279
UDHA – Urban Development and Housing Act,
However, the mayor must first secure approved March 24, 1992.
certifications from the district health officer
and/or the city engineer. The city engineer Nuisances per accidens
certifies and declares illegal or dangerous

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If no compelling necessity requires the summary The right to abate is not greater than
abatement of a nuisance, the municipal the necessity of the case and is limited
authorities, under their power to declare and to the removal of only so much of the
abate nuisances, do not have the right to objectionable thing as actually causes
compel the abatement of a particular thing or the nuisance.
act as a nuisance without reasonable notice to 5. The property must not be destroyed
the person alleged to be maintaining or doing unless it is absolutely necessary to do
the same of the time and place of hearing so.
before a tribunal authorized to decide whether
such a thing or act does in law constitute a
nuisance. (Iloilo Cold Storage v. Municipal DIFFERENT MODES OF
Council, supra) ACQUIRING OWNERSHIP
Different Modes of Acquiring Ownership
Noise pollution is not a nuisance per se, but a a. Occupation
nuisance per accidens. Noise can be considered b. Tradition
a nuisance only if it affects injuriously the health c. Donation
or comfort of ordinary people in the vicinity to d. Prescription
an unreasonable extent. Noise pollution tests e. Intellectual Creation
measuring the decibel levels of the sound f. Testate and Intestate Succession
complained of must show that the level is higher
than the normal level experienced in a particular Note: Only items a-d are discussed in Property.
location. This would differ if the location is near Item e is discussed in the Intellectual Property
a busy street or in a remote area. (Frabelle Code part of the Commercial Law reviewer. Item
Properties v AC Enterprises, G.R. No. 245438, f is discussed in the Succession part of this same
2020) reviewer.

Rules on Abatement I. OCCUPATION

1. The right must be exercised only in
cases of urgent or extreme necessity. The thing
Requisites
alleged to be a nuisance must exist at the time
1. There must be seizure of a thing.
that it was alleged to be a nuisance.
2. The thing seized must be corporeal
2. A summary abatement must be resorted
personal property.
to within a reasonable time after
3. The subject must have the intention to
knowledge of the nuisance is acquired
acquire ownership and the necessary
or should have been acquired by the
capacity to consent.
person entitled to abate.
4. The object must be appropriable by
3. The person who has the right to abate
nature and without an owner.
must give reasonable notice of his
intention to do so, and allow thereafter
Rules
a reasonable time to enable the other to
abate the nuisance himself.
4. The means employed must be A. ON LAND
reasonable and for any unnecessary
damage or force, the actor will be liable. The ownership of a piece of land cannot be
acquired by occupation (Art. 714.)
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B. ON ANIMALS Exception
Belongs to the prior owner if movement was
Wild animals enticed by some artifice or fraud (Art. 717.)
The right to hunt and to fish is regulated by
special laws. (Art. 715) C. ON OTHER PERSONAL
Possessed only while under a person’s control PROPERTY
(Art. 560.) When wild animals regain their
natural freedom, they resume being res nullius Abandoned Movables
and can be owned by occupation through May be acquired, as long as the abandonment
hunting or fishing. made by the prior possessor is voluntary and
intentional (Art. 713.)
Domesticated animals
Domesticated animals are those who retain the Lost Movables (except treasure)
habit of returning to the premises of their owner
(Art. 560.)
Known/Unknown Possessor
1. If prior possessor is known, the thing
They are claimable by prior owner within
must be returned to him/her;
twenty (20) days from occupation by
2. If prior possessor is unknown, the
another person. After 20 days, the animal can
thing must be deposited with the
be caught and kept by another person. (Art.
mayor of the city/municipality where it
716.)
was found (Art. 719.)

Swarm of bees
Procedure
Prior owner has the right to pursue them to
1. The mayor publicly announces the
another’s land, but is liable for damages the
finding of the thing for two (2)
other person may suffer (Art. 716.)
consecutive weeks in the way he deems
best.
Other persons may occupy or retain the swarm
2. If the item cannot be kept without
if prior owner:
deterioration or without expenses
1. Has not pursued the swarm; or,
that considerably diminish its
2. Ceased to pursue the swarm within
value, it shall be sold at public auction
two (2) consecutive days from
eight (8) days after the publication.
movement towards other person’s
3. If the owner does not appear within
property (Art. 716.)
six (6) months from publication, the
The 2-day period in Art. 716 applies to both
thing or its value shall be awarded to
instances where the owner does not pursue the
the finder.
swarm and when he ceases to pursue them.
4. If the owner appeared in time, the
owner is obliged to pay the finder
Pigeons and Fish
one-tenth (1/10) of the price of the
thing.
General rule
Belongs to the owner of the breeding place into Distinction between Occupation and
which they have moved (Art. 717.) Possession
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R.A. 8492 National Museum Act covers treasure

Occupation is different from possession because – hunting, where hidden treasure is deliberately
the latter: found, not by chance. A permit for treasure –
a) covers any property; hunting from the DENR, the National Museum,
b) raises only a presumption when done by and in some instances, from the Office of the
a person in the concept of an owner; President. Different sharing schemes are
and applied.
c) can be carried out as a holder and not
as owner. II. TRADITION
Possession is wider in scope than occupation
A mode of acquiring ownership as a
because it includes constructive possession.
consequence of certain contracts like the
contract of sale, barter, assignment, simple loan
Hidden Treasure or mutuum.
Any hidden and unknown deposit of money,
jewelry, or other precious objects the lawful
NOTE: Tradition or delivery by itself is not a
ownership of which does not appear (Art. 439.)
mode of acquiring ownership. It becomes a
mode of acquiring ownership only when the
General rule delivery is based on contract. In other words,
Belongs to the owner of the property where it is without a valid contract, the delivery does not
found (Art. 438.) transfer ownership nor cure the defect in the
contract.
Exceptions
Circumstances Entitlement Kinds of tradition
of discovery 1. Actual delivery consists in placing the
thing sold in the control and possession
If found on: Only one-half (1/2) shall be of the vendee (Art. 1497)
a. Property of allowed to the finder. 2. Legal or constructive delivery may
another, the
be had through any of the following
State, or
any of its ways:
subdivisions a. Execution of a public
; and instrument evidencing the
b. By chance sale. If based on a valid contract
of sale, then ownership is
Finder is a Finder is not entitled to any
transferred. (Art. 1498)
trespasser share; and,
b. Traditio symbolica, such as
Things are of The State may acquire them the delivery of the keys of the
interest to at their just price, which place where the movable sold is
science or the shall be divided in being kept (Art. 1498, par. 2)
arts conformity with the rules c. Traditio longa manu or by
stated
mere consent or agreement if
(Art. 438) the movable sold cannot yet be
transferred to the possession of

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the buyer at the time of the sale Donation transfers the title of the property from
(Art. 1499) the donor to the donee. It effectively reduces
d. Traditio brevi manu, if the the patrimony of the donor and increases the
buyer already had possession of donee’s.
the object even before the sale
(Art. 1499); and Effects of Subrogation
e. Traditio constitutum 1. The donee is subrogated to all the rights
possessorium, where the and actions which in case of eviction
seller remains in possession of would pertain to the donor;
the property in a different 2. If the donation is simple or
capacity (Art. 1500.) remunerative, the donor is not liable for
eviction or hidden defects, because the
III. DONATION donation is gratuitous;
3. Even if the donation is simple or
Art. 725. Donation is an act of liberality whereby remunerative, the donor is liable for
a person disposes gratuitously of a thing or right eviction or hidden defects in case of bad
in favor of another, who accepts it. faith on his part; and
4. If the donation is onerous, the donor is
Requisites liable on his warranty but only to the
1. Capacity of donor to make a donation; extent of the burden. (Art. 754)
2. Donative intent (Animus donandi);
3. Delivery (actual or constructive);
4. Acceptance by the donee; and Persons who may give or receive
a. Acceptance by the donee is donations
required because donation is
never obligatory. One cannot be General rule
compelled to accept the All persons who may contract and dispose of
generosity of another. their property (Art. 735.)
b. Although under Art. 725,
donation is an act, it is really a Exceptions
contract. The essential 1. Guardians and trustees cannot donate
requisites of consent, subject the property entrusted to them (Art.
matter, and cause must be 736);
present. 2. Minors and others who cannot enter into
5. Necessary form prescribed by law. a contract may become donees but
acceptance shall be done through their
Features parents or legal representatives (Art.
741);
Nature and Effect of Donation 3. For donation to conceived and unborn
It is not enough that the act is gratuitous, there children, acceptance may be made by
must also be the intent to benefit the donee. persons who would legally represent
(Heirs of Reyes v. Calumpang, G.R. No. 138463, them if they were already born (Art.
2006) 742);

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4. Donations made to incapacitated

b. Remuneratory Donation - given on
persons shall be void (though simulated account of the services provided by the
under the guise of another contract or donee to the donor which do not
through a person who is interposed) constitute a demandable debt
(Art. 743); c. Modal Donation - imposes a burden on
the donee which is less than the value
Incapacitated persons are those of the gift
d. Onerous Donation - where the value of
prohibited by law to receive a donation
the donated property exceeds the value
from the donee; such as, guilty of of the thing it is given for (Art. 733,
adultery or concubinage, guilty of same Civil Code)
criminal offense, public officers his
spouse, ascendants and descendants by As to extinguishment
reason of his office, prohibited to
a. Pure Donation - not subject to a
succeed by will, donation between condition or period
spouses or partners during cohabitation. b. Conditional - subject to a condition
5. When the same thing is donated to two c. With a term - subject to a resolutory or
or more different donees, rules on suspensive condition
double sale govern (Art. 744)
a. If movable property - ownership Inter Vivos vs. Mortis Causa
goes to the first possessor in
good faith; Inter Vivos Mortis Causa
b. If immovable property -
Disposition and Disposition happens
ownership goes to the first
acceptance to take upon the death of
registrant in good faith (Art. effect during lifetime of donor; acceptance by
1544.) donor and donee donee can only be
done after donor’s
Classifications death

As to taking effect Already pertains to the Even if there is a term

donee unless there is a of effectivity and
a. Donation inter vivos - takes effect during contrary intent effectivity is upon the
the donor’s lifetime (Arts. 729- 731, Civil death of the donor,
Code) still entitled to fruits
b. Donation mortis causa - takes effect upon
the donor’s death (Art. 728, Civil Code) Formalities required - Formalities required -
c. Donation propter nuptias - made by reason follow law on follow law on
of marriage and before the celebration of donations and certain succession to be valid,
which, for the spouses [Art. 82, Family kinds of donations and and donation must be
Code] law on obligations and in the form of a will
contracts (suppletory)
As to consideration
Irrevocable at the Revocable ad mutuum
a. Simple Donation - the consideration is instance of the donor; (exclusive will of
the liberality of the donor or based on may be revoked only donor)
the donee’s merits (Arts. 725-726) by reasons provided by
law

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subject of the deed (Villanueva v. Spouses

Revoked only for
reasons provided for Branoco, GR No. 173804, 2011).
by law (except onerous
donations The reservation of the “right, ownership,
possession and administration of the property”
Note: A donation mortis causa must comply with and made the donation operative upon death, in
the formalities of a last will and testament the context of an irrevocable donation, simply
otherwise; it would be void and would produce means that the donors parted with their naked
no effect. (Maglasang v. Heirs of Corazon title, maintaining only beneficial ownership of
Cabatingan, GR No. 131953, 2002) the donated property while they lived. (Del
Rosario vs. Ferrer, GR No. 187056, 2012)
If the donation is made in such a way that the
full and naked ownership will pass to the donee The title or general description of the
upon the death of the donor, then it is at that documentation of a donation will not be the
time when the donation will take effect and it is governing factor in determining the kind of
the donation mortis causa which should be donation. (Del Rosario v. Ferrer, supra)
embodied in the last will and testament.
(Maglasang v. Cabatingan, GR No. 131953, Formalities required
2002)
Movable Property
Rules for determining whether a a. If the value exceeds P5,000, the
donation is one inter vivos or mortis donation and acceptance shall be made
in writing. Otherwise, the donation shall
causa be void.
Where a donation was made “in consideration of b. If the value is below P5,000, donation
love and affection” but further stipulated that “It may be made orally or in writing.
became effective upon the death of the donor c. If oral, it must be with simultaneous
provided that in the event the donee should die delivery of the thing or of the document
before the donor, the donation would be representing the right donated. (Art.
748)
deemed automatically rescinded,” the Court held
that the same was a mortis causa since the right Immovable Property
of disposition was not transferred to donee while a. To be valid, donation must be made in a
donor is still alive. (Sicad v. CA, GR No. 125888, public instrument, specifying therein the
1998) property donated and the value of the
charges which the done must satisfy. If
Where, however, a donation was made donation is made in a private document,
stipulating that it would take effect after the it is void.
b. The acceptance of the donee may be
death of the donor but further stipulated that
made in the same deed of donation or
(1) the donor will not dispose nor take it away in a separate public document.
from the donee and that (2) the donor is parting c. If the acceptance is made in a separate
with the beneficial ownership while he lived was instrument, the donor shall be notified
held to be inter vivos. In case of doubt, the thereof in an authentic form, and this
conveyance should be deemed donations inter step shall be noted in both instruments.
vivos, rather than mortis causa, in order to avoid d. Acceptance must be made during the
lifetime of the donor. (Art.749)
uncertainty as to the ownership of the property

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Rules on double donations fails to comply with the conditions

imposed by the donor.
General Rule
Priority in time, priority in right. Grounds for revocation
1. If movable – one who first takes
possession in good faith 1. Birth, adoption, reappearance of
2. If immovable – one who recorded in child
registry of property in good faith It applies when the donor, at the time he made
a. No inscription, one who first the donation, did not have any child or
took possession in good faith descendant, or erroneously thought so.
b. In absence thereof, one who Donation may be revoked or reduced when:
presents oldest title a. Donor should have any children, after
donation, even though they be
Limitations posthumous
1. Reservation of sufficient means for b. Donor’s child whom he believed to be
support of donor and relatives. dead when he made the donation, turn
● Donation may comprehend all out to be living
present properties of the donor, c. Donor subsequently adopts a minor
or part thereof, provided he child (Art. 760)
reserves sufficient means for his
support and of relatives who, at This contemplates a donation inter vivos. It can
the time of the acceptance of only be reduced if the legitime of the child who
the donation, are by law entitled appeared or reappeared will be adversely
to be supported by the donor. affected; otherwise, the court will not allow the
Otherwise, the donation will be donation to be revoked.
subject to reduction upon
petition of any person affected. 2. Ingratitude
(Art. 750)
2. Donation of future property is The donation may also be revoked by reason of
prohibited. (Art. 751) ingratitude in the following cases:
3. Donation shall be limited to what the a. Donee should commit some offense
donor may give by will. Otherwise, the against the person, honor or property of
donation is inofficious (Art. 752). the donor, or of his wife, or children
● The limitation applies when the under his parental authority.
donor has forced or compulsory b. Donee imputes to the donor any:
heirs. The purpose is not to i. Criminal offense; or
impair their legitimes. ii. Any act involving moral turpitude;
c. Donee unduly refuses to give support
A donation would not be legally feasible if the when the donee is legally or morally
donor has neither ownership nor real rights that bound to give support to the donor. (Art.
he can transmit to the donee. (Hemedes v. CA, 765)
GR No. 107132, 2008)
Period for action prescribes within one year,
Reduction and revocation counted from the time the donor:
a. Had knowledge of the fact; and
Revocation b. It was possible for him to bring the
1. Affects the whole donation action. (Art. 769)
2. Applies only to donation inter vivos 3. Non-compliance with conditions
3. Not applicable to onerous donations Donation may be revoked when the donee fails
4. Donor can revoke donation if the donee to comply with any of the conditions which the
donor imposed.
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 PROPERTY CIVIL LAW

4. Inofficiousness
The alienations and mortgages made by the The donation exceeds that which the
donee are void, subject to the limitations donor can give by will.
imposed by the Mortgage Law and Land
Registration laws with regard to third persons. Cause of action arising from the
inofficiousness of donation arises only
General Rule upon death of the donor, as the value of
Action prescribes after 4 years from the the donation will be contrasted with the
noncompliance with the condition. Note: This net value of the estate of the donor
action may be transmitted to the heirs of the decedent. (Eloy Imperial v. CA, GR No.
donor and may be exercised against the donee’s 112483, 1999)
heirs. (Art. 764)
IV. PRESCRIPTION
Exception
By prescription, one acquires ownership and
PREMISE: If the deed of conditional donation
does not fix a period for fulfilment of the other real rights through the lapse of time in the
condition, the Court shall fix the period. manner and under the conditions laid down by
However, in a case where 50 years had passed law. In the same way, rights and conditions are
without the condition having been fulfilled, the lost by prescription (Art. 1106)
Court refused to fix a period and ruled that for
failing to comply with the conditions of the PRESCRIPTION is a question of fact that must
donation, such donation can be revoked.
be proved with clear and convincing evidence to
(Central Philippine University v. CA, GR No.
112127, 1995) determine the date when the period to bring an
action commended. (James v Eurem Realty
Reduction Development, cited in De Leon, p. 722)
1. affects only a part of the donation
2. allowed during the donor’s lifetime or Who may acquire by prescription
after his/her death
Persons who are capable of acquiring property
or rights by the other legal modes may acquire
Grounds for reduction
1. Birth, appearance, or adoption of a the same by means of prescription (Art. 1107
child par. 1)
Same case as revocation (only if the
child’s legitime will be impaired.) Minors and other incapacitated persons may
2. Failure to reserve acquire property or rights personally or through
Failure of the donor to reserve sufficient their parents, guardians, or legal representatives
means for support of himself or
(Art. 1107 par. 2)
dependent relatives
3. Fraud against creditors
Failure of donor to reserve sufficient When prescription is inapplicable
property to pay off existing debts

Note: This is not actually an action to a. By offender

reduce a donation. It is rather an action Art. 1133. Movables possessed through a crime
to rescind a rescissible contract called can never be acquired through prescription by
Accion Pauliana. Reduction of the the offender.
donation is the end result or
consequence once the prayer or relief in
the complaint is granted.
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An action to recover from the criminal is No prescription shall run in favor of a coowner
imprescriptible. or co-heir against his co-owners or coheirs so
long as he expressly or impliedly recognizes the
The buyer of stolen goods loses the thing to the co-ownership (Art. 494)
owner because the thief did not acquire
ownership over it, and therefore cannot transfer g. Property of public dominion
anything. Nemo dat quod non habet – one Prescription, both acquisitive and extinctive,
cannot give what one does not have. (Odrada v does not run against the State in the exercise of
Lazaro, Jan. 20, 2020) its sovereign function to protect its interest
except with respect to its patrimonial property
If the buyer bought the goods at public sale in which may be the object of prescription (Art.
good faith he must still return it to the owner, 1113)
who will reimburse him for the price paid. The
sale must have a publication of notice for the Types
general public. (Art. 559) The State does not
issue any warranty for properties sold by the
1. Acquisitive Prescription
sheriff at public auction.
The acquisition of ownership and other real
rights through possession in the concept of
b. Registered Lands ownership of a thing in the manner and
No title to registered land in derogation of the condition provided by law.
title of the registered owner shall be acquired by
prescription or adverse possession [Property
Ordinary
Registration Decree, PD 1529].
Ordinary acquisitive prescription requires
possession of things in good faith and with just
c. Actions to demand a right of title for the time fixed by law. Note: Ownership
way; to abate a nuisance (Art. and other real rights over immovable property
1143) are acquired by ordinary prescription through
possession of ten (10) years (Art. 1134, Civil
d. Action to quiet title if plaintiff is Code)
in possession
When the plaintiff is in possession of the Extraordinary
property, the action to quiet title does not Extraordinary acquisitive prescription is the
prescribe. The reason is that the owner of the acquisition of ownership and other real rights
property or right may wait until his possession is without need of title or of good faith or any
disturbed or his title is assailed before taking other condition.
steps to vindicate his right.
e. Void contracts 2. Extinctive Prescription
The action or defense for the declaration of the The loss or extinguishment of property rights or
inexistence of a contract does not prescribe (Art. actions through the possession by another of a
1410) thing for the period provided by law or through
failure to bring the necessary action to enforce
one’s right within the period fixed by law.
f. Action to demand partition;
distinguished from laches
Requisites
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 PROPERTY CIVIL LAW

1. Capacity to acquire by prescription;

of a thing in the
2. A thing capable of acquisition by manner and condition
prescription; provided by law.
3. Possession of the thing under certain
conditions; and Also referred to as Also referred to as
4. Lapse of time provided by law adverse possession. litigation of action.

Expressly vests the Bars the right of

Periods property and raises a action.
1. Movables new title in the
a. 4 years ‐ If in good faith; and, occupant.
b. 8 years ‐ If in bad faith (Art.
The controlling feature The controlling
1140 in relation to Art. 1132)
is the claimant in feature is the owner
2. Immovables possession. out of possession.
a. 10 years ‐ If in good faith
b. 30 years ‐ If in bad faith
Prescription vs. Laches
prescription, ownership over real property may Prescription Laches
be acquired through the lapse of time in the
manner and under the conditions laid down by Concerned with the Concerned with the
law, that is: fact of delay. effect of delay
i. through uninterrupted possession in
A matter of time Principally a question
good faith and with just title for a period of inequity of
of ten (10) years for ordinary acquisitive permitting a claim to
prescription; or be enforced, this
ii. through uninterrupted possession for inequity being
thirty (30) years without need of just founded on some
title or good faith for extraordinary subsequent change in
the condition or the
acquisitive prescription. (Republic v.
relation of the parties.
Pasig Rizal, G.R. No. 213207, 2022)
Statutory Not statutory
Note: Good faith consists in the reasonable
belief that the person from whom he received Applies at law Applies at equity
the thing was actually the owner thereof and
Cannot be availed of Being a defense of
could transfer his ownership (Art. 1127) unless it is especially equity, need not be
pleaded as an specifically pleaded.
Acquisitive vs. Extinctive Prescription affirmative allegation.

Acquisitive Extinctive
Prescription Prescription

Acquisition of Extinction of the right

ownership and other due to the passage of
real rights through time.
possession in the
concept of ownership

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LAND TITLES AND DEEDS CIVIL LAW

small-scale utilization of natural resources

THE REGALIAN DOCTRINE by Filipino citizens, as well as cooperative
fish farming, with priority to subsistence
fishermen and fishworkers in rivers, lakes,
I. CONCEPT OF REGALIAN bays, and lagoons.
DOCTRINE
The President may enter into agreements
with foreign-owned corporations involving
Section 2, Article XII, 1987 either technical or financial assistance for
Constitution. All lands of the public large-scale exploration, development, and
domain, waters, minerals, coal, utilization of minerals, petroleum, and
petroleum, and other mineral oils, all other mineral oils according to the general
forces of potential energy, fisheries, terms and conditions provided by law,
forests or timber, wildlife, flora and fauna, based on real contributions to the
and other natural resources are owned by economic growth and general welfare of
the State. With the exception of the country. In such agreements, the
agricultural lands, all other natural State shall promote the development and
resources shall not be alienated. The use of local scientific and technical
exploration, development, and utilization resources.
of natural resources shall be under the
full control and supervision of the State. The President shall notify the Congress of
The State may directly undertake such every contract entered into in accordance
activities, or it may enter into with this provision, within thirty days from
co-production, joint venture, or its execution.
production-sharing agreements with
Filipino citizens, or corporations or
The Regalian Doctrine, or jura regalia, simply
associations at least sixty per centum of
whose capital is owned by such citizens. means that the State is the original proprietor of
Such agreements may be for a period not all lands and, as such, is the general source of
exceeding twenty-five years, renewable all private titles. Thus, pursuant to this principle,
for not more than twenty-five years, and all claims of private title to land, save those
under such terms and conditions as may acquired from native title, must be traced from
be provided by law. In cases of water some grant, whether express or implied, from
rights for irrigation, water supply, the State. Absent a clear showing that land had
fisheries, or industrial uses other than the been let into private ownership through the
development of water power, beneficial State’s imprimatur, such land is presumed to
use may be the measure and limit of the belong to the State. [Republic v. Santos, G.R.
grant. No. 180027 (2012)]

A. HISTORY OF THE REGALIAN

The State shall protect the nation’s
DOCTRINE
marine wealth in its archipelagic waters,
territorial sea, and exclusive economic
The Spaniards first introduced the doctrine to
zone, and reserve its use and enjoyment
the Philippines through the Laws of the Indies
exclusively to Filipino citizens.
and the Royal Cedulas, which laid the foundation
The Congress may, by law, allow that "all lands that were not acquired from the

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Government, either by purchase or by grant, II. EXCEPTION TO THE

belong to the public domain. The 1935, 1973 REGALIAN DOCTRINE
and 1987 Constitutions adopted the Regalian
doctrine substituting, however, the state, in lieu
A. NATIVE TITLE
of the King, as the owner of all lands and waters
of the public domain. Both the 1935 and 1973
When as far back as memory goes, land that
Constitutions prohibited the alienation of all
has been held by individuals under a claim of
natural resources except agricultural lands of the
private ownership will be presumed to have
public domain. The 1987 Constitution readopted
been held in the same way from before the
this policy. Indeed, all lands of the public domain
Spanish conquest and never to have been public
as well as all natural resources enumerated in
land. [Cariño v. Insular Government, 212 US 449
the Philippine Constitution belong to the State.
(1909)]
[Collado v. CA, G.R. No. 107764 (2002)]

The only exception in the Regalian Doctrine is

B. EFFECTS OF THE REGALIAN
native title to land, or ownership of land by
DOCTRINE
Filipinos by virtue of a claim of ownership since
time immemorial and independent of any grant
1. All lands of public domain belong to the
from the Spanish Crown. [Federation of Coron,
State, and the State is the source of any
Busuanga, Palawan Farmers’ Association, Inc., v.
asserted right to ownership in land and
Secretary of Environment and Natural Resources
charged with the conservation of such
(SENR), G.R. No. 247866 (2020)]
patrimony. [Republic v. IAC, G.R. No. 71285
(1987)]
Native title refers to pre-conquest rights to lands
2. The State is the source of any asserted right
and domains which, as far back as memory
to ownership of land. All lands not otherwise
reaches, have been held under a claim of private
appearing to be clearly within private
ownership by ICCs/IPs, have never been public
ownership are presumed to belong to the
lands and are thus indisputably presumed to
State. Any applicant for confirmation of
have been held that way since before the
imperfect title bears the burden of proving
Spanish Conquest. [Rep. Act No. 8371,
that he is qualified to have the land titled in
otherwise known as the Indigenous Peoples’
his name. [Republic v. Manna Properties,
Rights Act of 1997 (IPRA), sec. 3(l)]
Inc., G.R. No. 146527 (2005)]
3. Unless public land is shown to have been
The Regalian Doctrine does not negate native
reclassified or alienated to a private person
title to lands held in private ownership since
by the State, it remains part of the
time immemorial. [Justice Kapunan’s separate
inalienable public domain for land
opinion in Cruz v. SENR, G.R. No. 135385
classification or reclassification cannot be
(2000)]
assumed. It must be proved. And the
applicant bears the burden to overturn, by
A recognized exception to the theory of jura
incontrovertible evidence, the presumption
regalia, the ruling in Cariño v. Insular
that the land subject of an application for
Government institutionalized the recognition of
registration is alienable and disposable.
the existence of native title to land, or
[Republic v. Raneses, G.R. No. 189970
ownership of land by Filipinos by virtue of
(2014)]
possession under a claim of ownership since
time immemorial and independent of any grant

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 LAND TITLES AND DEEDS CIVIL LAW

from the Spanish Crown. [Agcaoili, Property but not limited to, residential lots, rice terraces
Registration Decree and Related Laws (2018)] or paddies, private forests, swidden farms and
tree lots. [IPRA, sec. 3(b)]
B. ANCESTRAL DOMAINS
Certificate of Ancestral Domain Title (CADT)
Ancestral Domains refer to all areas generally refers to a title formally recognizing the rights of
belonging to ICCs/IPs comprising lands, inland possession and ownership of ICCs/IPs over their
waters, coastal areas, and natural resources ancestral domains identified and delineated in
therein, held under a claim of ownership, accordance with this law. [IPRA, sec. 3(c)]
occupied or possessed by ICCs/IPs, by
themselves or through their ancestors, Certificate of Ancestral Lands Title (CALT) refers
communally or individually since time to a title formally recognizing the rights of
immemorial, continuously to the present except ICCs/IPs over their ancestral lands. [IPRA, sec.
when interrupted by war, force majeure or 3(d)]
displacement by force, deceit, stealth or as a
consequence of government projects or any In Cruz v. SENR, supra, petitioners challenged
other voluntary dealings entered into by the constitutionality of some provisions of IPRA
government and private individuals/corporations, primarily on the ground that they amount to an
and which are necessary to ensure their unlawful deprivation of the State’s ownership
economic, social and cultural welfare. It shall over lands of the public domain as well as
include ancestral lands, forests, pasture, minerals and other natural resources therein.
residential, agricultural, and other lands The deliberation resulted in a 7-7 tie. After
individually owned whether alienable and redeliberation, the voting remained the same.
disposable or otherwise, hunting grounds, burial Accordingly, pursuant to Rule 56, Section 7 of
grounds, worship areas, bodies of water, mineral the Rules of Civil Procedure, the petition was
and other natural resources, and lands which dismissed.
may no longer be exclusively occupied by
ICCs/IPs but from which they traditionally had III. LAND CLASSIFICATION
access to for their subsistence and traditional
activities, particularly the home ranges of Under the Regalian Doctrine embodied in the
ICCs/IPs who are still nomadic and/or shifting Constitution, all lands of the public domain
cultivators. [IPRA, sec. 3(a)] belong to the State, which is the source of any
asserted right to ownership of land. All lands not
Ancestral Lands refer to land occupied, appearing to be clearly within private ownership
possessed and utilized by individuals, families are presumed to belong to the State. Unless
and clans who are members of the ICCs/IPs public land is shown to have been reclassified or
since time immemorial, by themselves or alienated to a private person by the State, it
through their predecessors-in-interest, under remains part of the inalienable public domain.
claims of individual or traditional group [Republic v. Lao, G.R. No. 150413 (2003)]
ownership, continuously, to the present except
when interrupted by war, force majeure or The classification of public lands is an exclusive
displacement by force, deceit, stealth, or as a prerogative of the Executive Department of the
consequence of government projects and other Government and not of the courts. In the
voluntary dealings entered into by government absence of such classification, the land remains
and private individuals/corporations, including, as unclassified land until it is released therefrom

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 LAND TITLES AND DEEDS CIVIL LAW

and rendered open to disposition. [Director of

Lands v. CA, G.R. No. L-58867 (1984)] RESTRICTIONS ON LAND
OWNERSHIP
A. PRIMARY CLASSIFICATION
I. NATIONALITY
1. Agricultural;
2. Forest or timber;
RESTRICTIONS
3. Mineral lands; and
4. National parks. Section 3, Article XII, 1987
Constitution. xxx Private corporations or
Alienable lands of the public domain shall be associations may not hold such alienable
limited to agricultural lands. [CONST. art. XII, lands of the public domain except by
sec. 3] lease, for a period not exceeding
twenty-five years, renewable for not more
B. SECONDARY CLASSIFICATION than twenty-five years, and not to exceed
one thousand hectares in area. Citizens of
Agricultural lands of the public domain may be the Philippines may lease not more than
further classified by law according to the uses five hundred hectares, or acquire not
which they may be devoted. [CONST. art. XII, more than twelve hectares thereof by
sec. 3]
purchase, homestead, or grant. xxx

Under Commonwealth Act No. 141 Section 7, Article XII, 1987

1. Agricultural Constitution. Save in cases of hereditary
2. Residential commercial industrial or for succession, no private lands shall be
similar productive purposes transferred or conveyed except to
3. Educational, charitable, or other similar individuals, corporations, or associations
purposes qualified to acquire or hold lands of the
4. Reservations for town sites and for public domain.
public and quasi-public uses. [CA 141,
sec. 9]
Section 8, Article XII, 1987
Under Rep. Act No. 7160 or the “Local Constitution. Notwithstanding the
Government Code of 1991” provisions of Section 7 of this Article, a
natural-born citizen of the Philippines who
A city or municipality may reclassify agricultural
has lost his Philippine citizenship may be
land to residential, commercial, or industrial
a transferee of private lands, subject to
purposes, subject to limitations. [LGC, sec. 20]
limitations provided by law.

Only Filipinos can acquire or hold title to private

lands or to lands of the public domain. [Halili v.
CA, G.R. No. 113539 (1998)]

The capacity to acquire private land is made

dependent upon the capacity to acquire or hold
lands of public domain. Private land may be

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 LAND TITLES AND DEEDS CIVIL LAW

transferred or conveyed only to individuals or Investments Act of 1991”, as amended

entities “qualified to acquire lands of public by Rep. Act No. 8179, any natural born
domain.” [Krivenko v. Register of Deeds, G.R. citizen who has lost his Philippine
No. L- 630 (1947)] citizenship and who has the legal
capacity to enter into a contract under
A. INDIVIDUALS Philippine laws may be a transferee of a
private land up to a maximum area of
General Rule: Citizens of the Philippines may five thousand (5,000) square meters in
lease not more than five hundred (500) the case of urban land or three (3)
hectares, or acquire not more than twelve (12) hectares in the case of rural land to be
hectares thereof, by purchase, homestead, or used by him for business or other
grant. [CONST. art. XII, sec. 3] purposes. In the case of married
couples, one of them may avail of the
The prohibition under the Constitution of sale of privilege herein granted: Provided, That
lands to aliens makes no distinction between if both shall avail of the same, the total
private lands that are strictly agricultural and area acquired shall not exceed the
private lands that are residential or commercial. maximum herein fixed.
[Krivenko v. Register of Deeds, supra]
Under Section 2 of B.P. 185, any
Exceptions: natural-born citizen of the Philippines
1. Aliens, by way of hereditary succession who has lost his Philippine citizenship
[CONST. art. XII, sec. 7] and who has the legal capacity to enter
into a contract under Philippine laws
If an alien buys land and titles it in his may be a transferee of a private land up
or her spouse’s name, then the land to a maximum area of 1000 square
cannot be considered conjugal property, meters, in the case of urban land, or
as doing so would permit indirect one hectare in the case of rural land, to
controversion of the constitutional be used by him as his residence. In the
prohibition. [Cheesman v. IAC, G.R. No. case of married couples, one of them
74833 (1991)] may avail of the privilege herein
granted; Provided, That if both shall
The foreign spouse cannot seek avail of the same, the total area
reimbursement on the ground of equity acquired shall not exceed the maximum
where it is clear that he willingly and herein fixed.
knowingly bought the property despite
the constitutional prohibition. [Muller v. 3. Lands acquired by an American citizen
Muller, G.R. No. 149615 (2006)] prior the proclamation of Philippine
Independence on July 4, 1946 but after
2. Natural born citizens who have lost their the passage of the 1935 Constitution
Philippine citizenship, subject to the may be registered, based on the
limitations provided by law [CONST. art. ordinance appended to the 1935
XII, sec. 8]: Constitution. [Moss v. Director of Lands,
G.R. No. L-27170 (1977)]
Under Section 10 of Rep. Act No. 7042
otherwise known as the “Foreign 4. Naturalized citizens

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unit owner is simply a member in this

Land sold to an alien which is now in condominium corporation. As long as 60% of
the hands of a naturalized citizen can no the members of this Condominium Corporation
longer be annulled [De Castro v. Tan, are Filipino, the remaining members can be
GR No. L-31956 (1984)]. The litigated foreigners. [Hulst v. PR Builders, Inc., G.R. No.
property is now in the hands of a 156364, (2008)]
naturalized Filipino. It is no longer
owned by a disqualified vendee. The Remedies if the land is in the hands of
purpose of the prohibition ceases to be a disqualified person (i.e., an alien)
applicable. [Barsobia v. Cuenco, G.R.
No. L-33048 (1982)] General Rule: The sale is null and void for
being contrary to the Constitution. However,
Where a Filipino citizen naturalized as a both the Filipino-seller and the alien-buyer are in
citizen in a foreign country has pari delicto, thus no affirmative relief of any kind
“reacquired” his Philippine citizenship will be given to one against the other. The
under the terms of Rep. Act No. 9225 following remedies are available:
otherwise known as the “Citizenship 1. Reversion
Retention and Re-acquisition Act of 2. Escheat to the estate
2003,” the area limitations may no Both remedies have the same effect of returning
longer apply since the law expressly the land to the State.
grants him the same right, as any
Filipino citizen, to “enjoy full civil and Exception: Public policy is advanced by
political rights” upon the re-acquisition allowing a party to sue or relief. The
of his Filipino citizenship. [Agcaoili] Filipino-seller shall be allowed to reacquire the
land if it will serve public interest. [Rellosa v.
5. Aliens, although disqualified to acquire Gaw Chee Hun, G.R. No. L-1411 (1953)]
lands of public domain, may lease
private land provided that such lease B. CORPORATIONS
does not amount to a virtual transfer of
ownership. They may also be given an General Rule: Private corporations or
option to buy property on the condition associations may not hold alienable lands of the
that he is granted Philippine citizenship public domain. [CONST. art. XII, sec. 3]
[Llantino v. Co Liong Chong, G.R. No.
L-29663 (1990)]
Exceptions:
1. By lease for a period not exceeding 25
NOTE: This prohibition only applies to lands.
years, renewable for not more than 25
Rep. Act No. 4726 or the Condominium Act
years and not to exceed 1,000 hectares
expressly allows foreigners to acquire
in area. [CONST. art. XII, sec. 3]
condominium units and shares in condominium
2. If the predecessors-in-interest of the
corporations up to not more than 40% of the
corporation have been in possession of
total and outstanding capital stock of a
the land in question since June 12,1945
Filipino-owned or controlled (condo) corporation.
or earlier, then it may rightfully apply
Under this set up, the ownership of the land is
confirmation of title to the land. The
legally separated from the unit itself. The land is
vested right has to be respected.
owned by a condominium corporation and the

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[Republic v. IAC and Acme Plywood & opening wedge to revive alien religious
Veneer Co., Inc., G.R. L-73002 (1986)] land-holdings in the country. [Agcaoili]
The possession of public land of the
character (alienable and disposable) II. OTHER RESTRICTIONS
and duration (at least 30 years, under
Sec. 48 of CA 141) prescribed by statute A. PRIVATE LANDS
is the equivalent of an express grant
from the State that the possessor shall 1. Private corporations, 60% of whose
be conclusively presumed to have capital is owned by Filipinos, can acquire
performed all conditions essential for private lands. [CONST. Art. XII, Sec. 2]
the grant from the government. 2. Land ownership is restricted as to extent
[Director of Lands, G.R. No. 73002 reasonably necessary to enable it to
(1986)] carry out the purpose for which it was
created. [Rep. Act No. 11232 otherwise
Corporations Sole known as the Revised Corporation Code,
A corporation sole is organized and composed of sec. 35(g)]
a single individual, the head of any religious 3. If the corporation is engaged in
society or church, for the administration of the agriculture, it can only own up to 1,024
temporalities of such society or church. Since hectares. [Rep. Act No. 3844 otherwise
corporations sole are mere administrators of the known as the Agricultural land Reform
“temporalities” or properties titled in their name Code, sec. 71]
and for the benefit of the members of their
respective religion, they have no nationality. B. PRIVATE LANDS
Thus the constitutional proscription against
private corporations acquiring public agricultural 1. Corporations, domestic or foreign, can
lands will not apply. [Roman Catholic Apostolic only lease land up to 1,000 hectares, for
Administrator of Davao v. Land Registration 25 years and renewable for another 25
Commission, G.R. No. L- 8451 (1957)] years. [CONST. Art. XII, Sec. 3]
2. This limitation does not apply where the
A corporation sole or a juridical person is corporation acquired the land, the same
disqualified to acquire or hold alienable lands of was already private land [Republic v.
the public domain because of the constitutional IAC and Acme Plywood & Veneer Co.,
prohibition and because it is not entitled to avail Inc., supra]
itself of the benefits of Section 48(b) [of CA
141] which applies only to Filipino citizens or
natural persons. A corporation sole (an REGISTRY OF PROPERTY
"unhappy freak of English law") has no
nationality. [Republic v. Iglesia ni Cristo, G.R.
No. 54952 (1984)] I. REGISTRABLE LANDS
Religious corporations controlled by
A. REGISTRABLE LANDS
non-Filipinos are not exempt from the
Constitutional provisions. To permit them to
1. Alienable public agricultural lands; If the
acquire agricultural lands would be to drive the
land is in the public domain, the land
must be classified as alienable and

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disposable. It must be classified as such

at the time of filing the application for B. LAWS THAT GOVERN LAND
registration [Republic v. CA and Naguit, REGISTRATION
G.R. No. 144057 (2005)]
1. Pres. Decree No. 1529 or the Property
2. Private lands Registration Decree, as amended
2. Act No. 2259 or the Cadastral Act, as
II. CONCEPT OF amended
REGISTRATION 3. CA 141 or the Public Land Act, as
amended
A. NATURE AND PURPOSE 4. Pres. Decree No. 27 or the Emancipation
Decree, as amended
The fundamental purpose of land registration 5. Rep. Act No. 6657 or the Comprehensive
laws is to finally settle title to real property. Agrarian Reform Law of 1988, as
Consequently, once the title is registered under amended
the said law, owners can rest secure on their 6. Rep. Act No. 8371 or the Indigenous
ownership and possession. [Republic v. Heirs of Peoples’ Rights Act of 1997
Sta. Ana, G.R. No. 233578 (2021)]
C. LAND TITLE
Registration is not a mode of acquiring
ownership but is merely a procedure to establish Title to real property refers to that upon which
evidence of title over realty. It does not give the ownership is based. It is the evidence of the
holder any better title than what he actually has. right of the owner or the extent of his interest,
[Solid State Multi-Products Corp. v. Development by which means he can maintain control and, as
Bank of the Philippines, G.R. No. 83383 (1991)] a rule, assert right to exclusive possession and
enjoyment of the property. [Evangelista v.
It is therefore binding on the whole world Santiago, G.R. No. 157447 (2005)]
because “by the description in the notice (of
initial hearing of the application for registration) The title is a conclusive evidence of ownership
“To Whom It May Concern,” all the world are and it cannot be attacked collaterally. [Castillo v
made parties defendant.” [Esconde v. Barlongay, Escutin, G.R. No. 171056 (2009)]
G.R. No. L-67583 (1987)]
Compared with Certificate of Title
In a registration proceeding, the judgment of Certificate
the court confirming the title, and ordering its Title
of Title
registration in one’s name constitutes, when
final, res judicata against the whole world. [Ting That which constitutes a just
It is a mere
v. Heirs of Lirio, G.R. No 168913 (2007)] cause of exclusive possession,
evidence of
or which is the foundation of
ownership; it
ownership of property.
In land registration proceedings, being in rem, is not the
there is no necessity to give personal notice to title to the
Lawful cause or ground of
land itself.
the owners or claimants of the land sought to be possessing that which is ours.
registered in order to vest the courts with power [Castillo v Escutin, supra]
and authority over the res. [Guido-Enriquez v.
Victorino, et al. G.R. No. 180427 (2013)]

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However, a certificate of title cannot be used to of ownership is established and recognized.

protect a usurper from the true owner or be [Casimiro Development Corp., v. Nato Mateo,
used as a shield for fraud. Registration merely G.R. No. 175485 (2011)]
creates a prima facie presumption of the validity Under the Torrens system of land registration,
of the registration and must give way to the State is required to maintain a register of
evidence to the contrary. [Jarantilla v. Jarantilla, landholdings that guarantees indefeasible title to
G.R. No. 154586 (2010)] those included in the register. The system has
been instituted to combat the problems of
uncertainty, complexity and cost associated with
THE TORRENS SYSTEM; old title systems that depended upon proof of an
CERTIFICATE OF TITLE unbroken chain of title back to a good root of
title. The State issues an official certificate of
title to attest to the fact that the person named
I. THE TORRENS SYSTEM
is the owner of the property described therein,
subject to such liens and encumbrances as
A system for establishing title to real estate in thereon noted or what the law warrants or
which a claimant first acquires an abstract of reserves. [Spouses Cusi v. Domingo, supra]
title and then applies to a court for the issuance
of a title certificate, which serves as conclusive II. NATURE AND PURPOSE
evidence of ownership. [Black’s Law Dictionary]
A. NATURE
The Torrens system is a system of registration of
transactions with interest in land whose declared Judicial proceedings for the registration of lands
object is, under governmental authority, to throughout the Philippines shall be in rem and
establish and certify to the ownership of an shall be based on the generally accepted
absolute and indefeasible title to realty, and to principles underlying the Torrens system. [PD
simplify its transfer. [Grey Alba v. De la Cruz, 1529, sec. 2]
G.R. No. 5246 (1910)]
B. PURPOSE
The Philippines adopted the Torrens system
through Act No. 496, also known as the Land
The real purpose of that system is:
Registration Act. In this jurisdiction, therefore,
1. to quiet title to land;
"a person dealing in registered land has the
2. to put a stop forever to any question of the
right to rely on the Torrens certificate of title and
legality of the title, except claims which
to dispense with the need of inquiring further,
were noted at the time of registration, in the
except when the party has actual knowledge of
certificate, or which may arise subsequent
facts and circumstances that would impel a
thereto. [Legarda v. Saleeby, G.R. No.
reasonably cautious man to make such inquiry".
8936 (1915)]
[Spouses Cusi v. Domingo, G.R. Nos. 195825 &
195871 (2013)]
The main purpose of the Torrens system is to
avoid possible conflicts of title to real estate and
The government has adopted the Torrens
to facilitate transactions relative thereto by
system due to its being the most effective
giving the public the right to rely upon the face
measure to guarantee the integrity of land titles
of a Torrens certificate of title and to dispense
and to protect their indefeasibility once the claim
with the need of inquiring further.

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Exception: when the party concerned has Exceptions:

actual knowledge of facts and circumstances a. When the party has actual knowledge of
that should impel a reasonably cautious man to facts and circumstances that would impel a
make such further inquiry [Traders Royal Bank v. reasonably cautious man to make further
CA, G.R. Nos. 114299 and 118862 (1999)]. inquiry;
b. When the buyer has knowledge of a defect
Where innocent third persons, relying on the or the lack of title in his vendor; or
correctness of the certificate of title thus issued, c. When the buyer/mortgagee is a bank or an
acquire rights over the property, the court institution of similar nature as they are
cannot disregard such rights and order the total enjoined to exert a higher degree of
cancellation of the certificate. The effect of such diligence, care, and prudence than
an outright cancellation would be to impair individuals in handling real estate
public confidence in the certificate of title, for transactions. [Dueñas v. Metropolitan Bank
everyone dealing with property registered under and Trust Co., supra]
the Torrens system would have to inquire in
every instance as to whether the title has been Only an innocent purchaser for value and in
regularly or irregularly issued by the court. good faith may invoke the mirror doctrine. (Dy v.
Every person dealing with registered land may Aldea, G.R. No. 219500 (2017)]
safely rely on the correctness of the certificate
of title issued therefor and the law will in no way B. CURTAIN PRINCIPLE
oblige him to go beyond the certificate to
determine the condition of the property. [Traders One does not need to go behind the certificate
Royal Bank v. CA, supra] of title because it contains all the information
about the title of its holder. This principle
III. PRINCIPLES UNDERLYING dispenses with the need of proving ownership
THE TORRENS SYSTEM by long complicated documents kept by the
registered owner, which may be necessary under
a private conveyancing system, and assures that
A. MIRROR PRINCIPLE
all the necessary information regarding
ownership is on the certificate of title. [Spouses
General Rule: The mirror doctrine provides
Cusi v. Domingo, supra]
that every person dealing with a registered land
may safely rely on the correctness of the
certificate of title issued therefor and is not IV. ADMINISTRATION OF THE
obliged to go beyond the certificate to TORRENS SYSTEM
determine the condition of property. "As such, a
defective title, or one the procurement of which A. LAND REGISTRATION
is tainted with fraud and misrepresentation — AUTHORITY
may be the source of a completely legal and
valid title, provided that the buyer is an innocent Agency under the executive supervision of the
third person who, in good faith, relied on the DOJ charged with the efficient execution of the
correctness of the certificate of title, or an laws relative to the registration of lands [PD
innocent purchaser for value. [Dueñas v. 1529, sec. 4]
Metropolitan Bank and Trust Co., G.R. No.
209463 (2022)]

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Composition and consolidation plans of titled lands [PD

1. Administrator 1529, sec. 6].
2. Two Deputy Administrators [PD 1529, sec.
5] B. REGISTER OF DEEDS

Functions of the LRA Commissioner The office of the Register of Deeds constitutes a
1. Issue decrees of registration pursuant to public repository of records of instruments
final judgments of the courts in land affecting registered or unregistered lands and
registration proceedings and cause the chattel mortgages in the province or city
issuance by the Registers of Deeds of the wherein such office is situated [PD 1529, sec.
corresponding certificates of title; 10].
2. Exercise supervision and control over all
Registers of Deeds and other personnel of There shall be at least one Register of Deeds for
the Commission; each province and one for each city [PD 1529,
3. Resolve cases elevated en consulta by, or on sec. 7].
appeal from decision of, Registers of Deeds;
4. Exercise executive supervision over all clerks Composition
of court and personnel of the Courts of First 1. Register of Deeds
Instance throughout the Philippines with 2. Deputy (as assistant) [PD 1529, sec. 7].
respect to the discharge of their duties and
functions in relation to the registration of Functions of Registers of Deeds
lands; 1. Immediately register an instrument
5. Implement all orders, decisions, and decrees presented for registration dealing with real
promulgated relative to the registration of or personal property which complies with all
lands and issue, subject to the approval of the requisites for registration.
the Secretary of Justice, all needful rules 2. Shall see to it that said instrument bears the
and regulations therefor; proper documentary and science stamps
6. Verify and approve subdivision, and that the same are properly canceled.
consolidation, and consolidation- subdivision 3. If the instrument is not registerable, he shall
survey plans of properties titled under Act forthwith deny registration thereof and
No. 496 except those covered by PD 957. inform the presentor of such denial in
[PD 1529, sec. 6] writing, stating the ground or reason
therefor, and advising him of his right to
Functions of the LRA appeal by consulta in accordance with
1. Extend speedy and effective assistance to Section 117 of PD 1529. [PD 1529, sec. 10]
the Department of Agrarian Reform, the 4. Prepare in every Registry an index system
Land Bank, and other agencies in the which shall contain the names of all
implementation of the land reform program registered owners alphabetically arranged.
of the government; For this purpose, an index card which shall
2. Extend assistance to courts in ordinary and be prepared in the name of each registered
cadastral land registration proceedings; owner which shall contain a list of all lands
3. Be the central repository of records relative registered in his name. [PD 1529, sec. 12]
to original registration of lands titled under
the Torrens system, including subdivision The function of the ROD with reference to
registration of deeds, encumbrances,

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instruments, and the like is ministerial in nature, A. LAND IS PLACED UNDER THE
provided the applicant complies with all the OPERATION OF THE TORRENS
requisites [Baranda v. Gustilo, G.R. No. 81163 SYSTEM
(1988)].
The real purpose of that system is to quiet title
Instances when ROD may validly deny to land; to put a stop forever to any question of
registration of a voluntary instrument: the legality of the title, except claims which were
1. When there is more than one (1) copy of noted at the time of registration, in the
the owner’s duplicate certificate of title and certificate, or which may arise subsequent
not all such copies are presented to the thereto. That being the purpose of the law, it
ROD; would seem that once a title is registered the
2. Where the voluntary instrument bears on its owner may rest secure, without the necessity of
face an infirmity; waiting in the portals of the court, or sitting in
3. Where the validity of the instrument sought the "mirador de su casa," to avoid the possibility
to be registered is in issue in a pending of losing his land. [Legarda v. Saleeby, supra]
court suit, notice of which must be given to
parties;
B. TITLE TO THE LAND
4. Where required certificates or documents
BECOMES NON-PRESCRIPTIBLE
such as DAR clearance, copy of latest tax
declaration, are not submitted. [Balbin v.
Register of Deeds, G.R. No. L-20611 (1969)] Section 47, PD 1529. Registered land
not subject to prescriptions. No title
Note: When the ROD is in doubt as to the to registered land in derogation of the
proper action to take on an instrument or deed title of the registered owner shall be
presented to him for registration, he should acquired by prescription or adverse
submit the question to the Administrator of the possession.
LRA en consulta. [PD 1529, sec. 117]
Title to the land, once registered, is
V. EFFECTS OF REGISTRATION imprescriptible. No one may acquire it from the
IN THE TORRENS SYSTEM owner by adverse, open, and notorious
possession. [Republic v. Mendoza, G.R. No.
185091 (2010)]
Section 31, par. (2), PD 1529. The
decree of registration shall bind the land Prescription is unavailing not only against the
and quiet title thereto, subject only to registered owner but also against his hereditary
such exceptions or liens as may be successor because the latter merely step into
provided by law. It shall be conclusive
the shoes of the decedent by operation of law
upon and against all persons, including
and are merely the continuation of their
the National Government and all branches
predecessor-in-interest. [Barcelona v. Barcelona,
thereof, whether mentioned by name in
G.R. No. L-9014 (1956)]
the application or notice, the same being
included in the general description "To all
whom it may concern". C. TORRENS CERTIFICATE IS
PRESUMED VALID AND DEVOID OF
FLAWS

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The Torrens certificate of title is presumed to VI. EFFECTS OF

have been regularly issued, valid and without NON-REGISTRATION IN THE
defects. The related presumption is that the
TORRENS SYSTEM
buyer or transferee of registered land is not
aware of any defect in the title of the property
he purchased or acquired. He has the right to A. AS TO VALIDITY
rely upon the face of the Torrens title and to
dispense with the trouble of inquiring further, General Rule: While registration is not a
except when he has actual knowledge of facts requirement for validity of the contract as
and circumstances that would impel a between the parties, registration in a public
reasonably cautious man to make inquiry. registry creates constructive notice to the whole
[Albienda v. CA, G.R. No. L-61416 (1985)] world. Hence, if the conveyance is not
registered, it is not valid against any person.
Registration is Not Equivalent to Legal
Exceptions: It is still valid to
Title
1. The grantor,
Under the Torrens system, registration only
2. The grantor’s heirs and devisees, and
gives validity to the transaction or creates a lien
3. Third persons having actual notice or
upon the land. It merely confirms, but does not
knowledge thereof. [Heirs of Arao v. Heirs of
confer, ownership. [Lu v. Manipon, G.R. No.
Eclipse, G.R. No. 211425 (2018)]
147072 (2002)]

B. AS TO PRESCRIPTIBILITY
Torrens Title Over Non-registrable
Lands
It is a settled rule that lands under a Torrens
If a person obtains a title, under the Torrens
title cannot be acquired by prescription or
system, which includes by mistake or oversight
adverse possession [PD 1529, sec. 47]. Thus, a
land which cannot be registered under the
non-registered land is subject to prescription or
Torrens system, he does not, by virtue of said
adverse possession.
certificate alone, become the owner of the lands
illegally included. [Avila v. Tapucar, G.R. No.
L-45947 (1991)]
VII. CERTIFICATE OF TITLE

Mere possession of a certificate of title under the Section 39, PD 1529. Preparation of
Torrens System is not conclusive as to the decree and Certificate of Title. After
holder's true ownership of all the property the judgment directing the registration of
described therein for he does not by virtue of title to land has become final, the court
said certificate alone become the owner of the shall, within fifteen days from entry of
land illegally included. A Land Registration Court judgment, issue an order directing the
has no jurisdiction to decree a lot to persons Commissioner to issue the corresponding
who have never asserted any right of ownership decree of registration and certificate of
over it. [Caragay-Layno v. CA, G.R. No. 52064 title. The clerk of court shall send, within
(1984)] fifteen days from entry of judgment,
certified copies of the judgment and of
the order of the court directing the
Commissioner to issue the corresponding
decree of registration and certificate of

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title, he shall enter the same in the record book

title, and a certificate stating that the
and shall be numbered, dated, signed and
decision has not been amended,
sealed with the seal of his office. The certificate
reconsidered, nor appealed, and has
shall take effect upon the date of entry thereof
become final. Thereupon, the
Commissioner shall cause to be prepared [PD 1529, sec. 40].
the decree of registration as well as the
original and duplicate of the B. TRANSFER CERTIFICATE OF
corresponding original certificate of title. TITLE
xxx
The subsequent certificate of title that may be
A. ORIGINAL CERTIFICATE OF issued by the Register of Deeds pursuant to any
voluntary or involuntary instrument relating to
TITLE
the same land shall be in like form, entitled
"Transfer Certificate of Title", and likewise issued
The OCT shall be a true copy of the decree of
in duplicate. [PD 1529, sec. 42]
registration. It includes both the original copy
filed in the Registry of Deeds, and the owner’s
duplicate certificate. The decree of registration
Contents of TCT
shall be signed by the LRA Commissioner, 1. The number of the next previous certificate
entered and filed in the LRA. The OCT shall also covering the same land; and
be signed by the LRA Commissioner. 2. The fact that it was originally registered,
● Original copy - delivered to the Register of giving the record number, the number of the
Deeds of the city or province where the original certificate of title, and the volume
property is situated for entry in his and page of the registration book in which
registration book [PD 1529, sec. 39]. the latter is found. [PD 1529, sec. 42]
● Owner’s duplicate - shall be delivered by the
Register of Deeds to the registered owner or Reconveyance
to his or her duly authorized representative An owner desiring to convey his registered land
[PD 1529, sec. 40]. in fee simple shall execute and register a deed
of conveyance in a form sufficient in law. The
Register of Deeds shall thereafter make out in
Contents of OCT
the registration book a new certificate of title to
1. The full names of all persons whose
the grantee and shall prepare and deliver to him
interests make up the ownership of the
an owner's duplicate certificate. The Register of
land;
Deeds shall note upon the original and duplicate
2. Their civil status and the names of their
certificate the date of transfer, the volume and
respective spouses, if married; and
page of the registration book in which the new
● If property belongs to the conjugal
certificate is registered and a reference by
partnership, it shall be issued in the
number to the last preceding certificate. The
name of both spouses.
original and the owner's duplicate of the
3. Their citizenship, residence, and postal
grantor's certificate shall be stamped
address [PD 1529, sec. 45].
"cancelled." [PD 1529, sec. 57]

Effective Upon Date of Entry

Upon receipt of the Register of Deeds of the
original and duplicate copy of the certificate of

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C. PATENTS The rule is well-settled that an original certificate

of title issued on the strength of a homestead
The instruments whereby public land is patent partakes of the nature of a certificate of
“alienated, granted, or conveyed” are title issued in a judicial proceeding, as long as
instruments transferring ownership, not the land disposed of is really part of the
documents of lease transferring mere possession disposable land of the public domain, and
[Dagdag v. Nepomuceno, G.R. No. L-12691 becomes indefeasible and incontrovertible upon
(1959)]. the expiration of one year from the date of the
promulgation of the order of the Director of
Whenever public land is by the Government Lands for the issuance of the patent. A
alienated, granted or conveyed to any person, homestead patent, once registered under the
the same shall be brought forthwith under the Land Registration Act, becomes as indefeasible
operation of this Decree [PD 1529, sec. 103]. as a Torrens Title. [Heirs of Tengco v. Heirs of
Aliwalas, G.R. No. 77541 (1988)]
Effect of Registration Pursuant to a
Patent VIII. STATUTORY LIENS
Sec. 103 of PD 1529, directs the issuance to the
grantee of an “owner’s duplicate certificate”. Lien
After due registration and issuance of the A "lien" is a qualified right or a proprietary
certificate of title, the land shall be deemed interest, which may be exercised over the
registered land under Property Registration property of another. It is a right which the law
Decree. Public lands when duly registered are gives to have a debt satisfied out of a particular
veritable Torrens titles subject to no thing. It signifies a legal claim or charge on
encumbrances except those stated therein, plus property, either real or personal, as a collateral
those specified by the statute. They become or security for the payment of some debt or
private property which can no longer be the obligation. [People v. RTC Manila, G.R. No.
subject of subsequent disposition by the Director 81541 (1989)]
of Lands. [Dagdag v. Nepomuceno, supra]
Encumbrance
The certificate of title issued by virtue of a An encumbrance is a burden upon land,
patent has the force and effect of a Torrens title depreciative of its value, such as a lien,
issued through judicial registration proceedings. easement, or servitude, which, though adverse
[Pajomayo v. Manipon, G.R. No. L-33676 (1917)] to the interest of the landowner, does not
conflict with his conveyance of the land in fee.
It is, therefore, evident that two (2) The following are considered encumbrances: A
circumstances should concur before the land is claim, lien, charge, or liability attached to and
deemed excluded from the public domain. First, binding real property; e.g., a mortgage,
is the issuance of the sale patent AND secondly, judgment lien, lease, security interest, easement
its subsequent registration in the office of the or right of way, accrued and unpaid taxes.
Register of Deeds. It is the Registration of the [People v. RTC Manila, supra]
sales patent that constitutes the operative act
that would convey ownership of the land to the Claims and Liens Prior to the Decree of
applicant. [Franco v. Executive Secretary, G.R. Registration
No. L-49911 (1986)]

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General Rule: Every registered owner receiving 5. Taking of the property through eminent
a certificate of title pursuant to a decree of domain;
registration and every subsequent purchaser for 6. Right to relieve the land from liability to
value and in good faith shall hold the same free be recovered by an assignee in
from all encumbrances. insolvency or trustee in bankruptcy
under the laws relative to preference;
Exceptions: and
1. Those claims and liens noted in the 7. Rights or liabilities created by law and
certificate of title; applicable to unregistered land.
2. The encumbrances in the law. [PD 1529,
sec. 44]
ORIGINAL REGISTRATION
Claims and Liens that May Limit the
Registered Owner’s Absolute Title Modes of Registering Land Titles
1. Original registration under PD 1529, as
a. Under PD 1529, sec. 44: amended
1. Liens, claims or rights existing or arising 2. Confirmation of imperfect or incomplete
under the laws or the Constitution which title
are not by law required to appear of
record in the Registry of Deeds Original Registration
2. Unpaid real estate mortgages levied and This is a proceeding brought before the land
assessed within two (2) years registration court to determine title or ownership
immediately preceding the acquisition of of land on the basis of an application for
any right over the land registration or answer by a claimant in a
3. Any public highway or private way cadastral registration.
established or recognized by law, or any
government irrigation canal or lateral Original vs. Subsequent Registration
thereof; and
Original Subsequent
4. Any disposition of the property or Registration Registration
limitation on the use thereof by virtue of
PD No. 27 or any other law on agrarian Any transaction
reform When right of affecting such
ownership or title to originally registered
land is for the first land, if in order, may
b. Under PD 1529, Sec. 46
time made of public be registered in the
1. Rights incident to the relation of record Office of the Register
husband and wife, and landlord and of Deeds concerned
tenant;
2. Liability to attachment or levy on
Kinds of Original Registration
execution;
3. Liability to any lien of any description Judicial/
Administrative/
established by law on the land and the Voluntary
Involuntary Registration
buildings thereon, or on the interest of Registration
the owner in such land or buildings;
A private Compulsory registration
4. Rights incident to the laws of descent or individual initiated by the government,
partition between co-owners;

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authority to hear not only applications for

himself files to adjudicate ownership of
with the proper land and involuntary on the original registration but also all petitions filed
court an part of the claimants, but after original registration of title. The
application they are compelled to amendment aims to avoid multiplicity of suits
substantiate their claim or and simplify registration proceedings. The court
interest through an answer. can now hear and decide not only
non-controversial cases but even contentious
issues which before were beyond its
I. NATURE OF PROCEEDINGS
competence. [Averia v. Caguioa, G.R. No.
L-65129 (1986)]
Section 2, PD 1529. Judicial
proceedings for the registration of lands Value of the Property, How
throughout the Philippines shall be in Ascertained
rem and shall be based on the generally 1. By the affidavit of the applicant;
accepted principles underlying the Torrens
2. By agreement of the respective claimants, if
system.
there are more than one; or,
3. From the corresponding tax declaration of
II. JURISDICTION AND VENUE the real property. [BP 129, sec. 34, as
amended by RA 7691]
A. JURISDICTION
B. VENUE
Exclusive Jurisdiction
Regional Trial Courts shall have exclusive The application for land registration shall be filed
jurisdiction over all applications for original with the RTC or MTC of the province or city
registration of title to lands, including where the land is situated. [PD 1529, sec 18]
improvements and interests therein, and over all
petitions filed after original registration of title, III. WHO MAY APPLY
with power to hear and determine all questions
arising upon such applications or petitions. [PD A. UNDER PD 1529, SEC. 14, AS
1529, sec. 2] AMENDED BY RA 11573

Delegated Jurisdiction The following persons may file, at any time, an

Metropolitan Trial Courts, Municipal Trial Courts, application for registration of title to land, not
and Municipal Circuit Trial Courts have delegated exceeding twelve (12) hectares, whether
jurisdiction in cadastral and land cases in the personally or through their duly authorized
following instances: representatives:
1. Where there is no controversy or opposition, 1. Those who by themselves or through their
OR predecessors-in-interest have been in open,
2. Over contested lots, where the value does continuous, exclusive and notorious
not exceed P100,000 [BP 129, sec. 34, as possession and occupation of alienable
amended by RA 7691] and disposable lands of the public domain
not covered by existing certificates of title or
Sec. 2, P.D. 1529 has eliminated the distinction patents under a bona fide claim of
between the court’s general jurisdiction and ownership for at least twenty (20)
limited jurisdiction. A regional trial court has the years immediately preceding the filing

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of the application for confirmation of title under claim of ownership. In that sense,
except when prevented by war or force possession is not exclusive and notorious so as
majeure. They shall be conclusively to give rise to a presumptive grant from the
presumed to have performed all the State. [Republic v. Vera, G.R. No. L-35779
conditions essential to a Government grant (1983)]
and shall be entitled to a certificate of title
under this section. 2. Those who have acquired ownership of
private lands or abandoned riverbeds by
NOTE: The original text of PD 1529, Sec 14 right of accession or accretion under the
provides: “(1) Those who by themselves or provisions of existing laws.
through their predecessors-in-interest have been
in open, continuous, exclusive and notorious Prescription
possession and occupation of alienable and Only when such land has become patrimonial
disposable lands of the public domain under a can the prescriptive period for the acquisition of
bona fide claim of ownership since June the property begin to run. [Malabanan v.
12, 1945, or earlier.” Republic, G.R. No. 179987 (2013)]

“Possession and Occupation” Note that in Republic v. Pasig Rizal Co., Inc.,
The law speaks of possession and occupation. [G.R. No. 213207 (2022)], the Court held that
Since these words are separated by the from being property of public dominion,
conjunction and, the clear intention of the law is agricultural lands, once declared as alienable
not to make one synonymous with the other. and disposable, become “converted” patrimonial
Possession is broader than occupation because it property of the state, which are within the
includes constructive possession. When, commerce of man and thus subject to
therefore, the law adds the word occupation, it prescription. The property still remains as public
seeks to delimit the all encompassing effect of domain, but now alienable and disposable.
constructive possession. Taken together with the
words open, continuous, exclusive and Prescriptive periods under the Civil Code:
notorious, the word occupation serves to i. Ordinary - 10 years in good faith and
highlight the fact that for an applicant to qualify, with just title
his possession must not be a mere fiction. ii. Extraordinary - 30 years
Actual possession of a land consists in the
manifestation of acts of dominion over it of such River Beds, Accession, Accretion
a nature as a party would naturally exercise over NOTE: River beds which are abandoned through
his own property. [Republic v. Alconaba, G.R. the natural change in the course of the waters
No. 155012 (2002)] ipso facto belong to the owners whose lands are
occupied by the new course in proportion to the
The mere fact of declaring uncultivated land for area lost. However, the owners of the lands
taxation purposes and visiting it every once in a adjoining the old bed shall have the right to
while, does not constitute acts of possession. acquire the same by paying the value thereof,
[Ramirez v. Director of Lands, G.R. No. 36995 which value shall not exceed the value of the
(1934)] area occupied by the new bed. [Art 461, Civil
Code]
A mere casual cultivation of portions of the land
by the claimant does not constitute possession

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To the owners of land adjoining the banks of GR: A trustee may apply for registration on
rivers belong the accretion which they gradually behalf of his principal
receive from the effects of the current of the EXC: Unless prohibited by the instrument
waters. [Art 457, Civil Code] creating the trust

The subject land was formed from the alluvial B. UNDER CA 141, SEC. 48(B), as
deposits that have gradually settled along the amended by R.A. 11573
banks of Cut-cut creek. Thus, the law that
governs ownership over the accreted portion is The following-described citizens of the
Article 84 of the Spanish Law of Waters of 1866, Philippines, occupying lands of the public
which remains in effect, in relation to Article 457 domain or claiming to own any such lands or an
of the Civil Code. Alluvial deposits along the interest therein, but whose titles have not been
banks of a creek do not form part of the public perfected or completed, may file a petition at
domain as the alluvial property automatically any time, whether personally or through their
belongs to the owner of the estate to which it duly authorized representatives, in the Regional
may have been added. Hence, while it is true Trial Court of the province where the land is
that a creek is a property of public dominion, the located, for confirmation of their claims and the
land which is formed by the gradual and issuance of a certificate of title to land not
imperceptible accumulation of sediments along exceeding twelve (12) hectares:
its banks does not form part of the public
domain by clear provision of law. [Office of the (a) Those who by themselves or through their
City Mayor of Parañaque City v. Ebio, G.R. predecessors-in-interest have been in open,
178411 (2010)] continuous, exclusive, and notorious possession
and occupation of alienable and disposable
3. Those who have acquired ownership of land agricultural lands of the public domain, under a
in any other manner provided for by law. bona fide claim of ownership, for at least
twenty (20) years immediately preceding the
Special Rules filing of the application for confirmation of title
i. Co-owned property except when prevented by war or force majeure.
All the co-owners shall file the application They shall be conclusively presumed to have
jointly performed all the conditions essential to a
Government grant and shall be entitled to a
ii. Pacto de retro sale certificate of title under the provisions of this
A vendor a retro may file an application for Chapter.
the original registration of the land
C. UNDER RA 8371 OR IPRA
Should the period for redemption expire
during the pendency of the registration 1. Formal recognition, when solicited by
proceedings and ownership to the property ICCs/IPs concerned, shall be embodied in a
consolidated in the vendee a retro, the latter Certificate of Ancestral Domain Title (CADT),
shall be substituted for the applicant and which shall recognize the title of the
may continue the proceedings. concerned ICCs/IPs over the territories
identified and delineated. [IPRA, sec. 11]
iii. Trust instrument

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2. Individual members of cultural communities, 9. The applicant shall file together with the
with respect to their individually-owned application all original muniments of titles or
ancestral lands who, by themselves or copies thereof and a survey plan of the land
through their predecessors-in-interest, have approved by the Bureau of Lands. [PD 1529,
been in continuous possession and sec. 17]
occupation of the same in the concept of
owner since time immemorial or for a period B. NOTICE OF INITIAL HEARING
of not less than 30 years immediately
preceding the approval of this Act and Within five days from the filing of the application
uncontested by the members of the same for registration, the court shall issue an order
ICCs/IPs shall have the option to secure title setting the date and hour of initial hearing
to their ancestral lands under the provisions which shall not be earlier than 45 days nor
of CA 141. [IPRA, sec. 12] later than 90 days from date of the order.
The public shall be given notice of the initial
NOTE: This option may only be hearing of the application for land registration
exercised within 20 years from the by means of (1) publication; (2) mailing; AND
approval of IPRA, or only until 2017. (3) posting.

IV. PROCEEDINGS a. Publication, once in the Official Gazette

and once in a newspaper of general
A. FILING OF PETITION circulation in the Philippines; Publication in
the Official Gazette shall be sufficient to
Form and contents of the application: confer jurisdiction. [PD 1529, sec. 23]
1. In writing,
2. Signed by the applicant or person authorized Publication in the Official Gazette is
in his behalf indispensably necessary because without it, the
3. Sworn to before an officer authorized to court would be powerless to assume jurisdiction
administer oaths for the province or city over a particular land registration case.
where the application was actually signed Publication of the notice of initial hearing also in
4. If there is more than one applicant, they a newspaper of general circulation is
shall be signed and sworn to by and in indispensably necessary as a requirement of
behalf of each procedural due process; otherwise, any decision
5. Shall contain a description of the land that the court may promulgate in the case would
6. Shall contain the citizenship of the applicant be legally infirm. [Director of Lands v. CA, G.R.
7. Shall contain the civil status of the applicant. No. 102858 (1997)]
If married, the spouse shall be named. If
marriage has been legally dissolved, when b. Mailing of the notice to persons named in
and how the marriage relation terminated the application for registration and also to
must be indicated. relevant government officials, which include:
8. Shall state the full names and addresses of i. DPWH Secretary and the Provincial
all occupants of the land and those of the Governor and Mayor, if there is a public
adjoining owners, if known, and, if not way or road involved.
known, it shall state the extent of the search ii. DAR Secretary, Solicitor General,
made to find them. [PD 1529, sec. 15] Director of Lands, DPWH Secretary,
Director of Mines, BFAR Secretary, if the

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land borders a river, sea, or other bodies 3. Apply for the remedy desired; and
of water, or if a tenant-farmer or the 4. Signed and sworn to by the oppositor or by
national government may have a claim some other duly authorized person.
adverse to the applicant. [PD 1529, sec.
23] The court may require the parties to submit a
subdivision plan duly approved by the Director
c. Posting of the notice on a conspicuous of Lands if:
place on the land itself and on the bulletin 1. The adverse claim covers only a portion of
board of the municipal building of the the lot, and said portion is not properly
municipality or city where the land is delimited on the plan attached to the
situated, at least 14 days before the date of application;
the initial hearing. [PD 1529, sec. 23] 2. In case of undivided co-ownership;
3. Conflicting claims of ownership or
C. AMENDMENT possession; or
4. Overlapping of boundaries. [PD 1529, sec.
When Can Be Made 25]
Amendments to the application including joinder,
substitution, or discontinuance as to parties may Motion to Dismiss
be allowed by the court at any stage of the By express provision of Rule 1 of the [2019]
proceedings upon just and reasonable terms. Rules of Court, the rules contained therein apply
[PD 1529, sec. 19] to land registration and cadastral cases in a
suppletory character and whenever practicable
When Publication and Notice in the and convenient. The Land Registration Act does
Amended Application is Necessary: not provide for a pleading similar or
1. There is a substantial change in the corresponding to a motion to dismiss. As a
boundaries; motion to dismiss is necessary for the
2. There is an increase in area of the land expeditious termination of land registration
applied for; or cases, said motion contained in the Rules of
3. There is an inclusion of an additional land Court can be availed of by the parties. [Dulay v.
[PD 1529, sec. 19] Olivia, G.R. No. L-16589 (1961)]

D. OPPOSITION/ANSWER E. INITIAL HEARING

Who May Oppose Order of Default

Any person claiming an interest, whether named 1. General Default
in the notice or not, may appear and file an If no person appears and answers within the
opposition on or before the date of initial time allowed, the court shall, upon motion
hearing, or within such further time as may be of the applicant, no reason to the contrary
allowed by the court. appearing, order a default to be recorded
and require the applicant to present
evidence. By the description in the notice
The opposition shall: “To all Whom It May Concern, ” all the world
1. State all the objections to the application; are made parties defendant and shall be
2. Set forth the interest claimed by the party concluded by the default order. [PD 1529,
filing the same; sec. 26]

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regardless of their classification, can be

2. Special Default subject of registration of private titles, as
Where an appearance has been entered and long as the applicant shows that he meets
an answer filed, a default order shall be the required years of possession. The
entered against persons who did not appear applicant must establish the existence of a
and answer. [PD 1529, sec. 26] positive act of the government, such as a
presidential proclamation or an executive
Effect of Order of Default order; administrative action; reports of
Bureau of Lands investigators and a
General Rule: Binding against the whole world legislative act or a statute. [Republic v. CA
and Ceniza, G.R. No. 127060 (2002)]
Exception:
1. To the parties who had appeared and filed b. Identity of land
pleadings in the registration case The applicant shall file, together with the
2. Notwithstanding the absence of opposition application, all original muniments of titles
from the government, the applicant in land or copies thereof and a survey plan of the
registration cases is not relieved of the land approved by the Bureau of Lands. [PD
burden of proving the imperfect right or title 1529, sec. 17]
sought to be confirmed. [Director of Lands
Management Bureau v. CA, G.R. No. 112567 The reason for this rule is to establish the
(2000)] true identity of the land to ensure that it
does not overlap a parcel of land or a
F. HEARING AND EVIDENCE portion thereof already covered by a
previous land registration, and to forestall
Applicable Rules of Procedure the possibility that it will be overlapped by a
The Rules of Court shall, insofar as not subsequent registration of any adjoining
inconsistent with the provision of this Decree, be land. The failure to comply with this
applicable to land registration and cadastral requirement is fatal to an application for
cases by analogy or in a suppletory character registration. [Republic v. Guinto-Aldana, G.R.
and whenever practicable and convenient. [PD No. 175578 (2010)]
1529, sec. 34]
Proof to Establish Identity of Land
Quantum of Evidence ● Best evidence: Original tracing cloth plan,
The established legal principle in actions duly approved by the Bureau of Lands
involving land registration is that a party must ● Substantial compliance:
prove its allegations not merely by a ○ Blueprint copies of the original tracing
preponderance of evidence, but by clear and cloth plan from the Bureau of Lands
convincing evidence. [Dela Paz v. Republic, G.R. ○ the blueprint copy of the plan and
No. 195726 (2017)] technical description which were both
approved by the Land Management
What Needs to be Proved Services of the DENR
○ the report of the Land Management
a. Nature of land
Sector stating that the subject property
The applicant has to establish first the
is not a portion of, nor identical to any
disposable and alienable character of the
previously approved isolated survey.
public land, otherwise, public lands,
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 LAND TITLES AND DEEDS CIVIL LAW

[Republic v. Spouses Hubilla, G.R. No. G. JUDGMENT

157683 (2005)]
c. Private Ownership If the court, after considering the evidence and
Possession of public lands, however long, report of the LRA, finds that the applicant or the
never confers title upon the possessor, opposition has sufficient title proper for
unless the occupant can prove possession or registration, it shall render judgment confirming
occupation of the same under claim of the title of the applicant, or the opposition, to
ownership for the required period to the land or portions thereof, as the case may be.
constitute a grant from the State. In order [PD 1529, sec. 29]
that a petition for registration of land may
prosper, the burden is upon the applicant to In a case where only a portion of the land
show that he and/or his subject of registration is contested, the court
predecessor-in-interest has been in open, may render partial judgment provided that a
continuous, exclusive, and adverse subdivision plan showing the contested and
possession and occupation of the land uncontested portions approved by the Director
sought for registration, for the required of Lands is previously submitted to said court.
number of years. [Diaz-Enriquez v. Republic, [PD 1529, sec. 28]
G.R. No. 141031 (2009)]
The unilateral action of the CA in substituting its
Tax Declarations own findings regarding the extent of the
Tax declarations and receipts are not conclusive coverage of the land included in TCT Nos. 77652
evidence of ownership. At most, they constitute and 77653, ostensibly to correct the error in,
mere prima facie proofs of ownership of the and conform with, the technical description
property for which taxes have been paid. In the found in OCT 351 based on the plan and other
absence of actual, public and adverse evidence submitted by respondent cannot be
possession, the declaration of the land for tax sustained. That function is properly lodged with
purposes does not prove ownership. They may the office of the trial court sitting as a land
be good supporting or collaborating evidence registration court and only after a full-dress
together with other acts of possession and investigation of the matter on the merits. It is
ownership; but by themselves, tax declarations before the land registration court that private
are inadequate to establish possession of the respondent must adduce the proof that the
property in the nature and for the period disputed parcels of land is legally registered in
required by statute for acquiring imperfect or its favor. [Widows and Orphans Association, Inc.
incomplete title to the land. [Bernas v. Estate of v. CA, G.R. No. 91797 (1991)]
Felipe Yu Han Yat, G.R. No. 195908 (2018)]
Finality of judgment: Upon the expiration of
While tax declarations are not conclusive proof 30 days to be counted from the data of receipt
of ownership, they constitute good indicia of of notice of the judgment.
possession in the concept of owner and a claim Appeal: May be taken from the judgment of the
of title over the subject property for no one in court as in ordinary civil cases. [PD 1529, sec.
his right mind would be paying taxes for a 30]
property that is not in his actual or constructive
possession. [Ilocos Norte Electric Cooperative v. Res Judicata in Land Registration
Andres-Ranjo, G.R. No. 200544 (2022)] Cases

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If the decree dismissing the application stated H. DECREE OF REGISTRATION

that it is "without prejudice", no conclusive
adjudication is made, in the sense of barring After judgment has become final and executory,
another application for registration by the same it shall devolve upon the court to forthwith issue
party. But, even if the order of dismissal were an order in accordance with Section 39 of this
not so qualified, it does not follow necessarily Decree to the Commissioner for the issuance of
that the order constitutes res judicata. This is the decree of registration and the corresponding
particularly true in a situation like the one at bar, certificate of title in favor of the person
for no opposition was filed in the previous adjudged entitled to registration. [PD 1529, sec.
registration cases, and the first was 'dismissed 30]
without a hearing and the second for Contents of the Decree
insufficiency of evidence. No contentious issue Every decree of registration issued by the
essential to the application of the principle of res Commissioner shall:
judicata existed, therefore, in said proceedings. 1. bear the date, hour and minute of its entry
Moreover, the dismissal of the second case, 2. be signed by him
predicated as it was upon the insufficiency of 3. whether the owner is married or unmarried,
evidence, meant no more than this. The order and if married, the name of the husband or
did not entail, either expressly or by necessary wife: Provided, however, that if the land
implication, a determination of the question adjudicated by the court is conjugal
whether or not the lands involved in the case property, the decree shall be issued in the
belong to the applicants. [Superiora Locale v. name of both spouses.
Republic, G.R. No. 242781 (2022)] 4. If the owner is under disability, it shall state
the nature of disability, and if a minor, his
Can prescription or laches bar a age.
petition to revive a judgment in a land 5. contain a description of the land as finally
registration case? determined by the court,
NO. Neither laches nor the statute of limitations 6. set forth the estate of the owner, and also,
applies to a decision in a land registration case. in such manner as to show their relative
In special proceedings, the purpose is to priorities, all particular estates, mortgages,
establish a status, condition or fact; in land easements, liens, attachments, and other
registration proceedings, the ownership by a encumbrances, including rights of
person of a parcel of land is sought to be tenant-farmers, if any, to which the land or
established. owner’s estate is subject, as well as any
other matters properly to be determined in
After the ownership has been proved and pursuance of this Decree. [PD 1529, sec.
confirmed by judicial declaration, no further 31]
proceeding to enforce said ownership is
necessary, except when the adverse party had Preparation of the Decree
been in possession of the land and the winning After the judgment directing the registration of
party desires to oust him therefrom. [Republic v. title to land has become final, the court shall,
Nillas, G.R. No. 159595 (2007)] within fifteen days from entry of judgment, issue
an order directing the Commissioner to issue the
corresponding decree of registration and
certificate of title. The clerk of court shall send,
within fifteen days from entry of judgment,

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 LAND TITLES AND DEEDS CIVIL LAW

certified copies of the judgment and of the order of third parties. The registration does not give
of the court directing the Commissioner to issue the owner any better title than he has. He does
the corresponding decree of registration and not obtain title by virtue of the certificate. He
certificate of title, and a certificate stating that secures his certificate by virtue of the fact that
the decision has not been amended, he has a fee simple title. [Legarda v. Saleeby,
reconsidered, nor appealed, and has become supra]
final. [PD 1529, sec. 39]
The decision in a land registration case, unless
the adverse or losing party is in possession,
The Commissioner causes the preparation of the becomes final without any further action, upon
following: the expiration of the period for perfecting an
1. Decree of registration - signed by the appeal. There is nothing in the law that limits
Commissioner, entered and filed in the LRC the period within which the court may order or
2. Original Certificate of Title (OCT) - a true issue a decree. The reason is that the judgment
copy of the decree of registration; signed by is merely declaratory in character and does not
the Commissioner and shall be sent, need to be asserted or enforced against the
together with the owner's duplicate adverse party. Furthermore, the issuance of a
certificate, to the Register of Deeds of the decree is a ministerial duty both of the judge
city or province where the property is and of the Land Registration Commission; failure
situated for entry in his registration book. of the court or of the clerk to issue the decree
3. Duplicate of the OCT. [PD 1529, sec. 39] for the reason that no motion therefor has been
filed can not prejudice the owner, or the person
Effect of the Decree in whom the land is ordered to be registered.
The decree of registration shall: [Republic v. Nillas, supra]
1. Bind the land and quiet title thereto, subject
only to such exceptions or liens as may be Unlike ordinary civil actions, the adjudication of
provided by law. land in a cadastral or land registration
2. Be conclusive upon and against all persons, proceeding does not become final, in the sense
including the National Government and all of incontrovertibility until after the expiration of
branches thereof, whether mentioned by one (1) year after the entry of the final decree
name in the application or notice, the same of registration. This Court, in several decisions,
being included in the general description "To has held that as long as a final decree has not
all whom it may concern". [PD 1529, sec. been entered by the Land Registration
31] Commission and the period of one (1) year has
not elapsed from date of entry of such decree,
Registration Only Confirms Ownership the title is not finally adjudicated and the
A decree of registration merely confirms, but decision in the registration proceeding continues
does not confer ownership. [City Mayor of to be under the control and sound discretion of
Parañaque City v. Ebio, G.R. No. 178411, the court rendering it. [Gomez v. CA, G.R. No.
(2010)] 77770 (1988)]

Registration does not vest title or give title to Decree of Registration and Certificate
the land, but merely confirms and thereafter of Title
protects the title already possessed by the
Decree of
owner, making it imprescriptible by occupation Certificate of Title
Registration

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 LAND TITLES AND DEEDS CIVIL LAW

[Manotok Realty, Inc., v. CLT Realty

Entry of the
Development Corp., supra]
certificate of title is
made by the register
of deeds, as he is
I. WRIT OF POSSESSION
Entry of the decree is precisely the recipient
made by the chief from the land In a registration case, the judgment
clerk of the land registration office of confirming the title of the applicant and
registration . the decree for ordering its registration in his name
transcription to the necessarily carried with it the delivery of
certificate as well as possession which is an inherent element of
the transcriber no the right of ownership. The issuance of the
less. writ of possession is, therefore, sanctioned
by existing laws in this jurisdiction and by
A decree of the generally accepted principle upon which
registration is an the administration of justice rests. [Vencilao v
Certificate of title is Vano, G.R. No. L-25660 (1990)]
order issued under
issued in pursuance
the signature of the
of the decree of
Commissioner of A writ of possession may be issued not only
registration. What
Land Registration in against the person who has been defeated in
stands as the
the name of the a registration case but also against anyone
certificate of the title
Judge to the fact that unlawfully and adversely occupying the land
is the transcript of
the land described or any portion thereof during the land
the decree of
therein is registered registration proceedings up to the issuance
registration made by
in the name of the of the final decree. [Vencilao v. Vano, supra]
the registrar of deeds
applicant or oppositor
in the registry.
or claimant as the V. FINALITY OF DECREE OF
case maybe. REGISTRATION
[Manotok Realty, Inc., v. CLT Realty
Development Corp., G.R. No. 123346 (2007)] A. FINALITY OF DECREE

When this [a decree of registration] is The decree of registration shall become

transcribed or spread in toto in the registration incontrovertible after 1 year from the issuance of
book and signed by the register of deeds, the the decree, if no petition for review is filed
page on which the transcription is made become within such period. [PD 1529, sec. 32]
the original certificate of title, more commonly
called the Torrens title. The land becomes a Since the LRA’s issuance of a decree of
registered land only upon the transcription of registration only proceeds from the land
the decree in the original registration book by registration court’s directive, a petition taken
the register of deeds, the date and time of such under Section 32 of PD 1529 is effectively a
transcription being set forth in the process and review of the land registration court’s ruling. As
certified to at the foot of each entry or such, case law instructs that for "as long as a
certificate of title. It is only after the final decree has not been entered by the [LRA]
transcription of the decree by the register of and the period of one (1) year has not elapsed
deeds that the certificate of title is to take effect. from the date of entry of such decree, the title is
not finally adjudicated and the decision in the

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 LAND TITLES AND DEEDS CIVIL LAW

registration proceeding continues to be under once registered can not be defeated, even by an
the control and sound discretion of the court adverse, open, and notorious possession.
rendering it [Lozada v. Bracewell, G.R. No. Registered title under the Torrens system can
179155 (2014)] not be defeated by prescription. The title, once
registered, is notice to the world. All persons
a. Entry in Registry Book must take notice. No one can plead ignorance of
the registration. [Legarda v. Saleeby, supra]
Immediately upon the issuance and entry of the
decree of registration, the Registrar of Land The certificate of registration accumulates in an
Titles transcribes the same in the registry book open document a precise and correct statement
called the "Registration Book" and issues an of the exact status of the fee held by its owner.
owner's duplicate certificate of title to the The certificate, in the absence of fraud, is the
applicant upon payment by him of the necessary evidence of title and shows exactly the real
registration fees. The entry made by the interest of its owner. The title once registered,
Registrar of Land Titles in his registry book is with very few exceptions, should not thereafter
actually the original copy of the original be impugned, altered, changed, modified,
certificate of title and shall be signed by him and enlarged, or diminished, except in some direct
sealed with the seal of the Court and of his proceeding permitted by law. Otherwise all
office. The land becomes a registered land only security in registered titles would be lost. A
upon the transcription of the decree in the registered title can not be altered, modified,
original registration book by the register of enlarged, or diminished in a collateral
deeds [Manotok Realty, Inc., v. CLT Realty proceeding and not even by a direct proceeding,
Development Corp., supra] after the lapse of the period prescribed by law.
[Legarda v. Saleeby, supra]
b. Doctrine of Indefeasibility of
Titles A certificate of title shall not be subject to
collateral attack. It cannot be altered, modified,
General Rule: The decree of registration shall or canceled except in a direct proceeding in
become incontrovertible after 1 year from the accordance with law. [PD 1529, sec. 48]
issuance of the decree.
Direct v. Collateral Attack
Exception: The title was obtained by actual Direct Attack Collateral Attack
fraud. [PD 1529, sec. 32]
One where the action one where the action
The decree ordering the registration of a filed is precisely for is not instituted for
particular parcel of land is a bar to future the purpose of the purpose of
litigation over the same between the same pointing out the attacking the title,
parties. In view of the fact that all the world are defects in the title but the nullity of the
parties, it must follow that future litigation over with a prayer that it title is raised as a
the title is forever barred; there can be no be declared void. defense in a different
persons who are not parties to the action. This, action.
we think, is the rule, except as to rights which
are noted in the certificate or which arise
c. Exceptions to the Doctrine
subsequently, and with certain other exceptions
which need not be dismissed at present. A title
Fraud
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 LAND TITLES AND DEEDS CIVIL LAW

This indefeasibility of a title does not attach to 3. The petition must be filed within one (1)
titles secured by fraud and misrepresentation. year from the issuance of the decree by the
Well settled is the rule that the indefeasibility of LRA.
a title does not attach to titles secured by fraud 4. The property has not yet passed to an
and misrepresentation. [Republic v. Heirs of innocent purchaser for value [PD 1529, sec.
Alejaga Sr., G.R. No. 146030 (2002)] 32]

Presumption of Validity Ground for Review - Extrinsic Fraud

However, every certificate of title is presumed to To justify the setting aside or review of a decree
have been validly issued. If an opponent claims of registration, the party seeking relief must
that it is fake, he has the burden of proving it. allege and prove, inter alia, that the registration
was procured through fraud - actual and
VI. REMEDIES ON THE extrinsic. [Frias v. Esquivel, G.R. No. L-17366
JUDGMENT IN ORIGINAL (1962)]

REGISTRATION
Extrinsic fraud refers to any fraudulent act of the
prevailing party in the litigation which is
A. REVIEW OF DECREE OF committed outside of the trial of the case,
REGISTRATION whereby the unsuccessful party has been
prevented from exhibiting fully his case, by fraud
Ground; Who May File or deception practiced on him by his opponent.
Only an aggrieved party who has been deprived The fraud or deceit cannot be of the losing
of land or of any estate or interest therein by party's own doing, nor must such party
such adjudication or confirmation of title contribute to it. The extrinsic fraud must be
obtained by actual fraud, may file for a employed against it by the adverse party, who,
petition for review of decree. [PD 1529, sec. 32] because of some trick, artifice, or device,
naturally prevails in the suit. It affects not the
When to File judgment itself but the manner in which the said
Any time after the rendition of the court’s judgment is obtained. Ultimately, the overriding
decision and before the expiration of one (1) consideration is that the fraudulent scheme of
year from entry of decree of registration. [PD the prevailing litigant prevented a party from
1529, sec. 32] having his day in court. [Chico v. Ciudadano,
G.R. No. 249815 (2022)]
Where to File
At the proper RTC - the same court which NOTE: Extrinsic fraud also justifies motion for
ordered the issuance of the decree Lozada v. new trial, a motion to set aside an order of
Bracewell, supra] default and an action for annulment of
judgment.
Requisites for Review
1. Petitioner must have an estate or interest in Extrinsic v. Intrinsic Fraud
the land. Extrinsic Intrinsic Fraud
2. There must be actual fraud in the Fraud
procurement of the decree of registration.
If it was If the fraud alleged in the
employed to petition to set aside the

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1. Fraud, accident, mistake or excusable

deprive a party decree is involved in the
negligence which ordinary prudence could
of his day in same proceedings in which
not have guarded against and by reason of
court, thus the party seeking relief had
which such aggrieved party as probably
preventing him ample opportunity to
been impaired in his rights; or
from asserting assert his right, to attack
2. Newly discovered evidence, which he could
his right to the the document presented
not, with reasonable diligence, have
property by the applicant for
discovered and produced at the trial, and
registered in the registration and to
which if presented would probably alter the
name of the cross-examine the
result. [Rules of Court, Rule 37, Sec 1]
applicant witnesses who testified
relative thereto
C. APPEAL
[Frias v. Esquivel, supra]
The judgment and orders of the court hearing
Exception the land registration case are appealable to the
In no case shall such petition be entertained by Court of Appeals or to the Supreme Court in the
the court where an innocent purchaser for value same manner as in ordinary actions. [PD 1529,
has acquired the land or an interest therein, sec. 33]
whose rights may be prejudiced. Whenever the
phrase "innocent purchaser for value" or an D. RELIEF FROM JUDGMENT
equivalent phrase occurs in this Decree, it shall
be deemed to include an innocent lessee, Grounds for a Petition for Relief
mortgagee, or other encumbrancer for value. 1. When a judgment or final order is entered,
[PD 1529, sec. 32] or any other proceeding is thereafter taken
against a party in any court through fraud,
Other remedies available after the accident, mistake, or excusable negligence;
expiration of the 1 year period [Rules of Court, Rule 38, Sec 1] or
Any person aggrieved by such decree of 2. When a judgment or final order is rendered
registration in any case may pursue his remedy by any court in a case, and a party thereto,
by action for damages against the applicant or by fraud, accident, mistake, or excusable
any other persons responsible for the fraud. [PD negligence, has been prevented from taking
1529, sec. 32] an appeal, he may file a petition in such
court and in the same case praying that the
B. RECONSIDERATION OR NEW appeal be given due course. [Rules of Court,
TRIAL Rule 38, Sec. 2]

The Rules of Court shall, insofar as not E. ANNULMENT OF JUDGMENT

inconsistent with the provision of this Decree, be
applicable to land registration and cadastral Grounds for a Petition for Annulment
cases by analogy or in a suppletory character of Judgment
and whenever practicable and convenient. [PD 1. Extrinsic fraud; and
1529, sec. 34] 2. Lack of jurisdiction.

Grounds for a Motion for Extrinsic fraud shall not be a valid ground if it
Reconsideration or New Trial was availed of, or could have been availed of, in

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a motion for new trial or petition for relief.

[Rules of Court, Rule 47, Sec 2] Absent one or two of the foregoing conditions,
then the law itself puts the buyer on notice and
VII. INNOCENT PURCHASER FOR obliges the latter to exercise a higher degree of
VALUE diligence by scrutinizing the certificate of title
and examining all factual circumstances in order
to determine the seller's title and capacity to
Individuals who rely on a clean certificate of title
transfer any interest in the property. Under such
in purchasing said title are referred to as
circumstance, it is no longer sufficient for said
innocent purchasers for value and in good faith
buyer to merely show that he relied on the face
[Register of Deeds of Negros Occidental v.
of the title; he must now also show that he
Anglo, G.R. No. 171804 (2015)]
exercised reasonable precaution by inquiring
beyond the title. Failure to exercise such degree
A buyer for value in good faith is one who buys
of precaution makes him a buyer in bad faith.
property of another, without notice that some
[Heirs of Cudal v. Sps Suguitan, supra]
other person has a right to, or interest in, such
property and pays full and fair price for the
same, at the time of such purchase, or before Presumption
he has notice of the claim or interest of some The presumption that a holder of a Torrens title
other persons in the property. He buys the is an innocent purchaser of value is disputable
property with the well-founded belief that the and may be overcome by contrary evidence.
person from whom he receives the thing had Once a prima facie case disputing this
title to the property and capacity to convey it. presumption is established, the adverse party
[Heirs of Cudal v. Sps Suguitan, G.R. No. 244405 cannot simply rely on the presumption of good
(2020)] faith and must put forward evidence that the
property was acquired without notice of any
Requisites of good faith defect in its title. [Sindophil, Inc. v. Republic,
G.R. No. 204594 (2018)]
To prove good faith, a buyer of registered and
titled land need only show that he relied on the
face of the title to the property. He need not Mortgagees
prove that he made further inquiry for he is not Whenever the phrase "innocent purchaser for
obliged to explore beyond the four corners of value" or an equivalent phrase occurs in this
the title. Decree, it shall be deemed to include an
innocent lessee, mortgagee, or other
Such degree of proof of good faith, however, is encumbrancer for value. [PD 1529, sec. 32]
sufficient only when the following conditions
concur: The certificate of title was in the name of the
1. The seller is the registered owner of the mortgagors when the land was mortgaged by
land; them to respondent bank. Such being the case,
2. The latter is in possession thereof; and said respondent bank, as mortgagee, had the
3. At the time of the sale, the buyer was not right to rely on what appeared on the certificate
aware of any claim or interest of some other of title and, in the absence of anything to excite
person in the property, or of any defect or suspicion, was under no obligation to look
restriction in the title of the seller or in his beyond the certificate and investigate the title of
capacity to convey title to the property. the mortgagor appearing on the face of said
[Heirs of Cudal v. Sps Suguitan, supra] certificate. It has also been held that a bank is

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not required, before accepting a mortgage, to immovable property, the ownership shall belong
make an investigation of the title of the property to the person acquiring it who in good faith first
being given as security. [Gonzales v. IAC, G.R. recorded it in the Registry of Property. Should
No. L-69622 (1988)] there be no inscription, the ownership shall
pertain to the person who in good faith was first
Where the Torrens title of the land was in the in the possession; and, in the absence thereof,
name of the mortgagor and later given as to the person who presents the oldest title,
security for a bank loan, the subsequent provided there is good faith. [Civil Code, art.
declaration of said title as null and void is not a 1544]
ground for nullifying the mortgage right of the
bank, which had acted in good faith. Being thus Otherwise stated, the law provides that a double
an innocent mortgagee for value, its right or lien sale of immovables transfers ownership to:
upon the land mortgaged must be respected 1. The first registrant in good faith; then
and protected, even if the mortgagors obtained 2. The first possessor in good faith; and
their title thereto thru fraud. [Gonzales v. IAC, 3. Finally, the buyer who in good faith presents
supra] the oldest title.
There is no ambiguity in the application of this
A. RIGHTS law with respect to lands registered under the
Torrens system. [Abrigo v. De Vera, G.R. No.
General Rule: Every person dealing with 154409 (2004)]
registered land, as in this case, may safely rely
on the correctness of the certificate of title and We have consistently held that [NCC] Article
the law will not, in any way, oblige him or her to 1544 requires the second buyer to acquire the
go behind the certificate to determine the immovable in good faith and to register it in
condition of the property. good faith. Mere registration of title is not
enough; good faith must concur with the
Exception: The buyer will not be considered an registration. [Abrigo v. De Vera, supra]
innocent purchaser in good faith and for value if
he or she had actual knowledge of a defect or The innocent purchaser for value protected by
the lack of title of the vendor over the property law is one who purchases a titled land by virtue
or anything on the title that would reasonably of a deed executed by the registered owner
arouse suspicion, and he or she failed to inquire himself, not by a forged deed, as the law
or take the necessary steps to ensure that there expressly states. [Sps Bernales v. Sambaan, G.R.
was no cloud on the title, right, or ownership of No. 163271 (2010)]
the property subject of the sale. [Aguirre v.
Bombaes, G.R. No. 233681 (2021)] Not Innocent Purchasers For Value
1. They acquired the interest in the land before
B. EFFECT OF SUBSEQUENT SALE the final decree has been entered, so
litigation was still pending and it appears
The Law on Double Sale that they were aware of that fact. [Rivera v.
If the same thing should have been sold to Moran, G.R. No. L-24568 (1926)]
different vendees, the ownership shall be 2. Annotations on the title show that the
transferred to the person who may have first property is controversial and has been the
taken possession thereof in good faith, if it subject of several adverse claims, belying
should be movable property. Should it be the petitioner’s contention that it acquired

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the property in good faith. [Sindophil, Inc. v.

citizens of the Philippines, occupying
Republic, supra]
lands of the public domain or claiming to
own any such lands or an interest therein,
CONFIRMATION OF but whose titles have perfected or
completed, may file a petition at any
IMPERFECT TITLES time, whether personally or through their
duly authorized representatives, in the
Public lands suitable for agricultural purposes Regional Trial Court of the province where
can be disposed of only as follows, and not the land is located, for confirmation of
otherwise: their claims and the issuance of a
1. For homestead settlement certificate of title to land not exceeding
2. By sale twelve (12) hectares:
3. By lease
“(a) Those who by themselves or through
4. By confirmation of imperfect or incomplete
their predecessors-in-interest have been
titles:
in open, continuous, exclusive, and
a. By judicial legalization
notorious possession and occupation of
b. By administrative legalization (free
alienable and disposable agricultural lands
patent) [CA 141, sec. 11] of the public domain, under a bona fide
claim of ownership, for at least twenty
I. CONCEPT OF IMPERFECT (20) years immediately preceding
TITLES the filing of the application for
confirmation of title except when
When an applicant is shown to have been in prevented by war or force majeure. They
open, continuous, exclusive, and notorious shall be conclusively presumed to have
possession of a land for the period required by
performed all the conditions essential to a
Government grant and shall be entitled to
law, he or she has acquired an imperfect title
a certificate of title under the provisions
that may be confirmed by the State. [Republic v.
of this Chapter.
Spouses Noval, G.R. No. 170316 (2017)]

Governing Law A. WHO MAY APPLY; REQUISITES

Judicial Administrative
Under CA 141, as amended by RA
Confirmation Confirmation -
Free Patents 11573
1. Applicant must be a citizen of the Philippines
Sec. 48(a) of CA 141, Sec. 44 of CA 141, as who is not the owner of more than 12
as amended by RA amended by RA hectares of land;
11573 11573 2. The subject land must be alienable and
disposable lands of the public domain; and
3. Applicant must, by themselves or through
II. JUDICIAL CONFIRMATION
their predecessors-in-interest have been in
OF IMPERFECT TITLES open, continuous, exclusive, and notorious
possession and occupation of such lands
Section 48, CA 141, as amended by under a bona fide claim of ownership, for at
RA 11573. The following-described least twenty (20) years immediately
preceding the filing of the application
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Except: When prevented by war or by existing certificates of title or patents

force majeure under a bona fide claim of ownership for
Acquisitive Prescription Periods at least twenty (20) years immediately
preceding the filing of the application for
Law Period
confirmation” shall be sufficient for
CA 141 original 30 years purposes of judicial confirmation of title,
(December 1 1936) and shall entitle the applicant to a
decree of registration
RA 1942 30 years
(June 22 1957) 3. In the interest of substantial justice, the
Regional Trial Courts and Court of Appeals
RA 11573 20 years are hereby directed, upon proper motion or
motu proprio, to permit the presentation of
B. RA 11573 additional evidence of land classification
status based on the parameters set forth in
Sec. 7 of RA 11573.
An Act Improving the Confirmation
a. Such additional evidence shall consist of
Process for Imperfect Land Titles
a certification issued by the DENR
Guidelines on the Application of RA 11573 as
geodetic engineer which
provided in Republic v. Pasig Rizal Co., Inc., G.R.
i. states that the land subject of the
No. 213207 (2022):
application for registration has been
1. RA 11573 shall apply retroactively to all
classified as alienable and
applications for judicial confirmation of title
disposable land of the public
which remain pending as of September 1,
domain;
2021, or the date when RA 11573 took
ii. bears reference to the applicable
effect.
Forestry Administrative DENR
Administrative Order, Order,
These include all applications pending
Executive Order, or proclamation
resolution at the first instance before all
classifying the land as such; and
Regional Trial Courts, and applications
iii. indicates the number of the LC Map
pending appeal before the Court of Appeals.
covering the land.
b. In the absence of a copy of the relevant
2. Applications for judicial confirmation of title
issuance classifying the land as alienable
filed on the basis of the old Secs. 14(1) and
and disposable, the certification must
14(2) of PD 1529 and which remain pending
additionally state (i) the release date of
before the Regional Trial Court or Court of
the LC Map; and (ii) the Project Number.
Appeals as of September 1, 2021 shall be
Further, the certification must confirm
resolved following the period and manner of
that the LC Map forms part of the
possession required under the new
records of NAMRIA and is precisely
Sec.14(1).
being used by the DENR as a land
classification map.
Thus, beginning September 1, 2021,
c. The DENR geodetic engineer must be
proof of “open, continuous, exclusive
presented as witness for proper
and notorious possession and
authentication of the certification in
occupation of alienable and disposable
accordance with the Rules of Court.
lands of the public domain not covered

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 LAND TITLES AND DEEDS CIVIL LAW

the conditions essential to a government grant

Sec. 6 of RA 11573 shortens the period of arises, and the applicant becomes the owner of
possession required under the old Sec. 14 (1). the land by virtue of an imperfect or incomplete
Instead of requiring applicants to establish their title. By legal fiction, the land has already
possession from "June 12, 1945, or earlier," the ceased to be part of the public domain and has
new Section 1 (1) only requires proof of become private property. [Heirs of Malabanan v.
possession "at least 20 years immediately Republic, G.R. No. 179987 (2013)]
preceding the filing of the application for
confirmation of title except when prevented by
war or force majeure." [Republic v. Pasig Rizal SUBSEQUENT
Co., Inc., supra] REGISTRATION

There is also a final proviso in the new Sec. 14

In an original registration, an OCT has been
(1) which expressly states that upon proof of
issued to an owner for the first time. On the
possession of alienable and disposable lands of
other hand, a subsequent registration is when
the public domain for the period and in the
the originally issued land title is cancelled and
manner required under said provision, the
replaced by another title, with the new owner
applicant/s "shall be conclusively presumed to
being issued a Transfer Certificate of Title or
have performed all the conditions essential to a
TCT.
Government grant and shall be entitled to a
certificate of title under this section." [Republic
Subsequent registration is a proceeding where
v. Pasig Rizal Co., Inc., supra] incidental matters after original registration may
be brought before the land registration court by
It unequivocally confirms that the classification way of motion or petition filed by the registered
of land as alienable and disposable immediately owner or a party in interest
places it within the commerce of man, and
renders it susceptible to private acquisition
Kinds of Subsequent Registrations
through adverse possession. [Republic v. Pasig
Rizal Co., Inc., supra] Voluntary Involuntary Dealings
Dealings
C. EFFECT OF JUDICIAL Refer to deeds, Refer to such writ, order
CONFIRMATION instruments or or process issued by a
documents which court of record affecting
If the mode is judicial confirmation of imperfect are the results of registered land which by
title under Section 48 (b) of the Public Land Act the free and law should be registered
[now Sec. 48(a) as amended by RA 11573], the voluntary acts of to be effective, and also
agricultural land subject of the application needs the parties thereto to such instruments
only to be classified as alienable and disposable which are not the willful
as of the time of the application, provided the acts of the registered
applicant's possession and occupation of the owner and which may
land dated back to June 12, 1945, or earlier. have been executed
[now, for at least 20 years immediately even without his
preceding the filing of the application, as knowledge or against his
amended by RA 11573]. Thereby, a conclusive consent
presumption that the applicant has performed all

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LAND TITLES AND DEEDS CIVIL LAW

[Aquino] owner. An owner of registered land may

convey, mortgage, lease, charge or
Include: Include: otherwise deal with the same in
1. Sale 1. Attachment accordance with existing laws. He may
2. Conveyances 2. Mandamus use such forms of deeds, mortgages,
of transfers of 3. Sale on execution of leases or other voluntary instruments as
ownership judgment or sales are sufficient in law. But no deed,
over titled for taxes mortgage, lease, or other voluntary
property 4. Adverse claims instrument, except a will purporting to
3. Mortgages 5. Notice of lis pendens convey or affect registered land shall take
4. Lease 6. Expropriation effect as a conveyance or bind the land,
5. Pacto de retro 7. Forfeiture but shall operate only as a contract
sale 8. Auction sale on between the parties and as evidence of
6. Extrajudicial foreclosure of authority to the Register of Deeds to
settlement mortgage make registration.
7. Free [Aquino] The act of registration shall be the
operative act to convey or affect the land
patent/homest
insofar as third persons are concerned,
ead
and in all cases under this Decree, the
8. Powers of
registration shall be made in the office of
attorney
the Register of Deeds for the province or
9. Trusts
city where the land lies.
Entry alone produces the effect of
Section 52, PD 1529. Constructive
registration, whether the transaction entered
notice upon registration. Every
is a voluntary or an involuntary one, so long
conveyance, mortgage, lease, lien,
as the registrant has complied with all that is
attachment, order, judgment, instrument
required of him for purposes of entry and
or entry affecting registered land shall, if
annotation, and nothing more remains to be registered, filed or entered in the office of
done but a duty incumbent solely on the ROD the Register of Deeds for the province or
[DBP v. Acting Register of Deeds of Nueva city where the land to which it relates lies,
Ecija, UDK No. 7671 (1988)] be constructive notice to all persons from
the time of such registering, filing or
Presentation of the Entry thereof in the day entering.
owner’s duplicate book is a sufficient
certificate of title notice to all persons
is required to even if the owner's I. VOLUNTARY DEALINGS
notify; mere entry duplicate certificate of
in the day book of title is not presented to Voluntary dealings are deeds, instruments,
the ROD is the ROD [Saberon v. documents which are the results of free and
insufficient Ventanilla, G.R. No. voluntary acts of parties thereto [Aquino].
192669 (2014)].
The act of registration shall be the operative act
to convey or affect the land insofar as third
Section 51, PD 1529. Conveyance persons are concerned. [PD 1529, sec. 51]
and other dealings by registered
Principles under Sec. 51 of PD 1529
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 LAND TITLES AND DEEDS CIVIL LAW

1. An owner of registered land may convey, the decree of registration on the original petition
mortgage, lease, charge, or otherwise deal or application, any subsequent registration
with the same in accordance with existing procured by the presentation of a forged
laws. duplicate certificate of title, or a forged deed or
2. He may use such forms of deeds, other instrument, shall be null and void.
mortgages, leases or other voluntary
instruments as are sufficient in law, i.e., Exception: If the certificate of title has already
a. Donation of real property - must be in a been transferred from the name of the true
public instrument [NCC, art. 749] owner to the name of the forger, and then the
b. Mortgage - the document in which it land is subsequently sold to an innocent
appears must be recorded in the purchaser for value. [PD 1529, sec. 53]
Registry of Deeds [NCC, art. 2125]
c. Agreements under the Statute of Frauds A. REGISTRATION OF VOLUNTARY
- must be in writing and subscribed by INSTRUMENTS
the party charged [NCC, art. 1403(2)]
3. The mere execution of deeds of sale, Reliance on Title
mortgages, leases or other voluntary General Rule: When there is nothing on the
documents serves only 2 purposes: certificate of title to indicate any cloud or vice in
a. As a contract between the parties the ownership of the property, the purchase is
thereto; and not required to explore further than what the
b. As evidence of authority to the ROD to Torrens title upon its face indicates. [Centeno v.
register such documents. CA, G.R. No. L-40105 (1985)]
4. The documents, by themselves, do not
effect a conveyance or encumbrance on the He is charged with notice only of such burdens
land. and claims which are annotated on the title, for
5. It is only the act of registering the registration is the operative act that binds the
instrument in the ROD for the province or property.
city where the land lies which is the
operative act that conveys ownership or Exception: A purchaser should investigate
affects the land insofar as third persons are when:
concerned. 1. The party concerned has actual knowledge
of facts and circumstances that would impel
Principles under Sec. 52 of PD 1529 a reasonably cautious man to make inquiry.
1. The rule is well-established that registration [Leung Yee v. Strong Machinery Company,
in a public registry is a notice to the whole G.R. No. L-11658 (1918)]
world. 2. When the purchaser is in bad faith; e.g. he
2. The record is constructive notice of its had full knowledge of a previous sale.
contents as well as all interests, legal and [Jamoc v. CA, G.R. No. 92871 (1991)]
equitable, included therein. 3. When a person buys land from one whose
3. All persons are charged with knowledge of rights over the land is evidenced only by a
what it contains. [Legarda v. Saleeby, supra] deed of sale and an annotation in the
certificate of title but no TCT. [Quiñiano v.
Forged Deeds CA, G.R. No. L-23024 (1971)]
General Rule: A forged deed is an absolute 4. Banks and financial institutions are required
nullity and conveys no title. After the entry of to exercise more care and prudence in

338
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 LAND TITLES AND DEEDS CIVIL LAW

dealing with registered lands for their estate taxes. Further, if evidence of such
business is one affected with public interest. payment is not presented within fifteen
The general rule does not apply. [Agag v. (15) days from the date of entry of said
Alpha Financing Corporation, G.R. No. document in the primary entry book of
154826 (2003)] the register of deeds the entry shall be
deemed cancelled.
Process of Registration, In General 4. Entry of the Instrument in the Primary Entry
1. The deed or other voluntary instrument Book - Instruments are regarded as
must contain: registered from the time the Register of
a. The following details of the grantee or Deeds enters them in the book [PD 1529,
other person acquiring or claiming sec. 56].
interest: 5. The Transfer Certificate of Title shall then be
● Full name issued.
● Nationality
● Residence B. DEALINGS LESS THAN
● Postal address OWNERSHIP
● Civil status (if married, include full
name of the spouse) Dealings Less Than Ownership
b. If grantee is a corporation - must The instrument does not divest ownership or
contain a recital showing that it is legally title from owner or from transferee of the
qualified to acquire private lands. [PD registered owners. In this case, no new
1529, sec. 55] certificate shall be entered or issued [PD 1529,
2. File instrument creating or transferring sec. 54].
interest and certificate of title with Register
of Deeds together with: Process of Registration of Instruments
a. Owner’s duplicate - No voluntary for Dealings Less Than Ownership
instrument shall be registered by the
1. Filing of the instrument with the Register of
Register of Deeds, unless the owner's
Deeds
duplicate certificate is presented with
2. A brief memorandum thereof is made:
such instrument. [PD 1529, sec. 53]
a. On the certificate of title by the Register
b. Evidence of full payment of real estate
of Deeds and signed by him; and
tax.
b. On the owner’s duplicate
c. Document of transfer – one (1) copy
Cancellation or extinguishment of such interests
additional for city/provincial assessor.
shall be registered in the same manner. [PD
3. Payment of fees and documentary stamp
1529, sec. 54]
taxes [PD 1529, sec. 56]
a. After payment of entry fee the Register Example: In a deed of conditional sale where
of Deeds shall enter the instruments in a ownership is transferred after the full payment
primary entry book. of the installments of the purchase price, the
b. The national, provincial and city obligatory force of the vendor’s obligation to
governments are exempted from transfer title is subordinated to the happening of
payment of entry fees. a future and uncertain event. Since the deed in
c. RA 456 prohibits registration of this case is in the nature of a voluntary
documents affecting real property which instrument, it must be registered as such and
is delinquent in the payment of real

339
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 LAND TITLES AND DEEDS CIVIL LAW

not as an adverse claim. [Logarta v. Mangahis, Process of Registration of Deeds of

G.R. No. 213568 (2016)] Sale and Transfers, if only a portion of
property is the subject
C. SALE AND TRANSFERS 1. Include a plan which shows all the portions
already subdivided with verified and
Process of Registration of Deeds of approved technical description.
Sale and Transfers 2. That plan with the certified copy of the
This applies where an owner desires to convey technical descriptions shall be filed with the
his registered land in fee simple. [PD 1529, sec. Register of Deeds for annotation in the TCT.
57] 3. Register of Deeds shall issue a TCT and
cancel the grantor's certificate partially OR it
Process of Registration of Deeds of may be cancelled totally and a new one
Sale and Transfers, if entire property is issued describing therein the remaining
portion
the subject
1. Owner executes and registers the deed
which must be sufficient in form. Process of Registration of Deeds of
2. A new certificate of title is issued and Sale and Transfers, if there are
Register of Deeds prepares and delivers to subsisting encumbrances and
grantee his owner's duplicate certificate annotations
3. Register of Deeds notes upon the OCT and
the duplicate certificate the date of transfer, General Rule: They shall be carried over in the
the volume and page of the registration new certificate or certificates
book where the new certificate is registered
4. The original and the owner's duplicate of the Exception: when they have been
grantor's certificate shall be stamped simultaneously discharged. [PD 1529, sec. 59]
"cancelled".
5. The deed of conveyance shall be filed and Innocent Purchaser for Value
indorsed with the number and the place of In case of voluntary registration of documents,
registration of the certificate of title of the an innocent purchaser for value of registered
land conveyed. [PD 1529, sec. 57] land becomes the registered owner, and, in
contemplation of law the holder of a certificate
Note: While Art. 1358, Civil Code seemingly of title, the moment he presents and files a duly
requires contracts transmitting rights over notarized and valid deed of sale and the same is
immovable property to be in a public document, entered in the day book (primary entry book),
a hornbook doctrine is that the embodiment of and at the same time he surrenders or presents
certain contracts is only for convenience. the owner’s duplicate certificate of title covering
Non-observance of the prescribed formalities of the land sold and pays the registration fees,
contracts does not necessarily excuse the because what remains to be done lies not within
contracting parties from their obligation. It his power to perform. [Garcia v. CA, G.R. Nos.
merely grants them the right to compel each L-48971 and 4901 (1980)]
other to execute the proper deed. [Pontigon v.
Sanchez, G.R. No. 221513 (2016)] Note: The phrase "innocent purchaser for value"
is deemed to include an innocent lessee,
mortgagee, or other encumbrancer for value.
[PD 1529, sec. 32]
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 LAND TITLES AND DEEDS CIVIL LAW

Double Sale property, the mortgage contract and the

General Rule: Prior est in tempore, potior est foreclosure sale arising therefrom are given
in jure (he who is first in time is preferred in effect by reason of public policy [Llanto v.
right). In case of sales of immovable property, Alzona, G.R. No. 150730 (2005)].
the ownership shall belong to the person
acquiring it who in good faith first recorded it in A mortgagee has a right to rely in good faith on
the Registry of Property. [NCC, art. 1544] the certificate of title of the mortgagor to the
property (registered in the Torrens system)
Exception: Does not apply if the previous sale given as security and in the absence of any sign
is found to be fraudulent, and the first buyer is that might arouse suspicion. He has no
not one in good faith [Remalante v. Tibe, G.R. obligation to undertake further investigation.
No. L-59514 (1988)].
Rationale: Based on the rule that all persons
Remedy of latter vendee in a double dealing with property covered by the Torrens
sale Certificate of Title, as buyers or mortgagees, are
The purchaser from the owner of the later not required to go beyond what appears on the
certificate and his successors should resort to title [Miles v. Lao, G.R. No. 209544 (2017)].
the vendor for redress, rather than molest the
holder of the first certificate and his successors, Effect of lis pendens on a previously
who should be permitted to rest secure in their registered mortgage
title [Gatioan v. Gaffud, G.R. No. L-21953 Any subsequent lien or encumbrance annotated
(1969)]. at the back of the certificate of title cannot in
any way prejudice the mortgage previously
D. MORTGAGE registered, and the lots subject to the mortgage
pass free from any lien or encumbrance.
Rationale: The value of the mortgage could be
Process of Registration of Deeds of
easily destroyed by a subsequent record of an
Mortgages and Leases
adverse claim or lis pendens, for no one would
Mortgages and leases shall be registered in the
purchase at a foreclosure sale if they are bound
manner provided in Sec. 54 on Dealings Less
by the posterior claim [BPI v. Noblejas, G.R. No.
Than Ownership. The deed shall take effect
L-12128 (1959)].
upon the title only from the time of registration.
When a deed of mortgage is presented, the
E. POWERS OF ATTORNEY
Register of Deeds will enter upon the OCT and
upon the owner’s duplicate a memorandum
thereof and shall sign said memorandum. [PD Process of Registration of Powers of
1529, sec. 60] Attorney
Powers of attorney and revocations shall be
General Rule: In contracts of mortgage, the registered with the Register of Deeds of the
mortgagor should be the absolute owner of the province or city where the land lies. Any
property to be mortgaged; otherwise, the instrument revoking such power shall be
contract is void. [NCC, art. 2085(2)] registered in like manner. [PD 1529, sec. 64]

Exception: The doctrine of mortgagee in good

faith. Under this doctrine, even if the mortgagor
is not the owner of the mortgaged of the
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F. TRUST INSTRUMENTS 2. Sale on execution or for taxes or for any

assessment
Process of Registration of Trust 3. Adverse claim
Instruments 4. Notice of lis pendens
Registration is by memorandum:
1. A memorandum by the words “in trust” or A. ATTACHMENT
“upon condition” or other apt words is made
if a deed or other instrument is filed in order
Section 69, PD 1529. Attachments.
to: a. Transfer registered land in trust, or
An attachment, or a copy of any writ,
upon any equitable condition or limitation order or process issued by a court of
expressed therein, or b. Create or declare a record, intended to create or preserve any
trust or other equitable interests in such lien, status, right, or attachment upon
land without transfer. [PD 1529, sec. 65] registered land, shall be filed and
2. A memorandum by the words “with power registered in the Registry of Deeds for the
to sell,” or “power to mortgage” or other apt province or city in which the land lies,
words is made when: The instrument and, in addition to the particulars required
creating or declaring a trust or other in such papers for registration, shall
equitable interest contains an EXPRESS contain a reference to the number of the
POWER to sell, mortgage, or deal with the certificate of title to be affected and the
land in any manner However, if an implied registered owner or owners thereof, and
or constructive trust is claimed, person also if the attachment, order, process or
claiming such must execute a sworn lien is not claimed on all the land in any
statement thereof with the Register of certificate of title a description sufficiently
Deeds, containing a description of the land, accurate for identification of the land or
the name of the registered owner and a interest intended to be affected. A
reference to the number of the certificate of restraining order, injunction or mandamus
title. Such claim shall not affect the title of a
issued by the court shall be entered and
registered on the certificate of title
purchaser for value and in good faith before
affected, free of charge.
its registration. [PD 1529, sec. 68]

II. INVOLUNTARY DEALINGS Attachment is defined as a provisional remedy

by which the property of an adverse party is
taken into legal custody, either at the
Involuntary dealings are such writs, orders or
commencement of an action or at any time
processes issued by a court of record affecting
thereafter, as a security for the satisfaction of
registered land which by law should be
any judgment that may be recovered by the
registered to be effective, and also to such
plaintiff or any proper party [Northern Islands,
instruments which are not the willful acts of the
Co., Inc., v. Spouses Garcia, G.R. No. 203240
registered owner and which may have been
(2015)].
executed even without his knowledge or against
his consent. [Aquino]
Kinds of attachment
The following involuntary dealings affecting 1. Preliminary
registered land must be registered: 2. Garnishment
1. Attachment 3. Levy on execution

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A writ of preliminary attachment is a provisional action is brought, or in the performance

remedy issued by a court where an action is thereof;
pending. A writ of preliminary attachment allows 5. In an action against a party who has
the levy of a property which shall then be held removed or disposed of his property, or is
by the sheriff. This property will stand as about to do so, with intent to defraud his
security for the satisfaction of the judgment that creditors; or
the court may render in favor of the attaching 6. In an action against a party who does not
party. (Tsuneishi Heavy Industries v. MIS reside and is not found in the Philippines, or
Maritime Corp., G.R. No. 193572 (2018)] on whom summons may be served by
publication
Grounds for the issuance of a writ of
preliminary attachment Stages in the grant of Preliminary
Sec. 1, Rule 57 of the Rules of Court provides Attachment
that at the commencement of the action or at 1. The court issues the order granting the
any time before the entry of judgment, a application
plaintiff or any proper party may have the 2. The writ of attachment issues pursuant to
property of the adverse party attached as the order granting the writ.
security for the satisfaction of any judgment that 3. The writ is implemented. [Rule 57, Rules of
may be recovered in the following cases: Court]
1. In an action for the recovery of a specified
amount of money or damages, other than How Real Property is Attached
moral and exemplary, on a cause of action Real property, or growing crops thereon, or any
arising from law, contract, quasi-contract, interest therein, standing upon the record of the
delict or quasi-delict against a party who is Registry of Deeds of the province in the name of
about to depart from the Philippines with the party against whom attachment is issued, or
intent to defraud his creditors; not appearing at all upon such records, or
2. In an action for money or property belonging to the party against whom attachment
embezzled or fraudulently misapplied or is issued and held by any other person, or
converted to his own use by a public officer, standing on the records of the registry of deeds
or an officer of a corporation, or an attorney, in the name of any other person:
factor, broker, agent, or clerk, in the course 1. By filing with the registry of deeds:
of his employment as such, or by any other a. A copy of the order;
person in a fiduciary capacity, or for a willful b. A description of the property attached;
violation of duty; and
3. In an action to recover the possession of c. A notice that it is attached, or that such
property unjustly or fraudulently taken, real property and any interest therein
detained or converted, when the property, held by or standing in the name of such
or any part thereof, has been concealed, other person are attached.
removed, or disposed of to prevent its being 2. By leaving a copy of such order, description,
found or taken by the applicant or an and notice with the occupant of the
authorized person; property, if any, or with such other person or
4. In an action against a party who has been his agent if found within the province
guilty of a fraud in contracting the debt or Where the property has been brought under the
incurring the obligation upon which the operation of either the Land Registration Act or
the Property Registration Decree, the notice

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shall contain a reference to the number of the Effect of Registration of Attachment

certificate of title, the volume and page in the 1. Creates real right
registration book where the certificate is 2. Has priority over execution sale
registered, and the register owner or owners 3. Between 2 attachments, the one that is
thereof. [Rule 57, sec. 7(a) Rules of Court] earlier in registration is preferred

Process of Registration Effect of Non-recording of a Writ of

1. Copy of writ in order to preserve any lien, Attachment
right or attachment upon registered land An attachment levied on real estate not duly
shall be filed with the Register of Deeds recorded in the Registry of Property is not an
where the land lies, containing number of encumbrance on the attached property, nor can
certificate of title of land to be affected or such attachment unrecorded in the Registry
description of land. [PD 1529, sec. 69] serve a ground for decreeing the annulment of
2. Register of Deeds to index attachment in the sale of the property at the request of
names of both plaintiff and defendant or another creditor [Siari Valley Estates, Inc., v.
name of person whom property is held or in Lucasan, G.R. No. L-13281 (1960)].
whose name stands in the records
a. If duplicate of certificate of title is not
How the Enforcement of the Writ may
presented:
be Prevented
i. Register of Deeds shall within 36
1. By depositing with the court from which the
hours send notice to registered
writ was issued;
owner by mail stating that there has
2. By giving a counterbond executed to the
been registration and requesting
applicant, in an amount equal to the bond
him to produce duplicate so that
fixed by the court in the order of attachment
memorandum be made
or to the value of the property to be
ii. If the owner neglects or refuses, the
attached, exclusive of costs; and
Register of Deeds shall report
3. By raising the defense that the property is
matter to court.
exempt from execution. [Rule 57, sec. 5,
b. Court after notice shall enter an order to
Rules of Court]
the owner to surrender certificate at
time & place to be named therein.
Discharge of Attachment
c.
An attachment may be discharged upon giving a
3. Although notice of attachment is not noted
counter-bond, or on the ground that the same
in duplicate, notation in the book of entry of
was improperly or irregularly issued or enforced,
Register of Deeds produces the effect of
or that the bond is insufficient. [Rule 57, sec. 13,
registration already. [PD 1529, sec. 71]
Rules of Court]
Section 69 of PD 1529 refers to an attachment
Effect: By the dissolution of the attachment
that arose after the issuance of a certificate of
levied on the property through the filing of a
title; while Section 71 of the same law pertains
bond the released property becomes free and no
to the registration of the order of a court of an
longer liable to the results of the preceding in
attachment that was continued, reduced,
which it was attached.
dissolved or otherwise affected by a judgment of
the court. [The Philippine Cotton Corporation v.
The act of the defendant of mortgaging the
Gagoomal, G.R. No. 130389 (2008)]
released property to third persons is not a

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conveyance in fraud of creditors, since the Tax Sale

transaction is legal and valid. [Manila Mercantile 1. Sale of land for collection of delinquent
Co. v. Flores, G.R. No. 27552 (1927)] taxes and penalties due the Government
2. In personam (all persons interested shall be
B. SALE ON EXECUTION OR FOR notified so that they are given opportunity
TAXES OR FOR ANY to be heard)
ASSESSMENT a. Notice to be given to delinquent
taxpayer at last known address
b. Publication of notice must also be made
Section 74, PD 1529. Enforcement of in English, Spanish, or local dialect,
liens on registered land. Whenever posted in a public and conspicuous
registered land is solved on execution, or place in place wherein property is
taken or sold for taxes or for any situated, and at the main entrance of
assessment or to enforce a lien of any the provincial building
character, or for any costs and charges
3. Sale cannot affect rights of other lien
incident to such liens, any execution or
holders unless they are given the right to
copy of execution, any officer's return, or
defend their rights: due process must be
any deed, demand, certificate, or
strictly observed
affidavit, or other instrument made in the
course of the proceedings to enforce such 4. Tax lien superior to attachment
liens and required by law to be recorded,
shall be filed with the Register of Deeds Notice of Tax Sale
of the province or city where the land lies Where the registered owner was not notified of
and registered in the registration book, the alleged tax delinquency and proceedings
and a memorandum made upon the relative to the tax sale, in view of the in rem
proper certificate of title in each case as nature of tax sales, a notice by publication does
lien or encumbrance. not suffice. It is still incumbent upon the city (or
municipal) treasurer to send notice of the tax
A valid levy is essential to the validity of an delinquency as well as notice by public auction
execution sale, and levy is invalid if the notice of directly to the taxpayer in order to protect the
levy of real property is not filed with the office of interests of the latter. [Talusan v. Tayag, G.R.
the Register of Deeds. [Valenzuela v. Aguilar, No. 133698 (2001)]
G.R. No. L-18083-84 (1963)] For purposes of real property tax, the registered
owner is deemed the taxpayer. [Talusan v.
Execution Sale Tayag, supra]
1. To enforce a lien of any description on
registered land, any execution or affidavit to A tax sale held despite the absence of actual
enforce such lien shall be filed with Register notice to the delinquent land owner is null and
of Deeds where the land lies void, and the title of the buyer therein is also
2. Register in the registration book and null and void. [Sarmiento v. CA, G.R. No. 152627
memorandum upon proper certificate of title (2005)]
as adverse claim or as an encumbrance
3. To determine preferential rights between 2 Process of Registration
liens: priority of registration of attachment 1. Officer’s return shall be submitted to
Register of Deeds together with duplicate
title

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2. Register in the registration book

therefor by the party in interest: Provided,
3. Memorandum shall be entered in the
however, that after cancellation, no
certificate as an adverse claim or
second adverse claim based on the same
encumbrance
ground shall be registered by the same
4. After the period of redemption has expired claimant.
and no redemption (2 years from
registration of auction sale) is made Before the lapse of thirty days aforesaid,
a. cancellation of title any party in interest may file a petition in
b. issuance of a new one the Court of First Instance where the land
5. Before cancellation, notice shall be sent to is situated for the cancellation of the
the registered owner adverse claim, and the court shall grant a
a. to surrender title speedy hearing upon the question of the
b. show cause why it shall not be cancelled validity of such adverse claim, and shall
render judgment as may be just and
Note: Actual knowledge of a person is equitable. If the adverse claim is
equivalent to registration as against him. adjudged to be invalid, the registration
thereof shall be ordered canceled. If, in
III. ADVERSE CLAIMS any case, the court, after notice and
hearing, shall find that the adverse claim
thus registered was frivolous, it may fine
Section 70, PD 1529. Adverse claim. the claimant in an amount not less than
Whoever claims any part or interest in one thousand pesos nor more than five
registered land adverse to the registered thousand pesos, in its discretion. Before
owner, arising subsequent to the date of the lapse of thirty days, the claimant may
the original registration, may, if no other withdraw his adverse claim by filing with
provision is made in this Decree for the Register of Deeds a sworn petition to
registering the same, make a statement that effect.
in writing setting forth fully his alleged
right or interest, and how or under whom A. NATURE AND PURPOSE
acquired, a reference to the number of
the certificate of title of the registered
A claim is adverse when:
owner, the name of the registered owner,
1. Claimant’s right or interest in registered land
and a description of the land in which the
is adverse to the registered owner, and
right or interest is claimed.
2. Such right arose subsequent to date of
original registration, and
The statement shall be signed and sworn
to, and shall state the adverse claimant's 3. No other provision is made in the Decree for
residence, and a place at which all notices the registration of such right or claimant.
may be served upon him. This statement [PD 1529, sec. 70]
shall be entitled to registration as an
adverse claim on the certificate of title. Note: A claim based on a future right does not
The adverse claim shall be effective for a ripen into an adverse claim, nor can a right still
period of thirty days from the date of subject to negotiations be enforced against a
registration. After the lapse of said period, title holder. [Cathay Metal Corp. v. Laguna West
the annotation of adverse claim may be Multipurpose Coop., G.R. No. 172204 (2014)]
canceled upon filing of a verified petition

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[Lozano v. Ballesteros, G.R. No. 49470

Nature of Adverse Claim (1991)]
The annotation of an adverse claim over
registered land under Sec. 70 of P.D. 1529 Incidents Which May Not be
requires a claim on the title of the disputed land. Registered as Adverse Claim
[Castro v. Monsod, G.R. No. 183719 (2011)] 1. No adverse claim may be registered for
ownership over a parcel of land already
Purpose of Annotating the Adverse registered under the Torrens system based
Claim on prescription and adverse possession. [PD
1. The annotation is a measure designed to 1529, sec. 47]
protect the interest of a person over an 2. Where a notice of lis pendens is annotated
immovable, where the registration of such on the title of the land already, since an
interest or right is not otherwise provided adverse claim and a notice of lis pendens
for by PD 1529; have the same purpose
2. The annotation serves as a warning to third 3. A claim based on occurrences prior to the
parties dealing with said property that original registration is not registerable.
someone is claiming an interest on the same 4. No second adverse claim based on the same
or a better right than the registered owner ground may be registered by the same
of the property. [Martinez v. Garcia, G.R. No. claimant. [PD 1529, sec. 70]
166536 (2010)] 5. A mere money claim cannot be registered as
3. To apprise third persons that there is a an adverse claim. [Sanchez v. CA, G.R. No.
controversy over the ownership of the land L-40177 (1976)]
and to preserve and protect the right of the
adverse claimant during the pendency of the C. EFFECT OF REGISTRATION OF
controversy. [Arrazola v. Bernas, G.R. No. AN ADVERSE CLAIM
L-29740 (1978)]
An adverse claim is a notice to third persons
B. REQUISITES FOR that any transaction regarding the disputed land
REGISTRATION is subject to the outcome of the dispute.
[Arrazola v. Bernas, supra]
1. The adverse claimant must give a statement
of the following in writing: Effectivity and Cancellation
a. His alleged right or interest The adverse claim shall be effective for a period
b. How and under whom such alleged right of thirty (30) days from the date of registration.
or interest is acquired After the lapse of said period, the annotation of
c. The description of the land in which the adverse claim may be canceled upon filing of a
right or interest is claimed and verified petition therefor by the party in interest:
d. The number of the certificate of title Provided, however, that after cancellation, no
2. The statement must be: second adverse claim based on the same ground
a. Signed by the adverse claimant shall be registered by the same claimant. [PD
b. Sworn before a notary public 1529, sec. 70]
c. The statement must also state his
residence or the place to which all At first blush, the provision in question would
notices may be served upon him. seem to restrict the effectivity of the adverse
claim to thirty days. The law, taken together,

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simply means that the cancellation of the

upon order of the court, after proper
adverse claim is still necessary to render it
showing that the notice is for the purpose
ineffective, otherwise, the inscription will remain
of molesting the adverse party, or that it
annotated and shall continue as a lien upon the
is not necessary to protect the rights of
property. For if the adverse claim has already the party who caused it to be registered.
ceased to be effective upon the lapse of the said It may also be canceled by the Register of
period, its cancellation is no longer necessary Deeds upon verified petition of the party
and the process of cancellation would be a who caused the registration thereof.
useless ceremony. [Equatorial Realty
Development, Inc., v. Sps Frogozo, G.R. No. At any time after final judgment in favor
128563 (2004)] of the defendant, or other disposition of
the action such as to terminate finally all
An adverse claim could subsist concurrently with rights of the plaintiff in and to the land
a subsequent annotation of a notice of lis and/or buildings involved, in any case in
pendens. [Arrazola v. Bernas, supra] which a memorandum or notice of lis
pendens has been registered as provided
IV. LIS PENDENS in the preceding section, the notice of lis
pendens shall be deemed canceled upon
the registration of a certificate of the clerk
Section 76, PD 1529. Notice of lis of court in which the action or proceeding
pendens. No action to recover was pending stating the manner of
possession of real estate, or to quiet title disposal thereof.
thereto, or to remove clouds upon the
title thereof, or for partition, or other A. NATURE AND PURPOSE
proceedings of any kind in court directly
affecting the title to land or the use or
Lis pendens
occupation thereof or the buildings
thereon, and no judgment, and no Literally means “pending suit.” It is an
proceeding to vacate or reverse any announcement to the whole world that a
judgment, shall have any effect upon particular real property is in litigation. The
registered land as against persons other inscription serves as a warning that one who
than the parties thereto, unless a acquires an interest over litigated property does
memorandum or notice stating the so at his own risk, or that he gambles on the
institution of such action or proceeding result of the litigation over the property.
and the court wherein the same is [Marasigan v. IAC, G.R. No. L-69303 (1987)]
pending, as well as the date of the
institution thereof, together with a Purpose of Lis Pendens
reference to the number of the certificate 1. To protect the rights of the party causing
of title, and an adequate description of the registration of the lis pendens;
the land affected and the registered 2. To advise third persons who purchase or
owner thereof, shall have been filed and contract on the subject property that they
registered. do so at their peril and subject to the result
of the pending litigation [Du v. Ortile, G.R.
Section 77, PD 1529. Cancellation of
No. 255934 (2022)].
lis pendens. Before final judgment, a
notice of lis pendens may be canceled

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B. REGISTRATION OF THE NOTICE c.

New certificate shall note that it is
OF LIS PENDENS entered to him as assignee or trustee in
insolvency proceedings. [PD 1529, sec.
When Notice of Lis Pendens is Proper 83]
1. To recover possession of real estate 2. Government in eminent domain
2. To quiet title a. Copy of judgment shall be filed in the
3. To remove clouds upon the title thereof Register of Deeds which states
4. For partition description of property, certificate
5. Other proceedings of any kind in court number, interest expropriated, nature of
directly affecting the title to land or the use public use
or occupation thereof or the buildings b. Memorandum shall be made or new
thereon certificate of title shall be issued. [PD
1529, sec. 85]
When Notice of Lis Pendens is NOT
C. EFFECT OF NOTICE OF LIS
Proper
1. Proceedings for the recovery of money PENDENS
judgments
2. Attachments 1. It keeps the subject matter within the
3. Proceedings on the probate of wills power of the court until the entry of
4. Administration of the estate of deceased final judgment to prevent the defeat of
persons the final judgment by successive
5. Levies on execution alenations. It therefore creates merely a
6. Foreclosure contingency & not a lien.
2. It binds a purchaser, bona fide or not, of
the land subject to the litigation to the
Form of the Notice of Lis Pendens
judgment or decree that the court will
1. The institution of the action or proceeding
promulgate subsequently.
2. The court wherein the same is pending
3. Without the notice of lis pendens, a
3. The date of the institution of the action
third party who acquires property after
4. Reference to the number of the certificate of
relying on the certificate of title is a
title
purchaser in good faith. [Lopez v.
5. Adequate description of the land affected
Enriquez, G.R. No. 146262 (2005)]
and registered owner thereof. [PD 1529,
4. Impossibility of alienating the property
sec. 76]
in dispute during the pendency of the
suit – may be alienated but purchaser is
Other Parties Who Need to Register
subject to final outcome of pending suit
1. Assignee in involuntary proceeding for
5. Register of Deeds is duty bound to carry
insolvency
over notice of lis pendens on all new
a. Duty of the officer serving notice to file
titles to be issued
a copy of the notice to the Register of
Deeds where the property of debtor lies
Effectivity
b. Assignee elected or appointed by court
The entry of the notice of lis pendens in the
shall be entitled to entry of new
primary entry book is sufficient to constitute
certificate of registered land upon
registration and such entry is notice to all
presentment of copy of assignment with
persons, including subsequent transferees, of
bankrupt’s certificate of title (duplicate)

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the pending action. [Director of Lands v. Reyes, when the land thus covered is not capable of
G.R. No. L-27594 (1975)] registration. [Dizon v. Rodriguez, G.R. Nos.
L-20300-01 (1965)]
D. CANCELLATION OF LIS A simple possession of a certificate of title under
PENDENS the Torrens system does not necessarily make
the possessor a true owner of all the property
1. Before final judgment – court may order described therein. If a person obtains title under
cancellation after showing that notice is only the Torrens system which includes by mistake or
for the purpose of molesting an adverse oversight, lands which cannot be registered
party or it is not necessary to protect the under the Torrens system, he does not by virtue
rights of the party who caused it to be of said certificate alone become the owner of
registered the land illegally included. [Ledesma v.
2. Register of Deeds may also cancel upon Municipality of Iloilo, G.R. no. L-26337 (1926)]
verified petition of the party who caused
such registration The right of reversion or reconveyance to the
3. Deemed cancelled when certificate of clerk State of the public properties fraudulently
of court stating manner of disposal of registered and which are not capable of private
proceeding is registered. [PD 1529, sec. 77] appropriation or private acquisition does not
prescribe. [Martinez v. CA, G.R. No. L-31271
(1974)]
NON-REGISTRABLE The law on innocent purchasers for value does
PROPERTIES not apply insofar as non-disposable public lands
are concerned. Any title issued on
non-disposable lots even in the hands of an
Section 2, Article XII, 1987 alleged innocent purchaser for value, shall be
Constitution. All lands of the public cancelled. [Republic v. Reyes, G.R. No.
domain, waters, minerals, coal, L-30263-5 (1987)]
petroleum, and other mineral oils, all
forces of potential energy, fisheries, I. UNDER THE CIVIL CODE
forests or timber, wildlife, flora and fauna,
and other natural resources are owned by
A. LANDS FOR PUBLIC USE AND
the State.
PUBLIC SERVICE
Section 2, Article XI, 1987
Constitution. With the exception of Article 420, Civil Code. The following
agricultural lands, all other natural things are property of public dominion:
resources shall not be alienated. 1. Those intended for public use, such as
roads, canals, rivers, torrents, ports
The land registration court has no jurisdiction and bridges constructed by the State,
over non-registrable property and cannot validly banks, shores, roadsteads, and others
adjudge the registration of title thereof in favor of similar character;
of a private applicant. [Republic v. Feliza, G.R. 2. Those which belong to the State,
No. 182913 (2013)] without being for public use, and are
intended for some public service or for
The incontestable and indefeasible character of the development of the national
a Torrens certificate of title does not operate
wealth.

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B. WATERS needed to declassify land which is classified as

forest and to convert it into alienable or
disposable land for agricultural or other
Article 502, Civil Code. The following purposes. Unless and until the land classified as
are of public dominion:
"forest" is released in an official proclamation to
1. Rivers and their natural beds;
that effect so that it may form part of the
2. Continuous or intermittent waters of
disposable agricultural lands of the public
springs and brooks running in their
domain, the rules on confirmation of imperfect
natural beds and the beds
themselves; title do not apply. [Heirs of Amunategui v.
3. Waters rising continuously or Director of Lands, G.R. Nos. L-27873 and
intermittently on lands of public L-30035 (1983)]
dominion;
4. Lakes and lagoons formed by Nature B. MINERAL LANDS
on public lands, and their beds;
5. Rain waters running through ravines Both under the 1987 Constitution and Sec. 2 of
or sand beds, which are also of public the Public Land Act, mineral lands are not
dominion; alienable and disposable. [Lepanto Consolidated
6. Subterranean waters on public lands; Mining Co. v. Dumyung, G.R. No. L-31666
7. Waters found within the zone of (1979)].
operation of public works, even if
constructed by a contractor; C. NATIONAL PARKS
8. Waters rising continuously or
intermittently on lands belonging to
Under the present Constitution, national parks
private persons, to the State, to a
are declared part of the public domain, and shall
province, or to a city or a municipality
be conserved and may not be increased nor
from the moment they leave such
lands; diminished, except by law. [Republic v. AFP
9. The waste waters of fountains, sewers Retirement and Separation Benefits System,
and public establishments. G.R. No. 180463 (2013)]

D. MANGROVE SWAMPS
The natural bed or basin of lakes is the ground
covered by their waters when at their highest
Mangrove swamps or mangroves should be
ordinary depth." and in which case, it forms
understood as comprised within the public
part of the national dominion. [Republic v. CA
forests of the Philippines as defined in Sec.
and ALAGAD, G.R. No. 68807 (1989)]
1820, Administrative Code of 1917. [Director of
Forestry v. Villareal, G.R. No. L-32266 (1989)]
II. SPECIFIC KINDS OF
NON-REGISTRABLE E. FORESHORE LAND AND
PROPERTIES SEASHORE AND RECLAIMED
LANDS
A. FOREST LANDS
A foreshore land is that part of (the land) which
Possession of forest lands, no matter how long, is between high and low water and left dry by
cannot ripen into private ownership. It bears the flux and reflux of the tides. It is the strip of
emphasizing that a positive act of Government is land that lies between the high and low water

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marks and that is alternatively wet and dry can be no doubt that the same are incapable of
according to the flow of the tide. Otherwise, registration. [Director of Lands v. Rivas, G.R. No.
where the rise in water level is due to the L61539 (1986)]
"extraordinary" action of nature, rainfall for
instance, the portions inundated thereby are not J. ALLUVIAL DEPOSIT ALONG
considered part of the bed or basin of the body RIVERS, WHEN MAN MADE
of water in question. It cannot therefore be said
to be foreshore land but land outside of the Such deposit is really an encroachment of a
public dominion, and land capable of registration portion of the bed of the river, classified as
as private property. [Republic v. CA and property of the public domain under Art. 420 (1)
ALAGAD, supra] and Art. 502 (1) of the Civil Code, hence not
open to registration. [Republic v. CA, G.R. No.
Seashore, foreshore, and/or portions of L-61647 (1984)]
territorial waters and beaches, cannot be
registered. Even alluvial formation along the K. PREVIOUSLY TITLED LAND
seashore is part of public domain [Dizon v.
Rodriguez, supra]. Proceeds from the indefeasibility of the Torrens
title.
F. CREEKS AND STREAMS

A dried up creek bed is property of public DEALINGS WITH

dominion. [Fernando v. Acuna, G.R. No. 161030 UNREGISTERED LANDS
(2011)]

G. MILITARY OR NAVAL Section 113, PD 1529. Recording of

RESERVATIONS instruments relating to unregistered
lands. No deed, conveyance, mortgage,
The reservation made segregates it from the lease, or other voluntary instrument
public domain and no amount of time, in affecting land not registered under the
whatever nature of possession, could have Torrens system shall be valid, except as
ripened such possession into private ownership.
between the parties thereto, unless such
[Republic v. Marcos, G.R. No. L32941 (1973)]
instrument shall have been recorded in
the manner herein prescribed in the office
of the Register of Deeds for the province
H. WATERSHED or city where the land lies. xxx

The Constitution expressly mandates the

conservation and utilization of natural resources, Effect of Transactions Covering
which includes the country’s watershed. [Tan v. Unregistered Land
Director Of Forestry, G.R. No. L- 24548 (1983)] 1. As between the parties – The contract is
binding and valid even if not registered
I. GRAZING LANDS 2. As among third persons – None. There must
be registration for the transaction to be
While the 1987 Constitution does not specifically binding against third persons. [PD 1529,
prove that grazing lands are not disposable, yet sec. 113]
if such lands are part of a forest reserve, there

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Process of Recording Recording by the Register of Deeds is

The Register of Deeds for each province or city Ministerial
shall keep a Primary Entry Book AND a The register of deeds does not exercise a
Registration Book. judicial or quasi-judicial power in the registration
1. The Primary Entry Book shall contain, of sheriff’s deeds or certificates of sale. His duty
among other particulars: with respect to the notation or recording of
a. Entry number these instruments, so far at least as relates to
b. Names of the parties unregistered property, is ministerial only; and
c. Nature of the document the registration of such instruments adds
d. Date, hour and minute the document nothing to their intrinsic effect. Registration in
was presented and received such cases is required merely as a means of
2. The Registration Book – Provides spaces notification of the purchasers’ rights to the
whereon the annotation is made after the public. [Hermanos v. Register of Deeds, G.R. No.
instrument has been entered in the Primary 27449 (1927)]
Entry Book
a. Registration is by way of annotation Better Right
b. The instrument dealing with "Better right", however, was not defined by law.
unregistered land is presented before But author Narciso Peña is inclined to concur
the Register of Deeds. [PD 1529, sec. that "better right" should refer to a "right which
113(a)] must have been acquired by a third party
3. The Register will then determine if it can be independently of the unregistered deed, such
registered: as, for instance, title by prescription, and that it
a. If, on the face of the instrument, it has no reference to rights acquired under that
appears that it is sufficient in law, the unregistered deed itself." [Spouses Reyes v.
Register of Deeds shall forthwith record Salvador, G.R. No. 139047 (2008)]
the instrument
b. In case the Register of Deeds refuses its
Involuntary Dealings
administration to record, he shall advise
Tax sale, attachment and levy, notice of lis
the party in interest in writing of the
pendens, adverse claim and other instruments in
ground or grounds for his refusal.
the nature of involuntary dealings with respect
The latter may appeal the matter to the
to unregistered lands, if made in the form
Commissioner of Land Registration.
sufficient in law, shall likewise be admissible to
Recording made under this section shall be
record under this section. [PD 1529, sec.
without prejudice to a third party with a better
113(d)]
right. [PD 1529, sec. 113(b)]

After recording, the Register of Deeds shall ASSURANCE FUND

endorse on the original of the instrument the file
number and the date as well as the hour and
minute when the instrument was received, I. CONCEPT AND PURPOSE
returning to the registrant the duplicate of the
instrument with a certification that he has The authors of the Torrens system also wisely
recorded the same. [PD 1529, sec. 113(c)] included provisions intended to safeguard the
rights of prejudiced parties rightfully entitled to
an interest in land but shut off from obtaining

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titles thereto. As suppletory to the registration of A. WHEN NOT LIABLE

titles, pecuniary compensation by way of
damages was provided for in certain cases for The Assurance Fund shall not be liable for any
persons who had lost their property. For this loss, damage or deprivation caused or
purpose, an assurance fund was created. But occasioned by a breach of trust, whether
the assurance fund was not intended to block express, implied or constructive or by any
any right which a person might have against mistake in the resurveyed or subdivision of
another for the loss of his land. Damages were registered land resulting in the expansion of
not recoverable from the assurance fund when area in the certificate of title. [PD 1529, sec.
they could be recovered from the person who 101]
caused the loss. [Estrellado v. Martinez, G.R. No.
23847 (1925)] It should be clarified that loss, damage, or
deprivation of land or any estate or interest
The Assurance Fund is a long-standing feature therein through fraudulent registration alone is
of our property registration system which is not a valid ground to recover damages against
intended "to relieve innocent persons from the the Assurance Fund. It is hornbook doctrine that
harshness of the doctrine that a certificate is "[w]hen a party uses fraud or concealment to
conclusive evidence of an indefeasible title to obtain a certificate of title of property, a
land.” [Stilianopoulos v. Register of Deeds, G.R. constructive trust is created in favor of the
No. 224678 (2018)] defrauded party." However, as stated in Section
101 of PD 1529, the inability to recover from the
II. CONDITIONS FOR defrauding party does not make the Assurance
COMPENSATION Fund liable therefor. [Stilianopoulos v. Register
of Deeds, supra]
1. The individual must sustain loss or damage,
or the individual is deprived of land or any B. WHEN LIABLE OR
estate or interest. COMPENSABLE
2. The individual must not be negligent.
3. The loss, damage, or deprivation is the Instead, the loss, damage or deprivation
consequence of either: becomes compensable under the Assurance
a. fraudulent registration under the Torrens Fund when the property has been further
system after the land's original registered in the name of an innocent purchaser
registration, or for value. This is because in this instance, the
b. any error, omission, mistake, or loss, damage or deprivation are not actually
misdescription in any certificate of title caused by any breach of trust but rather, by the
or in any entry or memorandum in the operation of the Torrens system of registration
registration book; and which renders indefeasible the title of the
4. The individual must be barred or otherwise innocent purchaser for value. It is only after the
precluded under the provision of any law registration of the innocent purchaser for value's
from bringing an action for the recovery of title (and not the usurper's title which
such land or the estate or interest therein. constitutes a breach of trust) can it be said that
[Register of Deeds of Negros Occidental v. the claimant effectively "sustains loss or
Anglo, Sr., G.R. No. 171804 (2015)] damage, or is deprived of land or any estate or
interest therein in consequence of the bringing
of the land under the operation of the Torrens

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 LAND TITLES AND DEEDS CIVIL LAW

system." The registration of the innocent General Rule: A right of action accrues only
purchaser for value's title is therefore a from the moment the right to commence the
condition sine qua non in order to properly claim action comes into existence, and prescription
against the Assurance Fund. [Stilianopoulos v. begins to run from that time.
Register of Deeds, supra]
Exception: Constructive Notice Rule
III. LIMITATION OF ACTION In cases involving fraud, the common
acceptation is that the period of prescription
A. AGAINST WHOM THE ACTION IS runs from the discovery of the fraud. The rule is
that the registration of an instrument in the
FILED
Office of the Register of Deeds constitutes
constructive notice to the whole world and
Purpose of Action Bring action therefore the discovery of fraud is deemed to
against have taken place at the time of registration
Action brought to recover Register of
The constructive notice rule on registration
for loss of damage or for Deeds of the
should NOT be made to apply to title holders
deprivation of land province, and
who have been unjustly deprived of their land
through fraud or National
without their negligence. The actual title holder
negligence or mistake of Treasurer as
cannot be deprived of his or her rights twice –
the court personnel, defendants
first, by fraudulent registration of the title in the
Register of Deeds
name of the usurper and second, by operation
Action brought to recover Register of of the constructive notice rule upon registration
for loss of damage or for Deeds of the of the title in the name of the innocent
deprivation of land province, purchaser for value.
through fraud or National
negligence or mistake of Treasurer, and As such, prescription, for purposes of
the court personnel, other persons as determining the right to bring an action against
Register of Deeds, and co- defendants the Assurance Fund, should be reckoned from
other employees the moment the innocent purchaser for value
registers his or her title and upon actual
knowledge thereof of the original title
[PD 1529, sec. 96] holder/claimant. [Stilianopoulos v. Register of
Deeds, supra]
The phrase "other person or persons" would
clearly include the usurper who fraudulently
C. JUDGMENT, HOW SATISFIED
registered the property under his name.
[Stilianopoulos v. Register of Deeds, supra]
1. Execution shall first issue against such
defendants other than the National
B. PRESCRIPTION
Treasurer and the Register of Deeds.
2. If the execution is returned unsatisfied in
The action shall be instituted within a period of
whole or in part, and the officer returning
six years from the time the right to bring such
the same certificates that the amount due
action first occurred. [PD 1529, sec. 102]
cannot be collected from the land or
personal property of such other defendants,

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only then shall the court, upon proper

Authority. No order or judgment ordering
showing, order the amount of the execution
the reconstitution of a certificate of title
and costs, or so much thereof as remains
shall become final until the lapse of
unpaid, to be paid by the National Treasurer
fifteen (15) days from receipt by the
out of the Assurance Fund Register of Deeds and by the
Plaintiff cannot recover as compensation more Administrator of the Land Registration
than the fair market value of the land at the Authority of a notice of such order or
time he suffered the loss, damage, or judgment without any appeal having been
deprivation thereof. [PD 1529, sec. 97] filed by any such officials. (as amended
by RA 6732)

RECONSTITUTION OF TITLE I. CONCEPT

Reconstitution is the restoration of the

Section 110, PD 1529. instrument or title allegedly lost or destroyed in
Reconstitution of lost or destroyed its original form and condition. Its only purpose
original of Torrens title. Original copies is to have the title reproduced, after observing
of certificates of titles lost or destroyed in the procedure prescribed by law, in the same
the offices of Register of Deeds as well as form they were when the loss or destruction
liens and encumbrances affecting the occurred. [Republic v. Heirs of Manansala, G.R.
lands covered by such titles shall be 241890 (2021)]
reconstituted judicially in accordance with
the procedure prescribed in Republic Act The reconstitution of a title is simply the
No. 26 insofar as not inconsistent with reissuance of a new duplicate certificate of title
this Decree. The procedure relative to
allegedly lost or destroyed in its original form
administrative reconstitution of lost or
and condition. It does not pass upon the
destroyed certificate prescribed in said Act
ownership of the land covered by the lost or
may be availed of only in case of
destroyed title. Possession of a lost certificate is
substantial loss or destruction of land
titles due to fire, flood or other force not necessarily equivalent to ownership of the
majeure as determined by the land covered by it. The certificate of title, by
Administrator of the Land Registration itself, does not vest ownership; it is merely an
Authority: Provided, That the number of evidence of title over a particular property.
certificates of titles lost or damaged [Strait Times, Inc., v. CA, G.R. No. 126673
should be at least ten percent (10%) of (1998)]
the total number in the possession of the
Office of the Register of Deeds: Provided, Validity of Reconstituted Titles
further, That in no case shall the number Reconstituted certificates of title shall have the
of certificates of titles lost or damaged be same validity and legal effect as the originals
less than five hundred (500). thereof: Provided, however, That certificates of
title reconstituted extrajudicially shall be without
Notice of all hearings of the petition for prejudice to any party whose right or interest in
judicial reconstitution shall be furnished to the property was duly noted in the original, at
the Register of Deeds of the place where the time it was lost or destroyed, but entry or
the land is situated and to the notation of which has not been made on the
Administrator of the Land Registration reconstituted certificate of title. [RA 26, sec. 7]

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 LAND TITLES AND DEEDS CIVIL LAW

Requisites The petition shall be filed with the proper RTC

The following requisites must be complied with where the land is situated. [RA 26, sec. 12]
for an order for reconstitution to be issued:
1. that the certificate of title had been lost or B. CONTENTS OF THE PETITION
destroyed; FOR RECONSTITUTION
2. that the documents presented by petitioner
are sufficient and proper to warrant The petition shall state the following:
reconstitution of the lost or destroyed 1. That the owner's duplicate of the certificate
certificate of title; of title had been lost or destroyed;
3. that the petitioner is the registered owner of 2. That no co-owner's mortgagee's or lessee's
the property or had an interest therein; duplicate had been issued, or, if any had
4. that the certificate of title was in force at the been issued, the same had been lost or
time it was lost and destroyed; and destroyed;
5. that the description, area and boundaries of 3. The location, area and boundaries of the
the property are substantially the same as property;
those contained in the lost or destroyed 4. The nature and description of the buildings
certificate of title. [Dy v. Aldea, G.R. No. or improvements, if any, which do not
219500 (2017)] belong to the owner of the land, and the
names and addresses of the owners of such
Kinds of Reconstitution buildings or improvements;
1. Judicial Reconstitution - done by filing a 5. The names and addresses of the occupants
petition before the court or persons in possession of the property, of
2. Administrative Reconstitution - may be the owners of the adjoining properties and
availed of only in case of: all persons who may have any interest in the
a. substantial loss or destruction of land property;
titles due to fire, flood or other force 6. A detailed description of the encumbrances,
majeure as determined by the LRA if any, affecting the property; and
b. The number of certificates of titles lost 7. A statement that no deeds or other
or damaged should be at least 10% of instruments affecting the property have
the total number in the possession of been presented for registration, or, if there
the Office of the Register of Deeds: be any, the registration thereof has not been
c. In no case shall the number of accomplished, as yet. [RA 26, sec. 12]
certificates of titles lost or damaged be
less than 500. [PD 1529, sec. 110] The petition shall be accompanied by the
following:
II. GENERAL RULE - JUDICIAL 1. Necessary sources for reconstitution; and
RECONSTITUTION 2. Affidavit of the registered stating the
following:
a. That no deed or other instrument
A. WHO MAY APPLY; WHERE TO
affecting the property had been
FILE
presented for registration, or, if there be
any, the nature thereof, the date of its
1. Registered owner;
presentation, as well as the names of
2. His or her assigns; or
the parties, and whether the registration
3. Other person, both natural and juridical,
having an interest in the property
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LAND TITLES AND DEEDS CIVIL LAW

of such deed or instrument is still

4. An authenticated 4. The deed of
pending accomplishment;
copy of the transfer or other
b. That the owner's duplicate certificate or
decree of document, on file in
co-owner's duplicate is in due form
registration or the registry of deeds,
without any apparent intentional
patent, as the containing the
alterations or erasures;
case may be, description of the
c. That the certificate of title is not the
pursuant to property, or an
subject of litigation or investigation,
which the authenticated copy
administrative or judicial, regarding its
original thereof, showing that
genuineness or due execution or
certificate of title its original had been
issuance;
was issued; registered, and
d. That the certificate of title was in full
pursuant to which the
force and effect at the time it was lost
lost or destroyed
or destroyed;
transfer certificate of
e. That the certificate of title is covered by
title was issued;
a tax declaration regularly issued by the
Assessor's Office; and 5. A document, on file in the registry of
f. That real estate taxes have been fully deeds, by which the property, the
paid up to at least two (2) years prior to description of which is given in said
the filing of the petition for document, is mortgaged, leased or
reconstitution. [RA 26, sec. 5, as encumbered, or an authenticated copy of
amended by RA 6732] said document showing that its original
had been registered; and
Sources for Reconstitution, in Order
6. Any other document which, in the
For OCTs For TCTs
judgment of the court, is sufficient and
RA 26, sec. 2 RA 26, sec. 3 proper basis for reconstituting the lost or
destroyed certificate of title
1. The owner's duplicate of the certificate of
title;
Liens and Other Encumbrances, in the
2. The co-owner's, mortgagee's, or lessee's Following Order
duplicate of the certificate of title; 1. Annotations or memoranda appearing on
NOTE: If the reconstitution is to be made the owner's co-owner's mortgagee's or
from this source, the affidavit should further lessee's duplicate;
state that the owner's duplicate has been lost 2. Registered documents on file in the registry
or destroyed and the circumstances under of deeds, or authenticated copies thereof
which it was lost or destroyed [RA 26, sec. 5, showing that the originals thereof had been
as amended by RA 6732]. registered; and
3. Any other document which, in the judgment
3. A certified copy of the certificate of title, of the court, is sufficient and proper basis
previously issued by the register of deeds for reconstituting the liens or encumbrances
or by a legal custodian thereof; affecting the property covered by the lost or
destroyed certificate of title. [RA 26, sec. 4]

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 LAND TITLES AND DEEDS CIVIL LAW

C. NOTICE AND PUBLICATION allegation sought to be established. It is

indeterminate, being more than preponderance,
1. Publication of the notice for 2 successive but not to the extent of such certainty as is
issues of the Official Gazette, at the expense required beyond reasonable doubt in criminal
of the petitioner; cases. Appropriately, this is the standard of
2. Posting of the notice on the main entrance proof that is required in reconstitution
of the provincial building and of the proceedings. [Republic v. Heirs of Manansala,
municipal building of the municipality or city supra]
in which the land lies, at least 30 days prior
to the date of hearing.
3. The petitioner shall, at the hearing, submit
proof of the publication and posting of the
notice. [RA 26, sec. 9]

Contents of the Notice

1. The number of the certificate of title,
2. The name of the registered owner,
3. The names of the interested parties
appearing in the reconstituted certificate of
title,
4. The location of the property, and
5. The date on which all persons having an
interest in the property must appear and file
such claim as they may have. [RA 26, sec.
9]

D. QUANTUM OF PROOF

The process involves diligent circumspect

evaluation of the authenticity and relevance of
all the evidence presented for fear of the chilling
consequences of mistakenly issuing a
reconstituted title when in fact the original is not
truly lost or destroyed (or when an original title
does not even exist in the name of the the
person from whom the petitioner derives his
purported claim or right.)

The established legal principle in actions

involving land registration is that a party must
prove its allegations not merely by a
preponderance of evidence, but by clear and
convincing evidence. Evidence is clear and
convincing if it produces in the mind of the trier
of fact a firm belief or conviction as to the

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SUCCESSION CIVIL LAW

i. Usufruct [Art 603, Civil

WILLS & SUCCESSION Code]
ii. Agency [Art 1919, Civil
Code]
I. GENERAL PROVISIONS iii. Commodatum [Art
Article 774, Civil Code. Succession is 1939, Civil Code]
a mode of acquisition by virtue of which 2. Monetary debts left by the decedent
(because they are chargeable to the
the property, rights and obligations,
estate of the decedent). If the estate’s
to the extent of the value of the
assets are insufficient to pay off the
inheritance, of a person are transmitted debts in their personal capacity, the
through death to another or others heirs cannot be liable for debts in their
either by will or by operation of law. personal capacity. [Rules 88-90, ROC]

A. SCOPE & OBJECT OF B. SUBJECTS OF SUCCESSION

INHERITANCE
Concerned Parties
General Rules 1. Decedent – person whose property is
1. All the property, rights, and obligations transmitted through succession, whether
(to the extent of the inheritance) of a or not he left a will [Art. 775, Civil Code]
person which are not extinguished by 2. Testator – a decedent who left a will
such person’s death [Art. 776, Civil [Art. 775, Civil Code]
Code]. 3. Successor/Heir – person who
2. The property and the transmissible succeeds to the property of the
rights and obligations which have decedent (either by will, or operation of
accrued to item (1) above since the law). [Art 782, Civil Code]
opening of the succession [Art. 781,
Civil Code]. Kinds of Heirs
1. Compulsory Heirs – Those who
Exceptions succeed to a portion determined by law.
1. Rights and obligations which are not 2. Voluntary or Testamentary Heir –
transmissible Those who succeed according to the
a. By nature: Generally due to decedent’s will:
rights and obligations that are a. Instituted by universal title
strictly personal b. Devisees - Persons to whom
i. Relating to family gifts of real property are given
relations [Art 782, Civil Code]
ii. Arising from civil c. Legatees - Persons to whom
personality gifts of personal property are
iii. Relating to discharge of given [Art 782, Civil Code]
public office 3. Legal or intestate heirs - Those who
b. By stipulation succeed in the absence of a will
c. By provision of law

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 SUCCESSION CIVIL LAW

Compulsory Heirs a. Direct - Degrees among

ascendants & descendants [Art
Article 887, Civil Code. The following 964, Civil Code)
are compulsory heirs: i. Either descending or
(1) Legitimate children and ascending. [Art 965,
descendants, with respect Civil Code]
to their legitimate parents and ii. Ascent is made to the
ascendants; common ancestor. [Art
(2) In default of the foregoing, 966, Civil Code]
legitimate parents and iii. Ex: Child is one degree
removed from parent,
ascendants, with respect to their
two degrees removed
legitimate children and
from grandparent.
descendants; b. Collateral - Degrees among
(3) The widow or widower; persons who are not ascendants
(4) Acknowledged natural children, & descendants, but who come
and natural children by legal from a common ancestor. [Art
fiction; 964, Civil Code]
(5) Other illegitimate children referred i. Ascent is made to the
to in article 287. common ancestor, and
descent is made to the
person with whom
Compulsory heirs mentioned in Nos. 3, 4
computation is made.
and 5 are not excluded by those in Nos. 1
[Art 966, Civil Code]
and 2; neither do they exclude one ii. Ex: Person is two
another. degrees removed from
his brother, three from
In all cases of illegitimate children, their his uncle (brother of his
filiation must be duly proved. father), four from his
first cousin.
The father or mother of illegitimate 3. Blood relationships - May either be full
children of the three classes mentioned, or half. [Art 967, Civil Code]
a. Full blood - Same father and
shall inherit from them in the manner and
mother.
to the extent established by this Code.
b. Half blood - Same father but not
same mother, or same mother
Relationships but not the same father.
Some important principles: 4. If there are several relatives of the same
1. Proximity - Determined by the number degree, but one or some of them are
of generations. unwilling or incapacitated to succeed,
a. Each generation forms a then their portion shall accrue to others
degree. [Art 963, Civil Code] of the same degree. [Art 968, Civil
2. Series of degrees - Forms a line (which Code]
may either be direct or collateral) a. EXC: When the right of
representation exists.

364
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 SUCCESSION CIVIL LAW

Capacity to Succeed 126334 (2001)], and without need of a

General Rule: Determined at the time of death judicial declaration of their status as
of the decedent. [Art 1034, Civil Code] heirs [De Vera v. Galauran, G.R. No.
45170 (1939)];
Exceptions: e. Heirs may also be sued without a
1. Those under paragraphs 2, 3 & 5 of Art previous declaration of heirship,
1032 (must wait for final judgment to be provided there is no pending special
rendered). proceeding for the settlement of estate
2. Those falling under paragraph 4 of Art of the decedent [Gayon v. Gayon, G.R.
1032— when the month allowed for No. L-28394 (1970)];
report expires. f. The possession of hereditary property is
3. If the institution is conditional— when deemed transmitted to the heir without
condition is complied with. interruption and from the moment of
death of the decedent, in case the
inheritance is accepted [Art. 533, Civil
C. OPENING OF SUCCESSION
Code];
Article 777, Civil Code. The rights to g. Estate taxes accrue upon death of the
succession are transmitted from the decedent, even if the heirs come into
moment of the death of the decedent. possession only later.

On Marriage & Succession

Implications a. Future spouses may give each other as
a. The law in effect at the time of death of much as one-fifth of their present
the decedent governs the succession property in their marriage settlements.
[Art. 2263, Civil Code]; b. With regards to future property, such
b. The heir becomes the owner of his donation shall be governed by the
share in the inheritance as well as all provisions on testamentary succession
fruits which accrue to such share upon and the formalities of wills. [Art 132,
the death of the decedent; Civil Code; Art 86, Family Code]
c. Upon the death of the decedent, heirs
may immediately possess, administer, D. REQUISITES FOR
and dispose of their shares in the estate
TRANSMISSION OF
(in the absence of existing debts/claims
SUCCESSIONAL RIGHTS
against the estate). However, while the
estate is under administration, heirs
1. Express will of the testator or provision
cannot compel the administrator to
of law
deliver to them the property inherited
2. Death of the person whose property is
[Arayata v. Joya, G.R. No. L-28067
subject of succession
(1928)];
3. Acceptance of inheritance
d. Since succession takes place by
operation of law at the moment of the
death of the decedent, the heirs can sue
upon the rights of the decedent, without
having to be appointed executor or
administrator [Emnace v. CA, G.R. No.

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On Death of Person Whose Property is II. TESTAMENTARY

Subject of Succession SUCCESSION
When a person may be “presumed” dead for the
purpose of opening succession. [Art 390, Civil
A. WILLS
Code]:
Article 783, Civil Code. A will is an act
No. of years Age at
Disappearance whereby a person is permitted, with the
formalities prescribed by law, to control to
10 years 75 years and below
a certain degree the disposition of his
5 years 76 years and above estate, to take effect after his death.

Extraordinary situations in which a person may

Characteristics
be presumed dead 4 years after the
a. Purely personal act - Cannot be left in
disappearance. [Art 391, CC]:
whole or in part to the discretion of a
1. While on board a lost sea vessel or
3rd person, or accomplished through
missing airplane; or
the instrumentality of an agent or
2. While taking part in war as a member of
attorney. [Art 784, Civil Code]
the armed forces; or
i. Exception
3. Has been in danger of death under
other circumstances shall be presumed What cannot be What may be
dead for the purpose of division of the delegated to 3rd entrusted to 3rd
persons persons
estate.
1. Designation of 1. Designation of
If they reappear or without appearing, their heirs, devisees, and person/institution
existence is proved: Such person may recover legatees falling under a class
the properties in the condition in which they specified by testator
2. Duration/efficacy of
may be found or the price of any alienated
designation 2. Manner of
property may be given to said returning person; distribution of
but he cannot claim either fruits or rents. [Art 3. Determination of property specified by
392, Civil Code]. portions, when testator [Art. 786, Civil
referred to by name Code]
E. KINDS OF SUCCESSION [Art. 785, Civil Code]
Note: The testator
must first specify the
1. Compulsory class and the amount
2. Testamentary of property for proper
3. Legal or Intestate delegation.
4. Mixed
b. Free and Intelligent - If execution of
a will is tainted by any vices affecting a
testator’s free will, the instrument may
be disallowed. [Art 839, CC]
c. Solemn or Formal - If the formalities
of a will required by law are not

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complied with, it will be disallowed. [Art. will are admissible. [Tolentino

839, Civil Code] commentary]
d. Revocable and ambulatory - A will c. Words are to be taken in their ordinary
can be revoked at any time before the & grammatical sense (unless clear
testator’s death. [Art. 828, Civil Code] intention to use them can be gathered)
e. Mortis causa - It takes effect upon the i. If technical, then it shall be
testator’s death. [Art. 783, Civil Code] interpreted technically (unless
f. Individual - There is an absolute context indicates otherwise, or if
prohibition against joint wills. [Art. 818, it was drafted solely by the
Civil Code] testator, he was unacquainted
g. Executed with animus testandi - with the term). [Art 790, CC]
Intent to dispose of the property. d. There shall be preference for
h. Unilateral act - Does not involve an interpretation that makes every
exchange of values or depend on expression or disposition operative. [Art
simultaneous offer and acceptance. 791, CC]
i. Dispositive - Disposes of property. e. When the testator does not state the
j. Statutory grant - Permitted only by extent of the interest to be given to
law, not a constitutional right. their legatee or devisee, it is understood
that the entire interest passes. [Art 794,
Interpretation CC
Testacy is preferred to intestacy. The intent of
the testator is paramount and must be given Law Governing Form
effect as far as legally possible. 1. Time of Execution
Aspect of the Will Governing Law
Rules of Construction & Interpretation
[Arts 788-795, Civil Code] FORMAL VALIDITY Law in force at the
time the will was
executed [Art. 795,
General Rule: Plain and literal meaning of the Civil Code]
will
INTRINSIC VALIDITY Law of decedent’s
nationality at the time
Other Rules of Interpretation
of his death [Arts. 16
a. If a testamentary disposition admits of and 2263, Civil Code].
different interpretations: If there is
doubt, interpret in a way which makes
the disposition operative. [Art 788, CC] 2. Place of Execution
b. Intention of the testator is to be
Place Filipinos Foreigners
ascertained from the words of the will,
taking into consideration the ABROAD Place of Law in the
circumstances in which it was made. Execution or residence,
i. Excludes the oral declarations of PH Law nationality;
the testator as to intention or Philippine law
(Arts. 816,
discernment as to ambiguity in
817)
the will. [Art 789, CC]
ii. By implication, written
declarations made outside the

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PHILIPPINES PH Law Law in the III. TESTAMENTARY CAPACITY

residence,
nationality;
Who May Make a Will
Philippine law
(Arts. 816, General Rule: All persons who are not
817) expressly prohibited by law may make a will [Art
796, CC]
Law Governing Content
Who are prohibited from making a will:
1. Time
1. Under 18 years of age. [Art 797, CC]
a. Decedent died before effectivity
2. Those not of sound mind at the time of its
of the New Civil Code -
execution. [Art 798, CC]
governed by the Civil Code of
1889 and other previous laws.
b. Decedent died after the How to determine if a testator is of
beginning of the effectivity of sound mind?
the New Civil Code - governed At the time of making of the will, he must have
by the New Civil Code, but been capable of understanding:
testamentary provisions shall be 1. The nature of his estate to be disposed
carried out as may be permitted of;
by the Code. 2. Proper objects of his bounty; and
i. Amount may be 3. Character of the testamentary act. [Art
reduced if in no other 799, CC]
manner can every Presumption: Every person is of sound mind.
compulsory heir be
given his full share. Exceptions:
2. Successional rights 1. When the testator, one month or less
before the execution of the will, was
Object of Governing Law
Succession publicly known to be insane. [Art. 800,
Civil Code]
Real or Personal Law of the country in 2. When the testator executed the will
Property which it is situated after being placed under guardianship or
ordered committed, in either case, for
Order of succession, Law of national law of insanity under Rules 93 and 101 of the
amount of the person whose
Rules of Court, and before said order
successional rights, succession is under
intrinsic validity of consideration. [Art 16, has been lifted. [Torres v. Lopez, G.R.
testamentary CC] No. L-25966 (1926); Balane]
provisions
Supervening Incapacity [Art 801, CC]
1. Does not invalidate an effective will
2. Will of an incapable person cannot be
validated by their acquisition of
supervening capacity

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Types of Wills 3. Signatures of the testator/representative

General Rule: Must be in writing and executed and the witnesses on the left hand side
in a language or dialect known to the testator. margin;
4. Page numbers in letters; and
A. NOTARIAL WILLS 5. Acknowledged before a notary public.
a. May be written out or printed,
or partly written and partly
Formal Requirements [Art 805, CC]
printed, engraved or
1. Subscribed to by the testator at the end;
lithographed.
2. Attested and subscribed by 3 or more
witnesses in the presence of the testator
and of one another;
a. When a will is executed in a
certain province or locality, in
the dialect currently used in
such province or locality, there
arises a presumption that the
testator knew the dialect so
used, in the absence of contrary
evidence.

FORMAL REQUIREMENTS

SUBSCRIPTION Signed at the end of the will by:

1. Testator himself; or
2. Testator’s name written by a
representative in his presence and under
his express direction.

Sufficient Signature
Any complete mark or design made by the testator
with the intention that it shall stand for or
represent the testator.

ATTESTATION CLAUSE Attested and subscribed by 3 or more credible

witnesses in the presence of the testator and of
one another. [Art. 805, Civil Code]

The attestation clause shall state the

following [par. 3, Art. 805, Civil Code]:
1. Number of pages;
2. The fact that the testator or his
representative under his express direction
signed the will and every page in the
presence of instrumental witnesses; and
3. That the witnesses signed the will and all
its pages in the presence of the testator
and of one another.

The signatures of the witnesses must be at the

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SUCCESSION CIVIL LAW

bottom of the attestation clause. [Cagro v. Cagro,

G.R. No. L-5826 (1953)]

The notary public cannot be counted as an

attesting witness. [Cruz v. Villasor, G.R. No.
L-32213 (1973)]

Test of presence: Not whether they saw each

other sign, but whether they might have seen each
other sign had they chosen to do so considering
their mental and physical condition and position
with relation to each other at the moment of
inscription of each signature. [Jaboneta v. Gustilo,
G.R. No. 1641 (1906)]

Effect of omissions: Omissions which can be

supplied by an examination of the will itself,
without the need of resorting to extrinsic evidence,
will not be fatal and will not prevent allowance of
the will.

MARGINAL SIGNATURES General Rule: Testator or his representative shall

write his name, and the witnesses shall sign every
page except the last page. [Art. 805, Civil Code]

Exceptions:
1. When the will consists of only one page
signed at the bottom by the testator and
three witnesses;
2. When the will consists of only two pages,
the first of which contains all
dispositions and is signed at the bottom by
the testator and the witnesses, and the
second page contains only the attestation
clause duly signed at the bottom by the
witnesses [Abangan v. Abangan, G.R. No.
L-13431 (1919)];
3. The use of thumbprint was allowed
[Matias v. Salud, G.R. No. L-10751
(1958)];
4. The inadvertent failure of one witness to
affix his signature to one page of a
testament, due to the simultaneous lifting
of two pages in the course of signing, is
not per se sufficient to justify denial of
probate. [Icasiano v. Icasiano, G.R. No.
L-18979 (1964)]

PAGE NUMBERS All the pages of the will shall be numbered

correlatively in letters placed on the upper part of
each page (i.e. Page One of Five Pages). [Art. 805,
Civil Code]

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ACKNOWLEDGED BEFORE A NOTARY PUBLIC The certification of acknowledgement need not be

signed by the notary in the presence of the
testator and the witnesses. [Javellana v. Ledesma,
G.R. L- 7179 (1955)]
1. Must be distinguished from a jurat, which
states that it was merely subscribed and
sworn before the notary. [Azuela v. CA,
G.R. 122880 (2006]
2. Acknowledgement: Certifying before the
notary public that it was a document
executed by the testator.

ADDITIONAL REQUIREMENTS FOR HANDICAPPED 1. Deaf Mute [Art. 807, Civil Code]
TESTATORS a. Testator must personally read the will; or
b. Testator shall personally designate two
persons to read the contents and
communicate it to him in some practicable
manner.
2. Blind [Art. 808, Civil Code]
a. The will shall be read to the testator twice
by one of the subscribing witnesses and by
the notary public acknowledging the will.
b. A testator suffering from glaucoma may be
considered as legally blind. [Garcia v.
Vasquez, G.R. No. L-26615 (1970)]
c. The provision requiring reading of a will
twice to a blind testator also applies to an
illiterate testator. [In Re: Probate of the
Will of Cosico, G.R. No. 246997 (2021)]

Substantial Compliance [Art 809, Civil

Code] B. HOLOGRAPHIC WILLS
Defects and imperfections in the attestation or
language used therein will not render the will The requirements are as follows: [Art 804, 810,
invalid where: Civil Code]
1. There is no bad faith, forgery, fraud, or 1. In writing;
undue and improper pressure and 2. In a language known to the testator;
influence; and 3. Entirely written, dated, and signed in the
2. It was executed and attested in hand of the testator himself.
substantial compliance with all the
requirements of Article 805. PROBATE REQUIREMENT
General Rule: The holographic will itself
Example must be presented for probate [Gan v. Yap,
Where the attestation clause fails to state the G.R. No. L-12190 (1958)].
number of pages upon which the will is written,
if the number of pages are stated elsewhere,
Exception: If there is a photostatic copy or
this is deemed substantial compliance. [Heirs of
xerox copy of the holographic will, it may be
Fedelina Estella v. Jesus Estella, G.R. 245469
(2020)]
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SUCCESSION CIVIL LAW

presented for probate [Rodelas v. Aranza, testator, the effect must be that
G.R. No. L-58509 (1982)]. the entire will is voided or
revoked for the simple reason
Formal Validity of Dispositions that nothing remains in the will
1. If written below the testator’s signature, after that which could remain
they must be dated and signed by the valid.
testator to make it valid as a
testamentary disposition. [Art 812, Civil Probate of Holographic Wills [Art 811,
Code] Civil Code]
2. If a number of dispositions appear in a 1. At least 1 witness who knows the
holographic will, and are signed without handwriting and signature of the
being dated, if the last disposition has a testator must explicitly declare that the
signature and date, this validates the will and signature are in the handwriting
dispositions preceding it. [Art 813, Civil of the testator.
Code] 2. If contested: At least 3 witnesses are
3. If a number of dispositions appear in a required.
holographic will, and are signed without 3. If no competent witnesses are present,
being dated, if the last disposition has a expert testimony may be resorted to.
signature and date, this validates the
dispositions preceding it. [Art 813, Civil Effect of Insertion Written by Another
Code] Person on the Validity of the
4. If there are any insertions, cancellations, Holographic Will
erasures or alterations, the testator
must authenticate it by their full Aspect of the Will Governing Law
signature. [Art 814, Civil Code] After execution, Insertion considered
a. If such change is not without consent of not written. Validity
authenticated by the testator, testator cannot be defeated by
such change is considered not the malice or caprice
of a third person.
made. Thus, “the will is not
thereby invalidated as a whole,
but at most only as regards the After execution, with Will is valid, but
particular words erased, consent of testator insertion shall be
considered void
corrected, or inserted.” [Kalaw v.
Relova, G.R. N. L-40207 (1984)] Contemporaneous to Will is void, because it
b. TO NOTE: In the case of Kalaw the execution of the is not written entirely
v. Relova, the alteration involved will by the testator.
the designation of the testator’s
sole heir. The holographic will
had only one substantial
provision, which was altered by
substituting the original heir
with another, but which
alteration did not carry the
requisite of full authentication
by the full signature of the

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CODICILS &
II. INCORPORATION BY
INCORPORATION BY
REFERENCE
REFERENCE
Article 827, Civil Code. If a will,
executed as required by this Code,
I. CODICILS incorporates into itself by reference any
document or paper, such document or
A. DEFINITION paper shall not be considered a part of
the will unless the following requisites are
Article 825, Civil Code. A codicil is present:
supplement or addition to a will, made (1) The document or paper referred to
after the execution of a will and annexed in the will must be in existence at
to be taken as a part thereof, by which the time of the execution of the
disposition made in the original will is will;
explained, added to, or altered. (2) The will must clearly describe and
A codicil is a supplement to an existing will. It is identify the same, stating among
always related to some prior will, explaining, other things the number of pages
altering or adding to it. thereof;
(3) It must be identified by clear and
If the testator, through a new instrument, makes satisfactory proof as the document
dispositions independent of those in the original
or paper referred to therein; and
(4) It must be signed by the testator
will, without explaining or modifying such an
and the witnesses on each and
original will, then it is a new will.
every page, except in case of
voluminous books of account or
B. SOLEMNITIES inventories.
Article 826, Civil Code. In order that a Note: Not available in holographic wills.
codicil may be effective, it shall be
executed as in the case of a will. Q: Is there a need to attach the document to
It must be executed with the same formalities as the will?
a will, whether it be notarial or holographic, as
the case may be. (Tolentino) A: YES. Requirement no. 4 states that it must be
signed by the testator. Signing presupposes that
the document is attached to the will, otherwise,
how can it be signed by the testator.

Exception: Voluminous records

Codicil Incorporation by Reference

When executed After execution of prior will Prior to the execution of the will

Manner of Executed as in the case of a will No requirement that the document be

execution executed in the same manner as wills

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Contents, Can be construed together with the Adds, supplements; does not contradict
with respect other provisions of the prior will
to prior will Ex: technical descriptions of properties

Effect on Merely explains, adds, or alters; but Adds, supplements; does not contradict
prior will there may be substantial changes
nonetheless

CONFLICT RULES REVOCATION OF WILLS

1. Law on intrinsic validity: Intestate and I. DEFINITION

testamentary successions, (with respect Revocation is an act of the mind, terminating the
to the order of succession and to the potential capacity of the will to operate at the
amount of successional rights and to the death of the testator, manifested by some
intrinsic validity of the testamentary outward and visible act or sign, symbolic thereof.
provisions), shall be regulated by the (Tolentino)
national law of the person whose
succession is under consideration,
II. WHEN REVOCATION MAY BE
whatever may be the nature and location
of the property. [Art 16, Civil Code]
EFFECTED
a. Real property and personal Article 828, Civil Code. A will may be
property = subject to the law of revoked by the testator at any time before
the country where situated. his death. Any waiver or restriction of this
2. Law on extrinsic validity: Forms and right is void.
solemnities shall be governed by the law
of the country where executed.
a. If executed before diplomatic or III. LAW GOVERNING
consular officials in a foreign REVOCATION
country: Solemnities established
Article 829, Civil Code. A revocation
by PH law.
done outside the Philippines, by a person
who does not have his domicile in this
Note: It has been held in Miciano v. Brimo [G.R. country, is valid when it is done according
No. L-22592, (1927)] that a will executed in the to the law of the place where the will was
Philippines providing that the property shall be made, or according to the law of the place
distributed pursuant to Philippine laws, instead of in which the testator had his domicile at
the national law of the Turkish testator is VOID. the time; and if the revocation takes place
in this country, when it is in accordance
If law at execution of the will IS NOT the law at with the provisions of this Code.
time of death: The law at the time of the
testator’s death will apply. It is at the time of
death that the rights are transmitted to the heirs,
devisees, or legatees.

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Place of Testator’s Governing estate distributed in accordance

Revocation Domicile Law therewith, if its contents, and due
Philippines Philippines, or Philippine Law execution, and the fact of its
some other unauthorized destruction,
country cancellation, or obliteration are
established according to the Rules
Outside the Philippines 1. Law of
of Court.
Philippines (This situation Domicile – PH
is not Law
governed by 1. By implication of law;
Art. 829) 2. Law of EXAMPLES:
Place of a. Preterition. [Art. 854, Civil Code]
Revocation; or
b. Legal separation. [Art. 63, Family
3. Law of Code]
Place of c. Unworthiness to succeed. [Art.
Execution. 1032, Civil Code]
2. By the execution of a will, codicil or other
Foreign 1. Law of the
Country Place of writing executed as provided in the case
Execution of of wills (may be total or partial); or
Will; or 3. By burning, tearing, canceling, or
obliterating the will with the intention of
2. Law of the revoking it, by the testator himself, or by
place in which some other person in his presence, and
the testator
by his express direction.
had his
domicile at the
time of The act contemplating revocation must be done
revocation. at any time before the death of the testator. The
right of revocation cannot be waived or restricted.
[Art. 828, Civil Code]
IV. MODES OF REVOCATION
Article 830, Civil Code. No will shall be Note: Even if a holographic will was not intended
revoked except in the following cases: to be revoked, unless a photocopy exists, it can
(1) By implication of law; or no longer be proved.
(2) By some will, codicil, or other
writing executed as provided in
case of wills; or V. DOCTRINE OF DEPENDENT
(3) By burning, tearing, canceling, or RELATIVE REVOCATION
obliterating the will with the
Article 832, Civil Code. A revocation
intention of revoking it, by the
made in a subsequent will shall take effect,
testator himself, or by some other
even if the new will should become
person in his presence, and by his
inoperative by reason of the incapacity of
express direction. If burned, torn,
the heirs, devisees or legatees designated
cancelled, or obliterated by some
therein, or by their renunciation.
other person, without the express
direction of the testator, the will General Rule: A revocation made in a
may still be established, and the subsequent will shall take effect, even if the new
will should become inoperative by reason of:
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1. the incapacity of the heirs, devisees or

legatees designated therein, or VI. DOCTRINE OF PRESUMED
2. by their renunciation.
REVOCATION
Exception: Doctrine of Dependent
It is presumed that a will is revoked:
Relative Revocation [Molo v. Molo, G.R.
(1) Where a will which cannot be found is
No. L-2538 (1951)] shown to have been in the possession of
The rule that where the act of destruction is the testator, when last seen, the
connected with the making of another will so as presumption is, in the absence of other
to fairly raise the inference that the testator competent evidence, that the same was
meant the revocation of the old to depend upon canceled or destroyed.
the efficacy of the new disposition intended to be (2) Where it is shown that the testator had
substituted, the revocation will be conditional and ready access to the will and it cannot be
dependent upon the efficacy of the new found after his death.
disposition; and if for any reason, the new will
intended to be made as a substitute is It will not be presumed that such will has been
inoperative, the revocation fails and the original destroyed by any other person without the
will remain in full force. knowledge or authority of the testator. The force
of the presumption of cancellation or revocation
The failure of the new testamentary disposition by the testator, while varying greatly, being weak
upon whose validity the revocation depends is or strong according to the circumstances, is never
equivalent to the non-fulfillment of a suspensive conclusive, but may be overcome by proof that
condition and hence prevents the revocation. the will was not destroyed by the testator with
intent to revoke it. [Gago v. Mamuyac, G.R. No.
It must appear that the revocation is dependent L-26317 (1927)]
upon the valid execution of a new will.

VI. EFFECT OF REVOCATION

Q: Whether the destruction or revocation was
with the absolute intent to revoke at all events,
OR only in case the new will is well and 1. If a subsequent will doesn’t revoke the
completely executed and operative, or previous one expressly, only inconsistent
conditionally on the effectual execution of the or contrary dispositions in the prior wills
new instrument will be annulled. [Art 831, Civil Code]
● A question of fact to be proved by any 2. When revocation made in a subsequent
competent evidence. will shall take effect: Even if new will
becomes inoperative due to incapacity of
Article 832 contemplates a case where a the heirs, devisees, or legatees
subsequent will revokes a prior one, and the designated, or by renunciation. [Art 832,
validity of the later will is established, but its Civil Code]
provisions cannot be carried out because of the 3. If revocation is based on false or illegal
incapacity of or renunciation by the beneficiaries cause: Null and void [Art 833, Civil Code]
named therein. 4. If will is revoked, recognition of an illegal
child shall retain legal effect. [Art 834,
Civil Code]

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 SUCCESSION CIVIL LAW

To reconcile, Art. 836 must be considered as the

general rule and Art. 835 the exception.
[Tolentino]

Art. 835 Art. 836

Article 835, Civil Code. The testator
cannot republish, without reproducing in a Void as to form [Art. Void as to:
subsequent will, the dispositions contained 805, Civil Code] 1. Non-formal
in a previous one which is void as to its defect
form. 2. Previously
revoked
Article 836, Civil Code. The execution of How to Republish: How to Republish:
a codicil referring to a previous will has the 1. Execute new will 1. Execute new will or
effect of republishing the will as modified 2. Copy out the codicil
by the codicil. provisions from the 2. Simply make
original void will references to old will
Article 837, Civil Code. If after making a
will, the testator makes a second will Reference to original Reference to original
expressly revoking the first, the revocation insufficient sufficient
of the second will does not revive the first
will, which can be revived only by another
will or codicil.

I. REPUBLICATION VS. REVIVAL

Republication Revival

● Takes place by an ● Takes place by

act of the operation of law I. ALLOWANCE
Testator ● Restores a
● Corrects extrinsic revoked will Article 838, Civil Code. No will shall pass
and intrinsic either real or personal property unless it is
defects proved and allowed in accordance with the
Rules of Court.
II. PROVISIONS ON The testator himself may, during his
REPUBLICATION lifetime, petition the court having
jurisdiction for the allowance of his will. In
Articles 835 and 836 conflict with each other: such a case, the pertinent provisions of the
● Art. 836 – duly executed codicil operates Rules of Court for the allowance of wills
as a republication of the original will after the testator’s death shall govern.
● Art. 835 – a will void as to its form cannot
be republished by mere reference, but The Supreme Court shall formulate such
must be reproduced in the subsequent additional Rules of Court as may be
document necessary for the allowance of wills on
petition of the testator.

Subject to the right of appeal, the

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allowance of the will, either during the explicitly declare that the will and the
lifetime of the testator or after his death, signature are in the handwriting of the
shall be conclusive as to its due execution. testator. If the will is contested, at least
Before any will can have force or validity, it must three of such witnesses shall be required.
be probated.
In the absence of any competent witness
referred to in the preceding paragraph, and
Concept of Probate if the court deem it necessary, expert
To probate a will – to prove before some officer or testimony may be resorted to.
tribunal, vested by law with authority for that
purpose:
(1) That the instrument offered to be proved Effect of Allowance of Wills
is the last will and testament of the After allowance or disallowance, and no appeal is
deceased person whose testamentary act taken in due time to such an order, the matter of
it is alleged to be; due execution of the will and the capacity of the
(2) That it has been executed, attested and testator acquire the character of res judicata and
published as required by law; and cannot again be brought into question.
(3) That the testator was of sound and
disposing mind. The order allowing a will, with respect to the due
execution and capacity of the testator is
All the law requires is that the competent court conclusive as against the whole world. Proceeding
declare that in the execution of the will, the is one in rem.
essential external formalities have been complied
with and that in view thereof, the document, as a Scope of Probate Proceedings [Art.
will, is valid and effective in the eyes of the law. 839, Civil Code]
● During probate, the ownership of General Rule: The probate court cannot inquire
property subject to distribution cannot be into the intrinsic validity of testamentary
discussed. provisions. Only the extrinsic validity of such wills
● It is a civil proceeding to establish the may be examined.
validity of the will.
● Authentication = Probate Exceptions
1. When practical considerations demand that
Modes of Probate: the intrinsic validity of the will be resolved:
1. Post-mortem: after death; When the will is intrinsically void on its face
2. Ante-mortem: during the testator’s (e.g., when there is clearly a preterition) such
lifetime (governed by Rule 76, ROC). that to rule on its formal validity would be a
Note: Probate of a will is mandatory. futile exercise; [Acain v. IAC, G.R. No.
L-72706 (1987)]
Requirements for probate of a 2. Claimants are all heirs and they consent,
holographic will either expressly or impliedly, to the
submission of the question of intrinsic validity
Article 811, Civil Code. In the probate of to the court; [Valera v. Inserto, G.R. No.
a holographic will, it shall be necessary L-56504 (1987)]
that at least one witness who knows the 3. Probate court may pass upon the title to a
handwriting and signature of the testator property, but such determination is

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provisional and not conclusive, and is subject property of his spouse, descendants, or
to the final decision in a separate action to ascendant. [Art 1335, Civil Code]
resolve title; [Pastor v.CA, G.R. No. L-56340 3. Undue Influence: A person takes
(1983)] improper advantage of his power over the
4. Probate court may decide on the ownership will of another, depriving the latter of a
of a property when the estate contains only reasonable freedom of choice. [Art 1337,
one property to be adjudicated upon. Civil Code]
[Portugal v. Portugal Beltran, G.R. No. 155555 4. Fraud: Through insidious words or
(2005)] machinations of one of the contracting
parties, the other is induced to enter into
II. DISALLOWANCE a contract which, without them, he would
not have agreed to. [Art 1338, Civil Code]
Article 839, Civil Code. The will shall be
disallowed in any of the following
cases:
(1) If the formalities required by law
have not been complied with;
(2) If the testator was insane, or
otherwise mentally incapable of
making a will, at the time of its
execution; I. INSTITUTION OF HEIRS IN
(3) If it was executed through force or
GENERAL
under duress, or the influence of
fear, or threats;
(4) If it was procured by undue and A. DEFINITION
improper pressure and influence, Article 840, Civil Code. Institution of
on the part of the beneficiary or of heir is an act by virtue of which a testator
some other person; designates in his will the person or persons
(5) If the signature of the testator was who are to succeed him in his property and
procured by fraud; transmissible rights and obligations.
(6) If the testator acted by mistake or
did not intend that the instrument
he signed should be his will at the B. REQUISITES FOR VALID
time of affixing his signature INSTITUTION OF HEIRS
thereto.
Article 785, Civil Code. The duration or
efficacy of the designation of heirs,
Definition of Certain Terms devisees or legatees, or the determination
1. Violence: in order to wrest consent, of the portions which they are to take,
serious or irresistible force is employed. when referred to by name, cannot be left
[Art 1335, Civil Code] to the discretion of a third person. (670a)
2. Intimidation: To give consent, one of the
contracting parties is compelled by a Article 787, Civil Code. The testator may
reasonable and well-grounded fear of an not make a testamentary disposition in
imminent and grave evil upon his person such manner that another person has to
or property, or upon the person or determine whether or not it is to be
operative.

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Effect of Prohibited Disposition Extent of Grant

It is not only the delegation that is VOID; the Freedom of disposition depends upon the
testamentary disposition whose effectivity will existence, kind and number of compulsory heirs.
depend upon the determination of the third 1. No compulsory heirs – Testator has full
person is the one which cannot be made. The power of disposition.
disposition itself is VOID. [Tolentino] 2. With compulsory heirs – Testator
cannot disregard the rights of the
C. EFFECT IF WILL INSTITUTES NO compulsory heirs. Testator may dispose of
HEIR the free portion of his estate only.
A will shall be valid even though it —
1. Should not contain an institution of an E. MANNER OF DESIGNATING AN
heir; or HEIR
2. Should not comprise the entire estate; or
3. The person so instituted should not General Rule: Testator shall designate the heir
accept the inheritance or be incapacitated by his name & surname. [Art 843, Civil Code]
to succeed.
Other Possible Situations
In such cases, the testamentary dispositions 1. If two persons have the same name, they
made in accordance with law shall be complied shall indicate a circumstance in which the
with and the remainder of the estate shall pass to heir may be known.
the legal heirs. [Art. 841, Civil Code] 2. It is also possible to designate an heir
despite omission of name if it is done
A person can die partly testate, and partly where there is no doubt as to who is
intestate, and a will is not invalidated by the mere referred to. [Art 843, Civil Code]
omission of an heir. 3. Error in name, surname or circumstances
will not vitiate the institution if they can
The heir may be instituted to succeed to the ascertain who the person is to be
whole or to an aliquot part of the inheritance. instituted. [Art 844, Civil Code]
● The existence of the institution does not
depend upon the designation or name
On What Proof may be Used to Correct
which the testator gives to his
the Will or Fill In Omissions [Art 786]
testamentary disposition.
1. Intention is to be ascertained from the
words of the will, taking into
D. FREEDOM OF DISPOSITION
consideration the circumstances under
Article 842, Civil Code. One who has no which it was made, excluding such oral
compulsory heirs may dispose by will of all declarations.
his estate or any part of it in favor of any 2. Oral evidence shall be excluded.
person having capacity to succeed.
Identification of Heirs
One who has compulsory heirs may If the institution leaves no doubt as to who is
dispose of his estate provided he does not designated, the will of the testator must be
contravene the provisions of this Code with complied with; and vice versa, if the doubt as to
regard to the legitime of said heirs.
who is instituted cannot be resolved, then it is the
same as if the testator has not expressed his will.

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F. DISPOSITION IN FAVOR OF AN ● Where determination of an heir is

UNKNOWN PERSON; OF A delegated to another.(VOID under Art.
DEFINITE CLASS 785)
● Where the designated heir had no
Article 845, Civil Code. Every disposition capacity to succeed at the time of the
in favor of an unknown person shall be death of the testator. (VOID)
void, unless by some event or
circumstance his identity becomes certain.
Institution of Class
However, a disposition in favor of a
The law allows testamentary dispositions in favor
definite class or group of persons shall
of a definite class or group of persons. Members
be valid.
of such, if existing and have the capacity to
succeed at the time of death, are considered as
Article 786, Civil Code. The testator may called to the succession.
entrust to a third person the distribution of
specific property or sums of money that he Special provisions for disposition in favor of:
may leave in general to specified classes or ● Relatives of the testator – Art. 959
causes, and also the designation of the ● Brothers and sisters, full and half blood –
persons, institutions or establishments to Art. 848
which such property or sums are to be ● A person and his children – Art. 849
given or applied. ● Of the poor in general – Art. 1030

Certainty of Identity In instituting a class, he may designate the

The heir is “known” when: distribution to a third person. As well as the
(1) He is individually determined or specified designation of the persons within the class or
(2) Necessary elements for the determination group to whom the property or money shall be
of his identity are given in the will. given. [Art. 786, Civil Code]

What nullifies the disposition is the absolute G. EQUALITY OF HEIRS

uncertainty of the identity of the heir, because it Article 846, Civil Code. Heirs instituted
cannot be determined from the will who is without designation of shares shall inherit
intended to be favored. in equal parts.
General rule: The will (express or presumed) of
Event Determining Identity the testator is the law that should govern
The determinate event or circumstances, succession. In the absence of express
sufficient to indicate with certainty the person designation, presumption is for the heirs to inherit
whom the testator wants to favor, must appear in in equal parts.
the will itself.
● Cannot be shown by extrinsic evidence, This rule, however, is not absolute. This rule only
either oral or documentary. refers to heirs of the same class or juridical
condition and to the free portion of the
Institution Ineffective inheritance.
There are cases where the institution of an ● When one is compulsory and the other is
unknown is VOID despite a future event in which a voluntary heir – the legitime of the
he can be determined. former must first be separated.

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● If the shares of those whose portions are K. INSTITUTION BASED ON A FALSE

designated consume the entire estate, CAUSE
those whose shares are not designated
will inherit nothing. Article 850, Civil Code. The statement of
a false cause for the institution of an heir
shall be considered as not written, unless it
Aliquot Parts Designated
appears from the will that the testator
If the testator expressly designates the share or
would not have made such institution if he
aliquot part of each heir, and such exceed the
had known the falsity of such cause.
amount of the inheritance, or less than such
inheritance, the solution will depend upon the
intention of the testator and the circumstances of Statement of False Cause
each case. [Arts. 851, 852, 853, Civil Code] Requisites for annulment of institution by reason
of false cause [Tolentino]
(1) The cause for the institution of heirs must
Article 848, Civil Code. If the testator
be stated in the will;
should institute his brothers and sisters,
(2) The cause must be shown to be false;
and he has some of full blood and others
and
of half blood, the inheritance shall be
distributed equally unless a different (3) It must appear on the face of the will that
intention appears. the testator would not have made such
institution if he had known the falsity of
the cause.
I. INDIVIDUALITY OF
INSTITUTION L. SHARES IN THE INSTITUTION
Article 847, Civil Code. When the
testator institutes some heirs individually Possible Situations
and others collectively as when he says, "I 1. Testator institutes only 1 heir, and the
designate as my heirs A and B, and the institution is limited to an aliquot part of
children of C," those collectively designated the inheritance: The rest of the estate will
shall be considered as individually be governed by legal succession. [Art
instituted, unless it clearly appears that the 851, Civil Code]
intention of the testator was otherwise. 2. If the testator intended for the
designated heirs to inherit the entire
estate or a specific portion, and each heir
Presumption of Equality
is named to receive a fractional share
Such presumption is based on the fact that there
that, when combined, falls short of
exists no reason for presuming the contrary if the
covering the entire estate or designated
testator has not clearly shown such contrary
portion, then each heir's share will be
intention.
proportionally increased to collectively
cover the intended inheritance. [Art 852,
J. SIMULTANEITY OF INSTITUTION
Civil Code]
Article 849, Civil Code. When the 3. If each instituted heir was given an
testator calls to the succession a person aliquot part of the inheritance, and
and his children they are all deemed to added, it exceeds the entire inheritance
have been instituted simultaneously and or free portion, the parts shall be reduced
not successively. proportionally. [Art 853, Civil Code]

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Article 852 is similar to Art. 851 (par. II. KINDS OF INSTITUTION

2). The difference is:
Par. 2, Art. 851 Art. 852 A. SIMPLE OR PURE
Heirs are not Heirs are instituted as Article 777, Civil Code. The rights to the
instituted as sole heirs the only heirs to the succession are transmitted from the
to the entire estate; entire inheritance; moment of the death of the decedent.

Heirs are limited to Entire estate passes to

their aliquot parts and the instituted heirs B. CONDITIONAL
the remainder passes plus their shares
Article 871, Civil Code. The institution of
to legal heirs. proportionally
increases by the
an heir may be made conditionally, or for a
portion not covered by certain purpose or cause.
their aliquot parts.

C. INSTITUTION WITH A TERM

M. PREDECEASE OF HEIRS The testator may designate the day or time when
the effects of the institution of an heir may
Article 856, Civil Code. A voluntary heir commence, or cease to be valid.
who dies before the testator transmits
● Heir is called to succession until the
nothing to his heirs.
arrival of the period or expiration.
● Shall not enter into possession of the
A compulsory heir who dies before the
property until after giving sufficient
testator, a person incapacitated to succeed,
security. [Art 885, Civil Code]
and one who renounces the inheritance,
shall transmit no right to his own heirs
except in cases expressly provided for in D. MODAL
this Code.
This institution is one where the testator states
the:
Heirs Who Transmit No Rights
1. The object of the institution;
General principle: No one can transmit to
2. The purpose of application of property
another more rights than what he himself has.
left by the testator; or
● Whether the heir be legal, voluntary, or
3. The charge imposed by the testator upon
compulsory, his death before the testator
the heir. [Art. 882, Civil Code]
or decedent, or his incapacity to succeed,
or his repudiation or renunciation of the
inheritance, prevents him from acquiring
How the object may be claimed:
any rights. 1. Give security for compliance with the
● The right of representation is not an wishes of the testator.
exception to this rule because the one 2. If they disregard the obligation, they may
representing does not acquire the return anything they may receive (with
inheritance from the one represented. fruits and interests). [Art 882, Civil Code]

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Mode v. Condition [Tolentino] 3. Should be incapacitated to accept the

● Mode” imposes an obligation upon their inheritance.
heir or legatee, but it does not affect the
efficacy of his rights to succession. b. Brief or Compendious [Art. 860,
● The condition is fulfilled in order to Civil Code]
acquire a perfect right as heir or legatee,
while the mode is complied with because Brief – Two or more persons were designated by
of being already the heir or legatee. the testator to substitute for only one heir.
● Statement shall not be considered as a
condition unless it appears that such was Compendious – One person is designated to
his intention. [Art 882, Civil Code] take the place of two or more heirs.

Constructive Compliance c. Reciprocal [Art. 861, Civil Code]

If institution cannot be done in the exact manner If the heirs instituted in unequal shares should be
in the statement, it must be complied with in a reciprocally substituted, the substitute shall
manner most analogous and in conformity with acquire the share of the heir who dies,
his wishes. [Art 883, Civil Code] renounces, or is incapacitated, unless it clearly
appears that the intention of the testator was
III. SUBSTITUTION OF HEIRS otherwise. If there is more than one substitute,
they shall have the same share in the substitution
as the institution.
A. CONCEPT
Article 857, Civil Code. Substitution is Example (only 1 substitute): If two heirs are
the appointment of another heir so that he reciprocally substituted, then if one of them dies
may enter into the inheritance in default of before the testator dies, renounces, or turns out
the heir originally instituted. to be incapacitated, the other will get his share,
The substitute shall be subject to the same regardless of whether or not their shares are
charges and conditions imposed upon the equal.
instituted heir, unless the testator has expressly
provided the contrary, or the charges or Example (more than 1 substitute): A is
conditions are personally applicable only to the instituted to 1/3, B to 1/6, and C to ½. If C dies
heir instituted [Art. 862, Civil Code]. before the testator, renounces or turns out to be
incapacitated, then the other two will get his
B. KINDS [ART. 858, CIVIL CODE] shares in the same proportion as in the
institution. A will get twice as much as B (because
his share of 1/3 in the institution is twice the size
a. Simple Substitution [Art. 859,
of B’s share of 1/6).
Civil Code]
The testator may designate one or more persons
d. Fideicommissary [Art. 863-869,
to substitute the heir/s instituted in case the heirs
Civil Code]
should:
1. Die before him;
2. Should not wish to accept the inheritance Requisites
(repudiation); or 1. A fiduciary or first heir instituted is
entrusted with the obligation to preserve
and to transmit to a Fideicommissary
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Substitute or second heir the whole or C. TIME-LIMITATION ON

part of the inheritance. INALIENABILITY [ART. 870, CIVIL
2. The substitution must not go beyond one CODE]
degree from the heir originally instituted.
3. The Fiduciary Heir and the Article 870, Civil Code. The dispositions
Fideicommissary are living at the time of of the testator declaring all or part of the
the death of the testator. estate inalienable for more than twenty
4. The fideicommissary substitution must be years are void.
expressly made.
5. The fideicommissary substitution is Purpose and Scope
imposed on the free portion of the estate Testator cannot declare the legitime of any
and never on the legitime. compulsory heir as inalienable.
● The right to impose the condition of
In the absence of an obligation on the part of the inalienability is limited to the portion of
first heir to preserve the property for the second the estate of which he can dispose, BUT
heir, there is no fideicommissary substitution. it still cannot exceed 20 years.
[PCIB v. Escolin, G.R. Nos. L- 27860 and L-27896 ● If the period fixed is more than 20 years,
(1974)] the property becomes free after 20 years.

Effects of predecease of the first

heir/fiduciary or the second
heir/fideicommissary:
Situation 1: If the heir dies followed by the
second heir, then the testator dies, who will
inherit? The legal heirs. There is no
fideicommissary substitution because first and
second heirs are not living at the time of the 3 Kinds of Testamentary Disposition:
testator’s death. [Art. 863, Civil Code] 1. Conditional [Art. 871, Civil Code];
2. Dispositions with a term [Art. 885, Civil
Situation 2: The testator dies first followed by Code];
the second heir. The first heir survived them but 3. Dispositions with a mode/modal
subsequently dies, who will inherit? The second disposition [Art. 882, Civil Code].
heir and his heirs under Art. 866, Civil Code. This
is because the second heir passes his rights to his I. CONDITIONAL
own heirs when he dies before the first heir.
Article 871, Civil Code. The institution of
Situation 3: If the first heir dies, followed by the
an heir may be made conditionally, or for a
certain purpose or cause.
testator, then the second heir, who will inherit? No
specific provision in law, but the second heir Condition – any future and uncertain fact or
inherits because the testator intended him to event on the happening of which a juridical act is
inherit. made to depend.

Condition Not Presumed

If the condition does not appear in the testament
itself, or in a document executed with the same

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formalities as a will, it cannot be enforced. It will

the testator or of any other person shall be
be considered as pure.
void.
This is also called a disposition captatoria.
A. KINDS

Disposition Captatoria
a. Inoperative or Void (872-875
To allow such dispositions will be:
re: 1183)
(1) To convert testamentary dispositions into
Article 872, Civil Code. The testator contractual agreements;
cannot impose any charge, condition, or (2) To impair the heir’s freedom of
substitution whatsoever upon the legitimes testamentary disposition; and
prescribed in this Code. Should he do so, (3) To allow the testator to dispose of the
the same shall be considered as not heir’s property.
imposed.
Encumbrances, conditions, or substitutions of any Such dispositions are incompatible with good faith
kind, imposed upon the legitime, do not affect the and with the nature of testaments; it is immoral
right of compulsory heir. and contrary to the freedom to make wills.
● They are simply disregarded; considered [Tolentino]
as not written.
● Compulsory heir’s right to the legitime is b. Compliance (876-877, 2nd par.)
free, unencumbered, and pure.
Kinds of Conditions
Examples of Impossible Void or (1) Potestative condition – one which
Inoperative Conditions [Art 873, Art depends exclusively upon the will of the
1183, Civil Code] heir, devisee or legatee, and must be
1. Impossible conditions; performed by him personally ; does not
2. Contrary to law or good morals. admit of performance by a third person,
even if the testator stressed more upon
the act than upon the person of the heir,
Condition not to Marry [Art 874, Civil
devisee or legatee in imposing the
Code]
condition.
Subsequent (2) Casual condition – one that does not
First Marriage
Marriage depend upon the will of the heir, devisee,
Always void; condition General rule: Void or legatee, but upon chance and/or upon
containing it is Exception: valid when the will of a third person.
considered not imposed upon a (3) Mixed condition – when it depends
widow or widower by jointly upon the will of the heir, devisee,
written.
the deceased spouse, or legatee and upon chance and/or the
his ascendants, or
will of a third person.
descendants.

Fulfillment of Conditions [Tolentino]

Article 875, Civil Code. Any disposition

Potestative Casual/Mixed
made upon the condition that the heir shall
make some provision in his will in favor of Must be fulfilled after May be fulfilled either

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the death ofthe before or after such

testator death, unless the c. Effect (879, 880, 881, 884)
testator provided
Except when it has otherwise Article 879. If the potestative condition
already been fulfilled imposed upon the heir is negative, or
and is of such nature consists in not doing or not giving
that it cannot be something, he shall comply by giving a
repeated security that he will not do or give that
To be performed by Immaterial to the
which has been prohibited by the testator,
the heir, devisee, or testator when the and that in case of contravention he will
legatee in obedience to condition happens return whatever he may have received,
the wishes of the unless he knew at the together with its fruits and interests.
testator. time, he made his will
that it had already
There is really no happened. Negative Potestative Condition
testamentary Such a person instituted under a negative
disposition to obey In the last case, it is condition has a perfect right to the hereditary
until the death of presumed that he property from the moment the succession opens.
testator. wants it to be fulfilled ● Such right continues until the moment
anew, but such a
when he violates the negative condition.
condition will be
considered fulfilled if it
cannot be repeated. So long as the condition has not been violated, he
is entitled to the possession and enjoyment of the
property.
Constructive Compliance ● The law secures the rights of those who
Is constructive compliance sufficient? would succeed to the property upon
Potestative Casual/Mixed violation of the condition by requiring the
conditional heir to give bond (caucion
YES. NO.
Muciana of the Roman law).
It may happen that the Since the performance
heir, devisee, or does not depend on Who may demand bond:
legatee willingly obeys the will of the heir, (1) Substitute heirs, if appointed;
the wishes of the devisee or legatee, (2) If no substitute, the co-heirs who may
testator, doing all that there must always be
acquire the property by right of accretion;
is in his power towards fulfillment as a fact or
the realization of the actual compliance. (3) If there are no such co-heirs, the legal
condition, which, heirs who would get the property by
however, is not fulfilled intestacy.
for reasons not
imputable to his fault In case of violation, the fruits must be returned
or neglect.
together with the thing itself and with interest.
Can admit of
constructive If the bond is not furnished, the property shall be
compliance, unless the placed under administration until the condition is
testator’s will to the fulfilled or it becomes certain that it cannot be
contrary is clearly fulfilled.
manifest.

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● Heir is placed in the same position as one inheritance should be

whose institution is subject to a delivered to the heir.
suspensive condition.
A caución muciana, No caución muciana
or bond, has to be required.
Article 880, Civil Code. If the heir be posted by the legal or
instituted under a suspensive condition or intestate heirs.
term, the estate shall be placed under
administration until the condition is B. EFFECTS
fulfilled, or until it becomes certain that it
cannot be fulfilled, or until the arrival of
the term. Term Distinguished from Condition
While a condition is an uncertain event which may
The same shall be done if the heir does not or may not happen, a term is sure to happen or
give the security required in the preceding to arrive, even if the exact date of such
article. happening or arrival may be uncertain.

Like the condition, the term may either be

Administration under Suspensive suspensive or resolutory.
Condition ● It is suspensive (ex die) when the
The right of the heir is not definitely transmitted inheritance can be delivered to the heir
to him until the condition is fulfilled. [Art 880] only upon the arrival of the term.
● It is resolutory (in diem) when the
II. WITH A TERM inheritance is delivered immediately to
the instituted heir, who holds it until the
Article 885 par 1, Civil Code. The arrival of the period.
designation of the day or time when the
effects of the institution of an heir shall Effect of Suspensive Term
commence or cease shall be valid. The heir instituted under a suspensive term
acquires his right from the moment of the
A. KINDS testator’s death. Therefore, even if such heir
should die before the term arrives, his right is no
Article 878, Civil Code. A disposition longer affected.
with a suspensive term does not prevent
the instituted heir from acquiring his rights Effect of Suspensive Condition
and transmitting them to his heirs even
Successional rights in institutions with a
before the arrival of the term.
suspensive condition are transmitted only upon
A term may either be suspensive or resolutory. the happening of the condition.

Suspensive Resolutory The death of the heir, devisee, or legatee before

the happening of the suspensive condition
Before the arrival of Before the arrival of the renders the testamentary disposition inoperative
the term, the property term, the property and without effect.
should be delivered to should be delivered to
the legal or intestate the instituted heir.
heirs. Upon the arrival
of the term, the

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legitimate child of the adopters

and both shall acquire the
reciprocal rights and obligations
arising from the relationship of
parent and child.” [Art. 189, FC]
2. Secondary: Those who succeed only in
I. LEGITIME the absence of the primary compulsory
heirs:
It is that part of the testator’s property which he a. Legitimate Parents and
cannot dispose of because the law has reserved it Legitimate Ascendants, with
for his compulsory heirs. [Art. 886, Civil Code] respect to their Legitimate
Children and Descendants.
b. The illegitimate parents are
Classes of Compulsory Heirs [Art. 887,
compulsory heirs ONLY when the
Civil Code]: deceased does not have
1. Primary: Legitimate Children and legitimate or illegitimate children
Legitimate Descendants with respect to or descendants.
their Legitimate Parents and Ascendants. 3. Concurring: Those who succeed
a. Legitimated and adopted children together with the primary or the
fall under this. secondary compulsory heirs:
b. “Children who are legitimated a. Surviving Spouse: requires that
shall enjoy the same rights as there should have been a valid
legitimate children.” [Art. 272, marriage between the deceased
CC] and the survivor.
c. “For civil purposes, the adopted b. Illegitimate Children
shall be deemed to be a

TABLE OF THE AMOUNT OF LEGITIME REGARDING TESTATE SUCCESSION

SURVIVING LEGITIMATE SURVIVING ILLEGITIMATE LEGITIMATE ILLEGITIMATE

RELATIVES CHILDREN SPOUSE CHILDREN PARENTS PARENTS
(LC) & (SS) (ILC) (LP) & (ILP)
DESCENDANTS ASCENDANTS

LC 1⁄2 of the estate

in equal portions
[Art. 888]

1 LC & SS 1⁄2 of the estate 1⁄4 of the

[Art. 888] estate taken
from the free
portion [Art.
892, par. 1]

2 or more LC, 1⁄2 of the estate Same portion

SS in equal portions as 1 LC [Art.
[Art. 888] 892, par. 1]

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LC & ILC 1⁄2 of the estate Each ILC gets

in equal portions 1⁄2 share of 1
[Art. 888] LC
[Art. 176, FC]

If 2 LC, 4 ILC,
no free portion
left.

1 LC, 2 or 1⁄2 of the estate 1⁄4 of the 1⁄2 share of 1

more ILC, SS [Art. 888] estate; LC [Art. 176, FC]
preferred
over ILC [Art. May suffer
892, par. 1] reduction pro
rata because
share of SS is
given preference
[Art. 895, last
par.]

2 or more LC, 1⁄2 of the estate Same as the 1⁄2 share of 1

SS, ILC in equal portions share of 1 LC LC [Art. 176, FC]
[Art. 888] [Arts 892,
par. 2, 897,
and 898]

LP alone 1⁄2 of the

estate, whether
they survive
alone or with
compulsory
heirs [Art. 889]

LP and ILC 1⁄4 in equal 1⁄2 of the

portions [Art. estate [Art.
896] 889]

LP & SS 1⁄4 of the 1⁄2 of the

estate [Art. estate [Art.
893] 889]

LP, SS, ILC 1⁄8 of the 1⁄4 in equal 1⁄2 of the

estate [Art. shares estate [Art.
899] [Art. 896] 889]

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ILC alone All together get

1⁄2 of the estate
[Art. 901]. They
divide this
portion equally.

ILC, SS 1/3 of the All the children

estate [Art together divide
894] 1⁄3 of the estate
equally [Art.
894]

SS alone GR: 1⁄2 of

the estate

Exception:
marriage in
articulo
mortis and
testator dies
within 3
months from
marriage –
1/3 [Art. 900]

Exception to
the
exception:
Have been
living
together as
husband and
wife for more
than 5
years–1⁄2

ILP alone 1⁄2 of the estate

[Art. 903]

ILP, SS 1⁄4 of the 1⁄4 of the estate

estate [Art. 903]
[Art. 903]

ILP and [depends as the [depends as the None [Art 903]

children of case may be] case may be]
any class

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Amount of Legitime children shall be entitled to 1/4 of

● Legitimate children and the estate. [Art 899, Civil Code]
descendants: 1/2 of the estate of the ○ Only widow or widower survives:
parents. The parents may freely dispose ½ of estate
of the remaining half, subject to the ● Illegitimate children: 1/2 of the
rights of illegitimate children and of the legitime of each of the legitimate children
surviving spouse [Art. 888, Civil Code] or descendants.
● Legitimate parents or ascendants:
1/2 of the estate of their children and ○ The legitime shall be taken from
descendants. The latter may freely the free portion.
dispose of the other half, subject to the ○ The legitime of the surviving
rights of illegitimate children and of the spouse must first be fully
surviving spouse. [Art 889, Civil Code] satisfied. [Art 895, Civil Code]
● Surviving Spouse: legitime is taken ○ Illegitimate children + legitimate
from the free portion. parents or ascendants of the
○ 1 Legitimate child/descendant deceased → illegitimate children
and surviving spouse survives → are entitled to ¼ of the estate.
widow or widower is entitled to [Art 896, Civil Code
1/4 of the estate. ○ Only illegitimate children survive:
○ 2 or more legitimate children or ½ of estate [Art 901, Civil Code]
descendants and surviving ● Illegitimate Parents
spouse → the surviving spouse is
○ Illegitimate parents only: ½ of
entitled to a portion equal to the
estate
legitime of each of the legitimate
children or descendants. [Art ○ Illegitimate parents + widow or
892, Civil Code] widower survives → the legitime
of the parents is ¼ of the estate
○ Surviving spouse and legitimate
of the child, and that of the
ascendants → the spouse shall
surviving spouse also ¼ of the
inherit 1/4 of the estate. [Art
estate.
893, Civil Code]
○ Surviving spouse + illegitimate
children → the spouse shall be Specific Rules on Legitime
entitled to 1/3 of the estate and a. Direct Descending Line
the illegitimate children to 1/3 as i. Rule of Preference between lines.
well. [Art 894, Civil Code] [Arts. 978 and 985, Civil Code]
1. Those in the direct
○ Widow or widower + legitimate descending line shall
children or descendants + exclude those in the
illegitimate children → surviving direct ascending and
spouse shall be entitled to a collateral lines; and
portion equal to the legitime of 2. Those in the direct
each of the legitimate children ascending line shall
[Art 897, Civil Code] exclude those in the
○ Widow or widower + legitimate collateral line.
parents or ascendants + 3. Rule of Proximity [Art.
illegitimate children → surviving 962, Civil Code]: The
spouse shall be entitled to 1/8 of relative nearest in degree
the estate and the illegitimate excludes the farther one.

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ii. Right of representation ad c. Rule of Equal Division

infinitum in case of predecease, i. The relatives who are in the same
incapacity, or disinheritance [Arts. degree shall inherit in equal
972 and 992, Civil Code] shares. [Art. 987, Civil Code]
1. For decedents who are d. Legal Separation of Spouses
Legitimate Children, the
i. The surviving spouse may inherit
Legitimate and if it was the deceased who had
Illegitimate Descendants given cause for the same. [Art
are entitled to right of 892, Civil Code]
representation. [Aquino
v. Aquino, G.R. No. e. Marriage in Articulo Mortis
208912 (2021)] i. If the marriage between the
2. For decedents who are surviving spouse and the testator
Illegitimate Children, was solemnized in articulo mortis,
both the Legitimate and and the testator died within three
the Illegitimate months from the time of the
Descendants can marriage, the legitime of the
represent, only with surviving spouse as the sole heir
respect to the decedent’s shall be 1/3 of the estate.
illegitimate parents.
iii. If all the Legitimate Children ii. EXCP: when they have been
repudiate their legitime, the next living as husband and wife for
generation of Legitimate more than five years. In such a
Descendants may succeed in case, the legitime of the spouse
their own right. shall be 1/2. [Art 900, Civil Code]
f. No Burden or Conditions on Legitime
b. Direct Ascending Line i. Testator cannot impose upon the
i. Rule of division between lines legitime any burden,
1. The father and the encumbrance, condition, or
mother shall inherit substitution of any kind
equally if both living. One whatsoever. [Art 904, Civil Code]
parent succeeds to the
g. Adoption
entire estate of the child
if the other parent is i. The adopters and adoptee shall
dead. [Art. 986, Civil have reciprocal rights of
Code] succession without distinction
2. In default of the mother from legitimate filiations.
and the father, the ii. However, if the adoptee and their
ascendants nearest in biological parents have left a will,
degree will inherit. [Art. the law on testamentary
987, Civil Code] succession shall govern. [Section
3. If there is more than one 43, R.A 116421]
relative of the same
degree but of different h. Renunciation or compromise of a
lines, one half will go to future legitime
the paternal ascendants i. Every renunciation or
and the other half to the compromise as regards a future
maternal ascendants. legitime between the person
[Art. 987, Civil Code] owing it and his compulsory heirs
is void, and the latter may claim
the same upon the death of the
former; but they must bring to

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collation whatever they may have The remedy, if the value of inheritance, legacy or
received by virtue of the devise, or donation inter vivos is only for
renunciation or compromise. completion of his legitime under Articles 906 and
[Art. 905, Civil Code] 907.
Steps in Determining the Legitime of
Effects of Preterition [Art. 854, Civil
Compulsory Heirs [Arts. 908-910, Civil
Code]
Code]:
1. The institution of the heir is annulled.
2. Devisees and legacies shall remain valid
[Value of the Estate] - [Taxes] - [Less Liabilities]
as long as they are not inofficious.
3. If the omitted compulsory heir should die
= NET ESTATE
before the testator, the institution shall be
effective, without prejudice to the right of
+ [collationable donations]
representation.
= THEORETICAL* HEREDITARY ESTATE
When there are no devisees and legacies,
preterition will result in the annulment of the will
*Because this amount is what the legitime will be
and give rise to intestate succession. [Neri v.
based on, but the actual amount available for
Akutin, G.R. No. L-47799 (1941)]
physical distribution is the net estate
Incomplete Legitime: any compulsory heir to
whom the testator has left by any title less than
II. PRETERITION the legitime belonging to him may demand that
the same be fully satisfied. [Art. 906, Civil Code]
Concept [Art. 854, Civil Code] ● This is not a case of preterition.
1. There must be a total omission of one,
some or all of the heir/s from the Share of the omitted child or descendant:
inheritance. The share must first be taken from the part of the
2. The omission must be that of a estate not disposed of by the will, if any. If that is
compulsory heir. not sufficient, so much as may be necessary must
3. The compulsory heir omitted must be of be taken proportionally from the shares of the
the direct line. other compulsory heirs. [Art 855, Civil Code]
4. The omitted compulsory heir must be ● This article does not necessarily refer to
living at the time of the testator's death preterition.
or must at least have been conceived ● Mere omission in a will does not
before the death. necessarily imply preterition, because the
compulsory heir may have received or
No Preterition may still receive a part of the inheritance
If the heir is instituted in the will but the portion in some other concept than by will.
given is less than his legitime → there is no
preterition. [Reyes v. Barretto-Datu, G.R. No.
L-17818 (1967)] Article 918, Civil Code. Disinheritance
without a specification of the cause, or for
If the heir is given a legacy or devise → no a cause the truth of which, if contradicted,
preterition. [Aznar v. Duncan, G.R. No. L- 24365 is not proved, or which is not one of those
(1966)] set forth in this Code, shall annul the
institution of heirs insofar as it may
If the heir had received a donation inter vivos
prejudice the person disinherited; but the
from the testator – the better view is that there is
no preterition. The donation inter vivos is devises and legacies and other
treated as an advance on the legitime under testamentary dispositions shall be valid to
Articles 906, 909, 910 and 1062. such extent as will not impair the legitime.

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Preterition v. Disinheritance from a brother or sister (origin or mediate

source) by gratuitous title.
PRETERITION DISINHERITANCE
2. The same property is inherited by another
● Tacit deprivation of ● Express deprivation ascendant (reservista) or is acquired by
a compulsory heir of of a compulsory heir him by operation of law from the said
his legitime. of his legitime. descendant.
● May be voluntary ● Always voluntary 3. The ascendant (reservista) must reserve
but the presumption ● For some legal the property for the benefit of the
of law is that it is cause. relatives of the decedent within the third
involuntary. ● If the disinheritance civil degree and who belong to the line
● Law presumes there is valid, the from which the said property came
has been merely compulsory heir (reservatarios).
oversight or mistake disinherited is totally
on the part of the excluded from the Parties: [Balane]
testator. inheritance. 1. Origin or Mediate Source –an
● Since preterition ● In case of invalid ascendant of any degree or a brother or
annuls the disinheritance, the sister of the Prepositus; responsible for
institution of heirs, compulsory heir is the 1st transfer.
the omitted heir merely restored to 2. Prepositus – 1st transferee of the
gets not only his his legitime. reserved property.
legitime but also his 3. Reservista – an ascendant of the
share in the free Prepositus other than the Origin or
portion not disposed Mediate Source; the one obligated to
of by way of reserve the property.
legacies and 4. Reservatarios – within the 3rd degree
devises. of consanguinity from the Prepositus
[Cabardo v. Villanueva, G.R. No. L-19003
(1922)] belonging to the line from which
the property came.

Requisites for Reserva Troncal [Chua v.

CFI, G.R. No. L-29901 (1977)]:
III. RESERVA TRONCAL 1. That the property was acquired by a
descendant from an ascendant or from a
brother or sister (Origin or Mediate
Article 891, Civil Code. The ascendant Source) by gratuitous title;
who inherits from his descendant any 2. That the Prepositus died without
property which the latter may have (legitimate*) issue;
3. That the property is inherited by another
acquired by gratuitous title from another
ascendant (Reservista) by operation of
ascendant, or a brother or sister, is obliged
law; and
to reserve such property as he may have 4. That there are relatives within the 3rd
acquired by operation of law for the benefit degree (Reservatarios) belonging to the
of relatives who are within the third degree line from the property came.
and who belong to the line from which said
property came. Note: Only legitimate descendants will prevent
the property from being inherited by the
legitimate ascending line by operation of law
Concept of Reserva Troncal [Balane].
1. A descendant (prepositus) inherits or
acquires property from an ascendant or

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Three transmissions involved: [Balane] 1. The reservatarios have a right of

1. 1st transfer – by gratuitous title, from a expectancy over the property;
person to his descendant, brother or 2. The right is subject to a suspensive
sister. condition, i.e., the expectancy ripens into
2. 2nd transfer – by operation of law, from ownership if the reservatarios survive the
the transferee in the 1st transfer to reservistas;
another ascendant. This creates the 3. The right is alienable but subject to the
reserva. same suspensive condition;
3. 3rd transfer – from the transferee in the 4. The right is registrable.
second transfer to the relatives.
Institution of Ascendant
The 1st transfer from the origin does 1. The prepositus acquired property
not make the property reservable gratuitously from an ascendant, a brother
The 1st transferee owns the property he receives or sister;
in full and in fee simple. If he sells the property, 2. In his will, he institutes as his heir his
then there is no reserva that can be created. It is ascendant (who is also a compulsory
at this point, however, that a reserva may ignite, heir) such that the ascendant receives
because if the 1st transferee has no legitimate half of the estate by operation of law as
descendants, the property, by operation of law, legitime and the other half by
will go back up to his ascendant. testamentary disposition.

Q: Within what limits should the reservation

The 2nd transferee is the reservor obtain?
The reservor can enjoy the property, but his title
is subject to a double resolutory condition. Two Views
1. Reserva Maxima: As much of the
So, if he dies, you need to ask 2 questions: potentially reservable property as possible
1. Does the prepositus have relatives? must be deemed included in the part that
2. Are these relatives qualified to inherit passes by operation of law (maximizing
from the prepositus? the scope of the reserva).
If the answers are YES: then a reserva 2. Reserva Minima: every single property
occurs. in the prepositus’s estate must be
deemed to pass, partly by will and partly
Note: The reservatarios actually inherit, by by operation of law, in the same
delayed intestacy, from the prepositus. proportion that the part given by will
bears to the part not so given. [Balane]
Nature of the reservista’s right: [Edroso Either view is defensible, but Reserva Minima
v. Sablan, G.R. No. 6878 (1913)] finds wider acceptance in the Philippines [Balane].
1. The right over the reserved property is
one reservista’s of ownership; Extinguishment of the Reserva
2. The right of ownership is subject to a 1. Loss of the reservable property without
resolutory condition, i.e., the existence of fault or negligence of the reservista.
reservatarios at the time of the 2. Death of the reservista.
reservista's death; 3. Death of all the relatives within the third
3. The right of ownership is alienable, but degree belonging to the line from which
subject to the same resolutory condition; the property came.
and 4. Renunciation by the reservatarios, but a
4. The reservista’s right of ownership is future reservatario is not bound by such
registrable. renunciation → _a conditional
Nature of the reservatario’s right [Sienes extinguishment.
v. Esparcia, G.R. No. L-12957 (1961)]

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5. Prescription - when the reservista holds III. GROUNDS

the property adversely against the
reservatarios, as free from reservation;
Causes for the disinheritance of
6. Registration under the Torrens System as
legitimate and illegitimate children and
free (peculiar under the Land Registration
Act). descendants [Art. 919, Civil Code]
1. Found guilty of an attempt against the life
of the testator, his or her spouse,
descendants, or ascendants;
2. Accused the testator of a crime for which
the law prescribes imprisonment for six
years or more, if the accusation has been
A compulsory heir may, in consequence of found groundless;
disinheritance, be deprived of his legitime, for 3. Convicted of adultery or concubinage with
causes expressly stated by law. [Art. 915, the spouse of the testator;
Civil Code] 4. By fraud, violence, intimidation, or undue
influence causes the testator to make a
I. REQUISITES will or to change one already made;
5. A refusal without justifiable cause to
(a) Heir disinherited must be designated by support the parent or ascendant who
name or in such a manner as to leave no disinherits such child or descendant;
room for doubt as to who is intended to 6. Maltreatment of the testator by word or
be disinherited; deed, by the child or descendant;
(b) It must be for a cause designated by law; 7. Leads a dishonorable or disgraceful life;
(c) It must be made in a valid will; [Art. 916, 8. Conviction of a crime which carries with it
Civil Code]; the penalty of civil interdiction.
(d) It must be made expressly, stating the
legal cause in the will itself; Causes for the disinheritance of
(e) The cause must be certain and true and legitimate or illegitimate parents or
must be proved by the interested heir if ascendants
the person should deny it; [Art. 917, Civil 1. Parents have abandoned their children or
Code]; induced their daughters to live a corrupt
(f) It must be unconditional; and or immoral life, or attempted against their
(g) It must be total. virtue;
2. When the parent or ascendant has been
II. EFFECT convicted of an attempt against the life of
the testator, his or her spouse,
The compulsory heir may be deprived of his descendants, or ascendants;
legitime. 3. Accused the testator of a crime for which
the law prescribes imprisonment for six
Effect of Disinheritance: A disinherited heir is years or more, if the accusation has been
totally excluded from the inheritance. This means found to be false;
that he forfeits not only his legitime, but also his 4. Convicted of adultery or concubinage with
intestate portion (if any), and any testamentary the spouse of the testator;
disposition made in a prior will of the disinheriting 5. By fraud, violence, intimidation, or undue
testator [Balane]. influence causes the testator to make a
will or to change one already made;
6. The loss of parental authority for causes
specified in this Code;
7. The refusal to support the children or
descendants without justifiable cause;

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8. An attempt by one of the parents against Rights of Descendants of Person

the life of the other, unless there has Disinherited [Art. 923, Civil Code]
been a reconciliation between them. Disinheritance gives rise to the right of
(756, 854, 674a) representation in favor of the children and
descendants of the disinherited person with
respect to his legitime.
Causes for disinheritance of a spouse
1. Convicted of an attempt against the life Ineffective Disinheritance [Art. 918,
of the testator, his or her descendants, or Civil Code]
ascendants;
2. Accused the testator of a crime for which Instances of Ineffective disinheritance
the law prescribes imprisonment of six 1. There is no specification of the cause.
years or more, and the accusation has 2. The cause is not proved.
been found to be false; 3. The cause is not among those specified in
3. By fraud, violence, intimidation, or undue the provisions.
influence cause the testator to make a
will or to change one already made; Effect of Ineffective Disinheritance: It shall
4. Spouse has given cause for legal annul the institution of heirs insofar as it may
separation; prejudice the person disinherited; but the devises
5. Spouse has given grounds for the loss of and legacies and other testamentary dispositions
parental authority; shall be valid to such extent as will not impair the
6. Unjustifiable refusal to support the legitime.
children or the other spouse.

IV. MODES OF REVOCATION

OF DISINHERITANCE

A. RECONCILIATION
A subsequent reconciliation between the offender
Legacy Devise
and the offended person deprives the latter of the
right to disinherit, and renders ineffectual any A gift of personal A gift of real property
disinheritance that may have been made. [Art. property given in a given in a will
922, Civil Code] will

Effect of Reconciliation between It is bequeathed It is devised

Offender and Offended Person:
● If no disinheritance has been made yet,
the offended person will be deprived of I. OBJECT OF LEGACIES AND
his right to disinherit. DEVISES
● If disinheritance has been effected, it will
be rendered ineffectual.
All things and rights which are within the
commerce of man may be bequeathed or
B. SUBSEQUENT INSTITUTION OF devised. [Art 924, Civil Code]
THE DISINHERITED HEIR
C. NULLITY OF THE WILL WHICH Within Commerce of Man Requisites:
CONTAINS THE ● Susceptible of appropriation or of being
DISINHERITANCE subjected to property rights of natural or
juridical persons; and
● Transmissible from one person to another,
such that they may be disposed of as
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forming part of one’s patrimony, by way ● Unless the testator has expressly given the
of sale, barter, donation, etc. right either to the (1) executor or
administrator or heir, devisee or legatee
II. PERSONS CHARGED WITH charged or to the (2) legatee or devisee
LEGACIES AND DEVISES favored, the former shall have the choice.
● In case of generic legacies or devises,
when the right is expressly granted to any
General Rule: Charge or burden upon the estate
one of the parties, the person designated
and are to be paid by the executor or
may choose whichever he may desire.
administrator.
● Once the selection has been made, it shall
be irrevocable.
Exception: Testator expressly burdens a
particular heir, legatee, or devisee with their
payment. IV. WARRANTY FOR GENERIC
● The legatee or devisee shall be liable only LEGACIES AND DEVISES (Art.
to the extent of the value of the legacy or 928)
the devisee received by them.
● The compulsory heirs shall not be liable ● The heir who is bound to deliver the
for the charge beyond the amount of the legacy or devise shall be liable in case of
free portion given them. [Art. 925, Civil eviction, if the thing is indeterminate and
Code] is indicated only by its kind. [Art. 928, Civil
● Note: The freedom of the testator to Code]
charge his heirs, legatees, or devisees is ● The heir, devisee or legatee is made a
limited to that part of the property warrantor; there is no such warranty if it is
subject to his free disposal; cannot a specific thing.
burden the compulsory heirs with respect
to their legitime.
V. DEFECTIVE LEGACIES AND
When the testator charges one of the heirs with a DEVISES
legacy or devisee, he alone shall be bound.
Should he not charge anyone in particular, all Possible Situation
shall be liable in the same proportion in which 1. If the thing bequeathed or interest is
they may inherit. [Art. 926, Civil Code] owned only partly by the testator, heir, or
legatee: Limited only to such part or
If two or more heirs take possession of the interest
estate, they shall be solidarily liable for the loss or a. EXC: Testator expressly declares
destruction of a thing devised or bequeathed, it is in its entirety. [Art 929, Civil
even though only one of them should have been Code)
negligent. [Art. 927, Civil Code] 2. Thing subject of a legacy or devisee
belonging to another person.
a. If testator erroneously believes it
III. GENERIC LEGACIES AND
is his: Void
DEVISES b. Becomes his later on: Disposition
takes effect. [Art 930, Civil Code]
● Whenever the testator expressly leaves 3. Item owned by another, testator ordering
the right of choice to the heir, or to the that it be given to a legatee or devisee:
legatee or devisee, the former may give or Heir to whom the obligation to acquire it
the latter may choose whichever he may is imposed must do so and give it.
prefer. [Art. 942, Civil Code] a. But if the owner of the thing
● Generic legacy – the genus or species of refuses, or demands excessive
the object should be determined, and the price: Just value of the thing will
quantity should be specified. be given instead, [Art 931, Civil
Code]

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4. If at the time of the will execution, the Legal succession is a mode of transmission mortis
legacy or devisee already belonged to the causa which takes place in the absence of the
legatee: It shall be ineffective. [Art 932, expressed will of the decedent embodied in a
Civil Code] testament [Tolentino].

Where Legacy or Devise is Without I. CAUSES OF INTESTACY &

Effect [Art 957, Civil Code] RELATIONSHIP
1. Transformation of the thing into a
different form or denomination. Where Legal or Intestate Succession
2. Alienation of any part Operates [Art 960, CC]
a. Without effect only to the part 1. If a person dies without a will, or with a
alienated void will, or will has subsequently lost its
b. If reacquired post-alienation by validity;
the testator, the legacy shall 2. When the will does not institute an heir;
remain invalid (unless reacquired 3. Upon the expiration of term, or period of
through right of repurchase). institution of heir [Balane];
3. Total loss during lifetime of the testator or 4. Upon fulfillment of a resolutory condition
after his death (without the heir’s fault). attached to the institution of heir,
4. Other causes: Nullity of will, non- rendering the will ineffective [Balane];
compliance with suspensive conditions, 5. When the will does not dispose of all the
sale of the thing to pay the debts of the property belonging to the testator. Legal
deceased during the settlement of his succession shall take place only with
estate. respect to the property which the testator
has not disposed (mixed succession);
Delivery of Legacy/Devise [Art. 951, 6. If the suspensive condition attached to
Civil Code]: the institution of the heir does not
The very thing bequeathed shall be delivered and happen or is not fulfilled;
not its value: 7. If the heir dies before the testator;
1. With all its accessions and accessories; 8. If the heir repudiates the inheritance,
2. In the condition in which it may be upon there being no substitution, and no right
the death of the testator; and of accretion takes place;
3. Legacies of money must be paid in cash. 9. When the heir instituted is incapable of
succeeding, except in cases provided in
Effect of Ineffective Legacies or Devises the Civil Code;
[Art. 956, Civil Code]: 10. Preterition – Intestacy may be total or
In case of repudiation, revocation or incapacity of partial depending on whether or not there
the legatee or devisee, the legacy or devise shall are legacies or devises [Balane].
be merged with the mass of the hereditary
estate, except in cases of substitution or Order if there is Institution of Heirs
accretion. [ISRAI]
1. If the Institution fails, Substitution
occurs.
2. If there is no substitute, the right of
Representation applies in the direct
descending line to the legitime if the
vacancy is caused by predecease,
incapacity, or disinheritance.
Intestacy – that which takes place by operation 3. The right of Accretion applies to the free
of law in default of compulsory and testamentary portion when the requisites in Art. 1016
succession. Not defined in the Civil Code. are present.

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4. If there is no substitute, and the right of Representation takes place ad infinitum in the
representation or accretion is not proper, direct descending line but never in the direct
the rules on Intestate succession shall ascending line. [Art. 972, Civil Code]
apply. ● General Rule: Grandchildren inherit
from the grandparents by right of
Intestate Heirs [Art 961] representation, if proper.
In default of testamentary heirs, inheritance will ● Exception: Whenever all the children
vest in the legitimate and illegitimate relatives of repudiate, the grandchildren inherit in
the deceased. their own right because representation is
not proper. [Art. 969, Civil Code]
II. RIGHT TO REPRESENTATION
Representation in Collateral Line:
In the collateral line, representation takes place
Article 970, Civil Code. Representation only in favor of the children of the brothers or
is a right created by fiction of law, by virtue sisters (i.e., nephews and nieces) whether of the
of which the representative is raised to the full or half-blood [Art. 972, Civil Code] and only if
place and the degree of the person they concur with at least one.
represented, and acquires the rights
which the latter would have if he On the Capacity of the Representative
They must be capable of succeeding the decedent
were living or if he could have
themselves. [Art 973, Civil Code]
inherited.
Types of Division of Estate Re: In Right
Grounds for Representation [DIP] [Art of Representation
923, Civil Code] 1. Per Capita: General rule. Estate divided
1. Disinheritance into as many equal parts as there are
2. Incapacity people to succeed.
3. Predecease 2. Per stirpes: Made when one sole
descendant or groups represent a person
When it occurs in intestate succession.
Representation is allowed with respect to
inheritance conferred by law. (legitime and Rationale: Representatives get only the share of
intestate based on Art. 923) the person represented.

Note: There is no right of representation in a III. ORDER OF INTESTATE

devisee or a legacy. SUCCESSION
Representation After Renouncement & A. DESCENDING DIRECT LINE
Repudiation Those in the direct descending line shall
An heir who renounces can represent, but cannot exclude those in the direct ascending and
be represented. Rationale is found in Art. 971 collateral lines;
which states that “The representative does not
succeed the person represented but the one
whom the person represented would have On Children
succeeded.” ● Legitimate children and their descendants
succeed their parents and other
But, if they have repudiated their share, they may ascendants.
not be represented. [Art 977, Civil Code] ● An adopted child succeeds to the
property of the adopting parents in the
Representation in the Direct same manner as a legitimate child. [Art
Descending Line 979, Civil Code]

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 SUCCESSION CIVIL LAW

Grandchildren If they survive with their brothers and sisters, the

● Grandchildren and other descendants widow shall inherit half, and the former the other
shall inherit by right of representation. half. [Art 994, Civil Code]
● If one of them dies (leaving several
heirs), the portion pertaining to him shall On the “Iron Curtain Rule”
be divided among the latter in equal This is referred to as the barrier between
portions. [Art 982, Civil Code] legitimate family and illegitimate family.
● The illegitimate family cannot inherit by
Illegitimate Children intestate succession from the legitimate
● If they survive with legitimate children, family and vice-versa. [Art. 992, Civil
their shares shall be 1/2 of that of a Code]
legitimate child. [Art 983 & 895, Civil ● The Supreme Court, however, ruled in
Code] Aquino v. Aquino [G.R. No. 208912
(2021)], that children, regardless of their
On Adopted Children parents’ marital status, can now inherit
● In cases of their death (with no children from their grandparents and other direct
or descendants), their parents and ascendants by right of representation.
relatives by consanguinity shall be his
legal heirs. D. COLLATERAL LINE
● Adopter now concurs with their parents In the absence of other relatives in succession,
and ascendants by consanguinity, the collateral relatives shall succeed to the entire
illegitimate children, and the surviving estate. [Art 1003, Civil Code]
spouse of the adopted [Art 190, Family
Code] Full siblings are entitled to a share double the half
siblings. [Art 1006, Civil Code]
B. ASCENDING DIRECT LINE
Those in the direct ascending line shall, in turn, Should there be neither brothers nor sisters nor
exclude those in the collateral line. their children, the other collateral relatives shall
succeed to the estate. [Art 1009, Civil Code]
In default of legitimate children & descendants of
the deceased, their parents & ascendants shall Right to inherit through intestacy shall not extend
inherit from him. [Art 985, Civil Code] beyond the fifth degree of relationship in the
collateral line. [Art 1010, Civil Code]
C. ILLEGITIMATE CHILDREN
In the absence of legitimate descendants or E. THE STATE
ascendants, the illegitimate children shall succeed In default of persons entitled to succeed, the
to the deceased’s entire estate. [Art 988, Civil State shall inherit the whole estate. [Art 1011,
Code] Civil Code]

If the illegitimate child should die without issue, Other Important Concepts to Take Note
their parents shall succeed to their entire estate. of:
[Art 993, Civil Code]
Rule of Proximity: The relative nearest in
If only the illegitimate children and legitimate degree excludes the farther one [Art. 962(1), Civil
ascendants are left, they shall divide the Code], saving the right of representation when it
inheritance among them. Ascendants take half of properly takes place.
the estate. [Art 991, Civil Code]
Rule of Equal Division:
In default of their parents, they may be ● General Rule: The relatives who are in
succeeded by their entire spouse, inheriting their the same degree shall inherit in equal
entire estate. [Art 994, Civil Code] shares. [Arts. 962(2), 987 and 1006, Civil

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SUCCESSION CIVIL LAW

Code] 5. Right of representation.

Exceptions [Balane]
1. Rule of preference between lines;
2. Distinction between legitimate and
illegitimate filiation. The ratio under the
present law is 2:1 [Art. 983, in relation to
Art. 895, Civil Code as amended by Art.
176, Family Code];
3. Rule of division by line in the ascending
line [Art. 987 (2), Civil Code];
4. Distinction between full-blood and half-
blood relationship among brothers and
sisters, as well as nephews and nieces
[Art. 1006 and 1008, Civil Code];

ORDER OF INTESTATE SUCCESSION

DECEDENT IS A DECEDENT IS AN ILLEGITIMATE DECEDENT IS AN
LEGITIMATE CHILD CHILD ADOPTED CHILD

Legitimate children or Legitimate children or descendants Legitimate children or

descendants (LCD) (LCD) descendants (LCD)

Legitimate parents or Illegitimate children or descendants Illegitimate children or

ascendants (LPA) (ICD) descendants (ICD)

Illegitimate children or Illegitimate parents (IP) Legitimate or illegitimate

descendants (ICD) parents, or legitimate
ascendants, adoptive parents

Surviving spouse (SS) Surviving spouse (SS) Surviving spouse (SS)

Brothers and sisters, nephews, Illegitimate brothers and sisters, Brothers and sisters,
nieces (BS/NN) nephews, nieces (IBS/NN) nephews, nieces (BS/NN)

Legitimate collateral relatives State State

within the 5th degree (C5)

State

RULES OF EXCLUSION & CONCURRENCE IN INTESTATE SHARES

INTESTATE HEIRS EXCLUDES EXCLUDED BY CONCURS WITH

LC + LD Ascendants, Collaterals, and No one SS + ILC

State

ILC + D ILP, Collaterals and State No one SS, LC, LP

LP + LA Collaterals and State LC ILC + SS

ILP Collaterals and State LC & ILC SS

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 SUCCESSION CIVIL LAW

SS Collaterals other than No one LC, ILC, LP, ILP,

siblings, nephews and Siblings, Nephews,
nieces, State Nieces

Siblings, Nephews, All other collaterals and state LC, ILC, LP, ILP SS
Nieces

Other collaterals within Collateral more remote in LC, ILC, LP, ILP, and Collaterals in the
5th degree degree & State SS same degree

State No one Everyone No one

Note: In partial intestacy, the testamentary dispositions can reduce the shares of intestate heirs, provided
that their legitimes, if they are also compulsory heirs, are not impaired. More specifically:
1. The law of legitimes must be brought into operation in partial intestacy.
2. If among the concurring intestate heirs there are compulsory heirs whose legal or intestate
portions exceed their respective legitimes, the amount of the testamentary disposition must be
deducted from the disposable portion, to be borne by all the intestate heirs in the proportions
that they are entitled to receive from such disposable portion as intestate heir.
3. If the legal or intestate share of a compulsory heir is equal to his legitime, then the amount of
the testamentary disposition must be deducted only from the legal or intestate shares of the
others.
4. If the testamentary dispositions consume the entire disposable portion, then the intestate heirs
who are compulsory heirs will get only their legitimes, and those who are not compulsory heirs
will get nothing [Tolentino].

OUTLINE OF INTESTATE SHARES

LC only Divide the entire estate equally among all legitimate children. [Art. 979, CC]

Legitimate children include an adopted child.

LC and ILC Divide the entire estate such that each illegitimate child gets 1⁄2 of what a
legitimate child gets. [Art. 983, CC and Art. 176, FC]

Ensure that the legitime of the legitimate children are first satisfied.

LC and SS Divide the entire estate equally between the legitimate children and the
surviving spouse, the latter deemed as one child. The same rule holds where
there is only one child.

LC, SS, and ILC Divide the entire estate such that the surviving spouse is deemed one
legitimate child and each illegitimate child getting 1⁄2 of what the legitimate
child gets. [Art. 996, CC and Art. 176, FC]

Ensure that the legitime of the legitimate children and the spouse are first
satisfied.

LP only Divide the entire estate equally. [Art. 985, CC]

Legitimate ascendants only Divide the entire estate equally but with the observance of the rule of
(excluding parents) division by line. [Art. 987, CC]

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LP and ILC Legitimate parents get 1⁄2 of the estate, illegitimate children get the other
1⁄2. [Art. 991, CC]

LP and SS Legitimate parents get 1⁄2 of the estate; The surviving spouse gets the
other 1⁄2. [Art. 997, CC]

LP, SS, and ILC Legitimate parents get 1⁄2 of the estate; surviving spouse and the
illegitimate child each get 1⁄4 each, the latter to share among themselves if
more than one.[Art. 1000, CC]

ILC only Divide the entire estate equally. [Art. 988, CC]

ILC and SS Illegitimate children get 1⁄2 of the estate; the surviving spouse gets the
other 1⁄2. [Art. 998, CC]

SS only Entire estate goes to the surviving spouse. [Art. 994/995, CC]

SS and ILP Illegitimate parents get 1⁄2 and the spouse gets the other 1⁄2. [by analogy
with Art. 997, CC]

SS and legitimate brothers Surviving spouse gets 1⁄2 of the estate, while the rest gets the other 1⁄2
and sisters, nephews and with the nephews and nieces inheriting by representation if proper. [Art.
nieces 1001, CC]

SS and illegitimate brothers Surviving spouse gets 1⁄2 of the estate while the rest gets the other 1⁄2
and sisters, nephews and with the nephews and nieces inheriting by representation, if proper; Note
nieces that all the other relatives should be “illegitimate” because of the
iron-curtain rule. [Art. 994, CC]

ILP only Entire estate goes to the illegitimate parents. [Art. 993, CC].

ILP and children of any kind Illegitimate parents are excluded and do not inherit. For the rule on the
(whether legitimate or respective shares of the children, see numbers 1, 2 or 10, whichever is
illegitimate child) applicable.

Legitimate brothers and Divide the entire estate such that full-blood brothers/sisters get a share
sisters only double the amount of a half-blood brother or sister. [Art. 1004 and 1006,
CC]

Legitimate brothers and Divide the entire estate observing the 2 is to 1 ratio for full and half-blood
sisters, nephews & nieces relationships with respect to the brothers and sisters, with the nephews and
nieces inheriting by representation, if proper. [Art. 1005 & 1008, CC].

Nephews and nieces only Divide the entire estate per capita, observing the 2 is to 1 ratio. [Arts. 975
and 1008, CC]

Other collaterals [Art 1009 & Divide the entire estate per capita. Collateral relatives must be with the 5th
1010] degree of consanguinity.

Note: the nearer relative excludes the more remote relatives.

State If there are no other intestate heirs, the State inherits the entire estate
through escheat proceedings. [Art. 1011, CC]

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 SUCCESSION CIVIL LAW

There can only be accretion if there is an

institution of heirs with respect to specific
PROVISIONS COMMON TO properties [Art. 1016, Civil Code]. In other words,
both heirs were called to inherit the same whole.
TESTATE & INTESTATE
SUCCESSION If there was “earmarking”, there can be no
accretion.
● Earmarking – when the whole has been
I. RIGHT OF ACCRETION subdivided into specific portions.
●
Example: Heir #1 was called to inherit the
Definition of Accretion [Art. 1015, Civil southern part of Plot A, and Heir #2 was called to
Code] inherit the northern part of Plot A.
It is a right by virtue of which, when two or more
persons are called to the same inheritance, devise Among compulsory heirs, there can only be
or legacy, the part assigned to one who accretion with respect to the free portion.
renounces or cannot receive his share or who
died before the testator is added or incorporated There can be no accretion with respect to the
to that of his co-heirs, co- devisees, or legitimes. [Arts. 1021 and 1018, Civil Code]
co-legatees.
The heirs to whom the portion goes by the right
Basis of accretion take it in the same proportion that
The right of accretion is based upon the they inherit. [Art. 1019, Civil Code]
presumed will of the decedent. Thus, the testator
can expressly provide that there shall be no Exceptions [Balane]
accretion among persons who would otherwise be 1. In testamentary succession, if the
entitled thereto. Conversely, the testator may testator provides otherwise;
validly provide for accretion in a case where no 2. If the obligation is purely personal, and
accretion would take place under the provisions of hence intransmissible.
the law [Tolentino].
The heirs to whom the inheritance accrues shall
Requisites [Tolentino] succeed to all the rights and obligations which the
1. Unity of object and plurality of subjects heir who renounced or could not receive it would
(two or more persons are called to the have had. [Art. 1020, Civil Code]
same inheritance or same portion
thereof); and In testamentary succession, when the right of
2. Vacancy of share (one of the heirs dies accretion does not take place, the vacant portion
before the testator, or renounces the
of the instituted heirs, if no substitute has been
inheritance, or is incapacitated)
designated, shall pass to the legal heirs of the
When does Accretion Occur? testator, who shall receive it with the same
1. Repudiation charges and obligations. [Art. 1022, Civil Code]
2. Incapacity
3. Predecease of an heir Accretion shall also take place among devisees,
legatees and usufructuaries under the same
It is the mechanism where the share of an heir is conditions established for heirs. [Art. 1023, Civil
increased by vacant shares vacated by heirs who Code]
cannot inherit for various reasons.
Capacity to Succeed
Rationale: The decedent intended to give the
1. The heir, legatee or devisee must be
property to nobody but the co-heirs.
living or in existence at the moment the

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SUCCESSION CIVIL LAW

succession opens [Art. 1025, Civil Code]; 2. Those made in consideration of a crime of
and which both the testator and the
2. He must not be incapacitated or beneficiary have been found guilty; and
disqualified by law to succeed. [Art. 1024, 3. Those made in favor of a public officer or
par.1, Civil Code] his spouse, descendants and ascendants,
by reason of his public office.
II. PERSONS INCAPABLE OF
SUCCEEDING Based on Acts of Unworthiness [Art
1032, Civil Code]
Based on undue influence or interest The following are incapable of succeeding by
[Art 1027, Civil Code] reason of unworthiness:
1. Priest who heard the last confession of 1. Parents who have abandoned their
the testator during his last illness, or the children or induced their daughters to
minister of the gospel who extended lead a corrupt or immoral life, or
spiritual aid to him during the same attempted against their virtue;
period; 2. Any person who has been convicted of an
2. Individuals, associations and corporations attempt against the life of the testator, his
not permitted by law to inherit; or her spouse, descendants, or
3. Guardian with respect to testamentary ascendants;
dispositions given by a ward in his favor 3. Any person who has accused the testator
before the final accounts of the of a crime for which the law prescribes
guardianship have been approved, even if imprisonment for six years or more, if the
the testator should die after the approval accusation has been found groundless;
thereof; except if the guardian is his 4. Any heir of full age who, having
ascendant, descendant, brother, sister, or knowledge of the violent death of the
spouse; testator, should fail to report it to an
4. Relatives of the priest or minister of the officer of the law within a month, unless
gospel within the fourth degree, the the authorities have already taken action;
church, order, chapter, community, this prohibition shall not apply to cases
organization, or institution to which such wherein, according to law, there is no
priest or minister may belong; obligation to make an accusation;
5. Attesting witness to the execution of a 5. Any person convicted of adultery or
will, the spouse, parents, or children, or concubinage with the spouse of the
anyone claiming under such witness, testator;
spouse, parents, or children; 6. Any person who by fraud, violence,
6. Physician, surgeon, nurse, health officer intimidation, or undue influence should
or druggist who took care of the testator cause the testator to make a will or to
during his last illness. change one already made;
7. Any person who by the same means
Based on Morality or Public Policy [Art prevents another from making a will, or
739 & 1028, Civil Code] from revoking one already made, or who
supplants, conceals, or alters the latter's
1. Those made in favor of a person with
will;
whom the testator was guilty of adultery
8. Any person who falsifies or forges a
or concubinage at the time of the making
supposed will of the decedent.
of the will;

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Pardon Acts of Unworthiness 3. Implied Acceptance - Within thirty

days after the court has issued an order
EXPRESS IMPLIED for the distribution of the estate in
Made by the execution Effected when the accordance with the Rules of Court, the
of a document or any testator makes a will heirs, devisees and legatees shall signify
writing in which the instituting the to the court having jurisdiction whether
decedent condones the unworthy heir with they accept or repudiate the inheritance;
cause of incapacity knowledge of the if they do not do so within that time, they
cause of incapacity. are deemed to have accepted the
inheritance. [Art. 1057, Civil Code]

Cannot be revoked. Revoked when the An inheritance is deemed accepted

testator revokes the 1. If the heir sells, donates, or assigns his
will or the institution. right to a stranger, or to his co-heirs, or
to any of them – the heir must first
accept the inheritance before he can
Effect of Pardon - Once the act of unworthiness dispose of it.
has been pardoned, whether expressly or tacitly, 2. If the heir renounces the same, even
the heir is restored to full capacity to succeed the though gratuitously, for the benefit of one
decedent. or more of his co-heirs – this is actually a
donation. The heir must first accept the
III. ACCEPTANCE & REPUDIATION inheritance before he can donate it.
3. If the heir renounces it for a price in favor
OF INHERITANCE of all his co-heirs indiscriminately – this is
actually an onerous disposition. The heir
Definition of Acceptance must first accept the inheritance before
The act by which the person called to succeed by he can dispose of it.
universal title either by the testator or by law
manifests his will of making his own the Note: But if the renunciation should be gratuitous,
universality of the rights and obligations which and in favor of all the co-heirs (to whom the
are transmitted to him. [Tolentino] portion renounced should devolve by accretion),
the inheritance shall not be deemed as accepted.
Definition of Repudiation [Art. 1050, Civil Code] This is a true case of
The manifestation by an heir of his desire not to renunciation.
succeed to the rights and obligations transmitted
to him. [Tolentino] Forms of Repudiation [Art. 1051, Civil
Code]
Requisites [Art. 1043, Civil Code] 1. In a public instrument acknowledged
1. Certainty of death of the decedent; and before a notary public; or
2. Certainty of the right to the inheritance. 2. In an authentic document – equivalent of
an indubitable writing or a writing whose
Forms of Acceptance [Arts. 1049 – authenticity is admitted or proved; or
1050, Civil Code] 3. By petition presented to the court having
1. Express Acceptance – one made in a jurisdiction over the testamentary or
public or private document. [Art. 1049, intestate proceeding.
par. 2, Civil Code]
2. Tacit Acceptance – one resulting from Heirs in Two Capacities [Art. 1055, Civil
acts by which the intention to accept is Code]
necessarily implied or from acts which 1. If a person is called to the same
one would have no right to do except in inheritance as an heir by will and by law
the capacity of an heir. and he repudiates the inheritance in his
capacity as a testamentary heir, he will be
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 SUCCESSION CIVIL LAW

considered to have also repudiated the latter to their children. [Art 1065, Civil
inheritance as a legal heir. Code]
2. If he repudiates it as a legal heir, without
knowledge of his being a testamentary
heir, he may still accept it in the latter
capacity.

Irrevocability of Acceptance
/Repudiation
● General Rule: The acceptance or
repudiation of an inheritance, once made,
is irrevocable and cannot be impugned.
● Exceptions
○ When the acceptance or
repudiation suffers from any of
the vices which annul consent;
and;
○ When an unknown will appears
[Art. 1056, Civil Code].

IV. COLLATION

Concept of Collation
To collate is to bring back or to return to the
hereditary mass, in fact or by fiction, property
which came from the estate of the decedent
during his lifetime, but which the law considers as
an advance from the inheritance. [Tolentino]
● It is required that every compulsory heir
be required to collate. [Art 1061, NCC]
● This is not required of the surviving
spouse (even if they are a compulsory
heir).
● WHY: Donations between spouses during
the marriage are prohibited, hence VOID.

Exception to Collation
If the donor expressly provides, or the donee
should repudiate the inheritance (unless the
donation should be reduced as inofficious). [Art
1062, Civil Code]

On Grandchildren
● If they survive with their uncles, aunts, or
cousins in representation of their parents,
they shall bring to collation all that their
parents would be obligated to bring. [Art
1064, Civil Code]
● Parents are not obligated to bring to
collation in the inheritance of their
ascendants, any property donated by the

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CREDIT TRANSACTIONS CIVIL LAW

Two Types of Contracts of Loan

CREDIT TRANSACTIONS 1. Commodatum – a contract where one
party delivers to another something not
consumable so that the latter may use the
I. LOAN
same for a certain time and return it [Art.
1933, Civil Code].
A. NATURE OF LOAN 2. Mutuum (Simple Loan) – a contract
Art. 1933, Civil Code. By the contract where one party delivers to another, money
of loan, one of the parties delivers to or other consumable thing, upon the
another, either something not consumable condition that the same amount of the same
so that the latter may use the same for a kind and quality shall be paid [Art. 1933,
certain time and return it, in which case Civil Code].
the contract is called a commodatum; or
money or other consumable thing, upon B. COMMODATUM V. MUTUUM
the condition that the same amount of
the same kind and quality shall be paid, in 1. Nature
which case the contract is simply called a
loan or mutuum. Commodatum Mutuum

Purely personal Not purely personal in

Commodatum is essentially gratuitous.
character [Art. 1939,
As such, Civil Code]
Simple loan may be gratuitous or with a 1. Death of either
stipulation to pay interest. bailor or bailee
extinguishes the
In commodatum the bailor retains the contract
ownership of the thing loaned, while in 2. The bailee
simple loan, ownership passes to the cannot lend or
borrower. lease the object
of the contract to
a third person.
Contract of Loan Contract to Loan However,
members of the
Real Contract: Consensual Contract: bailee’s
Perfected by perfected by mere household may
delivery of the consent. use thing loaned,
object of the unless there is a
contract, not by An accepted promise to stipulation to the
mere consent [Art. deliver something by contrary, or the
1934, Civil Code; way of commodatum or nature of the
see also Art. 1316, simple loan is binding thing forbids
Civil Code]. upon the parties [Art. such use [Art.
1934, Civil Code]. 1939, Civil Code]

Note: Performance of bailor’s (lender’s) Both are reciprocal obligations

obligation in contract to loan is perfection of
contract of loan: delivery of the object is
made.

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 CREDIT TRANSACTIONS CIVIL LAW

2. Purpose 5. As to Consideration
Commodatum Mutuum Commodatum Mutuum

Loan for permissive or Loan for use also. Essentially gratuitous May be gratuitous or
temporary use But use requires [Art. 1933, Civil Code] onerous, i.e. with
[Art.1935, Civil Code] consumption of the stipulated interest
object. If use is compensated,
transaction is not a
Note: If the purpose is not the use of the commodatum, i.e.
thing, transaction may be other than loan, lease.
such as deposit.

6. As to Obligations of Borrower
Commodatum is essentially gratuitous. Hence, a
contract ceases to be commodatum if any Commodatum Mutuum
compensation is to be paid by the borrower who
Borrower must return Borrower must pay
acquires use. In such case, there arises a lease the same thing loaned an equal amount of
contract. [Arts. 1642, 1643, 1644, Civil Code] [Art. 1933, Civil Code] the same kind and
quality [Art. 1953,
3. Object General Rule: Bailor Civil Code]
cannot demand the
Commodatum Mutuum return of the thing General Rule:
until after the Lender may NOT
General Rule: General Rule: expiration of the demand return or
Involves Involves money or period stipulated or payment before the
non-consumable other consumable the accomplishment lapse of the term
movable or movable property of the use for which agreed upon
immovable property the contract was
Consumable - cannot constituted [Art.1946,
Exception: be used in a manner Civil Code]
Consumable goods appropriate to their
may be the object of nature without their Exception: Bailor
commodatum if the being consumed may demand the
purpose of the [Art. 418, Civil Code] return or temporary
contract is NOT use of the thing
consumption of the loaned before
object, as when it is expiration of the term:
merely for exhibition 1. In case of urgent
[Art. 1936, Civil Code] need [Art. 1946,
(e.g., stamps for an Civil Code]
exhibition) 2. If the
commodatum is a
precarium [Art.
4. Ownership of the Thing Loaned 1947, Civil Code]
Commodatum Mutuum 3. If the bailee
commits an act of
Retained by the bailor Transferred to the ingratitude in Art.
[Art. 1933, Civil Code] borrower 765 [Art. 1948,
Civil Code]

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7. As to Liability for Loss 2. The nature of the thing forbids such use
[Art. 1939 (2), Civil Code].
Commodatum Mutuum

Bailor suffers the loss Borrower suffers the

of the subject matter loss even if caused b. As to the Use of Fruits of the Thing
since he is the owner exclusively by a Loaned
[Arts. 1942 and 1174, fortuitous event and
Civil Code] he is not, therefore,
discharged from his General Rule: The bailee acquires the
duty to pay the same permissive use of the thing loaned but not its
amount, kind and fruits [Art. 1935, Civil Code].
quality
Exception: Parties stipulate otherwise; such
stipulation is considered valid [Art. 1940, Civil
C. COMMODATUM
Code].

1. Parties
3. Obligations of the Bailee
1. Bailee – person who receives (debtor,
(TURN-PBS)
borrower)
2. Bailor – person who gives (creditor, lender)
1. Take care of the thing loaned with the
proper diligence of a good father of a family
“Bailor” or “Bailee” may also be used in a
[Art. 1163, Civil Code].
contract of deposit.

2. Use the thing loaned only for the purpose

Who May Be a Bailor in Commodatum?
for which it was loaned and not for any
Anyone. The bailor in commodatum need not be
other purpose [Arts. 1935, 1939 (2), 1942
the owner of the thing loaned [Art. 1938, Civil
(1), Civil Code].
Code], but as against the bailee, the bailor is the
“owner” of the thing loaned.
3. Return the thing upon expiration of the
period stipulated or after accomplishment of
2. Use by Bailee
the use for which it has been constituted
[Arts. 1944, 1946, Civil Code].
a. As to Who May Use the Property
Loaned Exception: Bailee has right of retention for
damages when the bailor who, knowing the
General Rule: The bailee acquires permissive flaws of the thing loaned, does not advise
use of the thing loaned only for himself. He may the bailee of the same [Arts. 1951, 1944,
not lend nor lease the thing loaned to him to a Civil Code].
third person [Art. 1939 (2), Civil Code].
4. Not to lend the thing to a third person who
Exception: The members of the bailee’s is not a member of his household [Art. 1942
household may make use of the thing loaned. (4), Civil Code].
Exception: The members of the bailee’s
Exceptions to the Exception household may make use of the thing
1. If there is a stipulation to the contrary, or loaned.
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Exceptions to the Exception:

a. If there is a stipulation to the contrary Since the bailor retains ownership of the
b. The nature of the thing forbids such use property loaned, generally, it is the bailor who
[Art. 1939 (2), Civil Code]. bears the liability for loss of the property loaned
due to fortuitous events.
5. Pay for the ordinary expenses for the use
and preservation of the thing loaned [Art. The bailee is liable for loss if loss is due to
1941, Civil Code]. Bailee’s fault.

6. Bear equally (with the bailor) the Exceptions (DDS-KL): Bailee is liable for loss
extraordinary expenses arising on the of the thing, even if it is through a fortuitous
occasion of the actual use of the thing by event, if the bailee [Art. 1942, Civil Code]
the bailee even though bailee acted without
fault [Art. 1949, Civil Code]. 1. Devoted the thing to any purpose different
from that for which it has been loaned;
7. Solidarily liable when there are two or more
bailees to whom a thing is loaned in the 2. Loaned thing has been Delivered with
same contract [Art. 1945, Civil Code]. appraisal of its value;

Note: If, for the purpose of making use of Exception: Unless there is a stipulation
the thing loaned, the bailee incurs expenses exempting the bailee from responsibility in
which are neither for the use nor the case of a fortuitous event.
preservation of the thing, he is not entitled
to reimbursement [Art. 1950, Civil Code]. 3. Saved his own thing, being able to save
either the thing borrowed or his own thing;
4. Liabilities of Bailee
4. Kept the thing longer than the period
stipulated, or after the accomplishment of
a. for Deterioration of the thing
the use for which the commodatum has
loaned
been constituted;

General Rule: The bailee is not liable for the

5. Lent or leased the thing to a third person;
deterioration of the thing loaned when the
deterioration of the thing is due only to the use
Exception: The members of the bailee’s
thereof and without his fault
household may make use of the thing
[Art. 1943, Civil Code].
loaned.

Exception: The bailee is liable when the

Exceptions to the Exception:
deterioration of the thing is due to his fault
1. There is a stipulation to the contrary, or
[Art. 1943, Civil Code].
2. The nature of the thing forbids such use
[Art. 1939 (2), Civil Code].
b. for Loss of the thing loaned

General Rule: The bailee is not liable for loss

due to a fortuitous event [Art. 1174, Civil Code].

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5. Right of Retention 6. The bailee unduly refuses bailor support

when bailee is legally or morally bound
General Rule: Bailee has no right of retention to give support to the bailor.
of the thing loaned on the ground that the bailor
owes him something, even though it may be by 2. Refund the extraordinary expenses during
reason of expenses [Art. 1944, Civil Code]. the contract for the preservation of the thing
loaned [Art. 1949, Civil Code].
Exception: Bailee has the right of retention for
damages arising from hidden flaws when bailor, Provided that: The bailee brings the same
knowing the flaws of the thing loaned, does not to the knowledge of the bailor before
advise the bailee of the same [Art. 1944, 1951, incurring them, except when they are so
Civil Code]. urgent that the reply cannot be awaited
without danger.
Note: Thing is retained by way of legal pledge.
3. Bear equally (with the bailee) the
extraordinary expenses arising on the
6. Obligations of Bailor (DR-BP) occasion of actual use of the thing by the
bailee [Art. 1949, Civil Code].
1. Demand return of the thing only upon
expiration of the term or after Exception: Contrary stipulation
accomplishment of the use [Art. 1946, Civil
Code]. 4. Pay damages to the bailee for hidden flaws
known to the bailor [Art. 1951, Civil Code].
Exceptions:
1. When bailor has urgent need of the Note: Bailor has no right of abandonment;
thing, he may demand its return he cannot exempt himself from payment of
(extinguish commodatum) or its expenses or damages to the bailee by
temporary use (suspend commodatum) abandoning the thing to the latter [Art.
[Art. 1946, Civil Code]. 1952, Civil Code].
2. Precarium [Art. 1947, Civil Code] or a
contractual relation where the bailor 7. Extinguishment (DEA-PU)
may demand the property loaned at will.
3. If bailee commits any acts of ingratitude 1. Death of either the bailor or the bailee
in Art. 765 [Art. 1948, Civil Code]: [Art. 1939, Civil Code]
4. The bailee committed some offense 2. Expiration of term or accomplishment of
against the person, honor or property of purpose [Art. 1946, Civil Code]
the bailor, or of his wife or children 3. Act/s of ingratitude has/have been
under his parental authority; committed by the bailee, and the bailor
5. The bailee imputes to bailor any criminal demands the return [Art. 1948, Civil Code]
offense, or any act involving moral 4. Upon demand in case of Precarium [Art.
turpitude, even though he should prove 1947, Civil Code]
it, unless the crime or act has been 5. Bailor has Urgent need of the thing loaned,
committed against the bailee himself, his and he demands the return (and not just
wife or children under his authority; or temporary use) [Art. 1946, Civil Code]

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D. MUTUUM 2. Right to receive interest, if expressly

stipulated in writing [Art. 1956, Civil Code]
Mutuum – a contract where one of the parties
(creditor/lender) delivers to another E. PRECARIUM
(debtor/borrower) money or other consumable
Article 1947, Civil Code. The bailor
thing upon the condition that the same amount
may demand the thing at will, and the
of the same kind and quality shall be paid.
contractual relation is called a precarium,
[Art. 1933, Civil Code].
in the following cases:
1. If neither the duration of the contract
1. Obligations of Borrower (EVI) nor the use to which the thing loaned
should be devoted, has been
1. Pay the creditor an Equal amount of the stipulated; or
same kind and quality [Art. 1953, Civil Code] 2. If the use of the thing is merely
2. Pay Value at the time of perfection of loan, tolerated by the owner.
if impossible to deliver the same kind [Art.
1955, Civil Code] Precarium is a kind of commodatum where the
3. Pay Interest, if expressly stipulated in bailor may demand the thing at will. It has been
writing [Art. 1956, Civil Code] defined as a “contract by which the owner of a
thing, at the request of another person, gives
the latter the thing for use as long as the owner
2. Rights of Borrower shall please” [De Leon, Comments and Cases on
Credit Transactions citing Cyc. Law Dictionary].
1. Right of ownership; upon delivery/receipt of
the loan of money or any fungible thing, the In either of the two cases mentioned in Art.
person acquires ownership of the 1947, it is presumed that use of the thing has
money/fungible thing [Art. 1953, Civil Code] been granted subject to revocation by the bailor
2. Right not to pay interest, unless expressly at any time, whether or not the use for which
stipulated in writing [Art. 1956, Civil Code] the thing has been loaned has been
If the debtor, however, pays interest when accomplished. Hence, the name precarium [De
there is no stipulation, the rules on solutio Leon, supra].
indebiti, or natural obligations, shall be
applied [Art. 1960, Civil Code] Note: The use of the term “owner” in Art. 1947
3. Obligations of Creditor (2) of the Civil Code is inaccurate. As per Art.
1938, the bailor need not be the owner of the
Barred from placing stipulations under any cloak thing loaned [De Leon, supra].
or device that circumvent laws on usury. Such
contract or stipulation shall be void [Art. 1957, F. INTEREST
Civil Code]. (Note: See discussion below on
usury.]
1. Interest, in General

4. Rights of Creditor Interest – The compensation allowed by law or

fixed by the parties for the loan or forbearance
1. Right to receive an equal amount of the of money, goods or credits (conventional
same kind and quality [Art. 1953, Civil Code] interest), or the amount imposed by contract, by

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law or by courts as penalty or indemnity for 2. Kinds of Interest

damages (compensatory interest) [Siga-an v.
Villanueva, G.R. No. 173227 (2009)]. a. Conventional Interest

Requisites for Interest to be Simple interest – Paid for the principal at a

Chargeable (EWL) certain rate fixed or stipulated by the parties.

1. Expressly stipulated [Art. 1956, Civil Code]

b. Interest on Interest
If interest is stipulated to be paid, but the
rate of interest is not stipulated, the rate is Compound Interest – Interest that is imposed
the legal interest rate (i.e. 6%) when interest due and unpaid is capitalized or
added to the principal [Art. 1959, Civil Code].
Exceptions:
1. The debtor in delay is liable to pay legal The accrued interest is added to the principal
interest (6% per annum) as indemnity sum and the whole (principal and accrued
for damages [Art. 2209, Civil Code] interest) is treated as a new principal upon
2. Interest accruing from unpaid interest – which the interest is calculated for the next
Interest demanded shall earn interest period [Mambulao Lumber Co. v. Philippine
from the time it is judicially demanded National Bank, G.R. No. L-22973 (1968)].
[Art. 2212, Civil Code] or when there is
an express stipulation General Rule: Compound interest is not
[Art. 1959, Civil Code] presumed [Art. 1959, Civil Code].

2. For conventional interest, agreement is in Exceptions: Compound interest may be

Writing enforced:
[Art. 1956, Civil Code] 1. When there is an express written stipulation
to that effect [Art. 1956, Civil Code] or
3. It is Lawful 2. Upon judicial demand [Art. 2212, Civil Code]

If the above-mentioned requisites are not c. Compensatory, Penalty, or

met, and the borrower: Indemnity Interest

1. Paid interest by mistake, the creditor is Also known as Legal Interest – That which the
obliged to return what was delivered law directs to be charged in the absence of any
[Arts. 1960 and 2154, Civil Code] agreement as to the rate between the parties, or
when there are actual and compensatory
2. Voluntarily paid interest (i.e., with damages imposed by the Court [Siga-an v.
knowledge that the requisites have not been Villanueva, supra].
met), the creditor is authorized to retain Rules for the Award of Interest in the
what was paid [Art. 1423, Civil Code] Concept of Actual and Compensatory
Damages [Lara's Gifts & Decors, Inc. v.
Midtown Industrial Sales, Inc., G.R. No. 225433
(2022) (Resolution)]

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When obligation Compensatory Interest rate Interest Accrual

consists in: Interest (scenario)

> If the penalty or

compensatory interest rate
is stipulated

> If the penalty or

compensatory interest is
not stipulated or
unconscionable

LOANS, > If conventional interest

FORBEARANCE OF is not stipulated or
MONEY, GOODS, OR unconscionable
CREDIT
Interest on Interest Interest rate Interest Accrual

i) Interest on Stipulated rate > As stipulated

conventional interest (compound interest > If not stipulated, from
rate) judicial or extrajudicial
demand

BSP-prescribed legal From judicial demand

rate, if not stipulated or
unconscionable

(ii) Interest on Stipulated rate > As stipulated

compensatory interest (compound interest > If not stipulated, from
rate) judicial or extrajudicial
demand

BSP-prescribed legal From judicial demand

rate, if not
unconscionable

NON-LOAN OR Is demand established Compensatory interest Interest Accrual

NON-FORBEARANCE with reasonable rate
OF MONEY, GOODS, certainty?
OR CREDIT
Yes Stipulated penalty or > As stipulated
compensatory interest > If not stipulated, from
judicial or extrajudicial
demand
Legal rate at 6%, if not
stipulated or
unconscionable.

Interest on interest at 6% From judicial demand

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No Discretionary at 6% From date of judgment

3. Usury
BUT even as usury is legally inexistent, courts
Unlawful or Usurious Interest – Paid or will not hesitate to declare void “excessive,
stipulated to be paid beyond the maximum fixed iniquitous, unconscionable, exorbitant” interest
by law. [Carpo v. Chua, G.R. Nos. 150773 and 153599
(2005)].
The Usury Law [Act No. 2655] is an act fixing a
ceiling on rates of interest on loans and Note: The Circular did not repeal or amend the
declaring the effect of receiving or taking Usury Law, but simply suspended its effectivity.
usurious rates and for other purposes [Arevalo v. Hence, should the Monetary Board restore
Dimayuga, G.R. No. L-26218 (1927)]. interest rate ceilings on loans, the Usury Law
would again apply [De Leon, supra].
Elements of Usury (MR-IT)
[De Leon, supra] II. DEPOSIT
1. A loan or forbearance of Money
2. An understanding between parties that the A deposit is constituted from the moment a
loan shall and may be Returned person receives a thing belonging to another,
3. An unlawful Intent to take more than the with the obligation of safely keeping it and of
legal rate for the use of money or its returning the same [Art. 1962, Civil Code].
equivalent
4. The Taking or agreeing to take for the use Object of Deposit
of the loan of something in excess of what is Art. 1966 provides that only movable things may
allowed by law. be the object of a deposit. However, Art. 2006
provides that movable as well as immovable
Note: A usurious loan transaction is not a property may be the object of sequestration or
complete nullity but defective only with respect judicial deposit.
to the agreed interest, i.e., as if no interest was
stipulated [Carpo v. Chua, G.R. Nos. 150773 and Principal Purpose of a Deposit
153599 (2005)]. Hence, if the principal Safekeeping of the thing; if safekeeping is NOT
obligation is the payment of a sum of money, the principal purpose, or is only an accessory
the debtor will be liable for the principal. And if obligation, there is NO DEPOSIT but some other
there is delay in payment, he is also liable for contract [Art. 1962, Civil Code].
legal interest, following Art. 2209.
Consideration of a Deposit
The Monetary Board of the Central Bank of the General Rule: A deposit is generally gratuitous
Philippines (now Bangko Sentral ng Pilipinas) Except:
issued Circular No. 905, Series of 1982 which 1. If there is an agreement to the contrary
lifted the ceilings on interest rates pursuant to 2. When depositary is engaged in the business
the powers granted to it by the Usury Law. of storing goods [Art. 1965, Civil Code]
Thus, usury is legally non- existent. Interest can
be charged based on agreement of the parties
pursuant to Art. 1306.

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Parties to a Deposit 1. In case of a gratuitous deposit, upon the

1. Depositor (Bailor): person who delivers, death of either the depositor or depositary
or formally transfers, gives, or yields [Art. 1995, Civil Code]. The depositary is not
possession or control of the movable obliged to continue with the contract of
property for purposes of safekeeping deposit.
2. Depositary (Bailee): person who receives 2. By other modes provided in the Civil Code,
e.g. novation, merger, etc. [Art. 1231, Civil
Kinds of Deposit Code].
1. Extrajudicial
a. Voluntary – obligation arises as a 2. Obligations of Depositary (KRB)
consequence of contract;
b. Necessary – obligation arises as a 1. Keep the thing safely
consequence of law or quasi-contract
2. Judicial – obligation arises as a 2. Return the thing to the depositor, heirs,
consequence of a law allowing the issuance successors or person designated in the
of a judicial order constituting a deposit contract, when required [Art. 1972, Civil
Code], together with all its products,
A. VOLUNTARY DEPOSIT accessories and accessions [Art. 1983, Civil
Code] at the place designated when deposit
Voluntary deposit – A voluntary deposit is was made. Otherwise, where the thing may
that wherein the delivery is made by the will of be [Art. 1987, Civil Code].
the depositor [Art. 1968, Civil Code]. A contract
to deposit, or an agreement to constitute a Exception to return on demand: there is no
deposit, is consensual and binding, but the obligation to return on demand when (a) the
deposit itself, being a real contract, is not thing is judicially attached while in the
perfected until the delivery of the thing depositary’s possession, or (b) when the
[Art. 1963, Civil Code] depositary is notified of the opposition of a
third person [Art. 1988, Civil Code].
A deposit may be made by two or more persons
(who believe that they are entitled to the thing Depositary has obligation to return on
deposited with a third person). The third person demand even if period is stipulated.
is to deliver the thing to the one to whom it
belongs [Art. 1968, Civil Code]. Note: The depositary must return the thing
closed and sealed if it is delivered in that
How Entered Into: Orally or in writing condition [Art. 1981, Civil Code].
[Art. 1969, Civil Code].
3. Bear the expenses for preservation of the
How Perfected: The deposit is perfected upon thing deposited if the deposit is onerous
delivery, which is made by the will of the [Art. 1992, Civil Code]
depositor [Arts. 1963 and 1968, Civil Code].

1. Extinguishment 3. Depositary’s Liability for Loss

Loss or destruction of thing deposited, or General Rule: The depositary is not liable in
the event of loss. The required degree of care

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however, is greater if the deposit is for 7. Loss occurs and the depositary Receives
compensation [Art. 1972, Civil Code]. money/replacement, he must deliver such to
the depositor [Art. 1990, Civil Code]
Exceptions (NPC-FUTR):
4. Authority of Depositary (CC-UR)
1. Loss is through his fault or Negligence [Art.
1170, Civil Code] or the negligence of his 1. Depositary may Change way of deposit if he
employee [Art. 1973, Civil Code], even if the may reasonably presume that the depositor
thing was insured [Art. 2207, Civil Code]; would consent if he knew the situation. He
is to notify the depositor thereof and wait
2. Loss while in his Possession, ordinarily for the latter’s decision, unless delay would
raises presumption of fault on his part [Art. cause danger [Art. 1974, Civil Code].
1265, Civil Code] 2. Depositary is required to Collect on interest
earned by certificates, bonds, securities and
3. Loss arose from the Character of the thing instruments when it becomes due [Art.
deposited, and the depositary was notified 1975, Civil Code].
of, or was aware of such character at the 3. Depositary cannot make Use of the thing
time of the constitution of the deposit [Art. deposited, unless with depositor’s consent
1993, Civil Code] or its preservation requires its use [Art.
1977, Civil Code].
4. Loss is through a Fortuitous event, and if 4. Depositary may Return the thing to the
a. It is stipulated that depositary will be depositor even before the time designated,
liable; if there is justifiable reason not to keep it.
b. Depositary uses the thing without
Depositor’s permission; Exception: when the deposit is for valuable
c. Depositary delays its return; or consideration [Art. 1989, Civil Code]
d. d. Depositary allows others to use it
[Art. 1979, Civil Code] 5. Obligations of Depositor
5. Loss when depositary Uses the thing
1. Depositor is obliged to reimburse the
Exception: Use with depositor’s permission depositary for expenses incurred for
or for preservation [Art. 1977, Civil Code] preservation in a gratuitous deposit [Art.
1992, Civil Code].
6. Loss when depositary deposits the thing 2. Depositor is obliged to pay losses incurred
with a Third person due to the character of the thing deposited
[Art. 1993, Civil Code].
Exception: if a stipulation allows for
deposit with a third person Exceptions [Art. 1993, Civil Code]:
1. Depositor was not aware nor expected to
Exception to the Exception: if such third know of the dangerous character of the
person is manifestly careless or unfit [Art. thing;
1973, Civil Code]; 2. Depositor notified the depositary of such
dangerous character;
3. Depositary was aware of the danger without
advice from the depositor.

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If stipulated, depositor is obliged to pay fees. 3. Deposit made by passengers with Common
carriers [Art. 1754, Civil Code].
6. Authority of Depositor 4. Deposit made by travelers in Hotels or inns
[Art. 1998, Civil Code].
1. When there are two or more depositors and
they are not solidary and the thing admits of 2. Deposit by Travelers in Hotels and
division, one cannot demand more than his Inns
share [Art. 1985, Civil Code].
2. If he should lose his capacity to contract Before keepers of hotels or inns may be held
after having made the deposit, the thing responsible as depositaries with regard to the
cannot be returned except to persons who effects of guests, the following must concur:
may have administration of his property and 1. Keepers or their employees have previously
rights [Art. 1986, Civil Code]. been informed about the effects brought by
the guests; and
7. Right of Retention 2. The latter have taken the precautions
prescribed regarding their safekeeping [Art.
The depositary may retain the thing until the full 1998, Civil Code].
payment of what may be due him by reason of
the deposit [Art. 1994, Civil Code]. a. Extent of Liability Under Art. 1998,
Civil Code
Note that the thing is retained by way of legal 1. Those lost or damaged in hotel rooms which
pledge [Ortiz v. Kayanan, G.R. No. L-32974 come under the term “baggage” or articles
(1979)]. such as clothing as are ordinarily used by
travelers
B. NECESSARY DEPOSIT 2. Those lost or damaged in hotel annexes
such as vehicles in the hotel’s garage [De
Made in compliance with a legal obligation, or Leon, supra].
on the occasion of any calamity [Art. 1996, Civil 3. Those lost after the perfection of the
Code], or by travelers in hotels and inns [Arts. contract of deposit [Art. 1962, Civil Code,
1998-2004, Civil Code]. Durban Apartments v. Pioneer Insurance,
G.R. No. 179419 (2011)]
1. Kinds (LCCH)
b. When Hotel-Keeper Liable
1. Deposit made in compliance with a Legal Regardless of the amount of care exercised, the
obligation, in which case it is governed by hotel-keeper is liable when:
the law establishing it, and in case of 1. The loss or injury to personal property is
deficiency, the rules on voluntary deposit, caused by his servants or employees as well
e.g., Arts. 538, 586 and 2104 as by strangers [Art. 2000, Civil Code].
2. Deposit taking place on the occasion of any 2. The loss is caused by the act of a thief or
Calamity [Art. 2168, Civil Code] robber without use of arms and without
Note: There must be a causal relation irresistible force [Art. 2001, Civil Code].
between the calamity and the constitution of
the deposit. In this case the deposit is
governed by the rules on voluntary deposit.

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c. When Hotel-Keeper not Liable 2. supplies usually furnished to hotel

1. Loss or injury is caused by force majeure, guests [Art. 2004, Civil Code].
like flood, fire, [Art. 2000, Civil Code], and
theft or robbery by a stranger—not the The right of retention recognized in this article is
hotel-keeper’s servant or employee—with in the nature of a pledge created by operation of
the use of arms or irresistible force [Art. law [Ortiz v. Kayanan, supra]. (See PPSA, Sec.
2001, Civil Code] 20, Priority and Right of Retention by Operation
Exception: Hotel-keeper is guilty of fault or of Law)
negligence in failing to provide against the
loss or injury from his cause [Arts. 1170 and C. JUDICIAL DEPOSIT
1174, Civil Code]
Judicial Deposit or sequestration takes place
2. Loss is due to acts of the guest, his family, when attachment or seizure of property in
servants, visitors [Art. 2002, Civil Code] litigation is ordered [Arts. 2005- 2009, Civil
Code]. It is the only type of deposit that may
3. Loss arises from the character of the things involve immovable property.
brought into the hotel [Art. 2002, Civil Code]
Examples of Judicial Deposit
Rule in the Occurrence of Theft or Robbery [De Leon, supra]
The act of a thief or robber, who has entered the 1. When properties are attached by the sheriff
hotel is not deemed force majeure, unless it is upon the filing of a complaint [Rule 57,
done with the use of arms or through irresistible Rules of Court]
force [Art. 2001, Civil Code]. 2. When a receiver (a disinterested party) is
appointed by the court to administer and
Exemption or Diminution of Liability preserve the property in litigation [Rule 59,
The hotel-keeper cannot free himself from Rules of Court]
responsibility by posting notices to the effect 3. When personal property is seized by sheriff
that he is not liable for articles brought by the in suits of replevin or manual delivery of
guest [Art. 2003, Civil Code]. This is due to personal property [Rule 60, Rules of Court]
public policy. The hotel business is imbued with
public interest [YHT Realty Corp. v. CA, G.R. No. 1. Nature and Purpose
126780 (2005)].
It is auxiliary to a case pending in court. The
Any stipulation between the hotel-keeper and purpose is to maintain the status quo during
the guest whereby the responsibility of the pendency of the litigation or to insure the right
former as set forth in Arts. 1998 to 2001 is of the parties to the property in case of a
suppressed or diminished shall be void [Art. favorable judgment [De Leon, supra].
2003, Civil Code].

d. Hotel-Keeper’s Right to 2. Depositary of Sequestered Property

Retention
The hotel-keeper has a right to retain the things A person is appointed by the court [Art. 2007,
brought into the hotel by the guest, as a Civil Code] with the obligations —
security for credits on account of:
1. lodging,
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1. To take care of the property with the

obligation of the principal debtor in case
diligence of a good father of the family [Art.
the latter should fail to do so.
2008, Civil Code]
2. To continue in his responsibility until the
If a person binds himself solidarily with
controversy which gives rise thereto is the principal debtor, the provisions of
ended, unless the court so orders [Art. Section 4, Chapter 3, Title 1 of this Book
2007, Civil Code] shall be observed. In such case the
contract is called a suretyship.
3. Applicable Law
General Rule: Guaranty is gratuitous
Judicial deposit law is remedial or procedural.
The Rules of Court govern matters not provided
Exception: When there is a stipulation to the
for in the Civil Code [Art. 2009, Civil Code].
contrary [Art. 2048, Civil Code]

1. Obligations Secured
III. GUARANTY AND SURETYSHIP
1. The guaranty must be founded on a valid
Guaranty – A contract whereby a person
principal obligation
(guarantor) binds himself to the creditor to fulfill
[Art. 2052 (1), Civil Code]
the obligation of the principal debtor in case the
2. A guaranty may secure the performance of a
latter should fail to do so [Art. 2047, Civil Code].
voidable, unenforceable, and natural
obligation [Art. 2052 (2), Civil Code]. This
Suretyship – A relation which exists where one
implies that a guaranty may secure the
person (surety) binds himself solidarily with the
performance of a:
principal debtor, such that the former
a. Voidable contract – such contract is
undertakes a direct and primary obligation or
binding, unless annulled by proper court
other duty to a third person (creditor), who is
action.
entitled to but one performance, and as
b. Unenforceable contract – because
between the two who are bound, the latter
such contract is not void, but may be
(principal debtor) rather than the former
ratified.
(surety) should perform.
c. Natural obligation – the creditor may
proceed against the guarantor though
While a surety undertakes to pay if the principal
he has no right of action against the
debtor does not pay, the guarantor only binds
principal debtor, for the reason that the
himself to pay if the principal debtor is unable to
latter’s obligation is not civilly
pay [See benefit of excussion, Art. 2058, Civil
enforceable. When the debtor himself
Code].
offers a guaranty for his natural
obligation, he impliedly recognizes his
A. NATURE AND EXTENT OF
liability, thereby transforming the
GUARANTY obligation from a natural into a civil one.
3. A guaranty may secure a future debt [Art.
Article 2047, Civil Code. By guaranty a 2053, Civil Code]; Continuing Guaranty
person, called the guarantor, binds a. Not limited to a single transaction but
himself to the creditor to fulfill the which contemplates a future course of

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dealings, covering a series of 2. Resorted to all the legal remedies against

transactions generally for an indefinite the debtor.
time or until revoked.
b. It is prospective in its operation and is To avail of the benefit of excussion, the
generally intended to provide security guarantor must [Art. 2060, Civil Code]:
with respect to future transactions. 1. Set it up against the creditor upon demand
c. Future debts, even if the amount is not for payment; and
yet known, may be guaranteed but 2. Point out to the creditor available property
there can be no claim against the of the debtor within PH territory sufficient to
guarantor until the amount of the debt cover the amount of the debt.
is ascertained or fixed and demandable
[De Leon, supra]. Excussion will be available even if judgment is
rendered against the principal debtor [Tupaz v.
2. Parties to a Guaranty CA, G.R. No. 145578 (2005)].

1. Creditor General Rule: The guarantor has the right to

2. Debtor of the principal obligation benefit from excussion/exhaustion.
3. Guarantor
Exceptions (ESIAP)
Qualifications of a Guarantor The excussion shall not take place:
1. Possesses integrity; 1. If the guarantor has Expressly renounced it;
2. Capacity to bind himself; 2. If he has bound himself Solidarily with the
3. Sufficient property to answer for the debtor;
obligation which he guarantees. 3. In case of Insolvency of the debtor;
4. When he has Absconded, or cannot be sued
General Rule: Creditor has the right to within the Philippines unless he has left a
demand another guarantor with the manager or a representative; or
qualifications in Art. 2056 if the previous 5. If it may be Presumed that an execution on
guarantor has been convicted in first instance of the property of the principal debtor would
a crime involving dishonesty or has become not result in the satisfaction of the obligation
insolvent [Art. 2057, Civil Code]. [Art. 2059, Civil Code].

Exception: Creditor has no right to demand a Other Exceptions

replacement guarantor if he himself required 1. If he does not comply with Art. 2060;
and stipulated that the specified person should 2. If he is a judicial bondsman and sub-surety
be the guarantor. [Art. 2084, Civil Code];
3. Where a pledge or mortgage has been given
3. Excussion by him as a special security [Southern
Motors, Inc. v. Barbosa, G.R. No. L-9306
The guarantor cannot be compelled to pay the (1956)]; or
creditor unless the latter has 4. If he fails to interpose it as a defense before
[Art. 2058, Civil Code]: judgment is rendered against him.
1. Exhausted all of the property of the debtor;

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4. Right to Protection 3. The expenses incurred by the guarantor

after having notified the debtor that
Art. 2071 provides a protective remedy in favor payment had been demanded of him;
of the guarantor as against the principal debtor, 4. Damages, if they are due
which is available BEFORE he has paid, but after [Art. 2066, Civil Code].
he is made liable for the debt, and when any of
the ff. grounds is applicable: If no consent of debtor, guarantor only has a
1. When he is sued for the payment; right of reimbursement. There is no right of
2. In case of insolvency of the principal debtor subrogation or indemnity.
or if he is in imminent danger of becoming
insolvent; 6. Right to Subrogation
3. When the debtor has bound himself to
relieve him from the guaranty within a The guarantor who pays is subrogated by virtue
specified period, and this period has thereof to all the rights which the creditor had
expired; against the debtor.
4. When the period for payment has expired;
5. After the lapse of ten years, when the If the guarantor has compromised with the
principal obligation has no fixed period for creditor, he cannot demand of the debtor more
its maturity, unless it be of such nature that than what he has really paid
it cannot be extinguished except within a [Art. 2067, Civil Code].
period longer than ten (10) years;
6. If there are reasonable grounds to fear that 7. Right of Reimbursement
the principal debtor intends to abscond.
If one, at the request of another, becomes a
To protect his interest, a guarantor can proceed guarantor for the debt of a third person who is
against the principal debtor by: not present, the guarantor who satisfies the
1. Obtaining release from the guaranty; or debt may sue either the person so requesting or
2. Demanding a security that shall protect him the debtor for reimbursement
from any proceedings by the creditor and [Art. 2072, Civil Code].
from the danger of insolvency of the debtor
[Art. 2071, Civil Code]. If the debt was for a period and the guarantor
paid it before it became due, he cannot demand
5. Right to Indemnification reimbursement of the debtor until the expiration
of the period unless the payment has been
The guarantor who pays for a debtor must be ratified by the debtor [Art. 2069, Civil Code].
indemnified by the latter.
8. Rights of Co-Guarantors
The indemnity comprises:
1. The total amount of the debt; 1. Right of excussion against the principal
2. The legal interests thereon from the time guarantor and the principal debtor [Art.
the payment was made known to the 2064, Civil Code]
debtor, even though it did not earn interest
for the creditor; 2. Benefit of division [Art. 2065, Civil Code].

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Should there be several guarantors of only 4. The paying guarantor seeks to be

one debtor and for the same debt, the indemnified only to the extent of his
obligation to answer for the same is divided proportionate share in the total obligation.
among all [Art. 2065, Civil Code]. For purposes of proportionate reimbursement,
other guarantors may interpose such defenses
However, the benefit of division will cease if: against the paying guarantor as are available to
a. Solidary liability has been stipulated the debtor against the creditor, except those
[Art. 2065, Civil Code]; or personal to the debtor [Art. 2074, Civil Code].
b. If any of the exceptions to the benefit of
excussion are present B. EFFECT OF GUARANTY
[Art. 2059, Civil Code]
Article 2058, Civil Code. The guarantor
cannot be compelled to pay the creditor
3. Right to reimbursement, i.e. to demand
unless the latter has exhausted all the
payment from the other co-guarantors their
property of the debtor, and has resorted to
proportional share owed to him/her. This is
all the legal remedies against the debtor.
available to the co-guarantor who paid the
debt [Art. 2073 (1), Civil Code] Article 2059, Civil Code. The excussion
shall not take place:
4. Right of an insolvent guarantor to have his (1) If the guarantor has expressly
share borne by the others, including the renounced it;
payor, in the same proportion [Art. 2073 (2), (2) If he has bound himself solidarily with
Civil Code] the debtor;
(3) In case of insolvency of the debtor;
5. Right to set-up defenses against the paying (4) When he has absconded, or cannot be
co-guarantor those available to the principal sued within the Philippines unless he
debtor against the creditor has left a manager or representative;
(5) If it may be presumed that an execution
Exception: Defenses personal to the debtor on the property of the principal debtor
are not available to the guarantor, hence not would not result in the satisfaction of
available as well to the co–guarantor [Art. the obligation.
2081, Civil Code]
Article 2060, Civil Code. In order that
6. Right to Benefit from the release of one the guarantor may make use of the benefit
guarantor [Art. 2078, Civil Code]
of exclusion, he must set it up against the
creditor upon the latter's demand for
payment from him, and point out to the
creditor available property of the debtor
Requisites for Applicability of Art. within Philippine territory, sufficient to cover
2073 of the Civil Code the amount of the debt.
1. There are two or more guarantors of the
same debtor for the same debt; Article 2061, Civil Code. The guarantor
2. Payment has been made by one guarantor; having fulfilled all the conditions required in
3. The payment was made: the preceding article, the creditor who is
a. Because of the insolvency of debtor, or negligent in exhausting the property
b. By judicial demand pointed out shall suffer the loss, to the

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been exhausted, to satisfy the latter’s obligation

extent of said property, for the insolvency
[Tupaz v. CA, G.R. No. 145578 (2005)].
of the debtor resulting from such
negligence.
3. The Creditor has the Duty to Make
Article 2062, Civil Code. In every action Prior Demand for Payment from the
by the creditor, which must be against the Guarantor [Art. 2060, Civil Code]
principal debtor alone, except in the cases The demand is to be made only after judgment
mentioned in article 2059, the former shall on the debt.
ask the court to notify the guarantor of the
action. The guarantor may appear so that 4. The Guarantor has the Duty to Set
he may, if he so desire, set up such
Up the Benefit of Excussion [Art.
defenses as are granted him by law. The
2060, Civil Code]
benefit of excussion mentioned in article
2058 shall always be unimpaired, even if
judgment should be rendered against the As soon as he is required to pay, the guarantor
principal debtor and the guarantor in case must also point out to the creditor available
of appearance by the latter. property (not in litigation or encumbered) of the
debtor within the Philippines.
Article 2063, Civil Code. A compromise
between the creditor and the principal
debtor benefits the guarantor but does not 5. The Creditor has the Duty to Resort
prejudice him. That which is entered into to All Legal Remedies [Arts. 2058
between the guarantor and the creditor and 2061, Civil Code]
benefits but does not prejudice the
principal debtor.
After the guarantor has fulfilled the conditions
for making use of the benefit of excussion, it
1. The Guarantor has the Benefit of becomes the duty of the creditor to:
Excussion/Exhaustion [Art. 2058, 1. Exhaust all the property of the debtor
Civil Code] pointed out by the guarantor;
2. If he fails to do so, he shall suffer the loss
2. The Creditor has the Right to for the insolvency of the debtor, but only to
the extent of the value of the said property
Secure a Judgment Against the
Guarantor Prior to the Excussion
6. The Creditor has the Duty to Notify
the Guarantor in the Action Against
General Rule: An ordinary personal guarantor
the Debtor [Art. 2062, Civil Code]
(NOT a pledgor/mortgagor), may demand
exhaustion of all the property of the debtor
Notice to the guarantor is mandatory in the
before he can be compelled to pay.
action against the principal debtor. The
guarantor, however, is not duty bound to appear
Exception: The creditor may, prior thereto,
in the case, and his non-appearance shall not
secure a judgment against the guarantor, who
constitute default, with its consequential effects.
shall be entitled, however, to a deferment of the
execution of said judgment against him, until
Rationale: To give the guarantor the
after properties of the principal debtor shall have
opportunity to allege and substantiate whatever

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defenses he may have against the principal cannot be indemnified by the debtor. The
obligation, and chances to set up such defenses guarantor can only demand reimbursement
as are afforded him by law. upon expiration of the period.

7. A Compromise Shall Not Prejudice Exception: Prior consent or subsequent

a Person Not Party to It [Art. 2063, ratification by the debtor.
Civil Code]
The guarantor may also proceed against the
A compromise between creditor and principal debtor even before payment has been made
debtor benefits the guarantor but does not under certain conditions [Art. 2071, Civil Code].
prejudice him.
C. EXTINGUISHMENT OF GUARANTY
A compromise between guarantor and the
creditor benefits but does not prejudice the 1. General Rule
principal debtor.
The obligation of the guarantor is extinguished
8. Effects of Guaranty between the at the same time as that of the debtor and for
Debtor and the Guarantor the same causes as all other obligations [Art.
2076, Civil Code].
1. The guarantor has the duty to notify the
debtor before paying the creditor [Art. 2068; 2. Specific Instances that Extinguish
see also Arts. 1236 and 1237, Civil Code] the Guaranty

Should payment be made without a. Creditor Voluntary Accepts the

notification or against the debtor’s will, and Immovable for Payment
supposing the debtor has already made a
prior payment, the debtor would be justified The guarantor is released if the creditor
in setting up the defense that the obligation voluntarily accepts immovable or other property
has already been extinguished by the time in payment of the debt, even if he should
the guarantor made the payment. The afterwards lose the same through eviction [Art.
guarantor will then lose the right of 2077, Civil Code].
reimbursement and consequently the right
of subrogation. b. When an Extension is Granted to
the Debtor without the Consent of
2. The guarantor cannot demand
Guarantor
reimbursement for payment made by him
before the obligation has become due [Art.
An extension granted to the debtor by the
2069, Civil Code]
creditor without the consent of the guarantor
extinguishes the guaranty.
General Rule: Since a contract of guaranty is
only subsidiary, the guarantor cannot be liable
However, the mere failure on the part of the
for the obligation before the date on which the
creditor to demand payment after the debt has
debtor’s liability will be due. Any payment made
become due does not, of itself, constitute any
by the guarantor before the obligation is due
extension of time [Art. 2079, Civil Code].

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c. When Subrogation is Not Feasible It shall be deemed as insurance contract if the

due to Act of Creditor surety’s main business is that of insurance, and
not where the contract is merely incidental to
Guarantors, even though they may be solidary, any other legitimate activity of the surety.
are released from their obligation, whenever by
some act of the creditor they cannot be 2. Form of Surety
subrogated to the rights, mortgages, and
preference of the latter [Art. 2080, Civil Code]. The contract of a surety is evidenced by a
document called surety bond which is essentially
D. NATURE AND EXTENT OF a promise to guarantee the obligation of the
SURETYSHIP obligor. In turn, the obligor executes an
indemnity agreement in favor of the insurer
[De Leon].
1. Concept of Suretyship
Article 2047, Civil Code. By guaranty a It is an accessory contract unlike a contract of
person, called the guarantor, binds insurance which is the principal contract itself.
himself to the creditor to fulfill the
obligation of the principal debtor in case A suretyship (and guaranty) is covered by the
the latter should fail to do so. Statute of Frauds since it constitutes a special
promise to answer for the debt, default, or
If a person binds himself solidarily with miscarriage of another [Art. 1403, Civil Code].
the principal debtor, the provisions of
Section 4, Chapter 3, Title 1 of this Book
Therefore, a suretyship (or guaranty) is
shall be observed. In such case the
unenforceable unless:
contract is called a suretyship.
1. The suretyship (or guaranty) or some note
or memorandum thereof, is in writing; and
Suretyship 2. It is subscribed by the party or his agent
A relation which exists where one person [Art. 1403, Civil Code].
(surety) binds himself solidarily with the
principal debtor, such that the former 3. Obligations Secured
undertakes a direct and primary obligation or
other duty to a third person (creditor), who is A suretyship is valid despite absence of any
entitled to but one performance, and as direct consideration received by the surety, from
between the two who are bound, the latter the principal debtor or from the creditor.
(principal debtor) rather than the former
(surety) should perform. The consideration necessary to support a
surety’s obligation need not pass directly to the
A suretyship is also an agreement whereby a surety. A consideration moving the principal
surety guarantees the performance or debtor alone is sufficient [Garcia v. CA, G.R. No.
undertakes to answer, under specified terms and 80201 (1990)].
conditions, for the debt, default or miscarriage
of the principal or obligor, such as failure to Strictissimi Juris Rule
perform, or breach of trust, negligence and the
The obligation of the surety cannot be extended
like, in favor of a third party.
by implication beyond the terms of the contract
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[La Insular v. Go-Tauco, G.R. No. L-13307 4. As Distinguished from Standby

(1919)]. Letters of Credit [Transfield
Philippines, Inc. v. Luzon Hydro
The rule will apply only after it has been Corp., G.R. No. 146717 (2004),
definitely ascertained that the contract is one of
citing Professor John F. Dolan]
suretyship or guaranty. It cannot be used as an
aid in determining whether a party’s undertaking
Surety
is that of a surety or guarantor [Palmares v. CA,
G.R. No. 126490 (1998)]. Surety Standby Letters of
Credit
This rule is applicable only to an accommodation Upon debtor’s Upon default, the
surety. An accommodation surety acts without default, the creditor creditor-beneficiary
motive of pecuniary gain. Therefore, the expects that the expects that it will
accommodation surety should be protected surety will perform promptly receive cash
against unjust pecuniary impoverishment by before any litigation
imposing on the principal, duties akin to those of
There is no duty to There is a duty to pay
a fiduciary [Pacific Tobacco Corp. v. Lorenzana,
pay or indemnify the the creditor-
G.R. No. L-8086 (1957)]. creditor until the beneficiary upon
creditor establishes presentation of the
This rule is not applicable to compensated the fact of the required documents
sureties. The rule of strictissimi juris was meant debtor’s non-
to secure gratuitous obligations, which is not performance No need to prove
non-performance in
present in compensated sureties. Thus, in
litigation.
compensated sureties, if there is any ambiguity
in the surety bond, it should be interpreted
against the surety company that prepared it 5. As Distinguished from Guaranty
[Pao Chuan Wei v. Reposito, G.R. No. L-10292 [Zobel, Inc. v. CA, G.R. No. 113931
(1958)]. (1998)]

Comprehensive or Continuing Surety Surety Guaranty

Art. 2053 applies to suretyships as well, such An accessory promise A collateral

that a surety may also be given as security for by which a person undertaking to pay
future debts. binds himself for the debt of another in
another already case the latter is
bound, and agrees unable to pay the
It contemplates a prospective or future course with the creditor to debt
of dealing, covering a series of transactions satisfy the obligation
within the stipulations of the contract, until the if the debtor does not
expiration or termination of the suretyship.
A surety is usually The contract of
bound with his guaranty is the
principal by the same guarantor's own
instrument, executed separate undertaking,
at the same time, and in which the principal
on the same does not join. It is
consideration. He is usually entered into

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immediate, primary, and absolute [De Leon,

an original promisor before or after that of
and debtor from the the principal, and is supra].
beginning, and is often supported on a
held, ordinarily, to separate
Surety Guaranty
know every default of consideration from
his principal. that supporting the Surety has the right Joint and solidary
contract of the to indemnification debtor has only a
principal. The original and subrogation as right to
contract of his against the principal reimbursement as
principal is not his debtor [Arts. 2066- against his co-
contract, and he is 2067, Civil Code] debtors [Art. 1217,
not bound to take Civil Code]
notice of its non-
performance Accessory, ancillary, Not dependent on, or
and collateral not an incident to a
A surety will not be A guarantor is often obligation principal obligation
discharged, either by discharged by the
the mere indulgence mere indulgence of
of the creditor to the the creditor to the E. LEGAL AND JUDICIAL BONDS
principal, or by want principal, and is
of notice of the usually not liable
default of the unless notified of the Article 2051, Civil Code. A guaranty
principal, no matter default of the may be conventional, legal, or judicial, or
how much he may be principal gratuitous or by onerous title.
injured thereby
It may be constituted, not only in favor of
A surety is the insurer A guarantor is the
of the debt, and he insurer of the the principal debtor, but also in favor of
obligates himself to solvency of the the other guarantor, with the latter’s
pay if the principal debtor and thus binds consent, or without his knowledge, or
does not pay himself to pay if the even over his objection.
principal is unable to
pay
Bond
An undertaking that is sufficiently secured, and
[Zobel, Inc. v. CA, G.R. No. 113931 (1998)] not cash or currency.

Note: Rules on indemnification, subrogation, and Bondsman

reimbursement of guarantor apply to sureties.
A surety offered in virtue of a provision of law or
a judicial order.
6. As Distinguished from Joint and
Solidary Obligations [Escaño and 1. Qualifications of Personal
Silos v. Ortigas, G.R. No. 151953 Bondsman
(2007)]
1. He possesses integrity;
Nature of Liability 2. He has capacity to bind himself;
Although contractual (limited by the terms of the 3. He has sufficient property to answer for the
contract) and accessory (arises only if principal obligation which he guarantees.
debtor is held liable), a surety’s liability is direct,

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2. Pledge or Mortgage in Lieu of Bond

otherwise known as "The Chattel
Mortgage Law"
Guaranty or suretyship is a personal security. b. b. Articles 2085-2123, 2127,
Pledge or mortgage is a property or real 2140-2141, 2241, 2243, and
security. If the person required to give a legal or 2246-2247 of Republic Act No.
judicial bond should not be able to do so, a 386, otherwise known as the "Civil
pledge or mortgage sufficient to cover the Code of the Philippines";
obligation shall be admitted in lieu thereof. c. c. Section 13 of Republic Act No.
5980, as amended by Republic Act
3. Bondsman Not Entitled to No. 8556, otherwise known as the
Excussion "Financing Company Act of 1998";
d. d. Sections 114-116 of Presidential
A judicial bondsman and the sub-surety are not Decree No. 1529, otherwise
entitled to the benefit of excussion.
known as the "Property
Registration Decree";
e. e. Section 10 of Presidential
Reason: They are not mere guarantors, but
Decree No. 1529, insofar as the
sureties whose liability is primary and solidary.
provision thereof is inconsistent
with this Act; and
Effect of Negligence of Creditor f. f. Section 5(e) of Republic Act No.
Mere negligence on the part of the creditor in 4136, otherwise known as the
collecting from the debtor will not relieve the "Land Transportation and Traffic
surety from liability. Code"

Implications
IV. PERSONAL PROPERTY
SECURITY ACT (R.A. No. 11057) Sec. 66 provides that the PPSA will now apply
over the laws it repeals. The following are the
A. SCOPE implications in connection with the repealing
clause:
General Rule: The PPSA applies to ALL 1. The system of conventional pledges and
transactions that secure an obligation with chattel mortgages are “replaced with a
movable collateral framework for secured transactions”
Exceptions [Somera, The Personal Property Security
1. Interests in aircrafts Act, 2018].
2. Interests in ships 2. Art. 2127 of the Civil Code is modified with
regard to property included in a Real Estate
Mortgage. Under Art. 2127, a REM “extends
Section 66, PPSA. Repealing Clause. — to natural accessions, to the improvements,
The following laws, and all laws, decrees, growing fruits and the rents or income not
orders, and issuances or portions thereof, yet received when the [principal] obligation
which are inconsistent with the provisions becomes due.”
of this Act, are hereby repealed,
amended, or modified accordingly:
a. Sections 1 to 16 of Act No. 1508,

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These Civil Code provisions have been Proceeds

repealed or amended [Somera]. Under the PPSA, even when the collateral is
1. Arts. 2093–2123 on Pledges are disposed, the security interest extends to its
repealed, with the exception of Art. identifiable or traceable proceeds [Sec. 8]. It
2121 on Legal Pledges. covers sales, leases, licenses, exchanges, other
2. Arts. 2140–2141 (as well as Act. No. forms of disposition [Sec. 9].
1508) on Chattel Mortgages are
repealed. Proceeds are:
3. The provisions on special preferred 1. Any property received upon sale, lease or
credits on movables (Arts. 2241, 2243, other disposition of collateral; or
2246, 2247) are amended. 2. Whatever is collected on or distributed with
respect to collateral, claims arising out of
The creation of the Registry, as the loss or damage to the collateral, as well
defined in Sec. 3 (h) of the PPSA as a right to insurance payment or other
repeals the ff. Laws: compensation for loss or damage of the
collateral [Sec. 3 (f)].
1. Secs. 10 & 114–116 of PD No. 1529
(Property Registration Decree) on the Parties
functions of the Register of Deed & The parties to a security agreement under the
Registration of Chattel Mortgages, PPSA are the grantor and the secured creditor
2. Sec. 13 of the Financing Company Act of [Sec. 3].
1998 on registry of financial leases, and
3. Sec. 5 (3) of Rep. Act No. 4136 (Land Grantor [Sec. 3 (c)]
Transportation Code) on the recording of 1. The person who grants a security interest in
mortgages, attachments and other collateral to secure its own obligation or that
encumbrances on motor vehicles [Somera]. of another person;
2. A buyer or other transferee of a collateral
B. SECURITY INTEREST that acquires its right subject to a security
interest;
A security interest is a property right in collateral 3. A transferor in an outright transfer of an
that secures payment or other performance of accounts receivable; or
an obligation, regardless of: 4. A lessee of goods.

1. Whether the parties have denominated it as Secured Creditor [Sec. 3 (i)]

a security interest; and A secured creditor is a person that has a security
interest.
2. The type of asset, the status of the grantor
or secured creditor, or the nature of the For the purposes of registration and priority only,
secured obligation “secured creditor” includes a buyer of account
receivable and a lessor of goods under an
Including the right of a buyer of accounts operating lease for not less than one (1) year.
receivable and a lessor under an operating
lease for not less than one year [Sec. 3(j)]

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1. Asset-Specific Rules limited to the lowest amount of the

commingled funds or money.
b. The reckoning period for such amount is
Future Property
between the time when the proceeds
Section 5 (b), PPSA. Creation of a were commingled and the time the
Security Interest. A security agreement may security interest in the proceeds is
provide for the creation of a security claimed.
interest in a future property, but the
security interest in that property is created Tangible Assets Commingled in a
only when the grantor acquires rights in it
Mass; Continuity of Security Interest
or the power to encumber it.
The PPSA provides rules for the continuity of the
security interest over tangible assets (i.e.,
Such security agreement containing a provision movable property) which has either:
over future property is akin to an “After-Acquired 1. Become a fixture,
Property” clause in a Deed of Real Estate 2. Undergone accession or
Mortgage. In both, the security interest is only 3. Undergone commingling.
created once the grantor is the absolute owner
of the future property. According to the PPSA, the security interest over
the said movable will continue, provided that it
Rights to Proceeds and Commingled can still be reasonably traced. However, as to
Funds the question of ownership over the said tangible
When the collateral is disposed, the security assets, Book II of the Civil Code will govern
interest extends to the proceeds from such [Sec. 25].
disposition, in the form of funds, even when
they are credited to a deposit account or money Otherwise, if the tangible asset did not become
are commingled with other funds or money a fixture, or underwent accession or
[Sec. 8]: commingling, a party who obtains the asset
1. Despite the fact that they are no longer in good faith will take it free from any
identifiable security interest. However, good faith will not
2. Only to the extent that they remain exist if the movable property was registered
traceable before being obtained [Sec. 21].

Rules on Commingled Funds [Sec. 8] Accounts Receivables

1. The security interest in the commingled Security interests in accounts receivable shall be
funds shall be limited to the amount of the effective notwithstanding any agreement
proceeds immediately before they were between the grantor and the account debtor or
commingled. any secured creditor limiting in any way the
2. If at any time after the commingling, the grantor’s right to create a security interest [Sec.
balance credited to the deposit account or 10 (a)].
the amount of the commingled money is
less than the amount of the proceeds Likewise, any stipulation limiting the grantor’s
immediately before they were commingled: right to create a security interest shall be void
a. The security interest against the [Sec. 10 (c)].
commingled funds or money shall be However, the PPSA limits the application of these
provisions to accounts receivable arising from:
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1. 1. A contract for the supply or lease of contract. Rather, perfection gives the security
goods or services other than financial interest third-party effectiveness [Somera].
services;
2. A construction contract or a contract for the
sale or lease of real property; and Section 11, PPSA. Means of Perfection. —
3. A contract for the sale, lease or license of A security interest may be perfected by:
intellectual property [Sec. 10 (d)].
a. Registration of a notice with the
Registry;
b. Possession of the collateral by the
Sec. 10 also shall not affect any obligation or
secured creditor; and
liability of the grantor for breach of the
c. Control of investment property and
agreement in Sec. 10 (a).
deposit account. (Also commodity
contract)
C. SECURITY AGREEMENT
A security interest in any tangible asset may
The secured transaction under the PPSA is the be perfected by registration or possession.
security agreement. It is a consensual contract, A security interest in investment property
perfected by the meeting of the minds of the and deposit account (and commodity
grantor and the secured creditor [Somera]. contract) may be perfected by registration
or control.
The agreement must be contained in a written
contract [Sec. 6]. Writing, for the purposes of 1. Perfection by Registration
the PPSA, includes electronic records [Sec. 3
A security interest in all asset types may be
(k)]. It is an accessory obligation entered into by
perfected by registration of a notice with the
a person who grants a property right to another
Registry. Specifically, Sec. 12 (a) provides for
person, in order to secure the payment or
perfection via registration on the ff:
performance of an obligation [Somera].
1. A tangible movable asset
2. Investment property
D. PERFECTION OF SECURITY 3. A deposit account
INTEREST
Notice – a statement of information that is
General Provisions registered in the Registry relating to a security
interest or lien. The term includes an initial
Section 11, PPSA. Perfection of Security
notice, amendment notice, and termination
Interest. —
a. A security interest shall be perfected notice [Sec. 3 (e)].
when it has been created and the
secured creditor has taken one of 2. Perfection by Possession
the actions in accordance with A security interest in a tangible movable asset
Section 12. may be perfected by possession of the collateral
b. On perfection, a security interest by the secured creditor [Sec. 12 (b)].
becomes effective against third
parties. Possession is “the holding of a thing or the
It is not perfection that gives birth to the enjoyment of a right” [Art. 523, Civil Code].
security agreement, since it is a consensual

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3. Perfection by Control a. Types of Control Agreements

A security interest in the ff. may be perfected by 1. Control Agreement with Respect to
control [Sec. 12 (c)]: Securities
1. Investment property a. An agreement in writing among the
2. A deposit account issuer or the intermediary, the grantor
3. Commodity contract [Sec. 3(b)(3)] and the secured creditor.
b. The issuer or the intermediary agrees to
A security interest in a deposit account or follow instructions from the secured
investment property may be perfected by control creditor with respect to the security,
through: without further consent from the grantor
1. The creation of the security interest in favor [Sec. 3 (b)(1)].
of the deposit-taking institution or the 2. Control Agreement with Respect to Rights to
intermediary; a Deposit Account
2. The conclusion of a control agreement; or a. An agreement in writing among the
3. For an investment property that is an deposit-taking institution, the grantor
electronic security not held with an and the secured creditor.
intermediary, the notation of the security b. The deposit-taking institution agrees to
interest in the books maintained by or on follow instructions from the secured
behalf of the issuer for the purpose of creditor with respect to the payment of
recording the name of the holder of the funds credited to the deposit account
securities [Sec. 13 (a)]. without further consent from the grantor
[Sec. 3 (b)(2)].
The Intermediary’s Role in Control 3. Control Agreement with Respect to
Agreements Commodity Contracts
a. An agreement in writing among the
Under Sec. 13 (b), a deposit-taking institution or grantor, secured creditor, and
intermediary must consent to the entering of a intermediary.
control agreement. b. The commodity intermediary will apply
any value distributed on account of the
The PPSA does not require the intermediary to commodity contract as directed by the
enter into such agreements, since its obligation secured creditor without further consent
is limited to following the instructions of the by the commodity customer or grantor
grantor, who is its depositor. [Sec. 3 (b)(3)].

i.e., Unless the intermediary signs a Control Note: A commodity contract is a commodity
Agreement, it has no obligation to (and may futures contract, an option on a commodity
refuse to follow the instructions of) the secured futures contract, a commodity option, or another
creditor contract, if the contract or option is:
1. Traded on or subject to the rules of a board
Should the intermediary refuse to enter into a of trade that has been designated as a
control agreement, the remedy of the grantor contract market for such a contract; or
and secured creditor is to register the security 2. Traded on a foreign commodity board of
agreement instead, in order to perfect the trade, exchange, or market, and is carried
security interest. on the books of a commodity intermediary
for a commodity customer [Sec. 3 (a)].

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Summary of Perfection of Security the minimum requirements and the fee is

Interests paid, it shall not be rejected [Sec. 28 (a)].
1. The Registry does not determine the
Regis- Possession Control
correctness, authenticity, or validity of
tration
the information contained in the notice.
Tangible P P 2. Thus, questions regarding the validity of
Assets the security agreement are expected to
be decided in a proper litigation after
Invest- P P (if P registration [Somera].
ment certificated)
Property
3. If the Registry rejects the registration of a
Deposit P P (if in P notice, it shall promptly communicate the
Account writing, e.g. fact and reason for rejection to the person
Time Deposit) who submitted the notice [Sec. 28 (b)]

E. REGISTRATION OF SECURITY 4. If the Registry accepts the registration of a

notice, it shall be effective, from the time it
INTEREST
is discoverable on the records of the
Registry, until such time that the duration
A security interest may be perfected by
indicated on the notice lapses [Sec. 30]
registration of a notice with the Registry.
1. Any person may search notices
registered in the Registry [Sec. 27].
Section 26, PPSA. Establishment of 2. The electronic records of the Registry
Electronic Registry. — shall be the official records [Sec. 27].
a. The Registry shall be established in and
administered by the LRA. Effects of Registration
b. The Registry shall provide electronic
means for registration and searching of 1. The security interest becomes binding on
notices. third parties [Sec. 11].

Procedure 2. The registered notice is considered a public

record [Sec. 27].
1. The grantor, or any person authorized by the
grantor, submits the notice to the Registry, 3. Subsequent purchasers of the collateral are
and pays the prescribed fee. The notice is charged with notice of the security interest
considered sufficient if it: burdening the title of said collateral.
1. Identifies the grantor by an
identification number Such notice cannot be overcome by proof of
2. Identifies the secured creditor or its good faith [Legarda & Prieto v. Saleeby, G.R.
agent by name No. L-8936 (1915)]
3. Provides an address for the grantor and
secured creditor or its agent 4. Establishes the basis of priority of security of
4. Describes the collateral [Sec. 28]. interest according to time of registration
2. The Registry accepts or rejects the notice [Sec. 17].
for registration. However, if the notice meets
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F. PRIORITY OF SECURITY INTEREST

deposit-taking institution or the
intermediary.
Priority – the right of a person to derive the b. The order of priority among competing
economic benefit of its security interest in security interests in a deposit account or
preference to the right of a competing claimant investment property that were perfected
[Somera, 2018, citing UNCITRAL Guidelines]. by the conclusion of control agreements
shall be determined on the basis of the
The perfection of a security interest gives rights time of conclusion of the control
to the secured creditor against other creditors agreements.
asserting rights over the same collateral. c. Any rights to set-off that the
deposit-taking institution may have
Priority Rules against a grantor’s right to payment of
The priority of security interests and liens on the funds credited to a deposit account shall
same collateral shall be determined according to
have priority over a security interest in
the deposit account.
the time of registration of a notice or perfection
by other means [Sec. 17].
Priority of Security Interests Over
General Rule: Such priority is without regard Deposit Accounts/Investment
to the order of creation of the security interests Property
and liens, or to the mode of perfection [Sec. Note: With (1) having the highest priority
17]. 1. Right to set-off of the deposit-taking
institution against a grantor’s right to
Exception: Except as provided in Secs. 18-25 payment of funds credited to a deposit
of the PPSA or Secs. 6.02-6.05 of these Rules account
[Rule VI, Sec, 6.01, IRR of R.A. 11057].
2. Security interest in a deposit account with
respect to which the secured creditor is the
1. Priority Rules for Intangible deposit-taking institution
Assets
3. Security interest in a deposit account or
Security Interests Over Deposit investment property that is perfected by a
Accounts/Investment Properties control agreement. The earlier the
conclusion of the control agreement, the
Section 18, PPSA. Priority for Perfection higher in priority
by Control. — A security interest in a
deposit account with respect to which the 4. Security interest in a deposit account or
secured creditor is the deposit-taking investment property that is perfected by
institution or the intermediary shall have registration
priority over a competing security interest
perfected by any method.
Security Interests Over Electronic
a. A security interest in a deposit account
or investment property that is perfected Securities
by a control agreement shall have Section 18, PPSA. Priority for Perfection
priority over a competing security by Control. —
interest except a security interest of the

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ownership of the underlying rights or property

--- XXX ---
embodied by them
[Rule I, Sec. 1.05(kk), IRR of R.A. 11057].
A security interest in electronic securities
not
held with an intermediary perfected by a Section 18, PPSA. Priority for Perfection
notation of the security interests in the by Control. —
books maintained for that purpose by or on --- XXX ---
behalf of the issuer shall have priority over
a security interest in the same securities A security interest in a security certificate
perfected by any other method. perfected by the secured creditor’s
possession of the certificate shall have
A security interest in electronic securities priority over a competing security interest
not held with an intermediary perfected by perfected by registration of a notice in the
the conclusion of a control agreement shall Registry.
have priority over a security interest in the
same securities perfected by registration of
a notice in the Registry. Priority of Security Interests Over
Security Certificates
The order of priority among competing 1. Security interest in a security certificate
security interests in electronic securities not perfected by possession of said certificate
held with an intermediary perfected by the 2. Security interest in a security certificate
conclusion of control agreements is perfected by registration of a notice in the
determined on the basis of the time of Registry.
conclusion of the control agreements.
Security Interests Over Instruments or
Priority of Security Interests Over Negotiable Documents
Non- Intermediated Electronic
Section 19, PPSA. Priority for Instruments
Securities and Negotiable Documents. – A security
1. Security interest in non-intermediated interest in an instrument or negotiable
electronic securities perfected by a notation document that is perfected by possession of
of such interest in the books of the issuer the instrument or the negotiable document
shall have priority over a security interest in
2. Security interest in non-intermediated the instrument or negotiable document that
electronic securities perfected by control is perfected by registration of a notice in
the Registry.
The earlier the conclusion of the control
agreement, the higher in priority Priority of Security Interests Over
Security Certificates
2. Priority Rules for Tangible Assets
1. A security interest in an instrument or
negotiable document that is perfected by
Security Interests Over Security possession
Certificates 2. A security interest in an instrument or
Certificated non-intermediated securities are negotiable document that is perfected by
considered tangible property if the mere registration
possession of such instruments results in the
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3. Priority Rules for Specific Cases:

inventory, intellectual property or
Security Interests Over Goods livestock shall have priority over a
that are Subject to the Right of conflicting perfected security interest in
Retention the same inventory, intellectual property
or livestock if:
Section 20, PPSA. Priority and Right of 1. The purchase money security
Retention by Operation of Law. – A person interest is perfected when the
who provides services or materials with grantor receives possession of
respect to the goods, in the ordinary course the inventory or livestock, or
of business, and retains possession of the acquires rights to intellectual
goods shall have priority over a perfected property; and
security interest in the goods until payment 2. Before the grantor receives
thereof. possession of the inventory or
livestock, or acquires rights in
Priority of Security Interests Over intellectual property, the purchase
Goods money secured creditor gives
1. Lien over goods created by operation of law written notification to the
in favor of a person who provides services holder of the conflicting
or materials with respect to the goods, in
perfected security interest in
the same types of inventory,
the ordinary course of business
livestock, or intellectual property.
2. Any perfected security interest over the
The notification sent to the holder of
same goods.
the conflicting security interest may
cover multiple transactions between
PMSI – Purchase Money Security the purchase money secured
Interest creditor and the grantor without the
need to identify each transaction.
d. The purchase money security interest in
Section 23, PPSA. Purchase Money
equipment or consumer goods perfected
Security Interest. —
timely in accordance with subsections
a. A purchase money security interest in
(a) and (b), shall have priority over the
equipment and its proceeds shall
rights of a buyer, lessee, or lien holder
have priority over a conflicting security
which arise between delivery of the
interest, if a notice relating to the
equipment or consumer goods to the
purchase money security interest is
grantor and the time the notice is
registered within three (3) business
registered.
days after the grantor receives
possession of the equipment.
b. A purchase money security interest in Priority of Security Interests Over
consumer goods that is perfected by Equipment and its Proceeds
registration of notice not later than 1. A PMSI in equipment and its proceeds shall
three (3) business days after the have priority, provided that –
grantor obtains possession of the A notice relating to the PMSI is registered
consumer goods shall have priority over within three (3) business days after the
a conflicting security interest. grantor receives possession of equipment.
c. A purchase money security interest in

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2. Right over the same equipment in favor of a 2. Any perfected security interest in the same
buyer, lessee, or lien holder which arise inventory, intellectual property or livestock.
between delivery of the equipment to the
grantor and the time the notice is registered
3. Any perfected security interest in the same Section 24, PPSA. Livestock. – A
equipment. perfected security interest in livestock
securing an obligation incurred to enable
the grantor to obtain food or medicine for
Priority of Security Interests Over
the livestock shall have priority over any
Consumer Goods other security interest in the livestock,
1. A PMSI in consumer goods shall have except for a perfected purchase money
priority, provided that – security interest in the livestock, if the
A notice relating to the PMSI is registered secured creditor providing credit for food or
within three business days after the grantor medicine gives written notification to the
receives possession of the consumer goods holder of the conflicting perfected security
2. Right over the same goods in favor of a interest in the same livestock before the
buyer, lessee, or lien holder which arise grantor receives possession of the food or
between delivery of consumer goods to the medicine.
grantor and the time the notice is registered
3. Any perfected security interest in the goods. 1. A perfected purchase money security
interest in the livestock incurred to enable
Priority of Security Interests Over the grantor to obtain food or medicine for
Inventory, Intellectual Property, or the livestock, provided that –
Livestock a. The secured creditor providing credit for
1. A PMSI in inventory, intellectual property or said food or medicine gives written
livestock shall have priority, provided that – notification to the holder of the
a. The PMSI is perfected when the grantor conflicting perfected security interest in
receives possession of the inventory or the same livestock.
livestock, or acquires rights to b. Such notice must be given before the
intellectual property; grantor receives possession of the food
b. The secured creditor gives a written or medicine
notification to the holder of the 2. A perfected security interest in livestock
conflicting perfected security interest in securing an obligation incurred to enable the
the same types of inventory, livestock, grantor to obtain food or medicine for the
or intellectual property livestock
i. Such notification must be given 3. Other security interest in the livestock,
before the grantor receives incurred for any other purpose
possession of the inventory or
livestock, or acquires rights in Note: A purchase money security interest is a
intellectual property; and security in goods, taken by:
ii. The notification may cover multiple 1. Seller to secure the price; or
transactions between the secured 2. Person who gives value to enable grantor to
creditor and the grantor, without the acquire goods to the extent that the credit is
need to identify each transaction. used for that purpose [Sec. 3 (g)].

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4. Prior to Insolvency Proceedings G. ENFORCEMENT OF SECURITY

INTEREST
Section 22, PPSA. Effect of the Grantor’s
Insolvency on the Priority of a Security 1. Repossession
Interest. Subject to the applicable
insolvency law, a security interest perfected Repossession is a preliminary process that
prior to the commencement of insolvency must be undertaken by secured creditor seeking
proceedings in respect of the grantor shall to enforce its security interest [Somera].
remain perfected and retain the priority it
had before the commencement of the May be undertaken extrajudicially or judicially.
insolvency proceedings.
1. Extra-Judicial Repossession
This section amends Arts. 2241, 2243, 2246,
2247 of the Civil Code or the provisions on The secured creditor may:
special preferred credits on movable property. 1. Take possession of the collateral without
judicial process if the security agreement so
1. The preference created by these Articles will stipulates: Provided, That possession can
be subordinate to the priority perfected be taken without breach of the peace.
pursuant to the PPSA [Somera]. 2. Remove the collateral from the real property
2. During insolvency proceedings, the to which it is affixed, in case it is a fixture,
perfected security interest shall constitute a without judicial process: Provided that –
lien over the collateral [Rule VI, Sec. a. The secured creditor has priority over all
6.04(b), IRR of R.A. 11057] owners and mortgagees
b. The secured creditor exercises due care
Tangible Assets; Intangible Assets in removing the fixture
[Sec. 12] [Sec. 47 (a) & (b)].

Tangible asset – any tangible movable asset, 2. Judicial Repossession

including: If, upon default, the secured creditor cannot
1. Money take possession of collateral without breach of
2. Negotiable instruments the peace, the secured creditor shall:
3. Negotiable documents; and 1. Be entitled to an expedited hearing upon
4. Certificated non-intermediated securities application for an order granting the secured
Only if the mere possession of such creditor possession of the collateral. Such
instruments results in the ownership of application shall include a statement by the
the underlying rights or property secured creditor, under oath:
embodied by them [Rule I, Sec. a. Verifying the existence of the security
1.05(kk), IRR of R.A. 11057]. agreement attached to the application;
b. Identifying at least one (1) event of
Intangible asset – any movable property other default by the debtor under the security
than a tangible asset including, but not limited agreement;
to, investment property, deposit accounts, 2. Provide the debtor, grantor, and, if the
commodity contracts and receivables [Rule 1, collateral is a fixture, any real estate
Sec. 1.05(m), IRR of R.A. 11057].

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mortgagee, a copy of the application, 2. Apply such payment to the satisfaction of

including: the obligation secured by the security
a. All supporting documents; and interest after deducting the secured
b. Evidence for the order granting the creditor’s reasonable collection expenses.
secured creditor possession of the
collateral; and Note: The account debtor may request the
3. Be entitled to an order granting possession secured creditor to provide evidence of its
of the collateral security interest to the account debtor when it
a. Upon the court finding that: delivers the instruction to the account debtor
i. A default has occurred under the [Sec. 48].
security agreement; and
ii. The secured creditor has a right to Recovery is conceptually similar to the
take possession of the collateral. enforcement in Yau Chu v. CA [G.R. No. L-
b. The court may direct the grantor to take 78519 (1989)], wherein the collateral was also
such action as the court deems money or an exchange of “peso for peso”
necessary and appropriate so that the [Somera].
secured creditor may take possession of
the collateral Specific Cases of Recovery
[Sec. 48]
Note: Breach of the peace shall include:
1. Entering the private residence of the grantor Specific Case Action Available to
Secured Creditor
without permission,
2. Resorting to physical violence or Negotiable Proceed as to the
intimidation, or being accompanied by a law document negotiable document or
enforcement officer when taking possession perfected by goods covered by the
or confronting the grantor [Sec. 47 (c)]. possession negotiable document;

Deposit account Apply the balance of the

H. MODES OF ENFORCEMENT OF maintained by the deposit account to the
SECURITY INTEREST secured creditor obligation secured by the
deposit account
The creditor with the security interest having the
Security interest Instruct the deposit-
highest priority will be able to enforce his/her
in a deposit taking institution to pay
interests via recovery, disposition or retention. account perfected the balance of the
by control deposit account to the
1. Recovery secured creditor’s
account
Recovery is an enforcement procedure that does
Accounts Instruct the account
not require judicial process. It applies only to
Receivable debtor to make payment
the special cases provided in Sec. 48. to the secured creditor,
and apply payment to the
Upon default, the secured creditor may without satisfaction of the
judicial process: obligation secured by the
1. Instruct the account debtor to make security interest after
deducting the secured
payment to the secured creditor, and
creditor's reasonable

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collection expenses. On a. Notification of Disposition

request of the account
debtor, the secured Not later than ten (10) days before disposition
creditor shall provide of the collateral, the secured creditor shall
evidence of its security notify:
interest to the account 1. The grantor;
debtor when it delivers
Note: The grantor may waive the right to be
the instruction to the
account debtor notified.
2. Any other secured creditor or lien holder
who, five (5) days before the date
2. Disposition notification is sent to the grantor, held a
security interest or lien in the collateral that
Right to Dispose of Collateral was perfected by registration; and
After default, a secured creditor may: 3. Any other person from whom the secured
1. Sell or otherwise dispose of the collateral, creditor received notification of a claim of an
publicly or privately, in its present condition interest in the collateral if the notification
or following any commercially reasonable was received before the secured creditor
preparation or processing; gave notification of the proposed disposition
2. Buy the collateral at any public disposition, to the grantor [Sec. 51].
or at a private disposition but only if the
collateral is of a kind that is customarily sold Sufficiency of Notification
on a recognized market or the subject of A notification of disposition is sufficient if it:
widely distributed standard price quotations 1. Identifies the grantor and the secured
[Sec. 49]. creditor;
2. Describes the collateral;
Disposition is a method of enforcement 3. States the method of intended disposition;
similar to the general right of the creditor to 4. States the time and place of a public
alienate the collateral upon default of the debtor disposition or the time after which other
under the Civil Code. The difference in the PPSA disposition is to be made [Sec. 51].
is that it requires commercial reasonableness of
the disposition [Somera]. Exceptions to the Notification
Requirement
Procedure before disposition may be
The requirement to send a notification under
availed of, a creditor must:
this section shall not apply if the collateral is:
1. Repossess the collateral, either:
1. Perishable; or
Extrajudicially [Sec. 47 (a) & (b)] or
2. Threatens to decline speedily in value;
Judicially [Sec. 47 (c)], and
3. Of a type customarily sold on a recognized
2. There must be compliance with notification
market [Sec. 51].
requirements in Sec. 51.
3. Let those entitled exercise the right of
b. Right of Redemption
redemption under Sec. 45.

Conceptually similar to “equity of redemption” in

foreclosure of REM where it is exercised BEFORE
the collateral is sold. It is, thus, unlike “right of

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redemption” in REM (under GBL 2000 and Act The secured creditor shall account to the grantor
3135) which is exercised AFTER sale of the for any surplus, and, unless otherwise agreed,
collateral. the debtor is liable for any deficiency.

General Rule: A party who is entitled to a Commercial Reasonableness

notification is also entitled to redeem the Requirement
property [Sec. 45 (a)]. After repossession and notice, the collateral may
Exceptions: The right of redemption may be be disposed of provided the creditor acts in a
exercised, unless: “commercially reasonable manner” [Sec. 50 (a)].
1. The person entitled to redeem has not, after A creditor acts in such manner if he/she/it
the default, waived in writing the right to “disposes of the collateral in conformity with
redeem; commercial practices among dealers in that type
2. The collateral is sold or otherwise disposed of property” [Sec. 50 (b)].
of, acquired or collected by the secured 1. A disposition is presumed commercially
creditor or until the conclusion of an reasonable when approved in any legal
agreement by the secured creditor for that proceeding [Sec. 50 (d)].
purpose; and 2. A disposition will still be treated as
3. The secured creditor has retained the commercially reasonable even if a better
collateral [Sec. 45 (b)]. price could have been obtained by
disposition at a different time or a different
How Exercised method from the time and method selected
The right to redeem is exercised by paying or by the secured creditor [Sec. 50 (c)].
otherwise performing the secured obligation in
full, including the reasonable cost of 3. Retention
enforcement [Sec. 45 (a)].
Conceptually similar to “dacion en pago,” but
Disposition and Application of more elaborate.
Proceeds
If there is no redeemer, the secured creditor Retention of collateral is the result of an offer
may dispose of the property, and the proceeds on the part of the secured creditor and the
will be applied in the following order [Sec. 52]: acceptance of the proposal by the parties
1. The reasonable expenses of taking, holding, entitled to receive the same.
preparing for disposition, and disposing of
the collateral, including reasonable After default, the secured creditor may propose
attorneys’ fees and legal expenses incurred to the debtor and grantor to take all or part of
by the secured creditor; the collateral in total or partial satisfaction of the
2. The satisfaction of the obligation secured by secured obligation, and shall send a proposal to:
the security interest of the enforcing secured 1. The debtor and the grantor;
creditor; and 2. Any other secured creditor or lien holder
3. The satisfaction of obligations secured by who, five (5) days before the proposal is
any subordinate security interest or lien in sent to the debtor and the grantor, perfected
the collateral if a written demand and proof its security interest or lien by registration;
of the interest are received before and
distribution of the proceeds is completed. 3. Any other person with an interest in the
collateral who has given a written
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notification to the secured creditor before

creditor to take over the enforcement
the proposal is sent to the debtor and the
process shall include the right to enforce
grantor [Sec. 54].
the rights by any method available to a
secured creditor under this Act.
When Retention May Be Exercised
[Sec. 54]
The creditor with security interest that has
highest priority over other security interests
The secured creditor may retain the collateral in
exercises the right of enforcement. However, the
the case of:
PPSA does not prohibit those with security
1. A proposal for the acquisition of the
interest that has lower priority to commence
collateral in full satisfaction of the secured
enforcement. Instead, it reserves the right of
obligation;
take over to the higher-ranking secured creditor.
Unless the secured creditor receives an
objection in writing from any person entitled
to receive such a proposal within twenty J. TRANSITIONAL PROVISIONS
(20) days after the proposal is sent to that
person 1. Prior Interest
2. A proposal for the acquisition of the Definition
collateral in partial satisfaction of the A security interest that was:
secured obligation 1. Created or provided for by an agreement or
Only if the secured creditor receives the other transaction that was made or entered
affirmative consent of each addressee of the into before the effectivity of this Act; and
proposal in writing within twenty (20) days 2. Had not been terminated before the
after the proposal is sent to that person. effectivity of this Act [Sec. 55 (c)].

I. TAKEOVER RIGHTS However, a security interest that is renewed or

Section 46, PPSA. Right of extended by a security agreement or other
Higher-Ranking Secured. Creditor to Take transaction made or entered into on or after the
Over Enforcement. — effectivity of this Act is not considered a prior
a. Even if another secured creditor or a interest [Sec. 55 (c)].
lien holder has commenced
enforcement, a secured creditor whose Creation
security-interest has priority over that of Creation of prior interest shall be determined by
the enforcing secured creditor or lien prior laws, which are laws that existed or in
holder shall be entitled to take over the force before the effectivity of this Act [Sec. 56].
enforcement process.
b. The right referred to in subsection (a) of Effectivity
this section may be invoked at any time A prior interest remains effective between the
before the collateral is sold or otherwise
parties, notwithstanding its creation did not
disposed of, or retained by the secured
comply with the creation requirements of this
creditor or until the conclusion of an
Act [Sec. 56].
agreement by the secured creditor for
that purpose.
c. The right of the higher-ranking secured

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Perfection [Sec. 57] Exceptions: The priority status of a prior

A prior interest that was perfected under prior interest has changed (refer to the 2nd instance
law continues to be perfected under this Act of the General Rule, i.e. Sec. 58 (a)(2)) only if:
until the earlier of: 1. It was perfected when this Act took effect,
1. The time the prior interest would cease to but ceased to be perfected; or
be perfected under prior law; and 2. It was not perfected under prior law when
2. The expiration of the transitional period. this Act took effect, and was only perfected
3. If the perfection requirements of the PPSA under this Act [Sec. 58 (b)].
are satisfied before the perfection of a prior
interest ceases in accordance with (a), the Enforcement [Sec. 59]
prior interest continues to be perfected If any step or action has been taken to enforce a
under this Act from the time when it was prior interest before the effectivity of this Act,
perfected under the prior law. enforcement may continue under prior law or
4. If the prior interest was perfected by the may proceed under this Act.
registration of a notice under prior law, the Note: Prior law shall apply to a matter that is the
time of registration under the prior law shall subject of proceedings before a court before the
be the time to be used for purposes of effectivity of this Act.
applying the priority rules of this Act.
5. If the perfection requirements of the PPSA 2. Transitional Period
are NOT satisfied before the perfection of a The period from the date of effectivity of this Act
prior interest ceases in accordance with (a), until the date when the Registry has been
the prior interest is perfected only from the established and operational [Sec. 55 (d)].
time it is perfected under this Act.
6. A written agreement between a grantor and Thus, the transitional period is from September
secured creditor creating a prior interest is 7, 2018 until the date when the Registry has
sufficient to constitute authorization by the been established and operational
grantor of the registration of a notice 1. All pledges and mortgages created pursuant
covering assets described in that agreement to the Civil Code and the Chattel Mortgage
under this Act. Law remain effective between the parties.
2. But upon expiration of the transitional
When a Prior Law Over a Prior Interest period, the binding effect as against third
Applies parties of chattel mortgages is lost, UNLESS
the requirements of the PPSA are complied
General Rule: The priority of a prior interest with [Somera].
as against the rights of a competing claimant is
determined by the prior law if:
Section 68, PPSA. Implementation. —
1. The security interest and the rights of all
Notwithstanding the entry into force of this
competing claimants arose before the Act under Section 67, the implementation of
effectivity of this Act; and the Act shall be conditioned upon the
2. The priority status of these rights has not Registry being established and operational
changed since the effectivity of this Act under Section 26.
[Sec. 58 (a)].
Section 26, PPSA. Establishment of
Electronic Registry.

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 CREDIT TRANSACTIONS CIVIL LAW

5. To bind third parties, it must be recorded in

a. The Registry shall be established in and
the Registry of Property [Art. 2125, Civil
administered by the LRA.
Code].
b. The Registry shall provide electronic
means for registration and searching of
notices. However, if the instrument is not recorded, the
mortgage is nevertheless binding between the
parties [Art. 2125, Civil Code].
Based on Secs. 68 and 26 of the PPSA, the
implementation of the PPSA is conditioned on
A. OBJECTS OF REAL ESTATE
the establishment and operation of the Registry.
MORTGAGE
The Registry will be administered by the Land
Registration Authority (LRA).
Only the following property may be the object of
real estate mortgages:
To date, the LRA has yet to establish the
1. Immovables
Electronic Registry, although it has announced
2. Alienable real rights over immovables
that it is targeting to launch the same on the
[Art. 2124, Civil Code]
sixth month from the promulgation of the IRR,
which was issued on Nov. 18, 2019.
Note: Art. 2127 is modified by the PPSA with
regard to property deemed included in a Real
V. REAL ESTATE MORTGAGE Estate Mortgage. Under Art. 2127, a REM
“extends to natural accessions, to the
Real Estate Mortgage - Concept improvements, growing fruits, and the rents or
Mortgage is a contract that directly and income not yet received when the [principal]
immediately subjects the property upon which it obligation becomes due.”
is imposed, whoever the possessor may be, to
the fulfillment of the obligation for whose Stipulation subjecting to the mortgage
security it was constituted [Art. 2126, Civil improvements which the mortgagor may
Code]. subsequently acquire, install or use in
connection with real property already mortgaged
Requisites: belonging to the mortgagor is valid. [People’s
1. The mortgage must be constituted to secure Bank & Trust Co. v. Dahican Lumber Co., G.R.
the fulfillment of a principal obligation [Art. No. L-17500 (1967)].
2085, Civil Code];
2. The mortgagor must be the absolute owner
B. OBLIGATIONS SECURED
of the immovable or alienable real rights
[Art. 2085, Civil Code];
General Rule: A real estate mortgage is limited
3. The mortgagor must have free disposal of
to the principal obligations mentioned in the
the property or is legally authorized for the
contract (within its four corners) [Lim Julian v.
purpose [Art. 2085, Civil Code];
Lutero, G.R. No. L-25235 (1926)].
4. The mortgage is subject to the condition
that when the principal obligation becomes
Exception: A real estate mortgage may contain
due, the collateral may be alienated for
a dragnet or blanket mortgage clause which
payment to the creditor [Art. 2087, Civil
subsumes all debts, whether past or future
Code];
[Philippine Bank of Communications v. CA, G.R.
No. 118552 (1996)].
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 CREDIT TRANSACTIONS CIVIL LAW

Note: This clause will be strictly construed 2. Characteristics of the Mortgage

[Prudential Bank v. Alviar, G.R. No. 150197
(2005)]. A mortgage with a dragnet clause A registered mortgage lien is considered
makes the mortgage a continuing security and inseparable from the property inasmuch as it is a
constitutes an exception to the rule that an right in rem. The mortgage creates a real right
action to foreclose a mortgage must be limited or a lien which, after being recorded, follows the
to the amount mentioned in the mortgage chattel wherever it goes. [PNB v. RBL
contract [PCSO v. New Dagupan Metro Gas Enterprises, Inc., G.R. No. 149569, (2004)].
Corporation, G.R. No. 173171 (2012)].
A real estate mortgage that is unregistered
Reliance on Security Test: When the binds the parties to the contract and it only
mortgagor takes another loan for which another gives the mortgagee the right to demand the
security was given, it could not be inferred that execution and recording of the mortgage. To
such loan was made in reliance solely on the bind third parties, a real estate mortgage must
original security with the dragnet clause, but be recorded in the Registry of Property [Art.
rather, on the new security given [Prudential 2125, Civil Code].
Bank v. Alviar, supra].
The right to alienate the real estate mortgage
C. CHARACTERISTICS credit is the right of the mortgagee to assign its
rights under the principal obligation secured.
1. Characteristics of the Collateral Although the mortgagee does not become the
owner of the collateral, it owns the real estate
As a general rule, the mortgagor retains mortgage credit and may alienate the same to a
possession of the property. He may deliver said third person [Art. 2128, Civil Code; Santiago v.
property to the mortgagee without altering the Pioneer Savings & Loan Bank, et al., G.R. No.
nature of the contract of mortgage. 77502 (1988)].
Mortgage creates an encumbrance over the
property, but ownership of the property is not Pactum de non alienando (Sp. pacto de non
parted with. It merely restricts the mortgagor’s alienando) is prohibited:
jus disponendi over the property. The mortgagor 1. Stipulations forbidding the mortgagor from
may still sell the property, and any stipulation to selling the collateral [Art. 2130, Civil Code]
the contrary (pactum de non alienando) is void 2. Stipulations forbidding the mortgagor from
[Art. 2130, Civil Code]. selling the collateral without the consent of
the mortgagee [Litonjua, et al. v. L&R
However, a stipulation prohibiting the mortgagor Corporation, et al., supra, citing Tambunting
from entering into second or subsequent v. Rehabilitation Finance Corporation, G.R.
mortgages is valid since there is no law Nos. L-54224-5 (1989).
prohibiting it [Litonjua et al. v. L&R Corporation,
et al., G.R. No. 130722 (1999), citing Philippine Alienation or assignment of mortgage credit is
Industrial Co. v. El Hogar & Vallejo, G.R. No. valid even if it is not registered. [Villanueva v.
20482 (1923)]. Perez, G.R. No. L-3438 (1907)].

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D. KINDS iii. When upon or after the

expiration of the right to
1. Voluntary – constituted by the will of the repurchase another instrument
owner of the property on which it is created. extending the period of
redemption or granting a new
2. Legal – required by law to be executed in period is executed;
favor of certain persons: iv. When the purchaser retains for
a. Persons in whose favor the law himself a part of the purchase
establishes a mortgage have no other price;
right than to demand the execution v. When the vendor binds himself
and recording of the document in to pay the taxes on the thing
which the mortgage is formalized [Art. sold;
2125, Civil Code] vi. In any other case where it may
b. The bondsman who is to be offered in be fairly inferred that the real
virtue of a provision of law or of a intention of the parties is that the
judicial order shall have the transaction shall secure the
qualifications prescribed in Art. 2056 payment of a debt or the
(integrity, capacity to bind himself, and performance of any other
sufficient property to answer for the obligation. [Art. 1602, Civil Code]
obligation), and in other laws [Art. c. Provisions governing equitable
2082, Civil Code] mortgage: Arts. 1365, 1450, 1454,
c. If the person bound to give a bond 1602, 1603, 1604 and 1607
should not be able to do so, a pledge
or mortgage considered sufficient to E. INDIVISIBILITY OF MORTGAGE
cover his obligation shall be admitted in
lieu thereof [Art. 2083, Civil Code] A mortgage is indivisible, even though the debt
may be divided among the successors in interest
3. Equitable – One which, although lacking of the debtor or of the creditor
the proper formalities of a mortgage, shows [Art. 2089, Civil Code].
the intention of the parties to make the
property a security for the debt A mortgage directly and immediately subjects
a. Lien created by equitable mortgage the property upon which it is imposed. It is
ought not to be defeated by requiring indivisible even though the debt may be divided,
compliance with formalities necessary and such indivisibility is likewise unaffected by
to the validity of voluntary real estate the fact that the debtors are not solidarily liable
mortgage. Ex.: Pacto de retro [Dayrit v. CA, G.R. No. L- 29388 (1970)].
b. The contract shall be presumed to be
an equitable mortgage, in any of the Indivisibility arises only when there is a
following cases: debtor-creditor relationship. It does not apply to
i. When the price of a sale with assignees of an accommodation mortgagor and
right to repurchase is unusually not of a debtor-mortgagor. [Spouses Belo v.
inadequate; Philippine National Bank, G.R. No. 134330
ii. When the vendor remains in (2001), citing Philippine National Bank v.
possession as lessee or Agudelo, G.R. No. L-39037 (1933)]
otherwise;

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Note: Where only a portion of the loan is Mortgage may be used as a “continuing
released, the mortgage becomes enforceable security” which secures future advancements
only as to the proportionate value of the loan and is not discharged by the repayment of the
[Central Bank v. CA, G.R. No. L-45710 (1985)]. amount in the mortgage [Julian v. Lutero].

Exception to the Principle of Pactum Commissorium

Indivisibility The creditor cannot appropriate the things given
Where there are several things given in by way of mortgage or dispose of them. Any
mortgage, each one of them guarantees only a stipulation to the contrary is null and void. [Art.
determinate portion of the credit, the debtor 2088, Civil Code]
shall have a right to the extinguishment of the
pledge or mortgage as the portion of the debt The elements of pactum commissorium are as
for which each thing is specially answerable is follows: [Development Bank of the Philippines v.
satisfied [Art. 2089, Civil Code]. Court of Appeals, G.R. No. 118342 (1998)]
1. There should be a property mortgaged by
F. RECORDING REQUIRED way of security for the payment of the
principal obligation; and
The real estate mortgage must be recorded in 2. There should be a stipulation for automatic
the Registry of Property in order to be validly appropriation by the creditor of the thing
constituted [Art. 2125, Civil Code]. mortgaged in case of non- payment of the
principal obligation within the stipulated
Note: The mortgage would still be binding period.
between the parties even if the instrument is not
recorded [Art. 2125, Civil Code]. Acceleration Clause Allowed
Acceleration clause, or the stipulation stating
G. FORECLOSURE that on the occasion of the mortgagor’s default,
the whole sum remaining unpaid automatically
Foreclosure is the remedy available to the becomes due and demandable, is ALLOWED
mortgagee by which he subjects the mortgaged [Luzon Development Bank v. Conquilla, G.R. No.
property to the satisfaction of the obligation 163338 (2005)].
secured by the mortgage by causing its
alienation in accordance with the procedures Kinds of Foreclosure
allowed by law [Spouses Caviles v. CA, G.R. No. 1. Judicial Foreclosure
126857 (2002)]. 2. Extrajudicial Foreclosure
Judicial Extrajudicial
In general, an action for foreclosure is limited to
the amount mentioned in the mortgage Court intervenes No court
[Landrito Jr. v. CA, G.R. No. 133079, (2005)], intervention
except when the mortgage contract intends to
There is equity of There is right of
secure future loans or advancements [See ACME
redemption – period redemption –
Shoe, Rubber & Plastic Corporation v. CA, G.R. starts from the finality of period starts from
No. 103576 (1996); Philippine Bank of the judgment until order date of registration
Communications v. CA, supra]. of confirmation. of certificate of
sale

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3. If the mortgagor fails to pay within the at

Right of redemption only
if original mortgagee is time directed, the court, upon motion, shall
covered by GBL 2000 order the property to be sold to the highest
bidder at a public auction [Rule 68, Sec. 3,
No need for a special There is a need for Rules of Court].
power of attorney in the a special power of
contract of mortgage attorney in favor
4. The issuance of a judicial confirmation of
of the mortgagee
in the contract the sale shall operate to divest the rights of
all parties to the action and to vest their
rights to the purchaser subject to such right
1. Judicial Foreclosure of redemption as may be allowed by law
[Rule 68, Sec. 3, Rules of Court], unless
1. May be availed of by bringing an action in there is a right of redemption, e.g., under
the proper court which has jurisdiction over GBL 2000.
the area wherein the real property involved
or a portion thereof is situated [Rule 68, Note: A foreclosure sale is not complete
Sec. 1, Rules of Court]. until it is confirmed. Thus, after the
foreclosure sale but before its confirmation,
2. If the court finds the complaint to be well- the court may grant the judgment debtor or
founded, it shall order the mortgagor to pay mortgagor the equity of redemption.
the amount due with interest and other
charges within a period of not less than 90 5. Before the confirmation, the court retains
days nor more than 120 days from the entry control of the proceedings; Secs. 31, 32,
of judgment [Rule 68, Sec. 2, Rules of and 34 of Rule 39 on the execution of
Court]. judgments apply
Note: The mortgagor may exercise the [Rule 68, Sec. 8, Rules of Court].
equity of redemption during this period of
grace in order to extinguish the mortgage 6. A certified copy of the final order of the
and retain ownership of the collateral by court confirming the sale shall be registered
paying the mortgage obligation [Top Rate in the registry of deeds.
International Services, Inc. v. IAC, G.R. Nos.
L-67496 and L-68257 (1986)]. If no right of redemption exists: The
certificate of title in the name of the
It is this equity of redemption that is mortgagor shall be cancelled, and a new
conferred on the mortgagor’s successors- one issued in the name of the purchaser.
in-interest or on third persons acquiring
rights over the collateral from the mortgage If a right of redemption exists (i.e., under
subsequent. Although these subsequent or GBL 2000): The certificate of sale and the
junior lien-holders acquire the equity of order confirming the sale shall be registered
redemption, this right is strictly subordinate [Rule 68, Sec. 7, Rules of Court].
to the superior lien of the first mortgagee
[Sun Life Assurance Company of Canada v. 7. The proceeds of the sale shall be applied to
Diez, G.R. No. L- 29027 (1928)]. the payment of the:
a. costs of the sale;
b. amount due the mortgagee;

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c. claims of junior encumbrancers or 3. Public sale should be made after proper

persons holding subsequent mortgages notice to the public; otherwise, it is a
in the order of their priority; and jurisdictional defect which could render the
d. the balance, if any shall be paid to the sale voidable.
mortgagor, his agent, or the person a. General Rule: Statutory provisions
entitled to it governing posting of notice must be
[Rule 68, Sec. 4, Rules of Court] strictly complied with and even slight
deviations will invalidate the notice.
8. Sheriff’s certificate is executed, b. Exception: If the objectives are
acknowledged and recorded to complete the attained, immaterial errors and mistakes
foreclosure [Development Bank of the may not affect the sufficiency of the
Philippines v. Zaragoza, G.R. No. L-23493 notice.
(1978)]. [Spouses Suico v. Philippine National Bank,
G.R. No. 170215 (2007); Metropolitan Bank
Nature of Proceedings and Trust Company v. Wong, G.R. No.
1. Quasi in rem action. Hence, jurisdiction may 120859 (2001) discussing Olizon v. CA, G.R.
be acquired through publication. [Ocampo v. No. 107075 (1994)].
Domalanta, G.R. No. L-21011 (1967)]
2. Foreclosure is only the result or incident of 4. Republication of the notice of sale is
the failure to pay debt [Salvador v. Locsin, necessary for the validity of the postponed
G.R. No. L-4629, (1953)]. extrajudicial sale [Development Bank of the
3. Survives death of mortgagor [Spouses Philippines v. Aguirre, G.R. No. 144877
Manalansan v. Castañeda, Jr., G.R. No. (2001)].
L-43607 (1978)].
5. There is no need to notify the mortgagor,
2. Extrajudicial Foreclosure where there is no contractual stipulation
therefor [Grand Farms, Inc. v. CA, G.R. No.
A real estate mortgage may be extrajudicially 91779 (1991)].
foreclosed only if there is a special power a. Proper notice consists of:
inserted or attached to the document in which i. posting notice in three (3) public
the real estate mortgage appears and only in places and/or
accordance with the provisions of Act No. 3135 ii. publication in newspaper of general
[Luna v. Encarnacion, G.R. No. L-4637 (1952)]. circulation [Sec. 3, Act No. 3135]
b. Purpose of notice is to obtain the best
Act No. 3135 bid for the foreclosed property, and to
1. Applies to mortgages where special inform the public of:
authority to foreclose is granted to the i. nature condition of collateral, and
mortgagee [Luna v. Encarnacion, supra] ii. time, place, and terms of the sale
[Olizon v. CA, supra]
2. Authority is not extinguished by death of
mortgagor or mortgagee. This is an agency 6. The foreclosure sale shall be made at public
coupled with interest. [Perez v. Philippine auction through sealed bids, within the
National Bank, G.R. No. L- 21813, (1966)]. province in which the property to be sold is
situated [Sec. 4, Act No. 3135; Sec. 5, A.M.
No. 99-10-05-0, as amended]

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Surplus proceeds of foreclosure sale belong to a bond equal to the value of the
the mortgagor [Gorospe v. Gochangco, G.R. No. mortgagee’s claim. [Sec. 8, Act No. 3135]
L-12735 (1959)].
11. If no redemption is made within one (1)
7. The Clerk of Court shall issue and sign the year from the date of registration of the
Certificate of Sale [Sec. 9, A.M. No. 99- Certificate of Sale (or the shorter period
10-05-0, as amended] under GBL 2000 if mortgagor is a juridical
person), the purchaser is entitled to a
8. Debtor, mortgagor, his successors in conveyance and possession of the property
interest, or any junior encumbrancer has the Ownership).
right to redeem the property sold within one a. General Rule: Upon Consolidation of
(1) year from and after the date of sale Ownership, possession of the property
[Sec. 6, Act No. 3135]. shall be given to the purchaser or last
a. EXCEPTION: If (1) the mortgagee is a redemptioner as a matter of right. [Cua
bank, quasi-bank or trust entity and the Lai Chu v. Philippine Bank of
debtor is a juridical person, and (2) the Communications, G.R. No. 169190
mortgagor is a juridical person, the (2010)]
mortgagor may redeem the property b. Exceptions:
before the registration of the approved 1. A third party is actually holding the
Certificate of Sale in the Registry of property [Rule 39, Sec. 33, Rules of
Deeds or three months after foreclosure, Court]
whichever is earlier [Sec. 47, General 2. The mortgagor filed a separate
Banking Law]. action to invalidate the auction sale
b. The mortgagor can legally transfer the because of the unusually low price
right to redeem and the use of the paid therein [Cometa v. IAC, G.R.
property during the period of No. L-69294 (1987)]
redemption because ownership of the 3. The mortgagee failed to deliver the
collateral is retained by the mortgagor surplus from the proceeds of the
until the expiration of such period foreclosure sale [Sulit v. CA, G.R.
[Medida v. CA, G.R. No. 98334 (1992)] No. 119247 (1997)]

9. During the redemption period, the purchaser 3. Nature of Power of Foreclosure by

may petition the land registration court to Extrajudicial Sale
give him possession of the property by
furnishing a bond in an amount equivalent 1. Conferred for mortgagee’s protection
to the use of the property for a period of 2. An ancillary stipulation [Perez v. Philippine
twelve (12) months. Upon approval of the National Bank, supra]
bond, the Court shall issue a Writ of 3. A prerogative of the mortgagee [Rural Bank
Possession. [Sec. 7, Act No. 3135] of San Mateo v. IAC, G.R. No. L- 66936,
(1986)]
10. Remedy of party aggrieved by foreclosure is
a petition to set aside sale and cancellation
Note
of Writ of Possession. However, if mortgagee
1. Both judicial and extrajudicial foreclosure of
is a bank, the mortgagor is required to post
mortgage should be distinguished from

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 CREDIT TRANSACTIONS CIVIL LAW

execution sale governed by Rule 39, Rules debtor may redeem the property [Velasquez
of Court. v. Coronel, G.R. No. L-18745 (1962)].
2. Foreclosure retroacts to the date of
registration of mortgage [St. Dominic Corp. Exception: Where the price is so inadequate
v. IAC, G.R. Nos. 70623 and L- 48630 as to shock the conscience of the court,
(1987)]. taking into consideration the peculiar
3. A stipulation of upset price, or the minimum circumstances [National Bank v. Gonzales,
price at which the property shall be sold to G.R. No. L-21026 (1924)].
become operative in the event of a
foreclosure sale at public auction, is null and 2. Property may be sold for less than its fair
void [El Banco Español-Filipino v. Donaldson, market value, upon the theory that the
Sim & Co., G.R. No. 2422 (1906)]. lesser the price the easier it is for the owner
to redeem [Development Bank of the
4. Right to Surplus or Deficiency Philippines v. Moll, G.R. No. L-25802
(1972)].
Right of Mortgagor
The mortgagor is entitled to the surplus, if any, 3. The value of the mortgaged property has no
after payment of the proceeds of the sale bearing on the bid price at the public
[Gorospe v. Gochangco, supra] auction, provided that the public auction
was regularly and honestly conducted
Right of Mortgagee [Escudero v. Ticson, 7 C.A. Rep. 139).
1. Mortgagee is entitled to recover deficiency.
This extends to judicial foreclosure of A suit for the recovery of the deficiency after the
mortgage arising out of the settlement of foreclosure of a mortgage is in the nature of a
estate, but NOT to extrajudicial foreclosure mortgage action because its purpose is precisely
arising out of the same [Heirs of Sps. to enforce the mortgage contract [Caltex v. IAC,
Maglasang v. Manila Banking Corp., G.R. No. G.R. No. 74730 (1989)].
171206 (2013)].
2. If the deficiency is embodied in a judgment, H. WAIVER OF SECURITY
it is referred to as deficiency judgment [See
Art. 2115, Civil Code]. 1. Mortgagee may waive the right to foreclose
3. Action for recovery of deficiency may be his mortgage and maintain a personal action
filed even during redemption period [Tarnate for recovery of the indebtedness [Hijos de I.
v. CA, G.R. No. 100635 (1995)]. de la Rama v. Sajo, G.R. No. 20870 (1924)].
4. Action to recover prescribes after ten (10) 2. Mortgagee cannot have both remedies
years from the time the right of action because he only has one cause of action,
accrues [See Art. 1144, Civil Code]. the nonpayment of the mortgage debt
[Caltex v. IAC, supra].

5. Effect of Inadequacy of Price in I. REDEMPTION

Foreclosure Sale
It is a transaction by which the mortgagor
1. Where there is right to redeem, inadequacy reacquires the property which may have passed
of price is immaterial because the judgment under the mortgage or divests the property of

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the lien which the mortgage may have created loan or other credit accommodation granted, the
[De Leon, citing 59 C.J.S. 813, supra]. mortgagor or debtor whose real property has
been sold for the full or partial payment of his
1. Kinds obligation shall have the right within one (1)
year after the sale of the real estate, to redeem
Equity of redemption – in judicial foreclosure the property by paying the amount due under
of real estate mortgage under the Rules of the mortgage deed, with interest thereon at rate
Court, it is the right of the mortgagor to redeem specified in the mortgage, and all the costs and
the mortgaged property by paying the secured expenses incurred by the bank or institution
debt within the 120-day period from entry of from the sale and custody of said property less
judgment or after the foreclosure sale, but the income derived therefrom. [RA 8791
before the sale of the mortgaged property or (General Banking Law of 2000), Sec. 47.]
confirmation of sale [See Secs. 2, 3, Rule 68,
Rules of Court; Raymundo v. Sunico, G.R. No. 2. Requisites for Valid Redemption
8241 (1913); Rosales v. Suba, G.R. No. 137792
(2003)]. 1. Redemption must be made within:
a. Judicial foreclosure, GBL 2000, all types
Right of redemption – in extrajudicial of mortgagors: one (1) year from the
foreclosure of real estate mortgage, the right of registration of the confirmed Certificate
the mortgagor to redeem the property within of Sale
one (1) year after it was sold for the satisfaction b. Extrajudicial foreclosure, NOT GBL 2000,
of the debt [Sec. 6, Act No. 3135] (or the all types of mortgagors: one (1) year
shorter period under GBL 2000 in case of from the registration of the Certificate of
juridical person mortgagor). Sale approved by the Executive Judge
c. Extrajudicial foreclosure, GBL 2000,
A formal offer to redeem must be with a bona natural person mortgagors: one (1) year
fide tender of redemption price to preserve the from the registration of the Certificate of
right of redemption. Where the right of Sale approved by the Executive Judge
redemption is exercised through judicial action, d. Extrajudicial foreclosure, GBL 2000,
such filing is equivalent to a formal offer to juridical person mortgagors: until, but
redeem and have the effect of preserving the not later than, the registration of the
right of redemption. [Tolentino v. CA, G.R. Nos. certificate of foreclosure sale (no more
L-50405-6 (1981)] than three (3) months after foreclosure)
[Sec. 10, A.M. No. 99-10- 05-0, as
In a judicial foreclosure sale, the right of amended]
redemption must be allowed by law. The
references in Rule 68 and Rule 39 to the right of 2. Payment of the purchase price of the
redemption are not grants of this statutory collateral involved, plus 1% interest per
prerogative. To claim a right of redemption in month, together with the amount of any
judicial foreclosure, there must be a specific law assessments or taxes if any, paid by the
that allows it [GSIS v. CFI of Iloilo, G.R. No. purchaser after the sale
L-45322 (1989)]. [Sec. 9, Act No. 3135].

Example: In the event of foreclosure of any Note: Under RA 8791, the amount is the
mortgage on real estate which is security for any amount due under the mortgage deed

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3. Written notice of the redemption must be

served on the officer who made the sale and
a duplicate filed with the Register of Deeds
of the province [Rosales v. Yboa, G.R. No.
L-42282 (1983)]

Equity of Right of
Redemption Redemption

Secs. 2, 3, Rule 68 Sec. 6, Act No. 3135

Right to extinguish Right to redeem the

the mortgage and property within one
retain ownership of (1) year from the
the property by date or registration of
paying the secured the certificate of sale
debt within the 90-
day period after the
judgment becomes
final in accordance
with Rule 68, or even
after the foreclosure
sale but prior to its
confirmation.

Applies to judicial Applies to

foreclosure of real extrajudicial
estate mortgage foreclosure of real
estate mortgage

The right of a purchaser at a foreclosure sale is

merely inchoate until after the period of
redemption has expired without the right being
exercised. The title to land sold under mortgage
foreclosure remains in the mortgagor or his
grantee until the expiration of the redemption
period and conveyance by the master's deed
[Medida v. CA, supra].

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 COMPROMISE AGREEMENTS CIVIL LAW

There may be a compromise upon the civil

COMPROMISE AGREEMENTS liability arising from an offense; but such
compromise shall not extinguish the public
action for the imposition of the legal penalty.
ART 2028, CC: A compromise is a (Art. 2034, CC)
contract whereby the parties, by making
reciprocal concessions, avoid a litigation V. WHAT CANNOT BE
or put an end to one already commenced. COMPROMISED

It is settled that criminal liability cannot be the

I. REQUISITES
subject of a compromise. [Team Image
Entertainment v. Solar Team Entertainment, G.R.
1. Contract
No. 191652 (2017)]
2. With reciprocal concessions
3. Seeking to avoid or end litigation
No compromise upon the following questions
shall be valid:
II. NATURE 1) The civil status of persons;
2) The validity of a marriage or a legal
A compromise is a consensual contract, and thus separation;
must comply with the requisites of a contract: a) 3) Any ground for legal separation;
consent; b) object certain which is the subject 4) Future support;
matter of the contract; and c) cause of the 5) The jurisdiction of courts; and
obligation which is established. [Regal Films v. 6) Future legitime. (Art. 2035, CC)
Concepcion, G.R. No. 139532 (2001)]
VI. SCOPE
III. KINDS
A compromise compromises only those objects
1. Judicial - to end a litigation which are definitely stated therein, or which by
2. Extrajudicial - to prevent litigation necessary implication from its terms should be
[Magbanua v. Uy, G.R. No. 161003 deemed to have been included in the same.
(2005) (Art. 2036, CC)

IV. WHAT CAN BE A general renunciation of rights is understood to

refer only to those that are connected with the
COMPROMISED
dispute which was the subject of the
compromise. (Art. 2036, CC)
ART 2029, CC: The Court shall endeavor
to persuade the litigants in a civil case to Juridical persons may compromise only in the
agree upon some fair compromise. form and with the requisites which may be
necessary to alienate their property. (Art. 2033,
CC)
Only civil cases may be subject to a
compromise. (Art. 2029, CC)

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VII. EFFECTS judicata; but there shall be no execution

except in compliance with a judicial
A. SUSPENSION OF compromise.
ACTION/PROCEEDING

A compromise has upon the parties the effect

ART 2030, CC: Every civil action or and authority of res judicata; and this is true
proceeding shall be suspended: even if the compromise is not judicially
approved. [Cochingyan v. Cloribel, G.R. No.
(1) If willingness to discuss a possible L-27070-71 (1997)]
compromise is expressed by one or both
parties; or However, court approval is necessary for
compromises entered into by:
1. Guardians
(2) If it appears that one of the parties,
2. Representatives of Absentees
before the commencement of the action
3. Administrators or Executors of a
or proceeding, offered to discuss a
decedent’s estate
possible compromise but the other party 4. Parents (Art. 2032, CC)
refused the offer.
VIII. COURT APPROVAL
The duration and terms of the suspension
of the civil action or proceeding and A judicial compromise, while binding between
similar matters shall be governed by such the parties upon its execution, is not executory
provisions of the rules of court as the until it is approved by the court and reduced to
Supreme Court shall promulgate. Said a judgment. [Spouses Abinujar v. CA, G.R. No.
rules of court shall likewise provide for 104133 (1995)]
the appointment and duties of amicable
compounders. The doctrine on immutability of judgments
applies to compromise agreements approved by
the courts in the same manner that it applies to
B. MITIGATION OF DAMAGES judgments that have been rendered on the basis
of a full-blown trial.

ART 2031, CC:The courts may mitigate

Thus, a judgment on compromise that has
the damages to be paid by the losing
attained finality cannot be modified in any
party who has shown a sincere desire for respect, even if the modification is meant to
a compromise. correct erroneous conclusions of fact and law,
and whether it be made by the court that
rendered it or by the Highest Court of the land.
C. RES JUDICATA
[Chiquita Brands v. Ornelio, G.R. No. 189102
(2017)]
ART 2037, CC: A compromise has upon
the parties the effect and authority of res

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IX. WHEN VOIDABLE either or both parties being unaware of

the existence of the final judgment, the
A compromise in which there is mistake, fraud,
compromise may be rescinded.
violence, intimidation, undue influence, or falsity
of documents is voidable.
Ignorance of a judgment which may be
However, one of the parties cannot set up a revoked or set aside is not a valid ground
mistake of fact as against the other if the latter, for attacking a compromise.
by virtue of the compromise, has withdrawn
from a litigation already commenced. (Art.
XII. RESCISSION
2038, CC)

When either or both of the parties are unaware

X. NEWLY-DISCOVERED of a court's final judgment at the time they
DOCUMENTS ART. 2039, CC) agree on a compromise, either of them can
rescind the compromise agreement. (Art. 2040
General Rule: When the parties compromise par. 1, CC)
generally on all differences which they might
have with each other, the discovery of When the court's decision is still appealable or
documents referring to one or more but not to otherwise subject to modification, ignorance of
all of the questions settled shall not itself be a the decision is not a ground to rescind a
cause for annulment or rescission of the compromise agreement, because the parties are
compromise. still unsure of the final outcome of the case at
this time. (Art. 2040 par. 2, CC)
Exceptions:
1. When said documents have been XIII. EFFECT OF
concealed by one of the parties
NON-COMPLIANCE
2. If the compromise refers only to one
If one of the parties fails or refuses to abide by
thing which one of the parties has no
the compromise, the other party may either
right, as shown by the newly-discovered
enforce the compromise or regard it as
documents
rescinded and insist upon his original demand.
(Art. 2041, CC)
XI. COMPROMISE AFTER FINAL
JUDGMENT

A compromise agreement may be entered into,

notwithstanding a final judgment that has
already settled the rights of the contracting
parties. [Magbanua v. Uy, supra]

ART 2040, CC. If after a litigation has

been decided by a final judgment, a
compromise should be agreed upon,

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