CIVIL LAW

I. Effect and Application of Laws New Civil Code

A. When law takes effect

GENERAL RULE:

Laws take effect 15 days following the completion of its

publication in the Official Gazette, or in a newspaper of general
circulation.

EXCEPTION:

Unless it is otherwise provided.1

B. Ignorance of the Law

Ignorance of the law excuses no one from compliance

therewith2.

C. Retroactivity of Laws

1
Art. 2
This refers to the 15 day period and NOT to the requirement of publication. (Tanada vs. Tuvera)
Administrative rules and regulations must also be published if their purpose is to enforce or implement
existing laws pursuant to a valid delegation. The publication must be in full since its purpose is to inform
the public of the contents of the law. (Phil. Intl Trading Corp. vs. Angeles)
Publication must be in full or it is no publication at all since its purpose is to inform the public of the
contents of the laws.
2
Art. 3
Considered a conclusive presumption and applies only to mandatory and prohibitory laws. (Consunji vs.
CA)
What Laws Covered.-- Philippine laws are covered. There is no conclusive presumption of knowledge
of foreign laws. Even our courts cannot take judicial notice of them. Ignorance of a foreign law will not
be a mistake of law but a mistake of fact.
Mistake of Fact.-- Ignorance may either be of law or of fact. Ignorance of fact (ignorantia facti) may
excuse a party from the legal consequences of his conduct; but not ignorance of law, for ignorantia juris
neminem excusat.
Difficult Question of Law.-- In specific instances provided by law, mistake as to difficult legal questions
has been given the same effect as a mistake of fact, e.g., Art. 526, par. 3 which provides: "Mistake upon a
doubtful or difficult question of law may be the basis of good faith."

1
 Laws shall have no retroactive effect, unless the contrary is
provided.3
D. Mandatory or Prohibitory Laws

GENERAL RULE:

Acts which are contrary to mandatory or prohibitory laws are

void. 4

EXCEPTIONS:

1. When the law itself authorized its validity5

2. When the law makes the act only voidable and not void6
3. When the law makes the act valid but punishes the violator7

E. Waiver of Rights

GENERAL RULE:

Rights may be waived.

EXCEPTIONS:

1. If the waiver is contrary to law, public order, public policy, morals,

or good customs, or
2. prejudicial to a third person with a right recognized by law.

3
Art. 4
Exceptions:
1.Unless the law otherwise provides
2. Curative statutes
3. Interpretative statutes
4. Procedural/remedial
5. Emergency laws
6. Laws creating new rights
7. Tax laws
Exceptions to the exceptions:
1. Ex post facto laws
2. Laws that impair obligation of contracts
4
Art. 5
5
ex. lotto, sweepstakes
6
ex. voidable contracts where consent is vitiated)
7
ex. marriage solemnized by a person without legal authority)

2
 F. Repeal of Laws

Laws are repealed only by subsequent ones, either expressly or

impliedly. Their violation or non-observance shall not be excused by
disuse, custom or practice to the contrary

When the courts declared a law to be inconsistent with the

Constitution, the former shall be void and the latter shall govern.
Administrative or executive acts, orders and regulations shall
be valid only when they are not contrary to the laws or the
Constitution.8

G. Judicial Decisions

Judicial decisions applying or interpreting the laws or the

Constitution shall form a part of the legal system of the Philippines.9

H. Duty to Render Judgment

No judge or court shall decline to render judgment by reason

of the silence, obscurity or insufficiency of laws.10
8
Art. 7
General v. special law:
If the general law was enacted prior to the special law, the latter is considered the exception to the
general law.
If the general law was enacted after the special law, the latter remains unless:
There is an express declaration to the contrary.
There is a clear, necessary and irreconcilable conflict.
The subsequent general law covers the whole subject and is clearly intended to replace the special law
on the matter.
If the general law treats a particular matter in specific, while the special law treats such matter in
general, the former will prevail.
Lapse of laws: there are laws which, without any repeal, cease to have effect because they lapse by
their own terms. A law may expressly provide that it shall be effective only for a fixed period.
Repeal of repealing law: The law first repealed shall not be revived unless so expressly provided.
But if the prior law was repealed, not expressly but by implication, the repeal of the repealing law will
revive the prior law, unless the language of the last law provides otherwise.
Implied repeals: not favored.
Requisites: the laws cover the same subject matter and the latter is repugnant to the earlier.
9
Art. 8
Only Supreme Court decisions establish jurisprudence; decisions of other judicial or quasi-judicial
bodies are merely persuasive.
This principle, however, does not mean blind adherence. The duty of the Court is to abandon any
doctrine found to be in violation of the law in force.
10
Art. 9
This article does not apply to criminal prosecutions, bec. when there is no law punishing an act, the
case must be dismissed, however, reprehensible the act may seem to the judge (Tolentino).

3
 I. Presumption and Applicability of Custom11

In case of doubt in the interpretation or application of laws, it

is presumed that the lawmaking body intended right and justice to
prevail.12

Customs which are contrary to law, public order or public

policy shall not be countenanced.13

A custom must be proved as a fact, according to the rules of

evidence.14

J. Legal Periods

When the laws speak of years, months, days or nights, it shall

be understood that years are of three hundred sixty-five days each;
months, of thirty days; days, of twenty-four hours; and nights from
sunset to sunrise.

If months are designated by their name, they shall be

computed by the number of days which they respectively have.

In computing a period, the first day shall be excluded, and the

last day included15

If the law is vague or obscure, the court should clarify it in the light of the rules of statutory
construction; it is silent or insufficient, the court should fill the deficiency by resorting to customs or
general principles of law.
11
the juridical rule w/c results from a constant and continued uniform practice by the members of a social
community, w/ respect to a particular state of facts, and observed w/ a conviction that it is juridically
obligatory
12
Art. 10
13
Art. 11
14
Art. 12
Custom is defined as "a rule of conduct formed by repetition of acts, uniformly observed (practiced) as
a social rule, legally binding and obligatory." The law requires that "a custom must be proved as a fact,
according to the rules of evidence." On this score the Court had occasion to state that "a local custom as a
source of right can not be considered by a court of justice unless such custom is properly established by
competent evidence like any other fact." The same evidence, if not one of a higher degree, should be
required of a foreign custom
15
Art. 13
superseded by Sec. 31, Book I of EO 292 (Administrative Code of 1987) w/c provides that

4
 K. Applicability of Penal Laws

Penal laws and those of public security and safety shall be

obligatory upon all who live or sojourn in Philippine territory, subject
to the principles of public international law and to treaty
stipulations.16

L. Conflict of Laws

Laws relating to family rights and duties, or to the status,

condition and legal capacity of persons are binding upon citizens of
the Philippines, even though living abroad.17

Real property as well as personal property is subject to the law

of the country where it is situated.18

However, intestate and testamentary successions, both with

respect to the order of succession and to the amount of successional
rights and to the intrinsic validity of testamentary provisions, shall
be regulated by the national law of the person whose succession is
under consideration, whatever may be the nature of the property and
regardless of the country wherein said property may be found.19

Sec. 31. Legal Periods.-- "Year" shall be understood to be twelve (12) calendar months; "months" of
thirty (30) days, unless it refers to a specific calendar 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 (24) hours; and "nights,"
from sunset to sunrise.
This article applies only to legal provisions and not to contracts, where the parties may stipulate on the
manner of computing years, months and days (Baviera).
16
Art. 14
17
Art. 15
Theories on Personal Law.--
Domiciliary theory, followed in the US, according to w/c the personal laws of a person are determined
by his domicile.
Nationality theory w/c makes nationality or citizenship as the basis for determining the personal laws
of an individual. (Tolentino)
The question of how a citizen may strip himself of the status as such citizen is governed by his
national law.
18
Art. 16, 1st par.
The lex situs or lex rei sitae governs real or personal property
19
Ibid., 2nd par.

5
 The forms and solemnities of contracts, wills, and other public
instruments shall be governed by the laws of the country in which
they are executed.20
When the acts referred to are executed before the diplomatic
or consular officials of the Republic of the Philippines in a foreign
country, the solemnities established by Philippine laws shall be
observed in their execution.21

Prohibitive laws concerning persons, their acts or property,

and those which have for their object public order, public policy and
good customs shall not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions agreed upon in a
foreign country.22

In matters which are governed by the Code of Commerce and

special laws, their deficiency shall be supplied by the provisions of
this Code.23

Relative to Divorce

Where a marriage between a Filipino citizen and a foreigner is

validly celebrated and a divorce is thereafter validly obtained abroad
by the alien spouse capacitating him or her to remarry, the Filipino
spouse shall likewise have capacity to remarry under Philippine
law.24

II. Human Relations New Civil Code

The second par. of this article can be invoked only when the deceased was vested w/ a descendible
interest in prop. w/in the jurisdiction of the Phils.
The intrinsic validity of the provisions of the will of a foreigner who dies in the Phils. is to be
determined by the laws of his own state or country, and not by those of the Phils. Thus, a condition in a
will of a foreigner that his legatee respect his order that his prop. be distributed according to the laws of
the Phils. instead of the laws of his own country, was held illegal and considered as not written.
The law governing succession may be considered from the point of view of (a) the execution of wills,
and (b) the distribution of property. The formalities of execution of will are generally governed by the
law of the place of execution (Art. 17, par. 1.) But the distribution of the estate is governed by the law of
the nation of the deceased.
20
Art. 17, 1st par., known as the lex loci celebrationis
21
Ibid, 2nd par.
22
Ibid, 3rd par.
23
Art. 18
24
Art. 26 (2nd par.), FC

6
 A. Relative to breach of promise to marry25

Every person must, in the exercise of his rights and in the

performance of his duties, act with justice, give everyone his due,
and observe honesty and good faith.26
Every person who, contrary to law, wilfully or negligently
causes damage to another, shall indemnify the latter for the same.27

Any person who wilfully causes loss or injury to another in a

manner that is contrary to morals, good customs or public policy
shall compensate the latter for the damage.28

Every person who through an act of performance by another,

or any other means, acquires or comes into possession of something
at the expense of the latter without just or legal ground, shall return
the same to him.29

PERSONS

I. Persons and Personality New Civil Code

A. Capacity to Act30

25
General rule: Breach of promise to marry by itself is not actionable.
Exception: In cases where there is another act independent of the breach of promise to marry which
gives rise to liability:
1. Cases where there was financial damage.
2. Social humiliation caused to one of the parties.
3. Where there was moral seduction.
Sexual intercourse is not by itself a basis for recovery; damages could only be awarded if the sexual
intercourse is not a product of voluntariness or mutual desire.
While a breach of promise to marry is not actionable, it has been held that to formally set a wedding
and go through and spend for all the wedding preparation and publicity, only to walk out of it when the
matrimony was about to be solemnized is a different matter. This palpably and unjustifiably contrary to
good customs for which the defendant must be held answerable for damages in accordance with Art. 21
of the Civil Code. (Wassmer vs. Velez)

26
Art. 19
Principle of abuse of rights
27
Art. 20
28
Art. 21
29
Art. 22
30
Power to do act with legal effects

7
 1. Civil Personality31

Juridical capacity, which is the fitness to be the subject of legal

relations, is inherent in every natural person and is lost only through
death. Capacity to act, which is the power to do acts with legal
effect, is acquired and may be lost.32

2. Restrictions on Capacity to Act

Minority, insanity or imbecility, the state of being a deaf-mute,

prodigality and civil interdiction are mere restrictions on capacity to
act, and do not exempt the incapacitated person from certain
obligations, as when the latter arise from his acts or from property
relations, such as easements.33

The following circumstances, among others, modify or limit

capacity to act: age, insanity, imbecility, the state of being a deaf-
mute, penalty, prodigality, family relations, alienage, absence,
insolvency and trusteeship. The consequences of these
circumstances are governed by this Code, other codes, the Rules of
Court, and in special laws. Capacity to act is not limited on account
of religious belief or political opinion.

A married woman, eighteen years of age or over, is qualified

for all acts of civil life, except in cases specified by law.34

3. Birth

Birth determines personality; but the conceived child shall be

considered born for all purposes that are favorable to it, provided it
be born later with the conditions specified in the following article.35
31
aptitude of being the subject, active or passive, of rights and obligations
32
Art. 37
Capacity may be (1) juridical capacity, and (2) capacity to act. The union of these 2 forms the full
civil capacity. Juridical capacity is synonymous to legal capacity and to personality. They all refer to the
aptitude for the holding and enjoyment of rights. On the other hand, capacity to act refers to the aptitude
for the exercise of rights, and is often referred to merely as "capacity."
33
Art. 38
34
Art. 39
35
Art. 40
Personality from Birth.-- Birth means the removal of the foetus from the mother's womb.
Conceived Child.-- The personality of the conceived child has 2 characteristics: (1) it is essentially
limited, bec. it is only for purposes favorable to the child, and (2) it is provisional or conditional, bec. it
depends upon the child being born alive later, such that if it is not born alive, its personality disappears as

8
 For civil purposes, the foetus is considered born if it is alive at
the time it is completely delivered from the mother's womb.
However, if the foetus had an intrauterine life of less than seven
months, it is not deemed born if it dies within twenty-four hours after
its complete delivery from the maternal womb.36

4. Death

Civil personality is extinguished by death. The effect of death

upon the rights and obligations of the deceased is determined by law,
by contract and by will.37

a. Compare Art. 43 with Rule 131, Sec. 3 (jj)

presumption of Survivorship

Under Art. 43:38

If there is a doubt, as between two or more persons who are

called to succeed each other, as to which of them died first, whoever
alleges the death of one prior to the other, shall prove the same; in
the absence of proof, it is presumed that they died at the same time
and there shall be no transmission of rights from one to the other.

Under Rule 131, Sec. 3 (jj):39

Except for purposes of succession, when two persons perish in
the same calamity, such as wreck, battle, or conflagration, and it is
not shown who died first, and there are no particular circumstances
from which it can be inferred, the survivorship is determined from
if it had never existed.
For civil personality to be acquired, one must be born.-- A foetus is born after it is completely separated
from the mother's womb w/c is produced by the cutting of the umbilical cord; after the separation, the
child now survives by itself.
36
Art. 41
Once birth occurs, personality for favorable purposes retroacts from the moment of conception.-- The
retroactivity rule is qualified-- only for purposes favorable to the child.
37
Art. 42.
Physical death and legal death are the same. (Balane)
38
Civil Code
39
Rules of Court

9
the probabilities resulting from the strength and the age of the
sexes, according to the following rules:

1. If both were under the age of fifteen years, the older is deemed to
have survived;
2. If both were above the age sixty, the younger is deemed to have
survived;
3. If one is under fifteen and the other above sixty, the former is
deemed to have survived;
4. If both be over fifteen and under sixty, and the sex be different, the
male is deemed to have survived, if the sex be the same, the older;
5. If one be under fifteen or over sixty, and the other between those
ages, the latter is deemed to have survived.40

B. Domicile41 and residence42 of person

For the exercise of civil rights and the fulfillment of civil

obligations, the domicile of natural persons is the place of their
habitual residence.43
When the law creating or recognizing them, or any other
provision does not fix the domicile of juridical persons, the same
shall be understood to be the place where their legal representation
is established or where they exercise their principal functions.44

II. Marriage Family Code45

40
Sec. 3 (jj), Rule 131.
41
denotes a fixed permanent residence, which when absent, one has the intention of returning
There can only be one place of domicile
42
used to indicate a place of abode, whether permanent or temporary
There can be several places of residence
43
Art. 50.
Requisites of Domicile:
(1) physical presence;
(2) animus manendi (intent to remain) (Gallego v. Vera, 73 P 453.)
Three kinds of Domicile:
(1) Domicile of Origin.-- Domicile of the parents of a person at the time he was born
(2) Domicile of Choice.-- Domicile chosen by a person to change his original domicile. Aside from the
2 requisites mentioned above, a third requisite must be present in domincile of choice, animus non
revertendi (intention not to return to one's old domicile as his permanent place.)
(3) Domicile by Operation of Law.-- E.g., Art. 69, FC.
Domicile and Residence. Domicile is not the same as residence. Domicile is residence plus habituality.
Importance of Understanding Domicile.-- In case of revocation of wills (Art. 829), place of
performance of obligation (Art. 1251, par. 3), renvoi (Aznar v. Garcia.)
44
Art. 51.
45
Aug. 3, 1988

10
 A. Requisites

1. Nature of Marriage

A special contract of permanent union between a man and a

woman entered into in accordance with law for the establishment of
conjugal and family life. It is the foundation of the family and an
inviolable social institution whose nature, consequences, and
incidents are governed by law and not subject to stipulation, except
that marriage settlements may fix the property relations during the
marriage within the limits provided by this Code46

2. Kinds of Requisites

Essential requisites:

(1) Legal capacity of the contracting parties who must be a male and
a female; and
(2) Consent freely given in the presence of the solemnizing officer. 47

Formal requisites:

(1) Authority of the solemnizing officer;

(2) A valid marriage license except in the cases provided for in
Chapter 248 of this Title; and
(3) A marriage ceremony which takes place with the appearance of
the contracting parties before the solemnizing officer and their
personal declaration that they take each other as husband and wife
in the presence of not less than two witnesses of legal age.49

3. Effect of absence of requisites

The absence of any of the essential or formal requisites shall

render the marriage void ab initio, except as stated in Article 35
(2).50

46
Art. 1
47
Art. 2
48
Marriages Exempted from License Requirement, see Reference
49
Art. 3
50
infra

11
 A defect in any of the essential requisites shall not affect the
validity of the marriage but the party or parties responsible for the
irregularity shall be civilly, criminally and administratively liable.51

4. Essential

a. Age52

Any male or female of the age of eighteen years or upwards not

under any of the impediments mentioned in Articles 37 and 38 53, may
contract marriage.

5. Ceremony

No prescribed form or religious rite for the solemnization of

the marriage is required. It shall be necessary, however, for the
contracting parties to appear personally before the solemnizing
officer and declare in the presence of not less than two witnesses of
legal age that they take each other as husband and wife. This
declaration shall be contained in the marriage certificate which shall
be signed by the contracting parties and their witnesses and attested
by the solemnizing officer.54

In case of a marriage in articulo mortis, when the party at the

point of death is unable to sign the marriage certificate, it shall be
sufficient for one of the witnesses to the marriage to write the name
of said party, which fact shall be attested by the solemnizing officer55

6. Formal

Marriage may be solemnized by:56

(1) Any incumbent member of the judiciary within the court's

jurisdiction;

(2) Any priest, rabbi, imam, or minister of any church or religious

sect duly authorized by his church or religious sect and registered

51
Art. 4
52
Art. 5
53
See Reference
54
Art. 6
55
Art. 6
56
Art. 7

12
with the civil registrar general, acting within the limits of the written
authority granted by his church or religious sect and provided that at
least one of the contracting parties belongs to the solemnizing
officer's church or religious sect;

(3) Any ship captain or airplane chief only in the case mentioned in
Article 31;57

(4) Any military commander of a unit to which a chaplain is assigned,

in the absence of the latter, during a military operation, likewise only
in the cases mentioned in Article 32;58

(5) Any consul-general, consul or vice-consul in the case provided in

Article 10.59

7. Solemnizing authority

The marriage shall be solemnized publicly in the chambers of

the judge or in open court, in the church, chapel or temple, or in the
office the consul-general, consul or vice-consul, as the case may be,
and not elsewhere, except in cases of marriages contracted on the
point of death or in remote places in accordance with Article 29 60 of
this Code, or where both of the parties request the solemnizing
officer in writing in which case the marriage may be solemnized at a
house or place designated by them in a sworn statement to that
effect.61

Marriages between Filipino citizens abroad may be solemnized

by a consul-general, consul or vice-consul of the Republic of the
Philippines. The issuance of the marriage license and the duties of
the local civil registrar and of the solemnizing officer with regard to
the celebration of marriage shall be performed by said consular
official.62

a. Exceptions

Those solemnized by any person not legally authorized to

perform marriages unless such marriages were contracted with

57
infra
58
ibid
59
ibid
60
See reference
61
Art. 8; for Art. 7, supra
62
Art. 10

13
either or both parties believing in good faith that the solemnizing
officer had the legal authority to do so.63

8. License Required

A valid marriage license except in the cases provided for in

Chapter 2 of this Title64

A marriage license shall be issued by the local civil registrar of

the city or municipality where either contracting party habitually
resides, except in marriages where no license is required in
accordance with Chapter 2 of this Title65

Where a marriage license is required, each of the contracting

parties shall file separately a sworn application for such license with
the proper local civil registrar which shall specify the following:

(1) Full name of the contracting party;

(2) Place of birth;
(3) Age and date of birth;
(4) Civil status;
(5) If previously married, how, when and where the previous
marriage was dissolved or annulled;
(6) Present residence and citizenship;
(7) Degree of relationship of the contracting parties;
(8) Full name, residence and citizenship of the father;
(9) Full name, residence and citizenship of the mother; and
(10) Full name, residence and citizenship of the guardian or person
having charge, in case the contracting party has neither father nor
mother and is under the age of twenty-one years.

The applicants, their parents or guardians shall not be

required to exhibit their residence certificates in any formality in
connection with the securing of the marriage license.66

The license shall be valid in any part of the Philippines for a

period of one hundred twenty days from the date of issue, and shall
be deemed automatically cancelled at the expiration of the said
period if the contracting parties have not made use of it. The expiry
63
Art. 35 (2)
64
Art. 3 (2)
65
Art. 9.
66
Art. 11

14
date shall be stamped in bold characters on the face of every license
issued.67

a. Foreign National

When either or both of the contracting parties are citizens of a

foreign country, it shall be necessary for them before a marriage
license can be obtained, to submit a certificate of legal capacity to
contract marriage, issued by their respective diplomatic or consular
officials.

Stateless persons or refugees from other countries shall, in lieu

of the certificate of legal capacity herein required, submit an
affidavit stating the circumstances showing such capacity to contract
marriage.68

b. Exceptions

In case either or both of the contracting parties are at the

point of death, the marriage may be solemnized without necessity of
a marriage license and shall remain valid even if the ailing party
subsequently survives.69

A marriage in articulo mortis between passengers or crew

members may also be solemnized by a ship captain or by an airplane
pilot not only while the ship is at sea or the plane is in flight, but also
during stopovers at ports of call.70

A military commander of a unit, who is a commissioned officer,

shall likewise have authority to solemnize marriages in articulo
mortis between persons within the zone of military operation,
whether members of the armed forces or civilians.71

No license shall be necessary for the marriage of a man and a

woman who have lived together as husband and wife for at least five
years and without any legal impediment to marry each other. The
contracting parties shall state the foregoing facts in an affidavit
before any person authorized by law to administer oaths. The
solemnizing officer shall also state under oath that he ascertained
67
Art. 20
68
Art. 21
69
Art. 27
70
Art. 31
71
Art. 32

15
the qualifications of the contracting parties are found no legal
impediment to the marriage72

9. Marriage Certificate

The marriage certificate, in which the parties shall declare that

they take each other as husband and wife, shall also state:

(1) The full name, sex and age of each contracting party;
(2) Their citizenship, religion and habitual residence;
(3) The date and precise time of the celebration of the marriage;
(4) That the proper marriage license has been issued according to
law, except in marriage provided for in Chapter 2 of this Title;
(5) That either or both of the contracting parties have secured the
parental consent in appropriate cases;
(6) That either or both of the contracting parties have complied with
the legal requirement regarding parental advice in appropriate
cases; and
(7) That the parties have entered into marriage settlement, if any,
attaching a copy thereof73

B. Effect of Marriage celebrated abroad and foreign divorce74

All marriages solemnized outside the Philippines, in

accordance with the laws in force in the country where they were
solemnized, and valid there as such, shall also be valid in this
country, except those prohibited under Articles 35 (1), (4), (5) and
(6), 36, 37 and 3875.

Where a marriage between a Filipino citizen and a foreigner is

validly celebrated and a divorce is thereafter validly obtained abroad
by the alien spouse capacitating him or her to remarry, the Filipino
spouse shall have capacity to remarry under Philippine law.

C. Void and Voidable marriages

1. Void Marriages

72
Art. 34
73
Art. 22
74
Art. 26
75
infra

16
 The judgment of annulment or of absolute nullity of the
marriage, the partition and distribution of the properties of the
spouses and the delivery of the children's presumptive legitimes
shall be recorded in the appropriate civil registry and registries of
property; otherwise, the same shall not affect third persons.76

Either of the former spouses may marry again after compliance

with the requirements of the immediately preceding Article;
otherwise, the subsequent marriage shall be null and void.77

a. Absence of Requisites

The following marriages shall be void from the beginning:

(1) Contracted by any party below eighteen years of age even with
the consent of parents or guardians;

(2) Solemnized by any person not legally authorized to perform

marriages unless such marriages were contracted with either or both
parties believing in good faith that the solemnizing officer had the
legal authority to do so;
(3) Solemnized without license, except those covered by the
preceding Chapter;78
(4) Bigamous or polygamous marriages not failing under Article 41;79
(5) Contracted through mistake of one contracting party as to the
identity of the other; and
(6) Subsequent marriages that are void under Article 53.80

b. Psychological incapacity

A marriage contracted by any party who, at the time of the

celebration, was psychologically incapacitated to comply with the
essential marital obligations of marriage, shall likewise be void even
if such incapacity becomes manifest only after its solemnization.81

c. Incestous marriages

76
Art. 52
77
Art. 53
78
Marriages exempted from License Requirement
79
infra
80
Art. 35; Art. 53, infra
81
Art. 36

17
 Marriages between the following are incestuous and void from
the beginning, whether relationship between the parties be
legitimate or illegitimate:

(1) Between ascendants and descendants of any degree; and

(2) Between brothers and sisters, whether of the full or half blood.82

The following marriages shall be void from the beginning for

reasons of public policy:

(1) Between collateral blood relatives whether legitimate or

illegitimate, up to the fourth civil degree;
(2) Between step-parents and step-children;
(3) Between parents-in-law and children-in-law;
(4) Between the adopting parent and the adopted child;
(5) Between the surviving spouse of the adopting parent and the
adopted child;
(6) Between the surviving spouse of the adopted child and the
adopter;
(7) Between an adopted child and a legitimate child of the adopter;
(8) Between adopted children of the same adopter; and
(9) Between parties where one, with the intention to marry the other,
killed that other person's spouse, or his or her own spouse.83

2. Prescription

The action or defense for the declaration of absolute nullity

shall not prescribe. However, in case of marriage celebrated before
the effectivity of this Code and falling under Article 36, such action
or defense shall prescribe in ten years after this Code shall take
effect.84

3. Subsequent marriages

The absolute nullity of a previous marriage may be invoked for

purposes of remarriage on the basis solely of a final judgment
declaring such previous marriage void.85

82
Art. 37
83
Art. 38
84
Art. 39
85
Art. 40

18
 A marriage contracted by any person during subsistence of a
previous marriage shall be null and void, unless before the
celebration of the subsequent marriage, the prior spouse had been
absent for four consecutive years and the spouse present has a well-
founded belief that the absent spouse was already dead. In case of
disappearance where there is danger of death under the
circumstances set forth in the provisions of Article 391 of the Civil
Code, an absence of only two years shall be sufficient.86

For the purpose of contracting the subsequent marriage under

the preceding paragraph the spouse present must institute a
summary proceeding as provided in this Code for the declaration of
presumptive death of the absentee, without prejudice to the effect of
reappearance of the absent spouse.

The subsequent marriage referred to in the preceding Article

shall be automatically terminated by the recording of the affidavit of
reappearance of the absent spouse, unless there is a judgment
annulling the previous marriage or declaring it void ab initio.

A sworn statement of the fact and circumstances of

reappearance shall be recorded in the civil registry of the residence
of the parties to the subsequent marriage at the instance of any
interested person, with due notice to the spouses of the subsequent
marriage and without prejudice to the fact of reappearance being
judicially determined in case such fact is disputed.87

The termination of the subsequent marriage referred to in the

preceding Article shall produce the following effects:

(1) The children of the subsequent marriage conceived prior to its

termination shall be considered legitimate;

(2) The absolute community of property or the conjugal partnership,

as the case may be, shall be dissolved and liquidated, but if either
spouse contracted said marriage in bad faith, his or her share of the
net profits of the community property or conjugal partnership
property shall be forfeited in favor of the common children or, if
there are none, the children of the guilty spouse by a previous
marriage or in default of children, the innocent spouse;

86
Art. 41
87
Art. 42

19
(3) Donations by reason of marriage shall remain valid, except that if
the donee contracted the marriage in bad faith, such donations made
to said donee are revoked by operation of law;

(4) The innocent spouse may revoke the designation of the other
spouse who acted in bad faith as beneficiary in any insurance policy,
even if such designation be stipulated as irrevocable; and

(5) The spouse who contracted the subsequent marriage in bad faith
shall be disqualified to inherit from the innocent spouse by testate
and intestate succession88

If both spouses of the subsequent marriage acted in bad faith,

said marriage shall be void ab initio and all donations by reason of
marriage and testamentary dispositions made by one in favor of the
other are revoked by operation of law.89

4. Annullable marriages

In case either or both of the contracting parties, not having

been emancipated by a previous marriage, are between the ages of
eighteen and twenty-one, they shall, in addition to the requirements
of the preceding articles, exhibit to the local civil registrar, the
consent to their marriage of their father, mother, surviving parent or
guardian, or persons having legal charge of them, in the order
mentioned. Such consent shall be manifested in writing by the
interested party, who personally appears before the proper local civil
registrar, or in the form of an affidavit made in the presence of two
witnesses and attested before any official authorized by law to
administer oaths. The personal manifestation shall be recorded in
both applications for marriage license, and the affidavit, if one is
executed instead, shall be attached to said applications.90

A marriage may be annulled for any of the following causes,

existing at the time of the marriage:

(1) That the party in whose behalf it is sought to have the marriage
annulled was eighteen years of age or over but below twenty-one,
and the marriage was solemnized without the consent of the parents,
guardian or person having substitute parental authority over the
88
Art. 43
89
Art. 44
90
Art. 14

20
party, in that order, unless after attaining the age of twenty-one, such
party freely cohabited with the other and both lived together as
husband and wife;

(2) That either party was of unsound mind, unless such party after
coming to reason, freely cohabited with the other as husband and
wife;

(3) That the consent of either party was obtained by fraud, unless
such party afterwards, with full knowledge of the facts constituting
the fraud, freely cohabited with the other as husband and wife;

(4) That the consent of either party was obtained by force,

intimidation or undue influence, unless the same having disappeared
or ceased, such party thereafter freely cohabited with the other as
husband and wife;

(5) That either party was physically incapable of consummating the

marriage with the other, and such incapacity continues and appears
to be incurable; or

(6) That either party was afflicted with a sexually-transmissible

disease found to be serious and appears to be incurable.91

Any of the following circumstances shall constitute fraud

referred to in Number 3 of the preceding Article:

(1) Non-disclosure of a previous conviction by final judgment of the

other party of a crime involving moral turpitude;

(2) Concealment by the wife of the fact that at the time of the
marriage, she was pregnant by a man other than her husband;

(3) Concealment of sexually transmissible disease, regardless of its

nature, existing at the time of the marriage; or

(4) Concealment of drug addiction, habitual alcoholism or

homosexuality or lesbianism existing at the time of the marriage.

No other misrepresentation or deceit as to character, health,

rank, fortune or chastity shall constitute such fraud as will give
grounds for action for the annulment of marriage92

91
Art. 45
92
Art. 46

21
 5. Voidable marriages93

The action for annulment of marriage must be filed by the

following persons and within the periods indicated herein:

(1) For causes mentioned in number 1 of Article 45, by the party

whose parent or guardian did not give his or her consent, within five
years after attaining the age of twenty-one, or by the parent or
guardian or person having legal charge of the minor, at any time
before such party has reached the age of twenty-one;

(2) For causes mentioned in number 2 of Article 45, by the same

spouse, who had no knowledge of the other's insanity; or by any
relative or guardian or person having legal charge of the insane, at
any time before the death of either party, or by the insane spouse
during a lucid interval or after regaining sanity;

(3) For causes mentioned in number 3 of Articles 45, by the injured

party, within five years after the discovery of the fraud;

(4) For causes mentioned in number 4 of Article 45, by the injured

party, within five years from the time the force, intimidation or undue
influence disappeared or ceased;

(5) For causes mentioned in number 5 and 6 of Article 45, by the

injured party, within five years after the marriage.94

6. Presence of prosecutor

In all cases of annulment or declaration of absolute nullity of

marriage, the Court shall order the prosecuting attorney or fiscal
assigned to it to appear on behalf of the State to take steps to
prevent collusion between the parties and to take care that evidence
is not fabricated or suppressed.

In the cases referred to in the preceding paragraph, no

judgment shall be based upon a stipulation of facts or confession of
judgment.95

7. Pendency of action

93
Arts. 45 & 46, see (4) Annullable marriages, supra
94
Art. 47
95
Art. 48

22
 During the pendency of the action and in the absence of
adequate provisions in a written agreement between the spouses,
the Court shall provide for the support of the spouses and the
custody and support of their common children. The Court shall give
paramount consideration to the moral and material welfare of said
children and their choice of the parent with whom they wish to
remain as provided to in Title IX. It shall also provide for appropriate
visitation rights of the other parent96

8. Effects of nullity

The effects provided for by paragraphs (2), (3), (4) and (5) of
Article 43 and by Article 4497 shall also apply in the proper cases to
marriages which are declared ab initio or annulled by final judgment
under Articles 40 and 45.98

The final judgment in such cases shall provide for the

liquidation, partition and distribution of the properties of the
spouses, the custody and support of the common children, and the
delivery of third presumptive legitimes, unless such matters had
been adjudicated in previous judicial proceedings.

All creditors of the spouses as well as of the absolute

community or the conjugal partnership shall be notified of the
proceedings for liquidation.

In the partition, the conjugal dwelling and the lot on which it is

situated, shall be adjudicated in accordance with the provisions of
Articles 102 and 129.99

In said partition, the value of the presumptive legitimes of all

common children, computed as of the date of the final judgment of
the trial court, shall be delivered in cash, property or sound
securities, unless the parties, by mutual agreement judicially
approved, had already provided for such matters.

96
Art. 49
97
supra
98
ibid
99
Art. 50; for Arts. 102 & 109, see Reference

23
 The children or their guardian or the trustee of their property
may ask for the enforcement of the judgment.

The delivery of the presumptive legitimes herein prescribed

shall in no way prejudice the ultimate successional rights of the
children accruing upon the death of either of both of the parents; but
the value of the properties already received under the decree of
annulment or absolute nullity shall be considered as advances on
their legitime100

The judgment of annulment or of absolute nullity of the

marriage, the partition and distribution of the properties of the
spouses and the delivery of the children's presumptive legitimes
shall be recorded in the appropriate civil registry and registries of
property; otherwise, the same shall not affect third persons.101

Either of the former spouses may marry again after compliance

with the requirements of the immediately preceding Article;
otherwise, the subsequent marriage shall be null and void.102

Children conceived or born before the judgment of annulment

or absolute nullity of the marriage under Article 36 103 has become
final and executory shall be considered legitimate.

Children conceived or born of the subsequent marriage under

Article 53 shall likewise be legitimate.104

III. Legal Separation

A. Grounds

(1) Repeated physical violence or grossly abusive conduct directed

against the petitioner, a common child, or a child of the petitioner;

(2) Physical violence or moral pressure to compel the petitioner to

change religious or political affiliation;

100
Art. 51
101
Art. 52
102
Art. 53
103
supra
104
Art. 54

24
(3) Attempt of respondent to corrupt or induce the petitioner, a
common child, or a child of the petitioner, to engage in prostitution,
or connivance in such corruption or inducement;

(4) Final judgment sentencing the respondent to imprisonment of

more than six years, even if pardoned;

(5) Drug addiction or habitual alcoholism of the respondent;

(6) Lesbianism or homosexuality of the respondent;

(7) Contracting by the respondent of a subsequent bigamous

marriage, whether in the Philippines or abroad;

(8) Sexual infidelity or perversion;

(9) Attempt by the respondent against the life of the petitioner; or

(10) Abandonment of petitioner by respondent without justifiable

cause for more than one year.

For purposes of this Article, the term "child" shall include a

child by nature or by adoption.105

B. Defenses

(1) Where the aggrieved party has condoned the offense or act
complained of;

(2) Where the aggrieved party has consented to the commission of

the offense or act complained of;

(3) Where there is connivance between the parties in the commission

of the offense or act constituting the ground for legal separation;

(4) Where both parties have given ground for legal separation;

(5) Where there is collusion between the parties to obtain decree of

legal separation; or

(6) Where the action is barred by prescription106

105
Art. 55; see also R. A. 9262, Anti-Violence Against Women and Children
106
Art. 56

25
 An action for legal separation shall be filed within five years
from the time of the occurrence of the cause.107

C. Cooling-off Period

An action for legal separation shall in no case be tried before

six months shall have elapsed since the filing of the petition108

D. Reconciliation efforts

No legal separation may be decreed unless the Court has taken

steps toward the reconciliation of the spouses and is fully satisfied,
despite such efforts, that reconciliation is highly improbable109

E. Confession of Judgment

No decree of legal separation shall be based upon a stipulation

of facts or a confession of judgment.

In any case, the Court shall order the prosecuting attorney or

fiscal assigned to it to take steps to prevent collusion between the
parties and to take care that the evidence is not fabricated or
suppressed.110

F. Effects of Filing Petition

After the filing of the petition for legal separation, the spouses
shall be entitled to live separately from each other.

The court, in the absence of a written agreement between the

spouses, shall designate either of them or a third person to
administer the absolute community or conjugal partnership property.
The administrator appointed by the court shall have the same powers
and duties as those of a guardian under the Rules of Court.111

G. Effects of pendency

107
Art. 57
108
Art. 58
109
Art. 59
110
Art. 60
111
Art. 61

26
 During the pendency of the action for legal separation, the
provisions of Article 49 shall likewise apply to the support of the
spouses and the custody and support of the common children.112

H. Effects of legal separation

The decree of legal separation shall have the following effects:

(1) The spouses shall be entitled to live separately from each other,
but the marriage bonds shall not be severed;

(2) The absolute community or the conjugal partnership shall be

dissolved and liquidated but the offending spouse shall have no right
to any share of the net profits earned by the absolute community or
the conjugal partnership, which shall be forfeited in accordance with
the provisions of Article 43(2);113

(3) The custody of the minor children shall be awarded to the

innocent spouse, subject to the provisions of Article 213 114 of this
Code; and

(4) The offending spouse shall be disqualified from inheriting from

the innocent spouse by intestate succession. Moreover, provisions in
favor of the offending spouse made in the will of the innocent spouse
shall be revoked by operation of law.
After the finality of the decree of legal separation, the innocent
spouse may revoke the donations made by him or by her in favor of
the offending spouse, as well as the designation of the latter as
beneficiary in any insurance policy, even if such designation be
stipulated as irrevocable. The revocation of the donations shall be
recorded in the registries of property in the places where the
properties are located. Alienations, liens and encumbrances
registered in good faith before the recording of the complaint for
revocation in the registries of property shall be respected. The
revocation of or change in the designation of the insurance
beneficiary shall take effect upon written notification thereof to the
insured

112
Art. 62
113
supra
114
See Reference

27
 The action to revoke the donation under this Article must be
brought within five years from the time the decree of legal
separation become final.115

I. Reconciliation

If the spouses should reconcile, a corresponding joint

manifestation under oath duly signed by them shall be filed with the
court in the same proceeding for legal separation.116

The reconciliation referred to in the preceding Articles shall

have the following consequences:

(1) The legal separation proceedings, if still pending, shall thereby

be terminated at whatever stage; and

(2) The final decree of legal separation shall be set aside, but the
separation of property and any forfeiture of the share of the guilty
spouse already effected shall subsist, unless the spouses agree to
revive their former property regime.

The court's order containing the foregoing shall be recorded in

the proper civil registries.117

The agreement to revive the former property regime referred

to in the preceding Article shall be executed under oath and shall
specify:

(1) The properties to be contributed anew to the restored regime;

(2) Those to be retained as separated properties of each spouse; and
(3) The names of all their known creditors, their addresses and the
amounts owing to each.

The agreement of revival and the motion for its approval shall
be filed with the court in the same proceeding for legal separation,
with copies of both furnished to the creditors named therein. After
due hearing, the court shall, in its order, take measure to protect the
interest of creditors and such order shall be recorded in the proper
registries of properties.

115
Art. 64
116
Art. 65
117
Art. 66

28
 The recording of the ordering in the registries of property shall
not prejudice any creditor not listed or not notified, unless the
debtor-spouse has sufficient separate properties to satisfy the
creditor's claim.118

IV. Rights and Obligations Between Husband and Wife

A. Essential Obligations

The husband and wife are obliged to live together, observe

mutual love, respect and fidelity, and render mutual help and
support.119

B. Family domicile

The husband and wife shall fix the family domicile. In case of
disagreement, the court shall decide.

The court may exempt one spouse from living with the other if
the latter should live abroad or there are other valid and compelling
reasons for the exemption. However, such exemption shall not apply
if the same is not compatible with the solidarity of the family120

C. Support

The spouses are jointly responsible for the support of the

family. The expenses for such support and other conjugal obligations
shall be paid from the community property and, in the absence
thereof, from the income or fruits of their separate properties. In
case of insufficiency or absence of said income or fruits, such
obligations shall be satisfied from the separate properties121

D. Management of household

118
Art. 67
119
Art. 68
120
Art. 69
121
Art. 70

29
 The management of the household shall be the right and the
duty of both spouses. The expenses for such management shall be
paid in accordance with the provisions of Article 70.122

E. Effect of neglect of duty

When one of the spouses neglects his or her duties to the

conjugal union or commits acts which tend to bring danger, dishonor
or injury to the other or to the family, the aggrieved party may apply
to the court for relief123

F. Exercise of profession

Either spouse may exercise any legitimate profession,

occupation, business or activity without the consent of the other. The
latter may object only on valid, serious, and moral grounds.

In case of disagreement, the court shall decide whether or not:

(1) The objection is proper, and

(2) Benefit has occurred to the family prior to the objection or
thereafter. If the benefit accrued prior to the objection, the resulting
obligation shall be enforced against the separate property of the
spouse who has not obtained consent.

The foregoing provisions shall not prejudice the rights of

creditors who acted in good faith.124

V. Property Relations of the Spouses

A. Marriage Settlements

In order that any modification in the marriage settlements may

be valid, it must be made before the celebration of the marriage,
subject to the provisions of Articles 66, 67,125 128, 135 and 136.126

The marriage settlements and any modification thereof shall be

in writing, signed by the parties and executed before the celebration
122
Art. 71
123
Art. 72
124
Art. 73
125
supra
126
Art. 76; see Reference for Arts. 128, 135-6

30
of the marriage. They shall not prejudice third persons unless they
are registered in the local civil registry where the marriage contract
is recorded as well as in the proper registries of properties.127

A minor who according to law may contract marriage may also

execute his or her marriage settlements, but they shall be valid only
if the persons designated in Article 14 128 to give consent to the
marriage are made parties to the agreement, subject to the
provisions of Title IX of this Code.129

For the validity of any marriage settlement executed by a

person upon whom a sentence of civil interdiction has been
pronounced or who is subject to any other disability, it shall be
indispensable for the guardian appointed by a competent court to be
made a party thereto130

In the absence of a contrary stipulation in a marriage

settlement, the property relations of the spouses shall be governed
by Philippine laws, regardless of the place of the celebration of the
marriage and their residence.131

This rule shall not apply:

(1) Where both spouses are aliens;

(2) With respect to the extrinsic validity of contracts affecting

property not situated in the Philippines and executed in the country
where the property is located; and

(3) With respect to the extrinsic validity of contracts entered into in

the Philippines but affecting property situated in a foreign country
whose laws require different formalities for its extrinsic validity.

Everything stipulated in the settlements or contracts referred

to in the preceding articles in consideration of a future marriage,
including donations between the prospective spouses made therein,
shall be rendered void if the marriage does not take place. However,
127
Art. 77
128
The father, mother, surviving parent or guardian, or persons having legal charge of them, in the order
mentioned.
129
Art. 78
130
Art. 79
131
Art. 80

31
stipulations that do not depend upon the celebration of the
marriages shall be valid.132

B. Donations by Reason of Marriage

Donations by reason of marriage are those which are made

before its celebration, in consideration of the same, and in favor of
one or both of the future spouses.133

These donations are governed by the rules on ordinary

donations established in Title III of Book III of the Civil Code, insofar
as they are not modified by the following articles134

A donation by reason of marriage may be revoked by the donor

in the following cases:

(1) If the marriage is not celebrated or judicially declared void ab

initio except donations made in the marriage settlements, which
shall be governed by Article 81;
(2) When the marriage takes place without the consent of the
parents or guardian, as required by law;
(3) When the marriage is annulled, and the donee acted in bad faith;
(4) Upon legal separation, the donee being the guilty spouse;
(5) If it is with a resolutory condition and the condition is complied
with;
(6) When the donee has committed an act of ingratitude as specified
by the provisions of the Civil Code on donations in general135

Donations by reason of marriage shall remain valid, except that

if the donee contracted the marriage in bad faith, such donations
made to said donee are revoked by operation of law;136

The effects provided for by paragraphs (2), (3), (4) and (5) of
Article 43137 and by Article 44 shall also apply in the proper cases to
132
Art. 81
133
Art. 82
134
Art. 83
135
Art. 86
136
Art. 43 (3)
137
See (3) Subsequent marriages, supra

32
marriages which are declared ab initio or annulled by final judgment
under Articles 40138 and 45139.

The final judgment in such cases shall provide for the

liquidation, partition and distribution of the properties of the
spouses, the custody and support of the common children, and the
delivery of third presumptive legitimes, unless such matters had
been adjudicated in previous judicial proceedings.

All creditors of the spouses as well as of the absolute

community or the conjugal partnership shall be notified of the
proceedings for liquidation.

In the partition, the conjugal dwelling and the lot on which it is

situated, shall be adjudicated in accordance with the provisions of
Articles 102 and 129.140

C. Void donations by the spouses

Every donation or grant of gratuitous advantage, direct or

indirect, between the spouses during the marriage shall be void,
except moderate gifts which the spouses may give each other on the
occasion of any family rejoicing. The prohibition shall also apply to
persons living together as husband and wife without a valid
marriage.141

D. Absolute Community of property

1. General Provisions

The future spouses may, in the marriage settlements, agree

upon the regime of absolute community, conjugal partnership of
gains, complete separation of property, or any other regime. In the
absence of a marriage settlement, or when the regime agreed upon
is void, the system of absolute community of property as established
in this Code shall govern142

138
ibid
139
See (4) Annullable marriages, supra
140
Art. 50; see Reference for Arts. 102 & 129
141
Art. 87
142
Art. 75

33
 If the future spouses agree upon a regime other than the
absolute community of property, they cannot donate to each other in
their marriage settlements more than one-fifth of their present
property. Any excess shall be considered void.143

Donations of future property shall be governed by the

provisions on testamentary succession and the formalities of wills.

Donations by reason of marriage of property subject to

encumbrances shall be valid. In case of foreclosure of the
encumbrance and the property is sold for less than the total amount
of the obligation secured, the donee shall not be liable for the
deficiency. If the property is sold for more than the total amount of
said obligation, the donee shall be entitled to the excess.144

The absolute community of property between spouses shall

commence at the precise moment that the marriage is celebrated.
Any stipulation, express or implied, for the commencement of the
community regime at any other time shall be void.145
No waiver of rights, shares and effects of the absolute
community of property during the marriage can be made except in
case of judicial separation of property.146

When the waiver takes place upon a judicial separation of

property, or after the marriage has been dissolved or annulled, the
same shall appear in a public instrument and shall be recorded as
provided in Article 77147. The creditors of the spouse who made such
waiver may petition the court to rescind the waiver to the extent of
the amount sufficient to cover the amount of their credits.

The provisions on co-ownership shall apply to the absolute

community of property between the spouses in all matters not
provided for in this Chapter.148

2. What constitutes Community Property

143
Art. 84
144
Art. 85
145
Art. 88
146
Art. 89
147
See Reference
148
Art. 90

34
 Unless otherwise provided in this Chapter or in the marriage
settlements, the community property shall consist of all the property
owned by the spouses at the time of the celebration of the marriage
or acquired thereafter.149

The following shall be excluded from the community property:

(1) Property acquired during the marriage by gratuitous title by

either spouse, and the fruits as well as the income thereof, if any,
unless it is expressly provided by the donor, testator or grantor that
they shall form part of the community property;

(2) Property for personal and exclusive use of either spouse.

However, jewelry shall form part of the community property;

(3) Property acquired before the marriage by either spouse who has
legitimate descendants by a former marriage, and the fruits as well
as the income, if any, of such property.150

Property acquired during the marriage is presumed to belong

to the community, unless it is proved that it is one of those excluded
therefrom.151

3. Charges Upon and Obligations of the

Community Property

The absolute community of property shall be liable for:

(1) The support of the spouses, their common children, and

legitimate children of either spouse; however, the support of
illegitimate children shall be governed by the provisions of this Code
on Support;

(2) All debts and obligations contracted during the marriage by the
designated administrator-spouse for the benefit of the community, or
by both spouses, or by one spouse with the consent of the other;

(3) Debts and obligations contracted by either spouse without the

consent of the other to the extent that the family may have been
benefited;
149
Art. 91
150
Art. 92
151
Art. 93

35
(4) All taxes, liens, charges and expenses, including major or minor
repairs, upon the community property;

(5) All taxes and expenses for mere preservation made during
marriage upon the separate property of either spouse used by the
family;

(6) Expenses to enable either spouse to commence or complete a

professional or vocational course, or other activity for self-
improvement;

(7) Antenuptial debts of either spouse insofar as they have

redounded to the benefit of the family;

(8) The value of what is donated or promised by both spouses in

favor of their common legitimate children for the exclusive purpose
of commencing or completing a professional or vocational course or
other activity for self-improvement;

(9) Antenuptial debts of either spouse other than those falling under
paragraph (7) of this Article, the support of illegitimate children of
either spouse, and liabilities incurred by either spouse by reason of a
crime or a quasi-delict, in case of absence or insufficiency of the
exclusive property of the debtor-spouse, the payment of which shall
be considered as advances to be deducted from the share of the
debtor-spouse upon liquidation of the community; and

(10) Expenses of litigation between the spouses unless the suit is

found to be groundless.
If the community property is insufficient to cover the foregoing
liabilities, except those falling under paragraph (9), the spouses shall
be solidarily liable for the unpaid balance with their separate
properties.152

Whatever may be lost during the marriage in any game of

chance, betting, sweepstakes, or any other kind of gambling,
whether permitted or prohibited by law, shall be borne by the loser
and shall not be charged to the community but any winnings
therefrom shall form part of the community property.153

152
Art. 94
153
Art. 95

36
 4. Ownership, Administration, Enjoyment and
Disposition of the Community Property

The administration and enjoyment of the community property

shall belong to both spouses jointly. In case of disagreement, the
husband's decision shall prevail, subject to recourse to the court by
the wife for proper remedy, which must be availed of within five
years from the date of the contract implementing such decision.

In the event that one spouse is incapacitated or otherwise

unable to participate in the administration of the common properties,
the other spouse may assume sole powers of administration. These
powers do not include disposition or encumbrance without authority
of the court or the written consent of the other spouse. In the
absence of such authority or consent, the disposition or
encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting spouse
and the third person, and may be perfected as a binding contract
upon the acceptance by the other spouse or authorization by the
court before the offer is withdrawn by either or both offerors.154

Either spouse may dispose by will of his or her interest in the

community property.155

Neither spouse may donate any community property without

the consent of the other. However, either spouse may, without the
consent of the other, make moderate donations from the community
property for charity or on occasions of family rejoicing or family
distress.156

5. Dissolution of Community Regime

The absolute community terminates:

(1) Upon the death of either spouse;

(2) When there is a decree of legal separation;
154
Art. 96
155
Art. 97
156
Art. 98

37
(3) When the marriage is annulled or declared void; or
(4) In case of judicial separation of property during the marriage
under Article 134 to 138.157

The separation in fact between husband and wife shall not

affect the regime of absolute community except that:

(1) The spouse who leaves the conjugal home or refuses to live
therein, without just cause, shall not have the right to be supported;

(2) When the consent of one spouse to any transaction of the other is
required by law, judicial authorization shall be obtained in a
summary proceeding;
(3) In the absence of sufficient community property, the separate
property of both spouses shall be solidarily liable for the support of
the family. The spouse present shall, upon proper petition in a
summary proceeding, be given judicial authority to administer or
encumber any specific separate property of the other spouse and use
the fruits or proceeds thereof to satisfy the latter's share.158

If a spouse without just cause abandons the other or fails to

comply with his or her obligations to the family, the aggrieved spouse
may petition the court for receivership, for judicial separation of
property or for authority to be the sole administrator of the absolute
community, subject to such precautionary conditions as the court
may impose.

The obligations to the family mentioned in the preceding

paragraph refer to marital, parental or property relations.

A spouse is deemed to have abandoned the other when her or

she has left the conjugal dwelling without intention of returning. The
spouse who has left the conjugal dwelling for a period of three
months or has failed within the same period to give any information
as to his or her whereabouts shall be prima facie presumed to have
no intention of returning to the conjugal dwelling. 159

157
Art. 99; see Reference for Arts. 134-138
158
Art. 100
159
Art. 101

38
 6. Liquidation of the Absolute Community Assets
and Liabilities

Upon dissolution of the absolute community regime, the

following procedure shall apply:

(1) An inventory shall be prepared, listing separately all the

properties of the absolute community and the exclusive properties of
each spouse.

(2) The debts and obligations of the absolute community shall be

paid out of its assets. In case of insufficiency of said assets, the
spouses shall be solidarily liable for the unpaid balance with their
separate properties in accordance with the provisions of the second
paragraph of Article 94.160

(3) Whatever remains of the exclusive properties of the spouses shall

thereafter be delivered to each of them.

(4) The net remainder of the properties of the absolute community

shall constitute its net assets, which shall be divided equally between
husband and wife, unless a different proportion or division was
agreed upon in the marriage settlements, or unless there has been a
voluntary waiver of such share provided in this Code. For purpose of
computing the net profits subject to forfeiture in accordance with
Articles 43, No. (2) and 63, No. (2), 161 the said profits shall be the
increase in value between the market value of the community
property at the time of the celebration of the marriage and the
market value at the time of its dissolution.

(5) The presumptive legitimes of the common children shall be

delivered upon partition, in accordance with Article 51.162

(6) Unless otherwise agreed upon by the parties, in the partition of

the properties, the conjugal dwelling and the lot on which it is
situated shall be 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 decided otherwise. In case there in no such majority, the court

160
supra
161
ibid
162
ibid

39
shall decide, taking into consideration the best interests of said
children.163

Upon the termination of the marriage by death, the community

property shall be liquidated in the same proceeding for the
settlement of the estate of the deceased.

If no judicial settlement proceeding is instituted, the surviving

spouse shall liquidate the community property either judicially or
extra-judicially within six months from the death of the deceased
spouse. If upon the lapse of the six months period, no liquidation is
made, any disposition or encumbrance involving the community
property of the terminated marriage shall be void.

Should the surviving spouse contract a subsequent marriage

without compliance with the foregoing requirements, a mandatory
regime of complete separation of property shall govern the property
relations of the subsequent marriage.164

Whenever the liquidation of the community properties of two

or more marriages contracted by the same person before the
effectivity of this Code is carried out simultaneously, the respective
capital, fruits and income of each community shall be determined
upon such proof as may be considered according to the rules of
evidence. In case of doubt as to which community the existing
properties belong, the same shall be divided between the different
communities in proportion to the capital and duration of each.165

E. Conjugal Partnership of Gains

1. General Provision

In case the future spouses agree in the marriage settlements

that the regime of conjugal partnership gains shall govern their
property relations during marriage, the provisions in this Chapter
shall be of supplementary application.

The provisions of this Chapter shall also apply to conjugal

partnerships of gains already established between spouses before
the effectivity of this Code, without prejudice to vested rights already
163
Art. 102
164
Art. 103
165
Art. 104

40
acquired in accordance with the Civil Code or other laws, as
provided in Article 256.166

Under the regime of conjugal partnership of gains, the

husband and wife place in a common fund the proceeds, products,
fruits and income from their separate properties and those acquired
by either or both spouses through their efforts or by chance, and,
upon dissolution of the marriage or of the partnership, the net gains
or benefits obtained by either or both spouses shall be divided
equally between them, unless otherwise agreed in the marriage
settlements.167

The rules provided in Articles 88 and 89168 shall also apply to

conjugal partnership of gains.169

The conjugal partnership shall be governed by the rules on the

contract of partnership in all that is not in conflict with what is
expressly determined in this Chapter or by the spouses in their
marriage settlements.170

2. Exclusive Property of Each Spouse

The following shall be the exclusive property of each spouse:

(1) That which is brought to the marriage as his or her own;

(2) That which each acquires during the marriage by gratuitous title;

(3) That which is acquired by right of redemption, by barter or by

exchange with property belonging to only one of the spouses; and

(4) That which is purchased with exclusive money of the wife or of

the husband171

The spouses retain the ownership, possession, administration

and enjoyment of their exclusive properties.

166
Art. 105; see Reference for Art. 256
167
Art. 106
168
supra
169
Art. 107
170
Art. 108
171
Art. 109

41
 Either spouse may, during the marriage, transfer the
administration of his or her exclusive property to the other by means
of a public instrument, which shall be recorded in the registry of
property of the place the property is located.172

A spouse of age may mortgage, encumber, alienate or

otherwise dispose of his or her exclusive property, without the
consent of the other spouse, and appear alone in court to litigate
with regard to the same.173

The alienation of any exclusive property of a spouse

administered by the other automatically terminates the
administration over such property and the proceeds of the alienation
shall be turned over to the owner-spouse.174

Property donated or left by will to the spouses, jointly and with

designation of determinate shares, shall pertain to the donee-
spouses as his or her own exclusive property, and in the absence of
designation, share and share alike, without prejudice to the right of
accretion when proper.175

If the donations are onerous, the amount of the charges shall

be borne by the exclusive property of the donee spouse, whenever
they have been advanced by the conjugal partnership of gains.176

Retirement benefits, pensions, annuities, gratuities, usufructs

and similar benefits shall be governed by the rules on gratuitous or
onerous acquisitions as may be proper in each case.177

3. Conjugal Partnership Property

All property acquired during the marriage, whether the

acquisition appears to have been made, contracted or registered in
the name of one or both spouses, is presumed to be conjugal unless
the contrary is proved.178

172
Art. 110
173
Art. 111
174
Art. 112
175
Art. 113
176
Art. 114
177
Art. 115
178
Art. 116

42
 The following are conjugal partnership properties:

(1) Those acquired by onerous title during the marriage at the

expense of the common fund, whether the acquisition be for the
partnership, or for only one of the spouses;

(2) Those obtained from the labor, industry, work or profession of

either or both of the spouses;

(3) The fruits, natural, industrial, or civil, due or received during the
marriage from the common property, as well as the net fruits from
the exclusive property of each spouse;

(4) The share of either spouse in the hidden treasure which the law
awards to the finder or owner of the property where the treasure is
found;

(5) Those acquired through occupation such as fishing or hunting;

(6) Livestock existing upon the dissolution of the partnership in

excess of the number of each kind brought to the marriage by either
spouse; and

(7) Those which are acquired by chance, such as winnings from

gambling or betting. However, losses therefrom shall be borne
exclusively by the loser-spouse.179

Property bought on installments paid partly from exclusive

funds of either or both spouses and partly from conjugal funds
belongs to the buyer or buyers if full ownership was vested before
the marriage and to the conjugal partnership if such ownership was
vested during the marriage. In either case, any amount advanced by
the partnership or by either or both spouses shall be reimbursed by
the owner or owners upon liquidation of the partnership.180

Whenever an amount or credit payable within a period of time

belongs to one of the spouses, the sums which may be collected
during the marriage in partial payments or by installments on the
principal shall be the exclusive property of the spouse. However,

179
Art. 117
180
Art. 118

43
interests falling due during the marriage on the principal shall
belong to the conjugal partnership.181

The ownership of improvements, whether for utility or

adornment, made on the separate property of the spouses at the
expense of the partnership or through the acts or efforts of either or
both spouses shall pertain to the conjugal partnership, or to the
original owner-spouse, subject to the following rules:

When the cost of the improvement made by the conjugal

partnership and any resulting increase in value are more than the
value of the property at the time of the improvement, the entire
property of one of the spouses shall belong to the conjugal
partnership, subject to reimbursement of the value of the property of
the owner-spouse at the time of the improvement; otherwise, said
property shall be retained in ownership by the owner-spouse,
likewise subject to reimbursement of the cost of the improvement.

In either case, the ownership of the entire property shall be

vested upon the reimbursement, which shall be made at the time of
the liquidation of the conjugal partnership.

4. Charges upon and obligations of the CPG

The conjugal partnership shall be liable for:

(1) The support of the spouse, their common children, and the
legitimate children of either spouse; however, the support of
illegitimate children shall be governed by the provisions of this Code
on Support;

(2) All debts and obligations contracted during the marriage by the
designated administrator-spouse for the benefit of the conjugal
partnership of gains, or by both spouses or by one of them with the
consent of the other;

(3) Debts and obligations contracted by either spouse without the

consent of the other to the extent that the family may have benefited;

(4) All taxes, liens, charges, and expenses, including major or minor
repairs upon the conjugal partnership property;

181
Art. 119

44
(5) All taxes and expenses for mere preservation made during the
marriage upon the separate property of either spouse;

(6) Expenses to enable either spouse to commence or complete a

professional, vocational, or other activity for self-improvement;

(7) Antenuptial debts of either spouse insofar as they have

redounded to the benefit of the family;

(8) The value of what is donated or promised by both spouses in

favor of their common legitimate children for the exclusive purpose
of commencing or completing a professional or vocational course or
other activity for self-improvement; and

(9) Expenses of litigation between the spouses unless the suit is

found to groundless.

If the conjugal partnership is insufficient to cover the foregoing

liabilities, the spouses shall be solidarily liable for the unpaid
balance with their separate properties.182

The payment of personal debts contracted by the husband or

the wife before or during the marriage shall not be charged to the
conjugal properties partnership except insofar as they redounded to
the benefit of the family.

Neither shall the fines and pecuniary indemnities imposed

upon them be charged to the partnership.

However, the payment of personal debts contracted by either

spouse before the marriage, that of fines and indemnities imposed
upon them, as well as the support of illegitimate children of either
spouse, may be enforced against the partnership assets after the
responsibilities enumerated in the preceding Article have been
covered, if the spouse who is bound should have no exclusive
property or if it should be insufficient; but at the time of the
liquidation of the partnership, such spouse shall be charged for what
has been paid for the purpose above-mentioned.183

182
Art. 121
183
Art. 122

45
 Whatever may be lost during the marriage in any game of
chance or in betting, sweepstakes, or any other kind of gambling
whether permitted or prohibited by law, shall be borne by the loser
and shall not be charged to the conjugal partnership but any
winnings therefrom shall form part of the conjugal partnership
property.184

5. Administration of the CPG

The administration and enjoyment of the conjugal partnership

shall belong to both spouses jointly. In case of disagreement, the
husband's decision shall prevail, subject to recourse to the court by
the wife for proper remedy, which must be availed of within five
years from the date of the contract implementing such decision.

In the event that one spouse is incapacitated or otherwise

unable to participate in the administration of the conjugal properties,
the other spouse may assume sole powers of administration. These
powers do not include disposition or encumbrance without authority
of the court or the written consent of the other spouse. In the
absence of such authority or consent, the disposition or
encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting spouse
and the third person, and may be perfected as a binding contract
upon the acceptance by the other spouse or authorization by the
court before the offer is withdrawn by either or both offerors.185

Neither spouse may donate any conjugal partnership property

without the consent of the other. However, either spouse may,
without the consent of the other, make moderate donations from the
conjugal partnership property for charity or on occasions of family
rejoicing or family distress.186

6. Dissolution of CPG Regime

The conjugal partnership terminates:

(1) Upon the death of either spouse;

(2) When there is a decree of legal separation;
(3) When the marriage is annulled or declared void; or
184
Art. 123
185
Art. 124
186
Art. 125

46
(4) In case of judicial separation of property during the marriage
under Articles 134 to 138.187
The separation in fact between husband and wife shall not
affect the regime of conjugal partnership, except that:

(1) The spouse who leaves the conjugal home or refuses to live
therein, without just cause, shall not have the right to be supported;

(2) When the consent of one spouse to any transaction of the other is
required by law, judicial authorization shall be obtained in a
summary proceeding;

(3) In the absence of sufficient conjugal partnership property, the

separate property of both spouses shall be solidarily liable for the
support of the family. The spouse present shall, upon petition in a
summary proceeding, be given judicial authority to administer or
encumber any specific separate property of the other spouse and use
the fruits or proceeds thereof to satisfy the latter's share.188

If a spouse without just cause abandons the other or fails to

comply with his or her obligation to the family, the aggrieved spouse
may petition the court for receivership, for judicial separation of
property, or for authority to be the sole administrator of the conjugal
partnership property, subject to such precautionary conditions as the
court may impose.

The obligations to the family mentioned in the preceding

paragraph refer to marital, parental or property relations.

A spouse is deemed to have abandoned the other when he or

she has left the conjugal dwelling without intention of returning. The
spouse who has left the conjugal dwelling for a period of three
months or has failed within the same period to give any information
as to his or her whereabouts shall be prima facie presumed to have
no intention of returning to the conjugal dwelling.189

7. Liquidation of the Conjugal Partnership Assets

and Liabilities

187
Art. 126
188
Art. 127
189
Art. 128

47
 Upon the dissolution of the conjugal partnership regime, the
following procedure shall apply:

(1) An inventory shall be prepared, listing separately all the

properties of the conjugal partnership and the exclusive properties
of each spouse.

(2) Amounts advanced by the conjugal partnership in payment of

personal debts and obligations of either spouse shall be credited to
the conjugal partnership as an asset thereof.

(3) Each spouse shall be reimbursed for the use of his or her
exclusive funds in the acquisition of property or for the value of his
or her exclusive property, the ownership of which has been vested by
law in the conjugal partnership.

(4) The debts and obligations of the conjugal partnership shall be

paid out of the conjugal assets. In case of insufficiency of said assets,
the spouses shall be solidarily liable for the unpaid balance with
their separate properties, in accordance with the provisions of
paragraph (2) of Article 121.190

(5) Whatever remains of the exclusive properties of the spouses shall

thereafter be delivered to each of them.

(6) Unless the owner had been indemnified from whatever source,
the loss or deterioration of movables used for the benefit of the
family, belonging to either spouse, even due to fortuitous event, shall
be paid to said spouse from the conjugal funds, if any.

(7) The net remainder of the conjugal partnership properties shall

constitute the profits, which shall be divided equally between
husband and wife, unless a different proportion or division was
agreed upon in the marriage settlements or unless there has been a
voluntary waiver or forfeiture of such share as provided in this Code.

(8) The presumptive legitimes of the common children shall be

delivered upon the partition in accordance with Article 51.191

(9) In the partition of the properties, the conjugal dwelling and the
lot on which it is situated shall, unless otherwise agreed upon by the
190
supra
191
ibid

48
parties, be 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
decided otherwise. In case there is no such majority, the court shall
decide, taking into consideration the best interests of said
children.192

Upon the termination of the marriage by death, the conjugal

partnership property shall be liquidated in the same proceeding for
the settlement of the estate of the deceased.

If no judicial settlement proceeding is instituted, the surviving

spouse shall liquidate the conjugal partnership property either
judicially or extra-judicially within six months from the death of the
deceased spouse. If upon the lapse of the six-month period no
liquidation is made, any disposition or encumbrance involving the
conjugal partnership property of the terminated marriage shall be
void.

Should the surviving spouse contract a subsequent marriage

without compliance with the foregoing requirements, a mandatory
regime of complete separation of property shall govern the property
relations of the subsequent marriage.193

Whenever the liquidation of the conjugal partnership

properties of two or more marriages contracted by the same person
before the effectivity of this Code is carried out simultaneously, the
respective capital, fruits and income of each partnership shall be
determined upon such proof as may be considered according to the
rules of evidence. In case of doubt as to which partnership the
existing properties belong, the same shall be divided between the
different partnerships in proportion to the capital and duration of
each.194

The Rules of Court on the administration of estates of deceased

persons shall be observed in the appraisal and sale of property of the
conjugal partnership, and other matters which are not expressly
determined in this Chapter.195

192
Art. 129
193
Art. 130.
194
Art. 131
195
Art. 132

49
 From the common mass of property support shall be given to
the surviving spouse and to the children during the liquidation of the
inventoried property and until what belongs to them is delivered; but
from this shall be deducted that amount received for support which
exceeds the fruits or rents pertaining to them.196

F. Separation of Property of the Spouses and Administration of

Common Property by One Spouse During the Marriage

In the absence of an express declaration in the marriage

settlements, the separation of property between spouses during the
marriage shall not take place except by judicial order. Such judicial
separation of property may either be voluntary or for sufficient
cause.197

Any of the following shall be considered sufficient cause for

judicial separation of property:

(1) That the spouse of the petitioner has been sentenced to a penalty
which carries with it civil interdiction;

(2) That the spouse of the petitioner has been judicially declared an
absentee;

(3) That loss of parental authority of the spouse of petitioner has

been decreed by the court;

(4) That the spouse of the petitioner has abandoned the latter or
failed to comply with his or her obligations to the family as provided
for in Article 101;198

(5) That the spouse granted the power of administration in the

marriage settlements has abused that power; and

(6) That at the time of the petition, the spouses have been separated
in fact for at least one year and reconciliation is highly improbable.

In the cases provided for in Numbers (1), (2) and (3), the
presentation of the final judgment against the guilty or absent

196
Art. 133
197
Art. 134
198
supra

50
spouse shall be enough basis for the grant of the decree of judicial
separation of property.199

The spouses may jointly file a verified petition with the court
for the voluntary dissolution of the absolute community or the
conjugal partnership of gains, and for the separation of their
common properties.

All creditors of the absolute community or of the conjugal

partnership of gains, as well as the personal creditors of the spouse,
shall be listed in the petition and notified of the filing thereof. The
court shall take measures to protect the creditors and other persons
with pecuniary interest.200

Once the separation of property has been decreed, the

absolute community or the conjugal partnership of gains shall be
liquidated in conformity with this Code.

During the pendency of the proceedings for separation of

property, the absolute community or the conjugal partnership shall
pay for the support of the spouses and their children. 201

After dissolution of the absolute community or of the conjugal

partnership, the provisions on complete separation of property shall
apply.202

The petition for separation of property and the final judgment

granting the same shall be recorded in the proper local civil
registries and registries of property.203
The separation of property shall not prejudice the rights
previously acquired by creditors.204

The spouses may, in the same proceedings where separation of

property was decreed, file a motion in court for a decree reviving the
property regime that existed between them before the separation of
property in any of the following instances:

199
Art. 135
200
Art. 136
201
Art. 137
202
Art. 138
203
Art. 139
204
Art. 140

51
(1) When the civil interdiction terminates;

(2) When the absentee spouse reappears;

(3) When the court, being satisfied that the spouse granted the
power of administration in the marriage settlements will not again
abuse that power, authorizes the resumption of said administration;

(4) When the spouse who has left the conjugal home without a
decree of legal separation resumes common life with the other;

(5) When parental authority is judicially restored to the spouse

previously deprived thereof;

(6) When the spouses who have separated in fact for at least one
year, reconcile and resume common life; or

(7) When after voluntary dissolution of the absolute community of

property or conjugal partnership has been judicially decreed upon
the joint petition of the spouses, they agree to the revival of the
former property regime. No voluntary separation of property may
thereafter be granted.

The revival of the former property regime shall be governed by

Article 67.205

The administration of all classes of exclusive property of either

spouse may be transferred by the court to the other spouse:

(1) When one spouse becomes the guardian of the other;

(2) When one spouse is judicially declared an absentee;
(3) When one spouse is sentenced to a penalty which carries with it
civil interdiction; or
(4) When one spouse becomes a fugitive from justice or is in hiding
as an accused in a criminal case.

If the other spouse is not qualified by reason of incompetence,

conflict of interest, or any other just cause, the court shall appoint a
suitable person to be the administrator.206
G. Regime of Separation of Property

205
Art. 141.
206
Art. 142.

52
 Should the future spouses agree in the marriage settlements
that their property relations during marriage shall be governed by
the regime of separation of property, the provisions of this Chapter
shall be suppletory.207

Separation of property may refer to present or future property

or both. It may be total or partial. In the latter case, the property not
agreed upon as separate shall pertain to the absolute community.208

Each spouse shall own, dispose of, possess, administer and

enjoy his or her own separate estate, without need of the consent of
the other. To each spouse shall belong all earnings from his or her
profession, business or industry and all fruits, natural, industrial or
civil, due or received during the marriage from his or her separate
property.209

Both spouses shall bear the family expenses in proportion to

their income, or, in case of insufficiency or default thereof, to the
current market value of their separate properties.

The liabilities of the spouses to creditors for family expenses

shall, however, be solidary.210

H. Property Regime of Unions Without Marriage

When a man and a woman who are capacitated to marry each

other, live exclusively with each other as husband and wife without
the benefit of marriage or under a void marriage, their wages and
salaries shall be owned by them in equal shares and the property
acquired by both of them through their work or industry shall be
governed by the rules on co-ownership.

In the absence of proof to the contrary, properties acquired

while they lived together shall be presumed to have been obtained
by their joint efforts, work or industry, and shall be owned by them in
equal shares. For purposes of this Article, a party who did not
participate in the acquisition by the other party of any property shall
be deemed to have contributed jointly in the acquisition thereof if the

207
Art. 143
208
Art. 144
209
Art. 145
210
Art. 146

53
former's efforts consisted in the care and maintenance of the family
and of the household.

Neither party can encumber or dispose by acts inter vivos of

his or her share in the property acquired during cohabitation and
owned in common, without the consent of the other, until after the
termination of their cohabitation.

When only one of the parties to a void marriage is in good

faith, the share of the party in bad faith in the co-ownership shall be
forfeited in favor of their common children. In case of default of or
waiver by any or all of the common children or their descendants,
each vacant share shall belong to the respective surviving
descendants. In the absence of descendants, such share shall belong
to the innocent party. In all cases, the forfeiture shall take place
upon termination of the cohabitation.211

In cases of cohabitation not falling under the preceding Article,

only the properties acquired by both of the parties through their
actual joint contribution of money, property, or industry shall be
owned by them in common in proportion to their respective
contributions. In the absence of proof to the contrary, their
contributions and corresponding shares are presumed to be equal.
The same rule and presumption shall apply to joint deposits of money
and evidences of credit.

If one of the parties is validly married to another, his or her

share in the co-ownership shall accrue to the absolute community or
conjugal partnership existing in such valid marriage. If the party who
acted in bad faith is not validly married to another, his or her shall be
forfeited in the manner provided in the last paragraph of the
preceding Article.

The foregoing rules on forfeiture shall likewise apply even if

both parties are in both faith.212

VI. The Family

A. The Family as an Institution

211
Art. 147
212
Art. 148

54
 The family, being the foundation of the nation, is a basic social
institution which public policy cherishes and protects. Consequently,
family relations are governed by law and no custom, practice or
agreement destructive of the family shall be recognized or given
effect.213

Family relations include those:

(1) Between husband and wife;

(2) Between parents and children;
(3) Among brothers and sisters, whether of the full or half-blood.214

No suit between members of the same family shall prosper

unless it should appear from the verified complaint or petition that
earnest efforts toward a compromise have been made, but that the
same have failed. If it is shown that no such efforts were in fact
made, the same case must be dismissed.

This rules shall not apply to cases which may not be the
subject of compromise under the Civil Code.215

B. The Family Home

The family home, constituted jointly by the husband and the

wife or by an unmarried head of a family, is the dwelling house
where they and their family reside, and the land on which it is
situated.216

The family home is deemed constituted on a house and lot from

the time it is occupied as a family residence. From the time of its
constitution and so long as any of its beneficiaries actually resides
therein, the family home continues to be such and is exempt from

213
Art. 149.
214
Art. 150
215
Art. 151
No compromise upon the following questions shall be valid:
(1) The civil status of persons;
(2) The validity of a marriage or a legal separation;
(3) Any ground for legal separation;
(4) Future support;
(5) The jurisdiction of courts;
(6) Future legitime (Art. 2035)
216
Art. 152

55
execution, forced sale or attachment except as hereinafter provided
and to the extent of the value allowed by law.217

The beneficiaries of a family home are:

(1) The husband and wife, or an unmarried person who is the head of
a family; and

(2) Their parents, ascendants, descendants, brothers and sisters,

whether the relationship be legitimate or illegitimate, who are living
in the family home and who depend upon the head of the family for
legal support.218

The family home shall be exempt from execution, forced sale or

attachment except:

(1) For nonpayment of taxes;

(2) For debts incurred prior to the constitution of the family home;
(3) For debts secured by mortgages on the premises before or after
such constitution; and
(4) For debts due to laborers, mechanics, architects, builders,
materialmen and others who have rendered service or furnished
material for the construction of the building.219

The family home must be part of the properties of the absolute

community or the conjugal partnership, or of the exclusive
properties of either spouse with the latter's consent. It may also be
constituted by an unmarried head of a family on his or her own
property.

Nevertheless, property that is the subject of a conditional sale

on installments where ownership is reserved by the vendor only to
guarantee payment of the purchase price may be constituted as a
family home.220

The actual value of the family home shall not exceed, at the
time of its constitution, the amount of the three hundred thousand
217
Art. 153
218
Art. 154.
219
Art. 155
220
Art. 156

56
pesos in urban areas, and two hundred thousand pesos in rural
areas, or such amounts as may hereafter be fixed by law.

In any event, if the value of the currency changes after the

adoption of this Code, the value most favorable for the constitution
of a family home shall be the basis of evaluation.

For purposes of this Article, urban areas are deemed to include

chartered cities and municipalities whose annual income at least
equals that legally required for chartered cities. All others are
deemed to be rural areas.221

The family home may be sold, alienated, donated, assigned or

encumbered by the owner or owners thereof with the written
consent of the person constituting the same, the latter's spouse, and
a majority of the beneficiaries of legal age. In case of conflict, the
court shall decide.222

The family home shall continue despite the death of one or

both spouses or of the unmarried head of the family for a period of
ten years or for as long as there is a minor beneficiary, and the heirs
cannot partition the same unless the court finds compelling reasons
therefor. This rule shall apply regardless of whoever owns the
property or constituted the family home.223

When a creditor whose claims is not among those mentioned in

Article 155224 obtains a judgment in his favor, and he has reasonable
grounds to believe that the family home is actually worth more than
the maximum amount fixed in Article 157 225, he may apply to the
court which rendered the judgment for an order directing the sale of
the property under execution. The court shall so order if it finds that
the actual value of the family home exceeds the maximum amount
allowed by law as of the time of its constitution. If the increased
actual value exceeds the maximum allowed in Article 157 and results
from subsequent voluntary improvements introduced by the person
or persons constituting the family home, by the owner or owners of
the property, or by any of the beneficiaries, the same rule and
procedure shall apply.
221
Art. 157
222
Art. 158
223
Art. 159
224
supra
225
ibid

57
 At the execution sale, no bid below the value allowed for a
family home shall be considered. The proceeds shall be applied first
to the amount mentioned in Article 157, and then to the liabilities
under the judgment and the costs. The excess, if any, shall be
delivered to the judgment debtor.226

For purposes of availing of the benefits of a family home as

provided for in this Chapter, a person may constitute, or be the
beneficiary of, only one family home.227

The provisions in this Chapter shall also govern existing family

residences insofar as said provisions are applicable.228

VII. Paternity and Filiation

A. Legitimate Children

The filiation of children may be by nature or by adoption.

Natural filiation may be legitimate or illegitimate.229

Children conceived or born during the marriage of the parents

are legitimate.

Children conceived as a result of artificial insemination of the

wife with the sperm of the husband or that of a donor or both are
likewise legitimate children of the husband and his wife, provided,
that both of them authorized or ratified such insemination in a
written instrument executed and signed by them before the birth of
the child. The instrument shall be recorded in the civil registry
together with the birth certificate of the child.230

Children conceived and born outside a valid marriage are

illegitimate, unless otherwise provided in this Code.231

Legitimacy of a child may be impugned only on the following

grounds:
226
Art. 160
227
Art. 161
228
Art. 162
229
Art. 163
230
Art. 164
231
Art. 165

58
(1) That it was physically impossible for the husband to have sexual
intercourse with his wife within the first 120 days of the 300 days
which immediately preceded the birth of the child because of:

(a) the physical incapacity of the husband to have sexual intercourse

with his wife;

(b) the fact that the husband and wife were living separately in such
a way that sexual intercourse was not possible; or

(c) serious illness of the husband, which absolutely prevented sexual

intercourse;

(2) That it is proved that for biological or other scientific reasons, the
child could not have been that of the husband, except in the instance
provided in the second paragraph of Article 164;232 or

(3) That in case of children conceived through artificial insemination,

the written authorization or ratification of either parent was obtained
through mistake, fraud, violence, intimidation, or undue influence.233

The child shall be considered legitimate although the mother

may have declared against its legitimacy or may have been
sentenced as an adulteress.234

If the marriage is terminated and the mother contracted

another marriage within three hundred days after such termination
of the former marriage, these rules shall govern in the absence of
proof to the contrary:
(1) A child born before one hundred eighty days after the
solemnization of the subsequent marriage is considered to have been
conceived during the former marriage, provided it be born within
three hundred days after the termination of the former marriage;

(2) A child born after one hundred eighty days following the
celebration of the subsequent marriage is considered to have been
conceived during such marriage, even though it be born within the
three hundred days after the termination of the former marriage.235
232
supra
233
Art. 166
234
Art. 167
235
Art. 168

59
 The legitimacy or illegitimacy of a child born after three
hundred days following the termination of the marriage shall be
proved by whoever alleges such legitimacy or illegitimacy.236

The action to impugn the legitimacy of the child shall be

brought within one year from the knowledge of the birth or its
recording in the civil register, if the husband or, in a proper case, any
of his heirs, should reside in the city or municipality where the birth
took place or was recorded.

If the husband or, in his default, all of his heirs do not reside at
the place of birth as defined in the first paragraph or where it was
recorded, the period shall be two years if they should reside in the
Philippines; and three years if abroad. If the birth of the child has
been concealed from or was unknown to the husband or his heirs,
the period shall be counted from the discovery or knowledge of the
birth of the child or of the fact of registration of said birth, whichever
is earlier.237

The heirs of the husband may impugn the filiation of the child
within the period prescribed in the preceding article only in the
following cases:

(1) If the husband should died before the expiration of the period
fixed for bringing his action;
(2) If he should die after the filing of the complaint without having
desisted therefrom; or
(3) If the child was born after the death of the husband.238

B. Proof of Filiation

The filiation of legitimate children is established by any of the

following:

(1) The record of birth appearing in the civil register or a final

judgment; or
(2) An admission of legitimate filiation in a public document or a
private handwritten instrument and signed by the parent concerned.

236
Art. 169.
237
Art. 170
238
Art. 171.

60
 In the absence of the foregoing evidence, the legitimate
filiation shall be proved by:

(1) The open and continuous possession of the status of a legitimate

child; or
(2) Any other means allowed by the Rules of Court and special
laws.239

The action to claim legitimacy may be brought by the child

during his or her lifetime and shall be transmitted to the heirs should
the child die during minority or in a state of insanity. In these cases,
the heirs shall have a period of five years within which to institute
the action.240

Legitimate children shall have the right:

(1) To bear the surnames of the father and the mother, in conformity
with the provisions of the Civil Code on Surnames;
(2) To receive support from their parents, their ascendants, and in
proper cases, their brothers and sisters, in conformity with the
provisions of this Code on Support; and
(3) To be entitled to the legitimate and other successional rights
granted to them by the Civil Code.241

C. Illegitimate Children

Illegitimate children may establish their illegitimate filiation in

the same way and on the same evidence as legitimate children.

The action must be brought within the same period specified in

Article 173, except when the action is based on the second
paragraph of Article 172, in which case the action may be brought
during the lifetime of the alleged parent.242

Illegitimate children shall use the surname and shall be under

the parental authority of their mother, and shall be entitled to
support in conformity with this Code. However, illegitimate children
may use the surname of their father if their filiation has been
239
Art. 172
240
Art. 173
241
Art. 174
242
Art. 175

61
expressly recognized by the father through the record of birth
appearing in the civil register, or when an admission in a public
document or private handwritten instrument is made by the father.
Provided, the father has the right to institute an action before the
regular courts to prove non-filiation during his lifetime. The legitime
of each illegitimate child shall consist of one-half of the legitime of a
legitimate child.243

D. Legitimated Children

Only children conceived and born outside of wedlock of

parents who, at the time of the conception of the former, were not
disqualified by any impediment to marry each other may be
legitimated.244

Legitimation shall take place by a subsequent valid marriage

between parents. The annulment of a voidable marriage shall not
affect the legitimation.245

Legitimated children shall enjoy the same rights as legitimate

children.246

The effects of legitimation shall retroact to the time of the

child's birth.247

The legitimation of children who died before the celebration of

the marriage shall benefit their descendants.248

Legitimation may be impugned only by those who are

prejudiced in their rights, within five years from the time their cause
of action accrues.249

VIII. Adoption

243
Art. 176, as amended by R.A. 9255
244
Art. 177
245
Art. 178
246
Art. 179
247
Art. 180
248
Art. 181
249
Art. 182

62
 A. Domestic Adoption Law250

1. Who can adopt

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

b) Any alien possessing the same qualifications as above stated for

Filipino nationals: Provided, That his/her country has diplomatic
relations with the Republic of the Philippines, that he/she has been
living in the Philippines for at least three (3) continuous years prior
to the filing of the application for adoption and maintains such
residence until the adoption decree is entered, that he/she has been
certified by his/her diplomatic or consular office or any appropriate
government agency that he/she has the legal capacity to adopt in
his/her country, and that his/her government allows the adoptee to
enter his/her country as his/her adopted son/daughter: Provided,
Further, That the requirements on residency and certification of the
alien's qualification to adopt in his/her country may be waived for the
following:

(i) a former Filipino citizen who seeks to adopt a relative within

the fourth (4th) degree of consanguinity or affinity; or

(ii) one who seeks to adopt the legitimate son/daughter of

his/her Filipino spouse; or

(iii) one who is married to a Filipino citizen and seeks to adopt

jointly with his/her spouse a relative within the fourth (4th)
degree of consanguinity or affinity of the Filipino spouse; or

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

250
RA 8552

63
 Husband and wife shall jointly adopt, except in the following
cases:

(i) if one spouse seeks to adopt the legitimate son/daughter of

the other; or

(ii) if one spouse seeks to adopt his/her own illegitimate

son/daughter: Provided, However, that the other spouse has
signified his/her consent thereto; or

(iii) if the spouses are legally separated from each other.

In case husband and wife jointly adopt, or one spouse adopts

the illegitimate son/daughter of the other, joint parental authority
shall be exercised by the spouses.251

2. Who can be adopted

(a) Any person below eighteen (18) years of age who has been
administratively or judicially declared available for adoption;

(b) The legitimate son/daughter of one spouse by the other spouse;

(c) An illegitimate son/daughter by a qualified adopter to improve

his/her status to that of legitimacy;

(d) A person of legal age if, prior to the adoption, said person has
been consistently considered and treated by the adopter(s) as his/her
own child since minority;

(e) A child whose adoption has been previously rescinded; or

(f) A child whose biological or adoptive parent(s) has died: Provided,

That no proceedings shall be initiated within six (6) months from the
time of death of said parent(s).

3. Rights of an adopted child

Except in cases where the biological parent is the spouse of the

adopter, all legal ties between the biological parent(s) and the

251
Sec. 7

64
adoptee shall be severed and the same shall then be vested on the
adopter(s).252

The adoptee shall be considered the legitimate son/daughter of

the adopter(s) for all intents and purposes and as such is entitled to
all the rights and obligations provided by law to legitimate
sons/daughters born to them without discrimination of any kind. To
this end, the adoptee is entitled to love, guidance, and support in
keeping with the means of the family.253

In legal and intestate succession, the adopter(s) and the

adoptee shall have reciprocal rights of succession without distinction
from legitimate filiation. However, if the adoptee and his/her
biological parent(s) had left a will, the law on testamentary
succession shall govern.

Adoption shall have the following effects:

(1) For civil purposes, the adopted shall be deemed to be a

legitimate child of the adopters and both shall acquire the reciprocal
rights and obligations arising from the relationship of parent and
child, including the right of the adopted to use the surname of the
adopters;

(2) The parental authority of the parents by nature over the

adopted shall terminate and be vested in the adopters, except that if
the adopter is the spouse of the parent by nature of the adopted,
parental authority over the adopted shall be exercised jointly by both
spouses; and

(3) The adopted shall remain an intestate heir of his parents

and other blood relatives.254

Legal or intestate succession to the estate of the adopted shall

be governed by the following rules:

(1) Legitimate and illegitimate children and descendants and

the surviving spouse of the adopted shall inherit from the adopted, in
accordance with the ordinary rules of legal or intestate succession;

252
Sec. 16
253
Sec. 17
254
Art. 189, FC

65
 (2) When the parents, legitimate or illegitimate, or the
legitimate ascendants of the adopted concur with the adopter, they
shall divide the entire estate, one-half to be inherited by the parents
or ascendants and the other half, by the adopters;

(3) When the surviving spouse or the illegitimate children of

the adopted concur with the adopters, they shall divide the entire
estate in equal shares, one-half to be inherited by the spouse or the
illegitimate children of the adopted and the other half, by the
adopters.

(4) When the adopters concur with the illegitimate children

and the surviving spouse of the adopted, they shall divide the entire
estate in equal shares, one-third to be inherited by the illegitimate
children, one-third by the surviving spouse, and one-third by the
adopters;

(5) When only the adopters survive, they shall inherit the entire
estate; and

(6) When only collateral blood relatives of the adopted survive,

then the ordinary rules of legal or intestate succession shall apply.255

4. Rescission of adoption

Upon petition of the adoptee, with the assistance of the

Department if a minor or if over eighteen (18) years of age but is
incapacitated, as guardian/counsel, the adoption may be rescinded
on any of the following grounds committed by the adopter(s): (a)
repeated physical and verbal maltreatment by the adopter(s) despite
having undergone counseling; (b) attempt on the life of the adoptee;
(c) sexual assault or violence; or (d) abandonment and failure to
comply with parental obligations.

Adoption, being in the best interest of the child, shall not be

subject to rescission by the adopter(s). However, the adopter(s) may
disinherit the adoptee for causes provided in Article 919 256 of the
Civil Code.257

255
Art. 190, ibid.
256
See Reference
257
Sec. 19, R.A. 8552

66
 If the petition is granted, the parental authority of the
adoptee's biological parent(s), if known, or the legal custody of the
Department shall be restored if the adoptee is still a minor or
incapacitated. The reciprocal rights and obligations of the adopter(s)
and the adoptee to each other shall be extinguished.

The court shall order the Civil Registrar to cancel the amended
certificate of birth of the adoptee and restore his/her original birth
certificate.

Succession rights shall revert to its status prior to adoption,

but only as of the date of judgment of judicial rescission. Vested
rights acquired prior to judicial rescission shall be respected.

All the foregoing effects of rescission of adoption shall be

without prejudice to the penalties imposable under the Penal Code if
the criminal acts are properly proven.258

C. The Law on Inter- Country Adoption259

1. Who can Adopt

An alien or a Filipino citizen permanently residing abroad may

file an application for inter-country adoption of a Filipino child if
he/she:

(a) is at least twenty-seven (27) years of age and at least sixteen

(16) years older than the child to be adopted, at the time of
application unless the adopter is the parent by nature of the child to
be adopted or the spouse of such parent:

(b) if married, his/her spouse must jointly file for the adoption;

(c) has the capacity to act and assume all rights and
responsibilities of parental authority under his national laws, and has
undergone the appropriate counseling from an accredited counselor
in his/her country;

(d) has not been convicted of a crime involving moral turpitude;

(e) is eligible to adopt under his/her national law;

258
Sec. 20, ibid.
259
RA 8043

67
 (f) is in a position to provide the proper care and support and to
give the necessary moral values and example to all his children,
including the child to be adopted;

(g) agrees to uphold the basic rights of the child as embodied

under Philippine laws, the U.N. Convention on the Rights of the
Child, and to abide by the rules and regulations issued to implement
the provisions of this Act;

(h) comes from a country with whom the Philippines has

diplomatic relations and whose government maintains a similarly
authorized and accredited agency and that adoption is allowed under
his/her national laws; and

(i) possesses all the qualifications and none of the disqualifications

provided herein and in other applicable Philippine laws.260

2. Who can be adopted

Only a legally free child may be the subject of inter-country

adoption. In order that such child may be considered for placement,
the following documents must be submitted to the Board:

(a) Child study;

(b)Birth certificate/foundling certificate;
(c) Deed of voluntary commitment/decree of abandonment/death
certificate of parents;
(d)Medical evaluation /history;
(e) Psychological evaluation, as necessary; and
(f) Recent photo of the child.261

IX. Support

A. What it Compromises

Support compromises everything indispensable for sustenance,

dwelling, clothing, medical attendance, education and
transportation, in keeping with the financial capacity of the family.

260
Sec. 9
261
Sec. 8

68
 The education of the person entitled to be supported referred
to in the preceding paragraph shall include his schooling or training
for some profession, trade or vocation, even beyond the age of
majority. Transportation shall include expenses in going to and from
school, or to and from place of work.262

B. Who are Obliged

Subject to the provisions of the succeeding articles, the

following are obliged to support each other to the whole extent set
forth in the preceding article:

(1) The spouses;

(2) Legitimate ascendants and descendants;
(3) Parents and their legitimate children and the legitimate and
illegitimate children of the latter;
(4) Parents and their illegitimate children and the legitimate
and illegitimate children of the latter; and
(5) Legitimate brothers and sisters, whether of full or half-
blood263

Brothers and sisters not legitimately related, whether of the

full or half-blood, are likewise bound to support each other to the full
extent set forth in Article 194 264, except only when the need for
support of the brother or sister, being of age, is due to a cause
imputable to the claimant's fault or negligence.265

In case of legitimate ascendants; descendants, whether

legitimate or illegitimate; and brothers and sisters, whether
legitimately or illegitimately related, only the separate property of
the person obliged to give support shall be answerable provided that
in case the obligor has no separate property, the absolute community
or the conjugal partnership, if financially capable, shall advance the
support, which shall be deducted from the share of the spouse
obliged upon the liquidation of the absolute community or of the
conjugal partnership.266

262
Art. 194
263
Art. 195
264
supra
265
Art. 196
266
Art. 197

69
 Whenever two or more persons are obliged to give support, the
liability shall devolve upon the following persons in the order herein
provided:

(1) The spouse;

(2) The descendants in the nearest degree;
(3) The ascendants in the nearest degree; and
(4) The brothers and sisters.267

When the obligation to give support falls upon two or more

persons, the payment of the same shall be divided between them in
proportion to the resources of each.

However, in case of urgent need and by special circumstances,

the judge may order only one of them to furnish the support
provisionally, without prejudice to his right to claim from the other
obligors the share due from them.

When two or more recipients at the same time claim support

from one and the same person legally obliged to give it, should the
latter not have sufficient means to satisfy all claims, the order
established in the preceding article shall be followed, unless the
concurrent obligees should be the spouse and a child subject to
parental authority, in which case the child shall be preferred.268

When, without the knowledge of the person obliged to give

support, it is given by a stranger, the latter shall have a right to
claim the same from the former, unless it appears that he gave it
without intention of being reimbursed.269
When the person obliged to support another unjustly refuses or
fails to give support when urgently needed by the latter, any third
person may furnish support to the needy individual, with right of
reimbursement from the person obliged to give support. This Article
shall particularly apply when the father or mother of a child under
the age of majority unjustly refuses to support or fails to give support
to the child when urgently needed.270

267
Art. 199
268
Art. 200
269
Art. 206
270
Art. 207

70
 In case of contractual support or that given by will, the excess
in amount beyond that required for legal support shall be subject to
levy on attachment or execution.

Furthermore, contractual support shall be subject to

adjustment whenever modification is necessary due to changes of
circumstances manifestly beyond the contemplation of the parties.271

C. Support during marriage litigation

During the proceedings for legal separation or for annulment

of marriage, and for declaration of nullity of marriage, the spouses
and their children shall be supported from the properties of the
absolute community or the conjugal partnership. After the final
judgment granting the petition, the obligation of mutual support
between the spouses ceases. However, in case of legal separation,
the court may order that the guilty spouse shall give support to the
innocent one, specifying the terms of such order.272

D. Amount

The amount of support, in the cases referred to in Articles 195

and 196273, shall be in proportion to the resources or means of the
giver and to the necessities of the recipient.274

Support in the cases referred to in the preceding article shall

be reduced or increased proportionately, according to the reduction
or increase of the necessities of the recipient and the resources or
means of the person obliged to furnish the same.275

E. When Demandable

271
Art. 208
272
Art. 198
273
supra
274
Art. 201.
275
Art. 202

71
 The obligation to give support shall be demandable from the
time the person who has a right to receive the same needs it for
maintenance, but it shall not be paid except from the date of judicial
or extrajudicial demand.

Support pendente lite may be claimed in accordance with the

Rules of Court.

Payment shall be made within the first five days of each

corresponding month or when the recipient dies, his heirs shall not
be obliged to return what he has received in advance.276

F. Options

The person obliged to give support shall have the option to

fulfill the obligation either by paying the allowance fixed, or by
receiving and maintaining in the family dwelling the person who has
a right to receive support. The latter alternative cannot be availed of
in case there is a moral or legal obstacle thereto. 277

G. Attachment

The right to receive support under this Title as well as any

money or property obtained as such support shall not be levied upon
on attachment or execution.278

X. Parental Authority

A. General Provisions

Pursuant to the natural right and duty of parents over the

person and property of their unemancipated children, parental
authority and responsibility shall include the caring for and rearing
them for civic consciousness and efficiency and the development of
their moral, mental and physical character and well-being.279

276
Art. 203
277
Art. 204
278
Art. 205
279
Art. 209

72
 Parental authority and responsibility may not be renounced or
transferred except in the cases authorized by law.280

The father and the mother shall jointly exercise parental

authority over the persons of their common children. In case of
disagreement, the father's decision shall prevail, unless there is a
judicial order to the contrary.

Children shall always observe respect and reverence towards

their parents and are obliged to obey them as long as the children
are under parental authority.281

In case of absence or death of either parent, the parent present

shall continue exercising parental authority. The remarriage of the
surviving parent shall not affect the parental authority over the
children, unless the court appoints another person to be the
guardian of the person or property of the children.282

In case of separation of the parents, parental authority shall be

exercised by the parent designated by the Court. The Court shall
take into account all relevant considerations, especially the choice of
the child over seven years of age, unless the parent chosen is unfit.283

In case of death, absence or unsuitability of the parents,

substitute parental authority shall be exercised by the surviving
grandparent. In case several survive, the one designated by the
court, taking into account the same consideration mentioned in the
preceding article, shall exercise the authority.284

No descendant shall be compelled, in a criminal case, to testify

against his parents and grandparents, except when such testimony is
indispensable in a crime against the descendant or by one parent
against the other.285

B. Substitute and Special Parental Authority

280
Art. 210
281
Art. 211
282
Art. 212
283
Art. 213.
284
Art. 214
285
Art. 215

73
 In default of parents or a judicially appointed guardian, the
following person shall exercise substitute parental authority over the
child in the order indicated:

(1) The surviving grandparent, as provided in Art. 214;286

(2) The oldest brother or sister, over twenty-one years of age,
unless unfit or disqualified; and
(3) The child's actual custodian, over twenty-one years of age,
unless unfit or disqualified.

Whenever the appointment or a judicial guardian over the

property of the child becomes necessary, the same order of
preference shall be observed.287

In case of foundlings, abandoned neglected or abused children

and other children similarly situated, parental authority shall be
entrusted in summary judicial proceedings to heads of children's
homes, orphanages and similar institutions duly accredited by the
proper government agency.288

The school, its administrators and teachers, or the individual,

entity or institution engaged in child are shall have special parental
authority and responsibility over the minor child while under their
supervision, instruction or custody.

Authority and responsibility shall apply to all authorized

activities whether inside or outside the premises of the school, entity
or institution.289

Those given the authority and responsibility under the

preceding Article shall be principally and solidarily liable for
damages caused by the acts or omissions of the unemancipated
minor. The parents, judicial guardians or the persons exercising
substitute parental authority over said minor shall be subsidiarily
liable.

The respective liabilities of those referred to in the preceding

paragraph shall not apply if it is proved that they exercised the
proper diligence required under the particular circumstances.
286
supra
287
Art. 216
288
Art. 217
289
Art. 218

74
 All other cases not covered by this and the preceding articles
shall be governed by the provisions of the Civil Code on quasi-
delicts.290

C. Effect of Parental Authority upon the Persons of the Children

The parents and those exercising parental authority shall have

with the respect to their unemancipated children on wards the
following rights and duties:

(1) To keep them in their company, to support, educate and

instruct them by right precept and good example, and to provide for
their upbringing in keeping with their means;

(2) To give them love and affection, advice and counsel,

companionship and understanding;

(3) To provide them with moral and spiritual guidance,

inculcate in them honesty, integrity, self-discipline, self-reliance,
industry and thrift, stimulate their interest in civic affairs, and
inspire in them compliance with the duties of citizenship;

(4) To furnish them with good and wholesome educational

materials, supervise their activities, recreation and association with
others, protect them from bad company, and prevent them from
acquiring habits detrimental to their health, studies and morals;

(5) To represent them in all matters affecting their interests;

(6) To demand from them respect and obedience;

(7) To impose discipline on them as may be required under the

circumstances; and

(8) To perform such other duties as are imposed by law upon

parents and guardians.291

Parents and other persons exercising parental authority shall

be civilly liable for the injuries and damages caused by the acts or
omissions of their unemancipated children living in their company
290
Art. 219
291
Art. 220

75
and under their parental authority subject to the appropriate
defenses provided by law.292

The courts may appoint a guardian of the child's property or a

guardian ad litem when the best interests of the child so requires.293

The parents or, in their absence or incapacity, the individual,

entity or institution exercising parental authority, may petition the
proper court of the place where the child resides, for an order
providing for disciplinary measures over the child. The child shall be
entitled to the assistance of counsel, either of his choice or appointed
by the court, and a summary hearing shall be conducted wherein the
petitioner and the child shall be heard.

However, if in the same proceeding the court finds the

petitioner at fault, irrespective of the merits of the petition, or when
the circumstances so warrant, the court may also order the
deprivation or suspension of parental authority or adopt such other
measures as it may deem just and proper.294

The measures referred to in the preceding article may include

the commitment of the child for not more than thirty days in entities
or institutions engaged in child care or in children's homes duly
accredited by the proper government agency.
The parent exercising parental authority shall not interfere
with the care of the child whenever committed but shall provide for
his support. Upon proper petition or at its own instance, the court
may terminate the commitment of the child whenever just and
proper.295

D. Effects of Parental Authority upon the Property of the Children

The father and the mother shall jointly exercise legal

guardianship over the property of the unemancipated common child
without the necessity of a court appointment. In case of
disagreement, the father's decision shall prevail, unless there is a
judicial order to the contrary.

292
Art. 221
293
Art. 222
294
Art. 223
295
Art. 224

76
 Where the market value of the property or the annual income
of the child exceeds P50,000, the parent concerned shall be required
to furnish a bond in such amount as the court may determine, but
not less than ten per centum (10%) of the value of the property or
annual income, to guarantee the performance of the obligations
prescribed for general guardians.

A verified petition for approval of the bond shall be filed in the

proper court of the place where the child resides, or, if the child
resides in a foreign country, in the proper court of the place where
the property or any part thereof is situated.

The petition shall be docketed as a summary special

proceeding in which all incidents and issues regarding the
performance of the obligations referred to in the second paragraph
of this Article shall be heard and resolved.

The ordinary rules on guardianship shall be merely suppletory

except when the child is under substitute parental authority, or the
guardian is a stranger, or a parent has remarried, in which case the
ordinary rules on guardianship shall apply.296

The property of the unemancipated child earned or acquired

with his work or industry or by onerous or gratuitous title shall
belong to the child in ownership and shall be devoted exclusively to
the latter's support and education, unless the title or transfer
provides otherwise.

The right of the parents over the fruits and income of the
child's property shall be limited primarily to the child's support and
secondarily to the collective daily needs of the family.297

If the parents entrust the management or administration of any

of their properties to an unemancipated child, the net proceeds of
such property shall belong to the owner. The child shall be given a
reasonable monthly allowance in an amount not less than that which
the owner would have paid if the administrator were a stranger,
unless the owner, grants the entire proceeds to the child. In any
case, the proceeds thus give in whole or in part shall not be charged
to the child's legitime.298
296
Art. 225
297
Art. 226
298
Art. 227

77
 E. Suspension or Termination of Parental Authority

Parental authority terminates permanently:

(1) Upon the death of the parents;

(2) Upon the death of the child; or
(3) Upon emancipation of the child.299

Unless subsequently revived by a final judgment, parental

authority also terminates:

(1) Upon adoption of the child;

(2) Upon appointment of a general guardian;
(3) Upon judicial declaration of abandonment of the child in a
case filed for the purpose;
(4) Upon final judgment of a competent court divesting the
party concerned of parental authority; or
(5) Upon judicial declaration of absence or incapacity of the
person exercising parental authority.300

Parental authority is suspended upon conviction of the parent

or the person exercising the same of a crime which carries with it
the penalty of civil interdiction. The authority is automatically
reinstated upon service of the penalty or upon pardon or amnesty of
the offender.301

The court in an action filed for the purpose in a related case

may also suspend parental authority if the parent or the person
exercising the same:

(1) Treats the child with excessive harshness or cruelty;

(2) Gives the child corrupting orders, counsel or example;
(3) Compels the child to beg; or
(4) Subjects the child or allows him to be subjected to acts of
lasciviousness.

The grounds enumerated above are deemed to include cases

which have resulted from culpable negligence of the parent or the
person exercising parental authority. lawphi1.net
299
Art. 228
300
Art. 229
301
Art. 230

78
 If the degree of seriousness so warrants, or the welfare of the
child so demands, the court shall deprive the guilty party of parental
authority or adopt such other measures as may be proper under the
circumstances.

The suspension or deprivation may be revoked and the

parental authority revived in a case filed for the purpose or in the
same proceeding if the court finds that the cause therefor has ceased
and will not be repeated.302

If the person exercising parental authority has subjected the

child or allowed him to be subjected to sexual abuse, such person
shall be permanently deprived by the court of such authority.303

The person exercising substitute parental authority shall have

the same authority over the person of the child as the parents.

In no case shall the school administrator, teacher of individual

engaged in child care exercising special parental authority inflict
corporal punishment upon the child.304
XI. Emancipation

Emancipation takes place by the attainment of majority. Unless

otherwise provided, majority commences at the age of twenty-one
years.

Emancipation also takes place:

(1) By the marriage of the minor; or

(2) By the recording in the Civil Register of an agreement in a

public instrument executed by the parent exercising parental
authority and the minor at least eighteen years of age. Such
emancipation shall be irrevocable.305

302
Art. 231
303
Art. 232
304
Art. 233
305
Art. 234, as amended by RA 6809

79
 Emancipation for any cause shall terminate parental authority
over the person and property of the child who shall then be qualified
and responsible for all acts of civil life.306

XII. Summary Judicial Proceedings in the Family Law

Until modified by the Supreme Court, the procedural rules

provided for in this Title shall apply as regards separation in fact
between husband and wife, abandonment by one of the other, and
incidents involving parental authority.307

When a husband and wife are separated in fact, or one has

abandoned the other and one of them seeks judicial authorization for
a transaction where the consent of the other spouse is required by
law but such consent is withheld or cannot be obtained, a verified
petition may be filed in court alleging the foregoing facts.

The petition shall attach the proposed deed, if any, embodying

the transaction, and, if none, shall describe in detail the said
transaction and state the reason why the required consent thereto
cannot be secured. In any case, the final deed duly executed by the
parties shall be submitted to and approved by the court.308

Claims for damages by either spouse, except costs of the

proceedings, may be litigated only in a separate action. 309

Jurisdiction over the petition shall, upon proof of notice to the

other spouse, be exercised by the proper court authorized to hear
family cases, if one exists, or in the regional trial court or its
equivalent sitting in the place where either of the spouses resides.310

Upon the filing of the petition, the court shall notify the other
spouse, whose consent to the transaction is required, of said petition,
ordering said spouse to show cause why the petition should not be
granted, on or before the date set in said notice for the initial
conference. The notice shall be accompanied by a copy of the

306
Art. 236
307
Art. 238
308
Art. 239
309
Art. 240
310
Art. 241

80
petition and shall be served at the last known address of the spouse
concerned.311

A preliminary conference shall be conducted by the judge

personally without the parties being assisted by counsel. After the
initial conference, if the court deems it useful, the parties may be
assisted by counsel at the succeeding conferences and hearings.312

In case of non-appearance of the spouse whose consent is

sought, the court shall inquire into the reasons for his failure to
appear, and shall require such appearance, if possible.313

If, despite all efforts, the attendance of the non-consenting

spouse is not secured, the court may proceed ex parte and render
judgment as the facts and circumstances may warrant. In any case,
the judge shall endeavor to protect the interests of the non-
appearing spouse.314

If the petition is not resolved at the initial conference, said

petition shall be decided in a summary hearing on the basis of
affidavits, documentary evidence or oral testimonies at the sound
discretion of the court. If testimony is needed, the court shall specify
the witnesses to be heard and the subject-matter of their
testimonies, directing the parties to present said witnesses.315

The judgment of the court shall be immediately final and

executor.316

The petition for judicial authority to administer or encumber

specific separate property of the abandoning spouse and to use the
fruits or proceeds thereof for the support of the family shall also be
governed by these rules.317

311
Art. 242
312
Art. 243.
313
Art. 244
314
Art. 245
315
Art. 246
316
Art. 247
317
Art. 248

81
 Petitions filed under Articles 223, 225 and 235 318 of this Code
involving parental authority shall be verified.319

Such petitions shall be verified and filed in the proper court of

the place where the child resides.320

Upon the filing of the petition, the court shall notify the
parents or, in their absence or incapacity, the individuals, entities or
institutions exercising parental authority over the child.321

The rules in Chapter 2 hereof shall also govern summary

proceedings under this Chapter insofar as they are applicable.322

XIII. Final Provisions

This Code shall have retroactive effect insofar as it does not

prejudice or impair vested or acquired rights in accordance with the
Civil Code or other laws.323

XIV. Funeral

The duty and the right to make arrangements for the funeral of
a relative shall be in accordance with the order established for
support, under article 294.324 In case of descendants of the same
degree, or of brothers and sisters, the oldest shall be preferred. In
case of ascendants, the paternal shall have a better right.325

Every funeral shall be in keeping with the social position of the

deceased.326

The funeral shall be in accordance with the expressed wishes

of the deceased. In the absence of such expression, his religious
beliefs or affiliation shall determine the funeral rites. In case of
doubt, the form of the funeral shall be decided upon by the person

318
supra
319
Art. 249
320
Art. 250
321
Art. 251
322
Art. 252
323
Art. 255
324
See Reference
325
Art. 305
326
Art. 306

82
obliged to make arrangements for the same, after consulting the
other members of the family.327

No human remains shall be retained, interred, disposed of or

exhumed without the consent of the persons mentioned in articles
294 and 305.328

Any person who shows disrespect to the dead, or wrongfully

interferes with a funeral shall be liable to the family of the deceased
for damages, material and moral.329

The construction of a tombstone or mausoleum shall be

deemed a part of the funeral expenses, and shall be chargeable to
the conjugal partnership property, if the deceased is one of the
spouses.330

XV. Use of surnames331

Legitimate and legitimated children shall principally use the

surname of the father.332

An adopted child shall bear the surname of the adopter. 333

A natural child acknowledged by both parents shall principally

use the surname of the father. If recognized by only one of the
parents, a natural child shall employ the surname of the recognizing
parent.334

Natural children by legal fiction shall principally employ the

surname of the father.335

Illegitimate children referred to in article 287 shall bear the

surname of the mother.336

327
Art. 307
328
Art. 308; Art. 305, supra
329
Art. 309
330
Art. 310
331
other articles repealed by Family Code
332
Art. 364
333
Art. 365
334
Art. 366
335
Art. 367
336
Art. 368

83
 Children conceived before the decree annulling a voidable
marriage shall principally use the surname of the father.337

A married woman may use:

(1) Her maiden first name and surname and add her husband's
surname, or
(2) Her maiden first name and her husband's surname or
(3) Her husband's full name, but prefixing a word indicating that she
is his wife, such as "Mrs."338

In case of annulment of marriage, and the wife is the guilty

party, she shall resume her maiden name and surname. If she is the
innocent spouse, she may resume her maiden name and surname.
However, she may choose to continue employing her former
husband's surname, unless:

(1) The court decrees otherwise, or

(2) She or the former husband is married again to another person.339

When legal separation has been granted, the wife shall

continue using her name and surname employed before the legal
separation.340

A widow may use the deceased husband's surname as though

he were still living, in accordance with article 370.341

In case of identity of names and surnames, the younger person

shall be obliged to use such additional name or surname as will avoid
confusion.342

In case of identity of names and surnames between ascendants

and descendants, the word "Junior" can be used only by a son.
Grandsons and other direct male descendants shall either:

(1) Add a middle name or the mother's surname, or

337
Art. 369
338
Art. 370
339
Art. 371
340
Art. 372
341
Art. 373
342
Art. 374

84
(2) Add the Roman numerals II, III, and so on.343

No person can change his name or surname without judicial

authority.344

Usurpation of a name and surname may be the subject of an

action for damages and other relief.345

The unauthorized or unlawful use of another person's surname

gives a right of action to the latter.346

The employment of pen names or stage names is permitted,

provided it is done in good faith and there is no injury to third
persons. Pen names and stage names cannot be usurped.347

Except as provided in the preceding article, no person shall

use different names and surnames.348

XVI. Absence

If there is a doubt, as between two or more persons who are

called to succeed each other, as to which of them died first, whoever
alleges the death of one prior to the other, shall prove the same; in
the absence of proof, it is presumed that they died at the same time
and there shall be no transmission of rights from one to the other.349

A marriage contracted by any person during subsistence of a

previous marriage shall be null and void, unless before the
celebration of the subsequent marriage, the prior spouse had been
absent for four consecutive years and the spouse present has a well-
founded belief that the absent spouse was already dead. In case of
disappearance where there is danger of death under the
circumstances set forth in the provisions of Article 391 of the Civil
Code, an absence of only two years shall be sufficient.350

343
Art. 375
344
Art. 376, amended by R.A. 9048, infra
345
Art. 377
346
Art. 378
347
Art. 379
348
Art. 380
349
Art. 43, NCC
350
Art. 41, FC

85
 For the purpose of contracting the subsequent marriage under
the preceding paragraph the spouse present must institute a
summary proceeding as provided in this Code for the declaration of
presumptive death of the absentee, without prejudice to the effect of
reappearance of the absent spouse.

A. Provisional measures in Case of Absence

When a person disappears from his domicile, his whereabouts

being unknown, and without leaving an agent to administer his
property, the judge, at the instance of an interested party, a relative,
or a friend, may appoint a person to represent him in all that may be
necessary.

This same rule shall be observed when under similar

circumstances the power conferred by the absentee has expired.351

The appointment referred to in the preceding article having

been made, the judge shall take the necessary measures to
safeguard the rights and interests of the absentee and shall specify
the powers, obligations and remuneration of his representative,
regulating them, according to the circumstances, by the rules
concerning guardians.352

In the appointment of a representative, the spouse present

shall be preferred when there is no legal separation.353

If the absentee left no spouse, or if the spouse present is a

minor, any competent person may be appointed by the court.

B. Declaration of Absence

Two years having elapsed without any news about the absentee
or since the receipt of the last news, and five years in case the
absentee has left a person in charge of the administration of his
property, his absence may be declared.354

The following may ask for the declaration of absence:

351
Art. 381
352
Art. 382
353
Art. 383
354
Art. 384

86
(1) The spouse present;
(2) The heirs instituted in a will, who may present an authentic copy
of the same;
(3) The relatives who may succeed by the law of intestacy;
(4) Those who may have over the property of the absentee some
right subordinated to the condition of his death.355

The judicial declaration of absence shall not take effect until

six months after its publication in a newspaper of general
circulation.356
An administrator of the absentee's property shall be appointed
in accordance with article 383.357

The wife who is appointed as an administratrix of the

husband's property cannot alienate or encumber the husband's
property, or that of the conjugal partnership, without judicial
authority.358

The administration shall cease in any of the following cases:

(1) When the absentee appears personally or by means of an agent;

(2) When the death of the absentee is proved and his testate or
intestate heirs appear;
(3) When a third person appears, showing by a proper document that
he has acquired the absentee's property by purchase or other title.

In these cases the administrator shall cease in the performance

of his office, and the property shall be at the disposal of those who
may have a right thereto.359

C. Administration of the Property of the Absentee

An administrator of the absentee's property shall be appointed

in accordance with article 383.360

The wife who is appointed as an administratrix of the

husband's property cannot alienate or encumber the husband's

355
Art. 385
356
Art. 386
357
Art. 387
358
Art. 388
359
Art. 389
360
Art. 387

87
property, or that of the conjugal partnership, without judicial
authority.361

The administration shall cease in any of the following cases:

(1) When the absentee appears personally or by means of an agent;

(2) When the death of the absentee is proved and his testate or
intestate heirs appear;
(3) When a third person appears, showing by a proper document that
he has acquired the absentee's property by purchase or other title.

In these cases the administrator shall cease in the performance

of his office, and the property shall be at the disposal of those who
may have a right thereto.362

D. Presumption of Death

After an absence of seven years, it being unknown whether or

not the absentee still lives, he shall be presumed dead for all
purposes, except for those of succession.

The absentee shall not be presumed dead for the purpose of

opening his succession till after an absence of ten years. If he
disappeared after the age of seventy-five years, an absence of five
years shall be sufficient in order that his succession may be
opened.363

The following shall be presumed dead for all purposes,

including the division of the estate among the heirs:

(1) A person on board a vessel lost during a sea voyage, or an

aeroplane which is missing, who has not been heard of for four years
since the loss of the vessel or aeroplane;

(2) A person in the armed forces who has taken part in war, and has
been missing for four years;

(3) A person who has been in danger of death under other

circumstances and his existence has not been known for four
years.364
361
Art. 388
362
Art. 389
363
Art. 390
364
Art. 391

88
 If the absentee appears, or without appearing his existence is
proved, he shall recover his property in the condition in which it may
be found, and the price of any property that may have been alienated
or the property acquired therewith; but he cannot claim either fruits
or rents.365

XVII. Civil Registrar

Acts, events and judicial decrees concerning the civil status of

persons shall be recorded in the civil register.366

The following shall be entered in the civil register:

(1) Births;
(2) marriages;
(3) deaths;
(4) legal separations;
(5) annulments of marriage;
(6) judgments declaring marriages void from the beginning;
(7) legitimations;
(8) adoptions;
(9) acknowledgments of natural children;
(10) naturalization;
(11) loss, or
(12) recovery of citizenship;
(13) civil interdiction;
(14) judicial determination of filiation;
(15) voluntary emancipation of a minor; and
(16) changes of name.367

In cases of legal separation, adoption, naturalization and other

judicial orders mentioned in the preceding article, it shall be the
duty of the clerk of the court which issued the decree to ascertain
whether the same has been registered, and if this has not been done,
to send a copy of said decree to the civil registry of the city or
municipality where the court is functioning.368

365
Art. 392
366
Art. 407
367
Art. 408
368
Art. 409

89
 The books making up the civil register and all documents
relating thereto shall be considered public documents and shall be
prima facie evidence of the facts therein contained.369

Every civil registrar shall be civilly responsible for any

unauthorized alteration made in any civil register, to any person
suffering damage thereby. However, the civil registrar may exempt
himself from such liability if he proves that he has taken every
reasonable precaution to prevent the unlawful alteration.370

No entry in a civil register shall be changed or corrected,

without a judicial order.371

All other matters pertaining to the registration of civil status

shall be governed by special laws.372

A. RA 9048-clerical errors373

B. Rule 108, Rules of Court374

PROPERTY375

I. Characteristics

1. Utility for the satisfaction of moral and economic wants

2. Susceptibility of appropriation
3. Individuality or substantivity376

II. Classification377
369
Art. 410
370
Art. 411
371
Art. 412
372
Art. 413
373
See Reference
374
ibid
375
All things which are, or may be the object of appropriation
376
that is, it can exist by itself, and not merely as a part of the whole; hence, the human hair becomes
property only when it is detached from the hair
377
Tests:
a. Immovable - cannot be transferred from place to place.
b. Movable excluded from the enumeration of immovable and can be moved from place to place
without damage thereto.

90
(1)Immovables or real378

a) By nature those which cannot be carried from place to

place.379

i. Lands, buildings, roads and constructions (adhered to the

soil).380
ii. Mines, quarries and slag dumps, while the matter thereof
forms part of the bed, and waters either running or stagnant.

b) By incorporation essentially movables but are attached to an

immovable in a fixed manner to be an integral part thereof.381

i. Trees, plants and growing fruits while they are attached to the
land or form an integral part of an immovable.
ii. Everything attached to an immovable in a fixed manner in such
a way that it cannot be separated therefrom without breaking
the material or deterioration of the object.382
iii. Fertilizers actually used on a piece of land.

c) By destination essentially movables but are placed in an

immovable as an added utility.

i. Statutes, reliefs painting or other objects for use or

ornamentation, placed in a building or on lands, by the owner
of the immovable in such a manner that it reveals the intention
to attach them permanently to the tenements.383
ii. Machinery, instruments or implements intended by the owner
of the tenement for an industry or works which may be carried
on in a building or land, and which tend directly to meet the
needs of such industry or works.384

c. Mixed/semi-movable - those which move by themselves (both immovable and movable in nature).
378
Art. 415
379
Pars. 1 & 8
380
The materials constituting a building which is the subject of demolition are movable.
A structure which is merely superimposed, not adhered, to the soil may be considered movable.
381
Pars. 2, 3 & 7
382
Rex vinta
383
Indirect utility
384
Direct utility

91
 iii. Animal houses or breeding places, in case the owner has
placed or preserved them with the intention to attach them
permanently to the land, and the animals in these places.
iv. Docks and structures which, though floating, are intended by
their nature and object to remain at a fixed place on a river,
lake or coast.

d) By analogy - classified by express provision of law because it is

regarded as united to the immovable property.385

i. Contracts for public works.

ii. Servitudes.
iii.Real rights over immovable property.

(2)Movables386

i. General Rule: all things which can be transported from place to

place without impairment of the real property to which they are
fixed.

ii. Exclusions: those movables susceptible of appropriation which

are not included in the enumeration of immovables.

iii. Special: real property which by any special provisions of law is

considered as personalty.

iv. In parts: forces of nature which are brought under control by

science.

v. Obligations387 and actions388 which have for their object

movables389 or demandable sums.390

vi. Shares of stocks or interests in juridical entities.

385
Par. 10
386
Art. 416 to 417
387
credits
388
replevin
389
corporeal or intangible
390
These are really personal rights because they have a definite passive subject (e.g. intellectual property).

92
 A. Hidden Treasure391

Hidden treasure belongs to the owner of the land, building, or

other property on which it is found.

When the discovery is made on the property of another, or of

the State or any of its subdivisions, and by chance, one-half thereof
shall be allowed to the finder. If the finder is a trespasser, he shall
not be entitled to any share of the treasure.

If the things found be of interest to science or the arts, the

State may acquire them at their just price, which shall be divided in
conformity with the rule stated.392
By treasure is understood, for legal purposes, any hidden and
unknown deposit of money, jewelry, or other precious objects, the
lawful ownership of which does not appear.393

B. Right of Accession

The ownership of property gives the right by accession to

everything which is produced thereby, or which is incorporated or
attached thereto, either naturally or artificially.394

1. Fruits

To the owner belongs:

(1) The natural fruits;

(2) The industrial fruits;
(3) The civil fruits.395

Natural fruits are the spontaneous products of the soil, and the
young and other products of animals.

391
Treasure consists of money, jewels, or other precious objects which are hidden and unknown, such that
their finding is a real discovery.
392
Art. 438
393
Art. 439
394
Art. 440
395
Art. 441

93
 Industrial fruits are those produced by lands of any kind
through cultivation or labor.

Civil fruits are the rents of buildings, the price of leases of

lands and other property and the amount of perpetual or life
annuities or other similar income.396
He who receives the fruits has the obligation to pay the
expenses made by a third person in their production, gathering, and
preservation.397
Only such as are manifest or born are considered as natural or
industrial fruits.

With respect to animals, it is sufficient that they are in the

womb of the mother, although unborn.398

2. With respect to Immovable Property

a. Builder, planter, sower on land of another

in concept of owner

(1)Builder, planter, sower in good faith

The owner of the land on which anything has been built, sown
or planted in good faith, shall have the right to appropriate as his
own the works, sowing or planting, after payment of the indemnity
provided for in articles 546 and 548 399, or to oblige the one who built
or planted to pay the price of the land, and the one who sowed, the
proper rent. However, the builder or planter cannot be obliged to
buy the land if its value is considerably more than that of the
building or trees. In such case, he shall pay reasonable rent, if the
owner of the land does not choose to appropriate the building or
trees after proper indemnity. The parties shall agree upon the terms
of the lease and in case of disagreement, the court shall fix the terms
thereof.400

396
Art. 442
397
Art. 443
398
Art. 444
399
See reference
400
Art. 448

94
 In the cases of the two preceding articles 401, the landowner is
entitled to damages from the builder, planter or sower.402

The builder, planter or sower in bad faith is entitled to

reimbursement for the necessary expenses of preservation of the
land.403

If there was bad faith, not only on the part of the person who
built, planted or sowed on the land of another, but also on the part of
the owner of such land, the rights of one and the other shall be the
same as though both had acted in good faith.

It is understood that there is bad faith on the part of the

landowner whenever the act was done with his knowledge and
without opposition on his part.404

When the landowner acted in bad faith and the builder, planter
or sower proceeded in good faith, the provisions of article 447 405
shall apply.406

If the materials, plants or seeds belong to a third person who

has not acted in bad faith, the owner of the land shall answer
subsidiarily for their value and only in the event that the one who
made use of them has no property with which to pay.

This provision shall not apply if the owner makes use of the
right granted by article 450. If the owner of the materials, plants or
seeds has been paid by the builder, planter or sower, the latter may
demand from the landowner the value of the materials and labor. 407

In the cases regulated in the preceding articles, good faith

does not necessarily exclude negligence, which gives right to
damages under article 2176.408

(2)Builder, planter, sower in bad faith

401
Refers to Arts. 449 and 450, infra
402
Art. 451
403
Art. 452
404
Art. 453
405
supra
406
Art. 454
407
Art. 455
408
Art. 456; see Reference for Art. 2176

95
 He who builds, plants or sows in bad faith on the land of
another, loses what is built, planted or sown without right to
indemnity.409

The owner of the land on which anything has been built,

planted or sown in bad faith may demand the demolition of the work,
or that the planting or sowing be removed, in order to replace things
in their former condition at the expense of the person who built,
planted or sowed; or he may compel the builder or planter to pay the
price of the land, and the sower the proper rent.410

b. Usufructuary

The usufructuary may make on the property held in usufruct

such useful improvements or expenses for mere pleasure as he may
deem proper, provided he does not alter its form or substance; but he
shall have no right to be indemnified therefor. He may, however,
remove such improvements, should it be possible to do so without
damage to the property.411

3. Lands adjoining river banks

a. Alluvion

To the owners of lands adjoining the banks of rivers belong the

accretion which they gradually receive from the effects of the
current of the waters.412

b. Change of course of river413

River beds which are abandoned through the natural change in

the course of the waters ipso facto belong to the owners whose lands
are occupied by the new course in proportion to the area lost.
However, the owners of the lands adjoining the old bed shall have
the right to acquire the same by paying the value thereof, which
value shall not exceed the value of the area occupied by the new
bed.414
409
Art. 449
410
Art. 450
411
Art. 579
412
Art. 457
413
see also Water Code (PD 1067) in Reference
414
Art. 461

96
 Whenever a river, changing its course by natural causes, opens
a new bed through a private estate, this bed shall become of public
dominion415

c. Avulsion

Whenever the current of a river, creek or torrent segregates

from an estate on its bank a known portion of land and transfers it to
another estate, the owner of the land to which the segregated
portion belonged retains the ownership of it, provided that he
removes the same within two years416

Trees uprooted and carried away by the current of the waters

belong to the owner of the land upon which they may be cast, if the
owners do not claim them within six months. If such owners claim
them, they shall pay the expenses incurred in gathering them or
putting them in a safe place.417

River beds which are abandoned through the natural change in

the course of the waters ipso facto belong to the owners whose lands
are occupied by the new course in proportion to the area lost.
However, the owners of the lands adjoining the old bed shall have
the right to acquire the same by paying the value thereof, which
value shall not exceed the value of the area occupied by the new
bed.418

Whenever a river, changing its course by natural causes, opens

a new bed through a private estate, this bed shall become of public
dominion.419

Whenever the current of a river divides itself into branches,

leaving a piece of land or part thereof isolated, the owner of the land
retains his ownership. He also retains it if a portion of land is
separated from the estate by the current.420

4. Islands

415
Art. 462
416
Art. 459
417
Art. 460
418
Art. 461
419
Art. 462
420
Art. 463

97
 Islands which may be formed on the seas within the
jurisdiction of the Philippines, on lakes, and on navigable or floatable
rivers belong to the State.421

Islands which through successive accumulation of alluvial

deposits are formed in non-navigable and non-floatable rivers, belong
to the owners of the margins or banks nearest to each of them, or to
the owners of both margins if the island is in the middle of the river,
in which case it shall be divided longitudinally in halves. If a single
island thus formed be more distant from one margin than from the
other, the owner of the nearer margin shall be the sole owner
thereof.422

C. By Object

1. Real or immovable423

The following are immovable property:

(1) Land, buildings, roads and constructions of all kinds adhered to

the soil;

(2) Trees, plants, and growing fruits, while they are attached to the
land or form an integral part of an immovable;

(3) Everything attached to an immovable in a fixed manner, in such a

way that it cannot be separated therefrom without breaking the
material or deterioration of the object;

(4) Statues, reliefs, paintings or other objects for use or

ornamentation, placed in buildings or on lands by the owner of the
immovable in such a manner that it reveals the intention to attach
them permanently to the tenements;

(5) Machinery, receptacles, instruments or implements intended by

the owner of the tenement for an industry or works which may be
carried on in a building or on a piece of land, and which tend directly
to meet the needs of the said industry or works;

421
Art. 464
422
Art. 465
423
See Classification

98
(6) Animal houses, pigeon-houses, beehives, fish ponds or breeding
places of similar nature, in case their owner has placed them or
preserves them with the intention to have them permanently
attached to the land, and forming a permanent part of it; the animals
in these places are included;

(7) Fertilizer actually used on a piece of land;

(8) Mines, quarries, and slag dumps, while the matter thereof forms
part of the bed, and waters either running or stagnant;

(9) Docks and structures which, though floating, are intended by

their nature and object to remain at a fixed place on a river, lake, or
coast;

(10) Contracts for public works, and servitudes and other real rights
over immovable property.

2. Personal or Movable424

The following things are deemed to be personal property:

(1) Those movables susceptible of appropriation which are not

included in the preceding article;
(2) Real property which by any special provision of law is considered
as personalty;
(3) Forces of nature which are brought under control by science; and
(4) In general, all things which can be transported from place to
place without impairment of the real property to which they are
fixed.

The following are also considered as personal property:

(1) Obligations and actions which have for their object movables or
demandable sums; and
(2) Shares of stock of agricultural, commercial and industrial
entities, although they may have real estate.

Movable property is either consumable or nonconsumable. To

the first class belong those movables which cannot be used in a

424
ibid

99
manner appropriate to their nature without their being consumed; to
the second class belong all the others.

D. By Owner

1. Of public dominion

It is not owned by the state but pertains to the state, which, as

territorial sovereign exercises certain juridical prerogatives over
such property. The ownership of such properties is in the social
group, whether national, provincial or municipal.

a. For public use425

b. For public service426
c. For the development of the national wealth.

2. Of private ownership

a. Patrimonial property distinction between

private property of individual persons, and
of State entities

Patrimonial property427

Property of the State owned by it in its private or proprietary

capacity.

The state has the same rights over this kind of property as a
private individual in relation to his own private property

Property of private ownership

This refers to all property belonging to private persons either

individually or collectively and those belonging to the State and any
of its political subdivisions which are patrimonial in nature.

425
e.g. roads, canals, rivers
426
e.g. public buildings
427
Used by the political subdivision as a juridical person in its private capacity (e.g. property acquired
through escheat proceedings, tax sales). It is the property which the unit has the same rights, and of
which it may dispose, to the same extent as private individuals according to laws and regulations on the
procedure of exercising such rights. Hence, it is subject to the principles on private properties (e.g.
subject to prescription

100
 E. By Nature

1. Consumable/non-consumable vs. Fungible/non-

fungible

Consumable428 cannot be used in a manner appropriate to

their nature without being consumed.

Non-consumable - not consumed by use.

Fungibles - belong to a common genus permitting substitution

of the same kind, quantity and quality;429

Non-fungibles specifically determined and cannot be

substituted (e.g. 10 bottles of wine which I have in my room).

III. Ownership

A. Rights in general430

1. Bundle of rights

a. Jus utendi,431 fruendi,432 abutendi,433

vindicandi,434 disponendi435 (possidendi)

(1) Actions to recover ownership and

possession of real property

428
Consumable goods cannot be the subject matter of a contract of commodatum unless the purpose of
the contract is not the consumption of the object as when it is merely for exhibition.
429
e.g. 10 bottles of wine
430
The right to enjoy, dispose, and recover a thing without further limitations than those established by
law or the will of the owner.
431
the right to use
432
the right to enjoy the fruits
433
the right to destroy (but cannot harm others)
434
The right of action available to the owner to recover the property against the holder or possessor
435
The right to dispose, or the right to alienate, encumber, transform

101
 (a) Distinctions between accion
reivindicatoria, accion
publiciana, accion
interdictal

Accion reinvindicatoria436 - an action to recover real property

based on ownership. Here, the object is the recovery of the
dominion over the property as owner.

Accion publiciana437 - ordinary civil proceeding to recover the

better right of possession, except in cases of forcible entry and
unlawful detainer. The involved is not possession de facto but
possession de jure.

Accion interdictal438 - summary action to recover physical or

material possession only. It consists of the summary actions of:

1. Forcible entry - Action for recovery of material possession of

real property when a person originally in possession was deprived
thereof by force, intimidation, strategy, threat or stealth

2. Unlawful Detainer -Action for recovery of possession of any

land or building by landlord, vendor, vendee, or other person against
436
This action should be filed in case of refusal of a party to deliver possession of property due to an
adverse claim of ownership.
Requisites:
1.Identity of the Property
2.Plaintiffs title to the property
437
plenary action
Whenever the owner is dispossessed by any other means (e.g. possession is due to tolerance of the owner)
other than FISTS, he may maintain this action to recover possession without waiting for the expiration of
1 year before commencing this suit. It may also be brought after the expiration of 1 year if no action had
been instituted for forcible entry or unlawful detainer
438
Period to file action: Within 1 year after such unlawful deprivation or withholding of possession,
commencing from the time of last demand (oral or written; direct or indirect) to vacate. No demand is
necessary for a lessee to vacate when it is specifically provided for in the agreement.
Prayer: for the restitution of possession, with damages and costs. However, the only damages that can
be recovered in an Ejectment suit are the fair rental value or the reasonable compensation for the use and
occupation of the real property. Other damages must be claimed in an ordinary action.
The defendant, however, may set up a counterclaim for moral damages and recover it if it is within the
jurisdiction of the court.
Jurisdiction: MTC (summary proceedings). Whatever the amount of plaintiffs damages will not affect
the courts jurisdiction.
Issue: Physical possession. The decision in such action is res judicata in the question of possession.
Sublessees are bound by the judgment rendered against the lessee in an ejectment case even if they
were not made parties thereto.

102
whom the possession of the same was unlawfully withheld after the
expiration or termination of the right to hold possession, by virtue of
any contract.

(b) Distinction between forcible

entry and unlawful detainer439

Forcible Entry Unlawful

Detainer
As to when possession became unlawful
Possession of the Possession is
defendant is inceptively lawful
unlawful from the but becomes illegal
beginning as he from the time
acquires defendant
possession by unlawfully
Force, withholds
intimidation, possession after
strategy, threat the expiration or
or stealth termination of his
right thereto.
As to the necessity of demand
No previous Demand is
demand for the jurisdictional if the
defendant to ground is non-
vacate is payment of rentals
necessary or failure to
comply with the
lease contract

As to necessity of proof of prior

physical possession
439
See Accion Interdictal, supra
Ejectment suit:
a. Can be brought by anyone of the coowners.
A co-owner may bring such an action without the necessity of joining all the other co-owners as co-
plaintiffs because the suit is deemed to be instituted for the benefit of all.
However, if the action is for the benefit of the plaintiff alone, such that he claims the possession for
himself and not for the co-ownership, the action will NOT prosper.
b. Action may be brought not only against strangers but even against a coowner.
The effect of the action will be to obtain recognition of the co-ownership. The defendant cannot be
excluded because he has a right to possess as a co-owner, and the plaintiff cannot recover any material or
determinate part of the property.
c. An adverse decision in the action is not necessarily res judicata with respect to the other coowners
not being parties to the action, but they are bound where it appears that the action was instituted in their
behalf with their express or implied consent.

103
 Plaintiff must Plaintiff need not
prove that he was have been in prior
in prior physical physical possession
possession of the
premises until he
was deprived
thereof by the
defendant
As to when the 1 year period is counted
from
1 year period is 1 year period is
generally counted counted from the
from the date of date of last
actual entry on demand or last
the land letter of demand

(2) Actions for recovery of possession of

movable
Property

Replevin - remedy when the complaint prays for the recovery

of the possession of personal property.

(3)Requisites for recovery of property

proof of right; identity; reliance on
strength of own evidence not
weakness of defendants claim

1. Identity of the property.

2. Strength of plaintiffs title.440

Evidence to prove ownership: ownership may be proved by any

evidence admissible in law.

a. Torrens title.
b. Title from the Spanish Government.
c. Patent duly registered in the Registry of Property by the
grantee.
d. Deed of sale.
e. Long possession.

2. Distinction between real and personal rights

440
proof of ownership
Tax declarations are not conclusive proof of ownership. However, when coupled with possession for a
period sufficient for prescription, they become strong evidence of ownership. Also, the failure of a person
to declare land for taxation may be admitted to show that he is not the owner thereof.

104
 Real Rights

1. no passive subject claim against whole world

2. object is corporeal thing441
3. creates juridical relations through mode & title
4. extinguished through loss or destruction of thing

Personal Rights

1. Passive and active subject

2. Object is an intangible thing442
3. Creates juridical relations through title
4. Not extinguished through loss or destruction of thing

Personal Real
1. jus ad rem, a 1. jus in re, a right
right enforceable enforceable against
only against a the whole world
definite person or
group of persons
2. right pertaining 2. right pertaining
to the person to to a person over a
demand from specific thing,
another, as a without a passive
definite passive subject individually
subject, the determined against
fulfillment of a whom such right
prestation to give, may be personally
to do or not to do. enforced

B. Modes of acquiring ownership

1. original, derivative

Modes of Titles of
acquiring acquiring
ownership ownership
A. Original Modes
1. Occupation 1. Condition of
being without
known owner

441
obligation
442
specific thing

105
 2. Work which 2. Creation,
includes discovery or
Intellectual invention
creation
B. Derivative modes
3. Law 3. Existence of
required
conditions
4. Tradition 4. Contract of the
parties
5. Donation 5. Contract of the
parties
6. Prescription 6. Possession in
the concept of
owner
7. Succession 7. Death

C. Limitations

1. General limitations443

Taxation:

The inherent power of the sovereign, exercised through the

legislature, to impose burdens upon the subjects and objects within
its jurisdiction, for the purpose of raising revenues to carry out the
legitimate objects of the government.

Eminent domain:

No person shall be deprived of his property except by

competent authority and from public use and always upon payment
of just compensation.

Should this requirement be not complied with, the courts shall

protect and, in proper cases, restore the owner in his possession.

Police power:

When any property is condemned or seized by competent

authority in the interest of health, safety or security, the owner
thereof shall not be entitled to compensation, unless he can show
that such condemnation or seizure is unjustified.444

443
For the benefit of the state
444
Requisites:
1 .The interest of the public in general, as distinguished from those of a particular class, requires such
interference.

106
 2. Specific Limitations

i. Those imposed by law such as legal easements and the

requirement of legitime in succession.

ii. The owner of a thing cannot make use thereof in such a manner as
to injure the rights of a 3rd person.445

iii. Nuisance446

iv. State of necessity law permits injury or destruction of things

owned by another provided this is necessary to avert a greater
danger447

v. Easements voluntarily imposed by owner: servitudes, mortgages

imposed by contract

IV. Accession448

A. Right to hidden treasure449

General rule:

2. The means employed are reasonably necessary for the accomplishment of a purpose, and not unduly
oppressive upon individuals.
445
sic utere tuo
This is based on the police power of the State.
It does not apply where the owner of a thing makes use of it in a lawful manner for then it cannot be
said that the manner of the use is such as to injure the rights of a third person.
446
infra
447
with right to indemnity vs. principle of unjust enrichment
Requisites:
1. The interference is necessary.
2. The damage to another is much greater than the damage to the property.
The seriousness or gravity of the danger must be much greater than the damage to the property affected
or destroyed by the protective act.
Danger to life is always greater than damage to property.
If through an error, one believed himself to be in a state of necessity, or used excessive means, his act
would be illicit, and the owner of the property can use the principle of self-help.
The law does not require that the person acting in a state of necessity be free from negligence in the
creation of the threatened danger
448
The right by virtue of which the owner of a thing becomes the owner of everything that it may produce
or which may be inseparably united or incorporated thereto, either naturally or artificially.
449
Hidden treasure - any hidden or unknown deposit of money, jewelry or other precious objects, the
lawful ownership of which does not appear.

107
It belongs to the owner of the land, building or other property on
which it is found.

Exceptions:

The finder is entitled to provided:

1. Discovery was made on the property of another, or of the state

or any of its political subdivisions;
2. The finding was made by chance;
3. The finder is not a co-owner of the property where it is found;
4. The finder is not a trespasser;
5. The finder is not an agent of the landowner;
6. The finder is not married under the absolute community or the
conjugal partnership system (otherwise his share belongs to the
community).

B. General Rules:

1. For immovables:

a. Accession discreta and continua450

Accession Discreta - the right pertaining to the owner of a

thing over everything produced thereby

GENERAL RULE:

To the owner belongs the natural,451 industrial,452 and civil

fruits.453

EXCEPTIONS:

If the thing is:

a) in possession of a possessor in good faith;

b) subject to a usufruct;
c) leased or pledged; or
450
artificial/industrial and natural
451
spontaneous products of the soil and the young and other products of animals
452
those produced by lands of any kind through cultivation or labor
453
rents of buildings, price of leases or lands and the amount of perpetual or life annuities or other similar
income

108
d) in possession of an antichretic creditor

Accession Continua the right pertaining to the owner of a

thing over everything that is incorporated or attached thereto either
naturally or artificially; by external forces.

Artificial/industrial

Building, planting or sowing

GENERAL RULE

Whatever is built, planted or sown on the land of another and

the improvements or repairs made thereon belong to the owner of
the land.454

EXCEPTION: contrary is proven

Natural

Alluvion or alluvium increment which lands abutting rivers

gradually receive as a result of the current of the waters. It is the
gradual deposit of sediment by the natural action of a current of
fresh water (not sea water, the original identity of the deposit being
lost.455

Avulsion - the accretion which takes place when the current of

the river, creek or torrent segregates from an estate on its bank a
known portion and transfers it to another estate, in which case, the
owner of the estate to which the segregated portion belonged,
retains the ownership thereof.456

Estates adjoining ponds or lagoons

RULE:

454
The owner of the land must be known, otherwise no decision can be rendered on the ownership of the
thing planted, built or sown until a hearing shall have been accorded to whosoever is entitled thereto.
455
To the owners of the lands adjoining the banks of rivers belong the accretions which they gradually
receive from the effects of the current of the waters.
456
The owner of the estate to which the segregated portion belongs preserves his ownership of the
segregated portion provided he removes (not merely claims) the same within the period of 2 years.
Failure to do so would have the effect of automatically transferring ownership over it to the owner of the
other estate.

109
 The owners of estates adjoining ponds or lagoons do not
acquire the land left dry by the natural decrease of the waters, or
loss that inundated by them in extraordinary floods

Trees uprooted/by force of river

RULE:

Trees uprooted and carried away by the current of the waters

belong to the owner of the land upon which they may be case, if the
owners do not claim them within 6 months. If such owners claim
them, they shall pay the expenses incurred in gathering or putting
them in a safe place.457

Abandoned river bed/change in the course of river

RULE:

River beds which are abandoned through the natural change in

the course of waters ipso facto belong to the owners whose lands are
occupied by the new course in proportion to the area lost.458

New river bed without abandonment

RULE:

Whenever a river, changing its course by natural causes, opens

a new bed through a private estate, this bed shall become of public
dominion.459
457
This rule refers to uprooted trees only. If a known portion of land with trees standing thereon is carried
away by the current to another land, the rule on avulsion governs.
458
However, the owners of land adjoining the old bed are given preferential right to acquire the same by
paying the value thereof to promote the interest of agriculture because the riparian owners of the old
course/bed can better cultivate the same. The indemnification to be paid shall not exceed the value of the
area occupied by the new bed.
River beds are part of public domain. In this case, there is abandonment by the government of its right
over the old bed. The owner of the invaded land automatically acquires ownership of the same without
the necessity of any formal act on his part.
In proportion to the area lost implies that there are two or more owners whose lands are occupied by
the new bed. Therefore, if only one owner lost a portion of his land, the entire old bed should belong to
him.
459
The bed of a public river or stream is of public ownership. If the river changes its course and opens a
new bed, this bed becomes of public dominion even if it is on private property.

110
 Branching of course of river

RULE:

Whenever the current of a river divides itself into branches,

leaving a piece of land or part thereof isolated, the owner of the land
retains his ownership thereto. He also retains ownership to a portion
of his land separated from the estate by the current.

Formation of Islands

RULES:

1. If formed on the seas within the jurisdiction of the Philippines, on

lakes, or on navigable or floatable rivers: 460 the island belongs to the
State as part of its patrimonial property.

2. If formed in non navigable and non floatable rivers:

a. It belongs to the nearest riparian owner, or owner of the margin or

bank nearest to it as he is considered on the best position to
cultivate and develop the island.

b. If the island is in the middle of the river, the island is divided

longitudinally in halves. If the island formed is longer than the
property of the riparian owner, the latter is deemed ipso jure to be
the owner of that portion which corresponds to the length of that
portion of his property along the margin of the river.

c. If a single island be more distant from one margin than from the
other, the owner of the nearer margin shall be the sole owner
thereof.

b. Accession industrial

Building, planting or sowing461

Avulsion462

The law does not make any distinction whether the river is navigable or not.
460
one which in its natural state affords a channel for useful commerce and not such as is only sufficient
to float a banca or a canoe.
461
infra
462
ibid

111
 Rivers463
Islands464

c. Accession natural465

Accretion - the act or the process by which a riparian land

generally and imperceptively receives addition made by the water to
which the land is contiguous.

Avulsion466
Rivers467
Islands468

2. For movables:

a. Accession continua

Adjunction or conjunction469
463
ibid
464
ibid
465
accretion, avulsion, rivers, islands
466
ibid
467
ibid
468
ibid
469
Rules:
1. Adjunction in good faith:
If the union took place without bad faith, the owner of the principal thing acquires the accessory, with
the obligation to indemnify the owner of the accessory for its value.
2. Adjunction in bad faith:
If the union took place in bad faith, the following rules shall apply:
a. Bad faith on the part of owner of accessory:
i. He shall lose the thing incorporated, and
ii. He shall be liable for damages to the owner of the principal thing, or the payment of the price,
including its sentimental value as appraised by experts.
iii. The principal may demand for the delivery of a thing equal in kind and value and in all other
respects to that of the principal thing, or the payment of the price, including its sentimental value as
appraised by experts.
b. Bad faith on the part of the owner of the principal:
The owner of the accessory thing is given the option either:

112
 It is the union of 2 movable things belonging to different
owners in such a way that they form a single object, but each one of
the component things preserves its value.

Commixtion or confusion470
Takes place when two or more things belonging to different
owners are mixed or combined with the respective identities of the
component parts destroyed or lost.

Specification471
i. To require the owner of the principal thing to pay the value of the accessory thing, plus damages.
ii. To have the accessory thing separated even if it be necessary to destroy the principal thing, plus
damages.
iii. The accessory may demand for the delivery of a thing equal in kind and value and in all other
respects to that of the accessory thing, or the payment of the price, including its sentimental value as
appraised by experts.
c. Both parties in bad faith:
Their respective rights are to be determined as though both acted in good faith.
Sentimental value shall be duly appreciated
470
Rules:
1. Mixture by will of both the owners or by chance:
a. Their rights shall first be governed by their stipulations.
b. If the things mixed are of the same kind and quality, there is no conflict of rights, and the mixture
can easily be divided between the 2 owners.
c. If the things mixed are of different kind and quality, in the absence of a stipulation, each owner
acquires a right or interest in the mixture in proportion to the value of his material as in co-ownership.
2. Mixture caused by an owner in good faith or by chance:
a. Their rights shall first be governed by their stipulations.
b. If the things mixed are of the same kind and quality, there is no conflict of rights, and the mixture
can easily be divided between the 2 owners.
c. If the things mixed are of different kind and quality, in the absence of a stipulation, each owner
acquires a right or interest in the mixture in proportion to the value of his material as in co-ownership.
3. Mixture caused by an owner in bad faith:
The owner in bad faith not only forfeits the thing belonging to him but also becomes liable to pay
indemnity for the damages caused to the other owner.
4. Mixture by both owners in bad faith:
There is bad faith when the mixture is made with the knowledge and without the objection of the other
owner. Accordingly, their respective rights shall be determined as though both acted in good faith.
471
Rules:
1. Worker and owner of the materials in good faith:
The worker becomes the owner of the work/transformed thing but he must indemnify the owner of the
material for its value.
Exception:
If the material is more precious or of more value than the work/transformed thing, the owner of the
material may choose:
a. To appropriate the new thing to himself but must pay for the value of the work or labor, or
b. To demand indemnity for the material.
2. Worker in bad faith but the owner of the material in good faith:

113
 Takes place whenever the work of a person is done on the
material of another, and such material, as a consequence of the work
itself, undergoes a transformation

Adjuncti Mixture Specificati

on on
1. Involves May
Involves at least involve
at least 2 2 things one thing
things (or more)
but form
is
changed
2. Co- Accessory
Accessor ownersh follows
y follows ip the
the results principal
principal
3. Things Things The new
joined mixed object
retain or retains or
their confuse preserves
nature d may the nature
either of the
retain or original
lose object.
their
respecti
ve
natures

The owner of the material has the option either:

a. To appropriate the work to himself without paying the maker, OR
b. To demand the value of the material plus damages.
3. Owner of the materials in bad faith but the worker is in good faith:
The owner of the material is in bad faith when he does not object to the employment of his materials.
Accordingly, he shall lose his materials and shall have the obligation to indemnify the worker for the
damages he may have suffered
4. Both owners are in bad faith:
Their rights shall be determined as though both acted in good faith.

114
 b. Rules for determining the principal and
accessory

Tests to determine the principal:472

Adjunction:

In the order of application, the principal is that:

a. To which the accessory has been united as an ornament

or for its use or perfection473.
b. Of greater value, if they are of unequal values.
c. Of greater volume, if they are of an equal value.
d. Of greater merits taking into consideration all the
pertinent legal provisions applicable as well as the
comparative merits, utility and volume of their respective
things.

Mixture:

Strictly speaking, there is no accession in mixture since there

is neither a principal nor an accessory

Specification:

Labor is the principal.

472
In paintings and sculpture, writings, printed matter, engraving and lithographs, the board, metal stone,
canvas, paper or parchment shall be deemed the accessory thing.
473
rule of importance and purpose

115
V. Quieting of title474 to/interest in and removal/prevention of
cloud over title to/interest in real property

A. Requirements:

1. plaintiff must have a legal or equitable title to, or interest in the

real property which is the subject matter of the action;

2. there must be a cloud in such title;

3. such cloud must be due to some instrument, record, claim,

encumbrance or proceeding which is apparently valid but is in
truth invalid, ineffective, voidable or unenforceable, and is
prejudicial to the plaintiffs title; and

4. plaintiff must return to the defendant all benefits he may have

received from the latter, or reimburse him for expenses that may
have redounded to his benefit.

B. Distinction between quieting of title and removing/preventing a

cloud475

Action to quiet title, strictly considered, is substantially an

action to put an end to
vexatious litigation in respect to the property involved.

An action to remove a cloud is intended to procure the

cancellation, delivery of, release of an instrument, encumbrance, or
claim constituting a claim on plaintiffs title, and which may be used
to injure or vex him in the enjoyment of his title.
474
It is an equitable action in rem to determine the condition of the ownership or the rights to immovable
property, and remove doubts thereon.
The action to quiet title does not apply:
a) to questions involving interpretation of documents
b) to mere written or oral assertions of claims; EXCEPT:
i) if made in a legal proceeding
ii) if it is being asserted that the instrument or entry in plaintiffs favor is not what it purports to
be
c) to boundary disputes
d) to deeds by strangers to the title UNLESS purporting to convey the property of the plaintiff
e) to instruments invalid on their face
f) where the validity of the instrument involves pure questions of law
475
What is a cloud on title?
It is a semblance of title, either legal or equitable, or a claim or a right in real property, appearing in
some legal form which is, in fact, invalid or which would be inequitable to enforce

116
 In an action to quiet title, the plaintiff asserts his own estate
and declares generally that the defendant claims some estate in the
land, without defining it, and avers that the claim is without
foundation.

In a suit to remove a cloud, plaintiff not only declares his own

title, but also avers the source and nature of defendants claim,
points out its defect, and prays that it be declared void.

In an action to prevent a cloud, relief is granted if the

threatened or anticipated cloud is one which if it existed, would be
removed by suit to quiet title.

C. Prescription/non-prescription of action

1. plaintiff in possession imprescriptible

2. plaintiff not in possession 10 years476 or 30 years477

VI. Co-ownership478

A. Characteristics of co-ownership

1. In general

a. Plurality of subjects.
b. Unity of object or material indivision.
c. Recognition of ideal or intellectual shares of co-owners which
determine their rights and obligations.

2. Special rules:

a. Concept of condominium

(1)Condominium corporation

476
ordinary
477
extraordinary
478
the right of common dominion which two or more persons have in a spiritual part of a thing which is
not physically divided.
Co-ownership exists where the ownership of a thing physically undivided pertains to more than one
person.

117
 An interest in real property consisting of a separate interest in
a unit in a residential, industrial or commercial building and an
undivided interest in common, directly or indirectly, in the land on
which it is located and in other common areas of the building.

Any transfer or conveyance of a unit or an apartment, office or

store or other space therein, shall include transfer or conveyance of
the undivided interest in the common areas or, in a proper case, the
membership or shareholdings in the condominium corporation:
provided, however, that where the common areas in the
condominium project are held by the owners of separate units as co-
owners thereof, no condominium unit therein shall be conveyed or
transferred to persons other than Filipino citizens or corporations at
least 60% of the capital stock of which belong to Filipino citizens,
except in cases of hereditary succession.

(2)Interest in real property479

(3)Concept of common areas,

amendment

GENERAL RULE:

Common areas shall remain undivided, and there shall be no judicial

partition thereof:

EXCEPTIONS:

1. When the project has not been rebuilt or repaired substantially to

its state prior to its damage or destruction 3 years after damage
or destruction which rendered a material part thereof unfit for
use;
2. When damage or destruction has rendered or more of the units
untenantable and that the condominium owners holding more
than 30% interest in the common areas are opposed to restoration
of the projects;
3. When the project has been in existence for more than 50 years,
that it is obsolete and uneconomic, and the condominium owners
holding in aggregate more than 50% interest in the common areas
are opposed to restoration, remodeling or modernizing;
4. When the project or a material part thereof has been condemned

479
See (1) Condominium Corporation, supra

118
 or expropriated and the project is no longer viable, or that the
condominium owners holding in aggregate more than 70%
interest in the common areas are opposed to the continuation of
the condominium regime;
5. When conditions for partition by sale set forth in the declaration
of restrictions duly registered have been met.

(4) Documents to consider

Master deed

An enabling or master deed shall contain, among others, the

following:

(a) Description of the land on which the building or buildings and

improvements are or are to be located;

(b) Description of the building or buildings, stating the number of

stories and basements, the number of units and their accessories, if
any;

(c) Description of the common areas and facilities;

(d) A statement of the exact nature of the interest acquired or to be

acquired by the purchaser in the separate units and in the common
areas of the condominium project. Where title to or the appurtenant
interests in the common areas is or is to be held by a condominium
corporation, a statement to this effect shall be included;

(e) Statement of the purposes for which the building or buildings and
each of the units are intended or restricted as to use;

(f) A certificate of the registered owner of the property, if he is other

than those executing the master deed, as well as of all registered
holders of any lien or encumbrance on the property, that they
consent to the registration of the deed;

119
(g) The following plans shall be appended to the deed as integral
parts thereof:

(1) A survey plan of the land included in the project, unless a survey
plan of the same property had previously been filed in said office;

(2) A diagrammatic floor plan of the building or buildings in the

project, in sufficient detail to identify each unit, its relative location
and approximate dimensions;

(h) Any reasonable restriction not contrary to law, morals or public

policy regarding the right of any condominium owner to alienate or
dispose of his condominium.

The enabling or master deed may be amended or revoked upon

registration of an instrument executed by the registered owner or
owners of the property and consented to by all registered holders of
any lien or encumbrance on the land or building or portion thereof.480

Declaration of restrictions

The owner of a project shall, prior to the conveyance of any

condominium therein, register a declaration of restrictions relating
to such project, which restrictions shall constitute a lien upon each
condominium in the project, and shall insure to and bind all
condominium owners in the project. Such liens, unless otherwise
provided, may be enforced by any condominium owner in the project
or by the management body of such project. The Register of Deeds
shall enter and annotate the declaration of restrictions upon the
certificate of title covering the land included within the project, if the
land is patented or registered under the Land Registration or
Cadastral Acts.

The declaration of restrictions shall provide for the

management of the project by anyone of the following management
bodies: a condominium corporation, an association of the
condominium owners, a board of governors elected by condominium
owners, or a management agent elected by the owners or by the
board named in the declaration. It shall also provide for voting
majorities quorums, notices, meeting date, and other rules governing
such body or bodies.481
480
Sec. 4, R.A. 4726
481
Sec. 9, ibid

120
 Articles and by-laws

Any provision of the Corporation Law to the contrary

notwithstanding, the by-laws of a condominium corporation shall
provide that a stockholder or member shall not be entitled to
demand payment of his shares or interest in those cases where such
right is granted under the Corporation Law unless he consents to sell
his separate interest in the project to the corporation or to any
purchaser of the corporation's choice who shall also buy from the
corporation the dissenting member or stockholder's interest. In case
of disagreement as to price, the procedure set forth in the
appropriate provision of the Corporation Law for valuation of shares
shall be followed. The corporation shall have two years within which
to pay for the shares or furnish a purchaser of its choice from the
time of award. All expenses incurred in the liquidation of the interest
of the dissenting member or stockholder shall be borne by him.482

b. Rights and obligations of condominium

owner

(1) Contributions/Dues

For reasonable assessments to meet authorized expenditures,

each condominium unit to be assessed separately for its share of
such expenses in proportion (unless otherwise provided) to its
owners fractional interest in any common areas.483

(2) PD 957 and RA 6552

Under P.D. 957

A. Obligations and Rights of the Owner/ Developer

1) Mortgage of Subdivision Lot or Condominium Unit

a) Requirements:

Owner or developer must:

i. secure prior written approval from the Authority

(HLURB);
482
Sec. 17, ibid
483
Sec. 9 (d), ibid

121
 ii. show that the proceeds of the mortgage loan inures to
the development of the condominium or subdivision project
iii. cause the determination of the loan value of each lot
or unit covered by the mortgage; and
iv. notify the buyer, if any.

b) Buyers Option: To pay the mortgage loan of his lot or unit

to acquire title thereof from the mortgage.484

2) Advertisement of the Subdivision or Condominium

a) Contents: The owner must advertise only:

i) real facts, and

ii) in a manner that does not mislead or deceive the
public.485

b) Improvements, facilities, etc. stated in the advertisement

i) Nature: Constitutes sales warranties486

ii) Time of Completion:

(a) Sales On the Effectivity of this Decree:

Within one year from the issuance of the license of

subdivision or condominium project, or other period fixed by the
Authority (HLURB).487

(b) Sales Prior to this Decree: Within two years from the
effectivity of this Decree, except:

(i) if extended by the Authority (HLURB),

(ii) if adequate performance bond in accordance
with Sec. 6 of this Decree is filed.488

3) Alteration of the Approved Subdivision Plan and/or of

Representations in Advertisement:

484
Sec. 18
485
Sec. 19
486
ibid
487
Sec. 20
488
Sec. 21

122
 Requirements: The owner or developer must:

(a) secure approval of the Authority (HLURB), and

(b) written conformity or consent of the duly organized
homeowners association, or in its absence, by the
majority of the lot buyers in the subdivision.489

4) Non-Forfeiture of Payments by the Owner or Developer

a) If the failure of the subdivision or condominium buyer to

pay installment is caused by the failure of the owner or
developer to develop the subdivision or condominium
according to the approved plan and within time limit, the
buyer shall be reimbursed with legal interest and
amortization interest, but excluding delinquency interest.490
b) If such failure is due to other causes, Republic Act No.
6552 which took effect on August 26, 1976, but prior to
such date, the buyer is entitled to refund based on
installments paid after the effectivity of the law in the
absence of contrary stipulation. 491

5) Issuance of Title to the Buyer by the Owner or Developer

a) Time: Upon the full payment of the lot or unit.

b) Chargeable Fee: The owner or developer can only charge
from the buyer fee for the registration of the Deed of Sale to
the Register of Deeds.
c) If the lot or unit is mortgaged, the owner or developer
should redeem the lot or unit within six months from the
issuance of the title.

6) Payment of Realty Tax and Other Charges on the Subdivision

or Condominium:

Rules on:

a) Real Taxes:

489
Sec. 22
490
Sec. 23
491
Sec. 24

123
 1) Paid by owner or developer unless title is passed to
the buyer.
2) Buyer who actually occupied and possessed a lot or
unit is liable for taxes to the owner or developer from
the year following such occupation or possession.492

b) Other Charges:

1) It cannot be collected by the owner or developer.

2) It can be collected only by a properly organized
homeowners association with the consent of majority
of lot or unit buyers actually residing in the
subdivision or condominium project.493

7) Access to Public Offices in the Subdivisions:

No owner or developer shall deny any person
free access to any government office or
public establishment located within the
subdivision or which may be reached only by
passing through the subdivision.494

8) Right of Way to Public Road

It should be secured by the owner and
developer of a subdivision without access to
any public road or street. Such way must be
developed and maintained in accordance with
the requirement set forth by the
government.495

9) Organization of Homeowner Association

a) Formation: Initiated by the owner or developer.

b) Members: buyers and residents of the project
c) Purpose: for the promotion and protection of mutual
interest of the buyers and residents, and for the community
development496

492
Sec. 26
493
Sec. 27
494
Sec. 28
495
Sec. 29
496
Sec. 30

124
 10) Mandatory Donations of Roads and Open Spaces to Local
Government497

Under R.A. 6552

Where the buyer has paid at least two years of installments,

the buyer is entitled to the following rights in case he defaults in the
payment of succeeding installments:

(a) To pay, without additional interest, the unpaid installments due

within the total grace period earned by him which is hereby fixed at
the rate of one month grace period for every one year of installment
payments made: Provided, That this right shall be exercised by the
buyer only once in every five years of the life of the contract and its
extensions, if any.

(b) If the contract is canceled, the seller shall refund to the buyer the
cash surrender value of the payments on the property equivalent to
fifty per cent of the total payments made, and, after five years of
installments, an additional five per cent every year but not to exceed
ninety per cent of the total payments made: Provided, That the
actual cancellation of the contract shall take place after thirty days
from receipt by the buyer of the notice of cancellation or the demand
for rescission of the contract by a notarial act and upon full payment
of the cash surrender value to the buyer. Down payments, deposits or
options on the contract shall be included in the computation of the
total number of installment payments made.498

In case where less than two years of installments were paid,

the seller shall give the buyer a grace period of not less than sixty
days from the date the installment became due.
If the buyer fails to pay the installments due at the expiration of the
grace period, the seller may cancel the contract after thirty days
from receipt by the buyer of the notice of cancellation or the demand
for rescission of the contract by a notarial act.499

Under Section 3 and 4, the buyer shall have the right to sell his
rights or assign the same to another person or to reinstate the
contract by updating the account during the grace period and before

497
P. D. No. 1216, amending Sec. 31 of this Decree
498
Sec. 3
499
Sec. 4

125
actual cancellation of the contract. The deed of sale or assignment
shall be done by notarial act.500

The buyer shall have the right to pay in advance any

installment or the full unpaid balance of the purchase price any time
without interest and to have such full payment of the purchase price
annotated in the certificate of title covering the property.501

Any stipulation in any contract hereafter entered into contrary

to the provisions of Sections 3, 4, 5 and 6, shall be null and void.502

c. Grounds for partition of common areas, or

dissolution of the condominium

1. Voluntary Dissolution503

Grounds:

i. Three (3) years after damage or destruction to the projects

which renders material part thereof unfit for its use prior
thereto, the project has not been rebuilt or repaired
substantially to its state prior to its damage or destruction;

ii. Damage or destruction to the project has rendered one-half or

more of its units thereof untenantable and the owners holding
in aggregate more than 30% interest in common areas are
opposed to repair or restoration of the project;

iii. The project has been in existence in excess of 50 years, that it

is obsolete and uneconomic, and that owners holding in
aggregate more than 30% interest in common areas are
opposed to repair or restoration of the projects;

iv. The project or material part thereof has been condemned or

expropriated and that the project is no longer viable, or that
the owners holding in aggregate more than 70% interest in
common areas are opposed to the continuation of the
condominium regime;

500
Sec. 5
501
Sec. 6
502
Sec. 7
503
Action for dissolution under Rule 104 of the Rules of Court.

126
 v. Conditions for partition under the declaration of restrictions
have been met.504

2. Involuntary Dissolution

Grounds: those provided for by law on

corporations. 505

B. Sources of co-ownership

a. The Law as in party walls, fences and in the legal conjugal

partnership.

b. Contracts.

c. Succession when a person dies intestate, leaving his properties

undivided to several heirs, who become co-owners of the inheritance.

d. Fortuitous event or chance as in cases of commixtion and

confusion caused by accident or chance, and of hidden treasure
accidentally discovered by a stranger on the land of another.

e. Occupancy when 2 persons catch a wild beast or gather forest

products.

C. Rights of co-owners

1. Distinction between right to property owned in

common and full ownership over his/her ideal
share

Rights of each co-owner as to the thing owned in common:

a) To use the thing owned in common506

b) To share in the benefits and charges in proportion to the interest
of each.507

504
Sec. 8, P.D. 4726
505
Sec. 12, ibid
506
Limitations:
i. use according to the purpose for which it was intended
ii. interest of the co-ownership must not be prejudiced
iii. other co-owners must not be prevented from using it according to their own rights
507
Any stipulation to the contrary is void.

127
c) To the benefits of prescription: prescription by one co-owner
benefits all.
d) Repairs and taxes: to compel the others to share in the expenses
of preservation even if incurred without prior notice.508
e) Alterations: to oppose alterations made without the consent of all,
even if beneficial.509
f) To protest against seriously prejudicial decisions of the majority
g) Legal redemption: to be exercised within 30 days from written
notice of sale of an undivided share of another co-owner to a
stranger
h) To defend the co-ownerships interest in court
i) To demand partition at any time

Rights as to the ideal share of each co-owner:

a) Each has full ownership of his part and of his share of the fruits
and benefits
b) Right to substitute another person its enjoyment, except when
personal rights are involved
c) Right to alienate, dispose or encumber
d) Right to renounce part of his interest to reimburse necessary
expenses incurred by another co-owner
e) Transactions entered into by each co-owner only affect his ideal
share.

2. Right to oppose acts of alteration510

To oppose alterations made without the consent of all, even if

beneficial.

3. Right to partition511

GENERAL RULE:

508
The co-owner being compelled may exempt himself from the payment of taxes and expenses by
renouncing his share equivalent to such taxes and expenses. The value of the property at the time of the
renunciation will be the basis of the portion to be renounced.
509
Alteration is an act by virtue of which a co-owner changes the thing from the state in which the others
believe it should remain, or withdraws it from the use to which they desire it to be intended.
Expenses to improve or embellish are decided by the majority
510
Alteration is an act by virtue of which a co-owner changes the thing from the state in which the others
believe it should remain, or withdraws it from the use to which they desire it to be intended.
Expenses to improve or embellish are decided by the majority
511
The division between 2 or more persons of real or personal property which they own in common so
that each may enjoy and possess his sole estate to the exclusion of and without interference from others

128
 Partition is demandable by any of the co-owners as a matter of
right at any time.

EXCEPTIONS:

i. When there is a stipulation against it; but not to exceed 10 years.

ii. When the condition of indivision is imposed by the donor or
testator; but not to exceed 20 years.
iii. When the legal nature of the community prevents partition.
iv. When partition would render the thing unserviceable.
v. When partition is prohibited by law
vi. When another co-owner has possessed the property as exclusive
owner for a period sufficient to acquire it by prescription.

4. Right to contributions for expenses512

Each co-owner shall have a right to compel the other co-

owners to contribute to the expenses of preservation of the thing or
right owned in common and to the taxes in proportion to their
interest therein.

5. Waiver513

512
necessary expenses, taxes
Expenses of preservation (necessary expenses) include all those which, if not made, would endanger
the existence of the thing or reduce its value or productivity. They do not imply an improvement or
increase.
There is no other remedy available against the co-owner who refuses to pay his share in the expenses of
preservation except an action to compel him to contribute such share.
Failure to contribute does not amount to a renunciation of any portion of share in the co-ownership.
The co-owner in default cannot be compelled to renounce his share therein. Renunciation is a voluntary
and free act.
513
No such waiver shall be made if it is prejudicial to the co-ownership
Rules on renunciation:
a.Total or partial.
b.Expressly made a tacit renunciation cannot produce any effect.
c.The renunciation is in reality a case of dacion en pago; the debt of the co-owner consisting of his
share in the expenses of preservation and taxes, is paid, not in money, but in an interest in property.
d.Since the renunciation refers to a portion equivalent in value to the share of the renouncing co-owner
in an existing debt, it is only logical that the other co-owners, who must should the debt of the renouncer
in exchange for the portion being renounced, should consent thereto.
e.Renunciation refers to existing debts and NOT to future expenses.
f.Renunciation is a free act; a co-owner may not be compelled to renounce.
g.However, waiver is not allowed if it is prejudicial to the coownership.

129
 Any one of the co-owners may exempt himself from this
obligation by renouncing so much of his undivided interest as may be
equivalent to his share of the expenses and taxes.

6. Right to redemption of co-owners share

Legal redemption: to be exercised within 30 days from written

notice of sale of an undivided share of another co-owner to a
stranger

D. Termination/extinguishment514

It has for its purpose the separation, division and assignment

of the thing held in common among those to whom it may belong; the
thing itself may be divided, or its value.

After partition, the portion belonging to each co-owner has

been identified and localized, so that co-ownership, in its real sense,
no longer exists.

1. Effects of partition

Partition shall not prejudice third persons who do not intervene

in the partition

After partition, there should be mutual accounting of benefits,

reimbursements, payment of damages due to negligence or fraud,
liability for defects of title and quality of portion assigned to each.515

Part allotted to a co-owner at partition will be deemed to be

possessed by such co-owner from the time the co- ownership
commenced.
Heir is exclusive owner of property adjudicated to him.

Co-owners reciprocally bound to each other for warranty of

title and quality of part given to each (hidden defect) after partition.

514
No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time
the partition of the thing owned in common.
515
See Art. 500

130
 Obligation of warranty is proportionate to respective
hereditary shares; insolvency of one makes the others liable subject
to reimbursement (joint liability).516

Each former co-owner is deemed to have had exclusive

possession of the part allotted to him for the entire period during
which the co-possession lasted;

Partition confers upon each the exclusive title over his

respective share.

2. Rights against individual co-owners in case of

partition517

3. Partition in case co-owners cannot agree

If the co-owners cannot agree, the thing shall be sold and its
proceeds distributed to the co-owners.518

VII. Possession519

A. Characteristics

Possession is characterized by two (2) relations:

1. The possessors relation to the property itself; and

2. the possessors relation to the world.

B. Acquisition of Possession
516
Under Art. 1093
517
See Effects of 1. partition, supra
518
Art. 498
The sale of the property held in common referred to in the above article is resorted to when (1) the
right to partition the property among the co-owners is invoked by any of them but because of the nature
of the property, it cannot be subdivided or its subdivision [See Article 495 of the New Civil Code] would
prejudice the interests of the co-owners (See Section 5 of Rule 69 of the Revised Rules of Court) and (2)
the co-owners are not in agreement as to who among them shall be allotted or assigned the entire property
upon reimbursement of the shares of the other co-owners (Marina Reyes, et al. vs. Hon. Alfredo
Concepcion, et al., G.R. No. 56550, Oct. 1, 1990
The sale may be public or private, and the purchaser may be a co-owner or a third person.
519
The holding of a thing or enjoyment of a right

131
 Possession is acquired by the material occupation of a thing or
the exercise of a right, or by the fact that it is subject to the action of
our will, or by the proper acts and legal formalities established for
acquiring such right.520

C. Effects of Possession

1. Possessor in Good Faith

A possessor in good faith is entitled to the fruits received

before the possession is legally interrupted.

Natural and industrial fruits are considered received from the

time they are gathered or severed.

Civil fruits are deemed to accrue daily and belong to the

possessor in good faith in that proportion.521

He is deemed a possessor in good faith who is not aware that

there exists in his title or mode of acquisition any flaw which
invalidates it.

He is deemed a possessor in bad faith who possesses in any

case contrary to the foregoing.

Mistake upon a doubtful or difficult question of law may be the

basis of good faith.522

Good faith is always presumed, and upon him who alleges bad
faith on the part of a possessor rests the burden of proof. 523

a. Right to pending fruits

If at the time the good faith ceases, there should be any

natural or industrial fruits, the possessor shall have a right to a part
of the expenses of cultivation, and to a part of the net harvest, both
in proportion to the time of the possession.

520
Art. 531
521
Art. 544
522
Art. 526
523
Art. 527

132
 The charges shall be divided on the same basis by the two
possessors.

The owner of the thing may, should he so desire, give the

possessor in good faith the right to finish the cultivation and
gathering of the growing fruits, as an indemnity for his part of the
expenses of cultivation and the net proceeds; the possessor in good
faith who for any reason whatever should refuse to accept this
concession, shall lose the right to be indemnified in any other
manner.524

b. Right to be reimbursed

(1)Necessary and useful expenses

Necessary expenses shall be refunded to every possessor; but

only the possessor in good faith may retain the thing until he has
been reimbursed therefor.

Useful expenses shall be refunded only to the possessor in

good faith with the same right of retention, the person who has
defeated him in the possession having the option of refunding the
amount of the expenses or of paying the increase in value which the
thing may have acquired by reason thereof.525

If the useful improvements can be removed without damage to

the principal thing, the possessor in good faith may remove them,
unless the person who recovers the possession exercises the option
under paragraph 2 of the preceding article.

(2)Expenses for pure luxury

Expenses for pure luxury or mere pleasure shall not be

refunded to the possessor in good faith; but he may remove the
ornaments with which he 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.526

524
Art. 545
525
Art. 546
526
Art. 548

133
 2. Possessor in Bad Faith

He who builds, plants or sows in bad faith on the land of

another, loses what is built, planted or sown without right to
indemnity.527

The possessor in bad faith shall reimburse the fruits received

and those which the legitimate possessor could have received, and
shall have a right only to the expenses mentioned in paragraph 1 of
article 546528 and in article 443. 529 The expenses incurred in
improvements for pure luxury or mere pleasure shall not be refunded
to the possessor in bad faith, but he may remove the objects for
which such expenses have been incurred, provided that the thing
suffers no injury thereby, and that the lawful possessor does not
prefer to retain them by paying the value they may have at the time
he enters into possession.530

A possessor in good faith shall not be liable for the

deterioration or loss of the thing possessed, except in cases in which
it is proved that he has acted with fraudulent intent or negligence,
after the judicial summons.531

A possessor in bad faith shall be liable for deterioration or loss

in every case, even if caused by a fortuitous event.

D. Loss or Unlawful Deprivation of a Movable

The possession of movable property acquired in good faith is

equivalent to a title. Nevertheless, one who has lost any movable or
has been unlawfully deprived thereof, may recover it from the person
in possession of the same.532

If the possessor of a movable lost or which the owner has been

unlawfully deprived, has acquired it in good faith at a public sale, the
owner cannot obtain its return without reimbursing the price paid
therefor.

527
Art. 449
528
supra
529
See Reference
530
Art. 549
531
Art. 552
532
Art. 559

134
 Subject to the provisions of this Title, where goods are sold by
a person who is not the owner thereof, and who does not sell them
under authority or with the consent of the owner, the buyer acquires
no better title to the goods than the seller had, unless the owner of
the goods is by his conduct precluded from denying the seller's
authority to sell.

Nothing in this Title, however, shall affect:

xxx
(3) Purchases made in a merchant's store, or in fairs, or
markets, in accordance with the Code of Commerce and special
laws533

1. Period to Recover

The ownership of movables prescribes through uninterrupted

possession for four years in good faith.

The ownership of personal property also prescribes through

uninterrupted possession for eight years, without need of any other
condition.

With regard to the right of the owner to recover personal

property lost or of which he has been illegally deprived, as well as
with respect to movables acquired in a public sale, fair, or market, or
from a merchant's store the provisions of articles 559 and 1505 of
this Code shall be observed.534

Movables possessed through a crime can never be acquired

through prescription by the offender.535

Ownership and other real rights over immovable property are

acquired by ordinary prescription through possession of ten years.536

Actions to recover movables shall prescribe eight years from

the time the possession thereof is lost, unless the possessor has
acquired the ownership by prescription for a less period, according

533
Art. 1505 (3)
534
Art. 1132
535
Art. 1133
536
Art. 1134

135
to articles 1132, and without prejudice to the provisions of articles
559, 1505, and 1133.537
2. Finder of Lost Movable

Whoever finds a movable, which is not treasure, must return it

to its previous possessor. If the latter is unknown, the finder shall
immediately deposit it with the mayor of the city or municipality
where the finding has taken place.

The finding shall be publicly announced by the mayor for two

consecutive weeks in the way he deems best.

If the movable cannot be kept without deterioration, or without

expenses which considerably diminish its value, it shall be sold at
public auction eight days after the publication.

Six months from the publication having elapsed without the

owner having appeared, the thing found, or its value, shall be
awarded to the finder. The finder and the owner shall be obliged, as
the case may be, to reimburse the expenses.538

If the owner should appear in time, he shall be obliged to pay,

as a reward to the finder, one-tenth of the sum or of the price of the
thing found.539
3. Distinguished from voidable title

Where the seller of goods has a voidable title thereto, but his
title has not been avoided at the time of the sale, the buyer acquires
a good title to the goods, provided he buys them in good faith, for
value, and without notice of the seller's defect of title. 540

E. In concept of owner, holder, in ones own name, in name of

another541

a) In the concept of owner possessor of the thing or right , by his

actions, is considered or is believed by other people as the owner,
537
Art. 1140
538
Art. 719
539
Art. 720
540
Art. 1506
541
None of these holders assert a claim of ownership in himself over the thing but they may be considered
as possessors in the concept of owner, or under claim of ownership, with respect to the right they
respectively exercise over the thing.

136
 regardless of the good or bad faith of the possessor

b) In the concept of holder possessor holds it merely to keep or

enjoy it, the ownership pertaining to another person; possessor
acknowledges in another a superior right which he believes to be
ownership.

c) In ones own name where possessor claims the thing for

himself

d) In the name of another for whom the thing is held by the

possessor

F. Rights of the possessor

1. Right to be respected in his possession; if disturbed protected

by means established by law; spoliation

2. Possession acquired and enjoyed in concept of owner can serve

as title for acquisitive prescription

a. Possession has to be in concept of owner, public, peaceful

and uninterrupted
b. Title short of ownership

3. Person in concept of owner has in his favor the legal

presumption of just title542

4. Possession of real property presumes that movables are

included

5. Co-possessors deemed to have exclusively possessed part

which may be allotted to him; interruption in whole or in part
shall be to the prejudice of all

6. Possessor in good faith entitled to fruits received before

possession is legally interrupted543

7. Possessor in good faith entitled to part of net harvest and part

of expenses of cultivation if there are natural or industrial

542
prima facie
543
natural and industrial gathered or severed; civil accrue daily

137
 fruits544; owner has option to require possessor to finish
cultivation and gathering of fruits and give net proceeds as
indemnity for his part of expenses; if possessor in good faith
refuses barred from indemnification in other manner

8. Possessor has right to be indemnified for necessary expenses

whether in good faith or in bad faith; Possessor in good faith
has right of retention over thing unless necessary expenses
paid by owner

9. Possessor in good faith has right to be reimbursed for useful

expenses with right of retention; owner has option of paying
expenses or paying the increase in value of property which
thing acquired by reason of useful expenses
10. Possessor in good faith may remove improvements if can
be done w/o damage to principal thing- unless owner exercises
option of paying; possessor in bad faith not entitled.

11. Possessor in good faith and bad faith may not be entitled
to payment for luxurious expense but may remove them
provided principal is not injured provided owner does not
refund the amount expended

12. Improvements caused by nature or time to inure to the

benefit of person who has succeeded in recovering possession

13. Wild animals possessed while in ones control;

domesticated possessed if they retain habit of returning back
home

14. One who recovers, according to law, possession unjustly

lost is deemed to have enjoyed it w/o interruption

G. Loss/termination

A possessor may lose his possession:

544
proportionate to time of possession

138
(1) By the abandonment of the thing;545

(2) By an assignment546 made to another either by onerous or

gratuitous title;

(3) By the destruction or total loss of the thing 547, or because it goes
out of commerce;

(4) By the possession of another, subject to the provisions of article

537548, if the new possession has lasted longer than one year 549. But
the real right of possession is not lost till after the lapse of ten
years.550
(5) by recovery by lawful owner or possessor551

VIII. Usufruct

A. Characteristics

1. it is a real right;
2. it is of temporary duration;
3. it is transmissible;
4. it may be constituted on real or personal property, consummable
or non consummable, tangible or intangible, the ownership of
which is vested on another

B. Classification

1. As to whether or not impairment of object is allowed:

545
the voluntary renunciation of all rights which a person has over a thing thereby allowing a third person
to acquire ownership or possession thereof by means of occupancy;
By voluntary abandonment, thing becomes without an owner or possessor and is converted into res
nullius and may thus be acquired by a third person by occupation;
Abandonment which converts the thing into res nullius, ownership of which may be acquired by
occupation can hardly apply to land, as to which said mode of acquisition is not available
546
the complete transmission of the thing or right to another by any lawful manner;
-the effect is that he who was the owner or possessor is no longer so
547
a thing is lost when it perishes, or goes out of commerce, or disappears in such a way that its existence
is unknown, or cannot be recovered
548
see Reference
549
this refers to possession de facto and not de jure
550
Art. 555
551
recovered in an reivindicatory action or in an action to recover the better right of possession

139
 - normal;
- abnormal

2. As to origin:

- legal;
- voluntary;
- mixed

3. As to number of usufructuaries:

- simple;
- multiple which may either be :
- simultaneous;
- successive

4. As to terms or conditions:

- pure;
- with a term or period;
- conditional

5. As to quality or kind of object:

- of things;
- of rights
6. As to quantity or extent of object

- total;
- partial

7. as to extent of owners patrimony;

- universal;
- particular

C. Rights and obligations of usufructuary

Rights of usufructuary:

1. Right to civil, natural & industrial fruits of property

2. Right to hidden treasure as stranger

140
3. Right to transfer usufructuary rights gratuitous or onerous; but
is co-terminus with term of usufruct; fruits proportionate at duration
of usufruct; but cant do acts of ownership such as alienation or
conveyance except when property is:
a. consumable
b. intended for sale
c. appraised when delivered; if not appraised & consumable
return same quality552

4. Right not exempt from execution and can be sold at public

auction by owner

5. Naked owner still have rights but w/o prejudice to usufructuary;

may still exercise act of ownership bring action to preserve

6. Right to fruits growing at time usufruct begins; growing fruits at

termination of usufruct belongs to owner

7. Right to necessary expenses from cultivation at end of usufruct

8. Right to enjoy accessions & servitudes in its favor & all benefits
inherent therein

9. Right to make use of dead trunks of fruit bearing trees & shrubs
or those uprooted/cut by accident but obliged to plant anew

10. Right of usufructuary of woodland ordinary cutting as owner

does habitually or custom of place; cannot cut down trees unless it is
for the restoration of improvement of things in usufruct must notify
owner first

11. Right to leave dead, uprooted trees at the disposal of owner with
right to demand that owner should clear & remove them if caused
by calamity or extraordinary event impossible to replace them

12. Right to oblige owner to give authority & furnish him proofs if
usufruct is extended to recover real property or real right

13. Right to necessary expenses

552
mutuum

141
14. Right to introduce useful & luxurious expenses but with no
obligation of reimbursement on part of owner; may remove
improvement if can be done w/o damage

15. Right to set-off improvements against damages he made against

the property

16. Right to administer when property is co-owned; if co-ownership

cease usufruct of part allotted to co-owner belongs to usufructuary
not affected

17. Right to demand the increase in value of property if owner did

not spend for extraordinary repairs when urgent & necessary for
preservation of thing

Obligations of usufructuary553

1. Pay expenses to 3rd persons for cultivation & production at

beginning of usufruct; whose who have right to fruits should
reimburse expenses incurred

2. Generally, usufructuary has no liability when due to wear & tear,

thing deteriorates, obliged to return in that state; except when there
is fraud or negligence, then he shall be liable

3. Before entering into usufructuary:

a) Notice of inventory of property (appraisal of movables &

description)
b) Posting of security554

4. Take care of property as a good father of family

5. Obliged to make ordinary repairs wear & tear due to natural use
of thing and are indispensable for preservation; owner may make
them at expense of usufructuary during existence of usufruct

6. Obliged to make expenses due to his fault; cannot escape by

renouncing usufruct

553
Arts. 583-602
554
1. not applicable to parents who are usufructuary of children except when 2nd marriage contracted
2. excused allowed by owner, not required by law or no one will be injured

142
7. Pay legal interest from extraordinary expenses made by owner

8. Payment of expenses, charges & taxes affecting fruits

9. Payment of interest on amount paid by owner charges on capital

10. Obliged to notify owner of act of 3rd person prejudicial to rights

of ownership he is liable if he does not do so for damages as if it
was caused through his own fault
11. Expenses, cost & liabilities in suits brought with regard to
usufructuary borne by usufructuary

D. Rights of the owner

1. Alienate thing
2. Cant alter form or substance
3. Cant do anything prejudicial to usufructuary
4. Construct any works Y make any improvement provided it does
not diminish value or usufruct or prejudice right of usufructuary

E. Extinction/termination

1. Death of the usufructuary;

2. Expiration of period or fulfillment of condition;
3. Merger;
4. Renunciation;
5. Loss of the thing;
6. Termination of right of owner;
7. Prescription;
8. Other causes such as emancipation of the child555

IX. Easements

An easement or servitude is an encumbrance imposed upon an

immovable for the benefit of another immovable belonging to a
different owner.

555
Art. 603
A usufruct is not extinguished by bad use of the thing in usufruct

143
 The immovable in favor of which the easement is established is
called the dominant estate; that which is subject thereto, the
servient estate.556

Easements may be continuous or discontinuous, apparent or

nonapparent.

Continuous easements are those the use of which is or may be

incessant, without the intervention of any act of man.

Discontinuous easements are those which are used at intervals

and depend upon the acts of man.

Apparent easements are those which are made known and are
continually kept in view by external signs that reveal the use and
enjoyment of the same.

Nonapparent easements are those which show no external

indication of their existence.557
Easements are also positive or negative.

A positive easement is one which imposes upon the owner of

the servient estate the obligation of allowing something to be done
or of doing it himself, and a negative easement, that which prohibits
the owner of the servient estate from doing something which he
could lawfully do if the easement did not exist.558

A. Characteristics

a) It is a real right but will affect third persons only when duly
registered
b) It is enjoyed over another immovable, never on ones own
property
c) It involves two neighboring estates (in case of real easements)
d) It is inseparable from the estate to which it is attached, and,
therefore, cannot be alienated independently of the estate
e) It is indivisible for it is not affected by the division of the estate
between two or more persons
f) It is a right limited by the needs of the dominant owner or estate,
without possession
556
Art. 613
557
Art. 615
558
Art. 616

144
g) It cannot consist in the doing of an act unless the act is accessory
in relation to a real easement
h) It is a limitation on the servient owners rights of ownership for
the benefit of the dominant owner; and, therefore, it is not
presumed.

B. Classification

1. Legal easements559

a. Right of way560

The right granted to the owner of an estate which is

surrounded by other estates belonging to other persons and without
an adequate outlet to a public highway to demand that he be allowed
a passageway throughout such neighboring estates after payment of
proper indemnity.

2. Voluntary easements561

Constituted by the will of the parties or of a testator.

The owner possessing capacity to encumber property may

constitute voluntary servitude. If there are various owners, all must
consent; but consent once given is not revocable.

a. Effect of Zoning ordinance

The existence of a zoning ordinance is immaterial. The

ordinance might be repealed at any time; and if so repealed, this

559
they are easements imposed by law and which have for their object either public use or the interest of
private persons
560
Requisites:
1. Claimant must be an owner of enclosed immovable or one with real right
2. There must be no adequate outlet to a public highway
3. Right of way must be absolutely necessary
4. Isolation must not be due to the claimants own act
5. Easement must be established at the point least prejudicial to the servient estate
6. Payment of proper indemnity
Special cause of extinction: the opening of a public road, or joining the dominant tenement to another
with exit on a public road.
The extinction in NOT automatic. There must be a demand for extinction coupled with tender of
indemnity by the servient owner.
561
Art. 688; see Reference

145
prohibition would not be enforceable against new purchasers of the
land, who may be ignorant thereof.562

C. Modes of Acquiring Easements

1. Compulsory easements

Continuous and apparent easements are acquired either by

virtue of a title or by prescription of ten years.563

In order to acquire by prescription the easements referred to

in the preceding article, the time of possession shall be computed
thus: in positive easements, from the day on which the owner of the
dominant estate, or the person who may have made use of the
easement, commenced to exercise it upon the servient estate; and in
negative easements, from the day on which the owner of the
dominant estate forbade, by an instrument acknowledged before a
notary public, the owner of the servient estate, from executing an act
which would be lawful without the easement.564

Continuous nonapparent easements, and discontinuous ones,

whether apparent or not, may be acquired only by virtue of a title. 565

The absence of a document or proof showing the origin of an

easement which cannot be acquired by prescription may be cured by
a deed of recognition by the owner of the servient estate or by a final
judgment.566

The existence of an apparent sign of easement between two

estates, established or maintained by the owner of both, shall be
considered, should either of them be alienated, as a title in order
that the easement may continue actively and passively, unless, at the
time the ownership of the two estates is divided, the contrary should
be provided in the title of conveyance of either of them, or the sign
aforesaid should be removed before the execution of the deed. This

562
see In re: Petition for cancellation of condition annotated on Transfer certificate of title no. 54417,
Quezon city, Dra. Rafaela v. Trias, vs. Gregorio Araneta, Inc., G.R. No. L-20786, October 30, 1965
563
Art. 620
564
Art. 621
565
Art. 622
566
Art. 623

146
provision shall also apply in case of the division of a thing owned in
common by two or more persons.567

2. Easement of light and view

When the distances in article 670568 are not observed, the

owner of a wall which is not party wall, adjoining a tenement or
piece of land belonging to another, can make in it openings to admit
light at the height of the ceiling joints or immediately under the
ceiling, and of the size of thirty centimeters square, and, in every
case, with an iron grating imbedded in the wall and with a wire
screen.
Nevertheless, the owner of the tenement or property adjoining
the wall in which the openings are made can close them should he
acquire part-ownership thereof, if there be no stipulation to the
contrary.

He can also obstruct them by constructing a building on his

land or by raising a wall thereon contiguous to that having such
openings, unless an easement of light has been acquired.569

No windows, apertures, balconies, or other similar projections

which afford a direct view upon or towards an adjoining land or
tenement can be made, without leaving a distance of two meters
between the wall in which they are made and such contiguous
property.

Neither can side or oblique views upon or towards such

conterminous property be had, unless there be a distance of sixty
centimeters.

The nonobservance of these distances does not give rise to

prescription.570

The distance referred to in the preceding article shall be

measured in cases of direct views from the outer line of the wall
when the openings do not project, from the outer line of the latter

567
Art. 624
568
See Reference
569
Art. 669
570
Art. 670

147
when they do, and in cases of oblique view from the dividing line
between the two properties.571

The provisions of article 670572 are not applicable to buildings

separated by a public way or alley, which is not less than three
meters wide, subject to special regulations and local ordinances.573

Whenever by any title a right has been acquired to have direct

views, balconies or belvederes overlooking an adjoining property, the
owner of the servient estate cannot build thereon at less than a
distance of three meters to be measured in the manner provided in
article 671.574 Any stipulation permitting distances less than those
prescribed in article 670 is void.575

X. Nuisance

A nuisance is any act, omission, establishment, business,

condition of property, or anything else which:

(1) Injures or endangers the health or safety of others; or

(2) Annoys or offends the senses; or
(3) Shocks, defies or disregards decency or morality; or
(4) Obstructs or interferes with the free passage of any public
highway or street, or any body of water; or
(5) Hinders or impairs the use of property.576

XI. Action to Quiet Title

Whenever there is a cloud on title to real property or any

interest therein, by reason of any instrument, record, claim,
encumbrance or proceeding which is apparently valid or effective
but is in truth and in fact invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title, an action may be
brought to remove such cloud or to quiet the title.

571
Art. 671
572
supra
573
Art. 672
574
supra
575
Art. 673
576
Art. 694

148
 An action may also be brought to prevent a cloud from being
cast upon title to real property or any interest therein.577
The plaintiff must have legal or equitable title to, or interest in
the real property which is the subject matter of the action. He need
not be in possession of said property.578

There may also be an action to quiet title or remove a cloud

therefrom when the contract, instrument or other obligation has
been extinguished or has terminated, or has been barred by
extinctive prescription.579

The plaintiff must return to the defendant all benefits he may

have received from the latter, or reimburse him for expenses that
may have redounded to the plaintiff's benefit.580

The principles of the general law on the quieting of title are

hereby adopted insofar as they are not in conflict with this Code.581

XII. Modes of Acquiring Ownership

Ownership is acquired by occupation and by intellectual

creation.

Ownership and other real rights over property are acquired

and transmitted by law, by donation, by testate and intestate
succession, and in consequence of certain contracts, by tradition.

They may also be acquired by means of prescription.582

A. Occupation

Things appropriable by nature which are without an owner,

such as animals that are the object of hunting and fishing, hidden
treasure and abandoned movables, are acquired by occupation. 583

B. Donation
577
Art. 476
578
Art. 477
579
Art. 478
580
Art. 479
581
Art. 480
582
Art. 712
583
Art. 713

149
 1. Definition

Donation is an act of liberality whereby a person disposes

gratuitously of a thing or right in favor of another, who accepts it.584

When a person gives to another a thing or right on account of

the latter's merits or of the services rendered by him to the donor,
provided they do not constitute a demandable debt, or when the gift
imposes upon the donee a burden which is less than the value of the
thing given, there is also a donation585

Acceptance must be made during the lifetime of the donor and

of the donee.586

2. Characteristics

a. Extent to which donor may donate

property587

A person may not donate more than he can give by will and a
person may not receive by way of donation more than what the donor
is allowed by law to give by will; otherwise the donation shall be
inofficious and shall be reduced with regard to the excess.588

b. Reservations and reversions589

584
Art. 725
585
Art. 726
586
Art. 746
587
What may be given:
All or part of donors present property provided he reserves sufficient means for the support of the ff:
a) himself
b) relatives who by law are entitled to his support
c) legitimes shall not be impaired
when w/o reservation or if inofficious, may be reduced on petition of persons affected
Except: conditional donation & donation mortis causa
Except: future property
588
See Art. 752
589
1. Future property cannot be donated.
2. Present property that can be donated:
a) if the donor has forced heirs: he cannot give or receive by donation more than he can give of
receive by will
b) if the donor has no forced heirs: donation may include all present property provided he reserves
in full ownership or in usufruct:
1) the amount necessary to support him, and

150
 The donation may comprehend all the present property of the
donor, or part thereof, provided he reserves, in full ownership or in
usufruct, sufficient means for the support of himself, and of all
relatives who, at the time of the acceptance of the donation, are by
law entitled to be supported by the donor. Without such reservation,
the donation shall be reduced in petition of any person affected.590

The donor may provide for reversion, whereby the property

donated shall go back to the donor or some other person.591
3. Kinds

a. Donation Inter Vivos592

When the donor intends that the donation shall take effect
during the lifetime of the donor, though the property shall not be
delivered till after the donor's death, this shall be a donation inter
vivos. The fruits of the property from the time of the acceptance of
the donation, shall pertain to the donee, unless the donor provides
otherwise.593

b. Donation By Reason of Marriage

Donations by reason of marriage are those which are made

before its celebration, in consideration of the same, and in favor of
one or both of the future spouses.594

2) those relatives entitled to support from him

3) property sufficient to pay the donors debt contracted prior to the donation.
3. Donation should not prejudice creditors
4. Donee must reserve sufficient means for his support and for his relatives which are entitled to be
supported by him.
590
A donor may donate all his present property or part thereof provided he reserves sufficient property in
ownership or in usufruct for the support of himself and of all relatives who are entitled to be supported by
him at the time of the perfection of the donation
591
See Art. 757
A reversion in favor of the donor may be validly established for any case and circumstances;
If the revision is in favor of other persons, such other persons must be living at the time of the
donation
592
In case of doubt with regard to nature of donation: inter vivos
593
Art. 729
594
Art. 82, FC

151
 These donations are governed by the rules on ordinary
donations established in Title III of Book III of the Civil Code, insofar
as they are not modified by the following articles595

A donation by reason of marriage may be revoked by the donor

in the following cases:

(1) If the marriage is not celebrated or judicially declared void ab

initio except donations made in the marriage settlements, which
shall be governed by Article 81;596

(2) When the marriage takes place without the consent of the
parents or guardian, as required by law;

(3) When the marriage is annulled, and the donee acted in bad faith;

(4) Upon legal separation, the donee being the guilty spouse;

(5) If it is with a resolutory condition and the condition is complied

with;

(6) When the donee has committed an act of ingratitude as specified

by the provisions of the Civil Code on donations in general597

c. Donation Mortis Causa

Donations which are to take effect upon the death of the donor
partake of the nature of testamentary provisions, and shall be
governed by the rules established in the Title on Succession.598

d. Onerous Donation

Donations with an onerous cause shall be governed by the

rules on contracts and remuneratory donations by the provisions of
the present Title as regards that portion which exceeds the value of
the burden imposed.599
595
Art. 83, ibid
596
supra
597
Art. 86, ibid
598
Art. 728
Title conveyed upon donors death
Void if donor survives done
Always revocable
Must comply with the formalities required by law for the execution of wills
599
Art. 733

152
 e. Simple, modal, conditional

a. simple - gratuitous
b. conditional - valuable consideration is imposed but value is
less than value of thing donated
c. modal imposes upon the donee a burden which is less than
the value of the thing donated

4. Formalities required

a. How made and accepted

Donations of movable property:

a. With simultaneous delivery of property donated:

i. it may be oral/written P5,000 or less;

ii. if value exceeds P5,000 written in public or private
document

b. Without simultaneous delivery:

The donation and acceptance must be written in a public or

private instrument, regardless of value

Donation of immovable property:

a. must be in a public instrument specifying the property donated

and the burdens assumed by donee, regardless of value
b. acceptance must be either:

i. in the same instrument; or

ii. in another public instrument, notified to the donor in
authentic form, and noted in both deeds

b. Perfection600

c. Differences between formalities for

donation of real, personal properties
600
See (a) How made and accepted, supra

153
 (1)Movables

The donation of a movable may be made orally or in writing.

An oral donation requires the simultaneous delivery of the

thing or of the document representing the right donated.

If the value of the personal property donated exceeds five

thousand pesos, the donation and the acceptance shall be made in
writing. Otherwise, the donation shall be void.601

(2)Immovables

In order that the donation of an immovable may be valid, it

must be made in a public document, specifying therein the property
donated and the value of the charges which the donee must satisfy.

The acceptance may be made in the same deed of donation or

in a separate public document, but it shall not take effect unless it is
done during the lifetime of the donor.

If the acceptance is made in a separate instrument, the donor

shall be notified thereof in an authentic form, and this step shall be
noted in both instruments.602

5. Qualifications of donor, donee

Donor:

- All persons who may contract and dispose of their property

Donee:

1. natural & juridical persons w/c are not especially disqualified

by law

2. minors & other incapacitated

a) by themselves

601
Art. 748
602
Art. 749

154
 - if pure & simple donation
- if it does not require written acceptance

b) by guardian, legal representatives if needs written

acceptance

1. natural guardian not more than P50,000

2. court appointed - more than P50,000
3. conceived & unborn child, represented by person who
would have been guardian if already born

6. Effects of donation/limitations

a. In general

Effects of donation:

1. donee may demand the delivery of the thing donated

2. donee is subrogated to the rights of the donor in the property

3. in donations propter nuptias, the donor must release the property

from encumbrances, except servitudes

4. donors warranty exists if

a. expressed
b. donation is propter nuptias
c. donation is onerous
d. donor is in bad faith

5. when the donation is made to several donees jointly, they are

entitled to equal portions, without accretion, unless the contrary
is stipulated.

Limitations on donation of property:

1. Future property cannot be donated.

2. Present property that can be donated:

a) if the donor has forced heirs: he cannot give or receive by

155
 donation more than he can give of receive by will
b) if the donor has no forced heirs: donation may include all
present property provided he reserves in full ownership or in
usufruct:

1) the amount necessary to support him, and

2) those relatives entitled to support from him
3) property sufficient to pay the donors debt contracted prior
to the donation.

3. Donation should not prejudice creditors

4. Donee must reserve sufficient means for his support and for his
relatives which are entitled to be supported by him.

b. Double donations

RULE: Priority in time, priority in right

1. If movable one who first take possession in good faith

2. If immovable one who recorded in registry of property in good
faith

- no inscription, one who first took possession in good faith

- in absence thereof, one who can present oldest title

c. Excessive/inofficious

1. shall be reduced with regards to the excess

2. action to reduce to be filed by heirs who have right to
legitimate at time of donation
3. donees/creditors of deceased donor cannot ask for reduction of
donation
4. if there are 2 or more donation: recent ones shall be
suppressed
5. if 2 or more donation at same time treated equally &
reduction is pro rata but donor may impose preference which
must be expressly stated in donation

d. Scope of amount

156
 The donation may comprehend all the present property of the
donor, or part thereof, provided he reserves, in full ownership or in
usufruct, sufficient means for the support of himself, and of all
relatives who, at the time of the acceptance of the donation, are by
law entitled to be supported by the donor. Without such reservation,
the donation shall be reduced in petition of any person affected.603

Donations cannot comprehend future property.

By future property is understood anything which the donor

cannot dispose of at the time of the donation.604

The provisions of article 750605 notwithstanding, no person may

give or receive, by way of donation, more than he may give or
receive by will.

The donation shall be inofficious in all that it may exceed this

limitation.606

e. In fraud of creditors

There being no stipulation regarding the payment of debts, the

donee shall be responsible therefor only when the donation has been
made in fraud of creditors.

The donation is always presumed to be in fraud of creditors,

when at the time thereof the donor did not reserve sufficient
property to pay his debts prior to the donation.607

7. Void Donations

(1) Those made between persons who were guilty of adultery or

concubinage at the time of the donation;

603
Art. 750
604
Art. 751
605
See Reference
606
Art. 752
607
Art. 759

157
(2) Those made between persons found guilty of the same criminal
offense, in consideration thereof;
(3) Those made to a public officer or his wife, descendants and
ascendants, by reason of his office.

In the case referred to in No. 1, the action for declaration of

nullity may be brought by the spouse of the donor or donee; and the
guilt of the donor and donee may be proved by preponderance of
evidence in the same action.608

Incapacity to succeed by will shall be applicable to donations

inter vivos.609

The following are incapable of succeeding:

(1) The priest who heard the confession of the testator during his
last illness, or the minister of the gospel who extended spiritual aid
to him during the same period;

(2) The relatives of such priest or minister of the gospel within the
fourth degree, the church, order, chapter, community, organization,
or institution to which such priest or minister may belong;

(3) A guardian with respect to testamentary dispositions given by a

ward in his favor before the final accounts of the guardianship have
been approved, even if the testator should die after the approval
thereof; nevertheless, any provision made by the ward in favor of the
guardian when the latter is his ascendant, descendant, brother,
sister, or spouse, shall be valid;

(4) Any attesting witness to the execution of a will, the spouse,

parents, or children, or any one claiming under such witness, spouse,
parents, or children;

(5) Any physician, surgeon, nurse, health officer or druggist who took
care of the testator during his last illness;

(6) Individuals, associations and corporations not permitted by law to

inherit.610

608
Art. 739
609
Art. 740
610
Art. 1027

158
 8. Revocation611 or reduction612

a. Grounds for revocation613

i. birth, appearance, or adoption of a child;

ii.. non fulfillment of a resolutory condition imposed by the donor;
iii. ingratitude of the donee614
Grounds for reduction615

i. failure of the donor to reserve sufficient means for support of

himself or dependent relatives;
ii. failure of the donor to reserve sufficient property to pay off his
existing debts;
iii. inofficiousness, that is, the donation exceeds that which the
donor can give by will;

b. How done

Birth of child Non-fulfillment of Ingratitude

condition
Ipso jure revocation, no needs court action needs court action
need for action., court
decision is merely
declaratory
Extent: portion which Extent: whole portion Extent: Whole portion
may impair legitime of but court may rule returned
heirs partial revocation only

611
affects the whole donation and is allowed during the lifetime of the donor
applies only to donation inter vivos
not applicable to onerous donations
612
generally affects a portion only of the donation and is allowed during the lifetime of the donor or after
his death
613
Art. 760
614
Donee commits offense against person, honor, property of donor, spouse, children under his parental
authority
Donee imputes to donor any criminal offense or any cat involving moral turpitude even if he should
prove it unless act/crime has been committed against donee himself, spouse or children under his parental
authority
Donee unduly refuses to give support to donor when legally or morally bound to give support to
donor
615
ibid

159
Property must be Property in excess Property to be returned
returned

Alienation/mortgages
done prior to recording
in Register of Deeds:
If already sold or cannot Alienations/mortgages Prior ones are void;
be returned the value imposed are void unless demand value of
must be returned registered with Register property when alienated
If mortgaged donor of Deeds and cant be recovered
may redeem the or redeemed from 3rd
mortgage with right to persons
recover from donee

Fruits to be returned at Fruits to be returned at

filing of action for filing of complainant
revocation
Prescription of action isPrescription is 4 years Prescription is 1 year
4 years from birth, etc. from non-fulfilment from knowledge of fact
and it was possible for
him to bring action
Action cannot be Action cannot be
renounced renounced in advance
Right of action Right of action at Heirs cant file action
transmitted to heirs instance of donor but
may be transmitted to
heirs
Action extends to Action does not extend
donees heirs to donees heirs

c. Effects

Upon the revocation or reduction of the donation by the birth,

appearance or adoption of a child, the property affected shall be
returned or its value if the donee has sold the same.616

In this case, the property donated shall be returned to the

donor, the alienations made by the donee and the mortgages
imposed thereon by him being void, with the limitations established,
with regard to third persons, by the Mortgage Law and the Land
Registration laws.617

616
Art. 762
617
Art. 764, par. 2

160
 Although the donation is revoked on account of ingratitude,
nevertheless, the alienations and mortgages effected before the
notation of the complaint for revocation in the Registry of Property
shall subsist. Later ones shall be void.618

In the case referred to in the first paragraph of the preceding

article, the donor shall have a right to demand from the donee the
value of property alienated which he cannot recover from third
persons, or the sum for which the same has been mortgaged.

The value of said property shall be fixed as of the time of the

donation.619

When the donation is revoked for any of the causes stated in

article 760,620 or by reason of ingratitude, or when it is reduced
because it is inofficious, the donee shall not return the fruits except
from the filing of the complaint.

If the revocation is based upon noncompliance with any of the

conditions imposed in the donation, the donee shall return not only
the property but also the fruits thereof which he may have received
after having failed to fulfill the condition.621

Donations which in accordance with the provisions of article

752, are inofficious, bearing in mind the estimated net value of the
622

donor's property at the time of his death, shall be reduced with

regard to the excess; but this reduction shall not prevent the
donations from taking effect during the life of the donor, nor shall it
bar the donee from appropriating the fruits.

For the reduction of donations the provisions of this Chapter

and of articles 911 and 912623 of this Code shall govern.

d. Prescription

618
Art. 766
619
Art. 767
620
see reference
621
Art. 768
622
supra
623
See Reference

161
 The donation is revoked ipso jure by operation of law, by the
happening of any of the events mentioned in article 760624;

The period to bring an action is four years, and the day from
which the period shall begin to run depends upon the cause for the
revocation or reduction;

If the donor dies within the period of prescription, the action is

transmitted to his legitimate and illegitimate children and
descendants;

The surviving spouse and the ascendants of the donor are not
included.

c. Innofficious Donations

Every donation inter vivos, made by a person having no

children or descendants, legitimate or legitimated by subsequent
marriage, or illegitimate, may be revoked or reduced as provided in
the next article, by the happening of any of these events:

(1) If the donor, after the donation, should have legitimate or

legitimated or illegitimate children, even though they be
posthumous;

(2) If the child of the donor, whom the latter believed to be dead
when he made the donation, should turn out to be living;

(3) If the donor subsequently adopt a minor child.625

In the cases referred to in the preceding article, the donation

shall be revoked or reduced insofar as it exceeds the portion that
may be freely disposed of by will, taking into account the whole
estate of the donor at the time of the birth, appearance or adoption
of a child.626

Donations which in accordance with the provisions of article

752, are inofficious, bearing in mind the estimated net value of the
donor's property at the time of his death, shall be reduced with
regard to the excess; but this reduction shall not prevent the
624
ibid
625
Art. 760
626
Art. 761

162
donations from taking effect during the life of the donor, nor shall it
bar the donee from appropriating the fruits.

For the reduction of donations the provisions of this Chapter

and of articles 911 and 912 of this Code shall govern.627

Only those who at the time of the donor's death have a right to
the legitime and their heirs and successors in interest may ask for
the reduction or inofficious donations.

Those referred to in the preceding paragraph cannot renounce

their right during the lifetime of the donor, either by express
declaration, or by consenting to the donation.

The donees, devisees and legatees, who are not entitled to the
legitime and the creditors of the deceased can neither ask for the
reduction nor avail themselves thereof.628

If, there being two or more donations, the disposable portion is

not sufficient to cover all of them, those of the more recent date shall
be suppressed or reduced with regard to the excess.629

Succession is a mode of acquisition by virtue of which the

property, rights and obligations to the extent of the value of the
inheritance, of a person are transmitted through his death to another
or others either by his will or by operation of law.630

"Decedent" is the general term applied to the person whose

property is transmitted through succession, whether or not he left a
will. If he left a will, he is also called the testator.631

d. Ingratitude

The donation may also be revoked at the instance of the donor,

by reason of ingratitude in the following cases:

627
Art. 771
628
Art. 772
629
Art. 773
630
Art. 774
631
Art. 775

163
(1) If the donee should commit some offense against the person, the
honor or the property of the donor, or of his wife or children under
his parental authority;

(2) If the donee imputes to the donor any criminal offense, or any act
involving moral turpitude, even though he should prove it, unless the
crime or the act has been committed against the donee himself, his
wife or children under his authority;
(3) If he unduly refuses him support when the donee is legally or
morally bound to give support to the donor.632

The action granted to the donor by reason of ingratitude

cannot be renounced in advance. This action prescribes within one
year, to be counted from the time the donor had knowledge of the
fact and it was possible for him to bring the action.633

PRESCRIPTION

I. Definition

By prescription, one acquires ownership and other real rights

through the lapse of time in the manner and under the conditions
laid down by law.634

A. Acquisitive635

Acquisitive prescription of dominion and other real rights may

be ordinary or extraordinary.

Ordinary acquisitive prescription requires possession of things

in good faith and with just title for the time fixed by law.636
1. Characteristics

1. Relationship between the occupant and the land in terms of

possession is capable of producing legal consequences; it is the
possessor who is the actor

632
Art. 765
633
Art. 769
634
Art. 1106
635
one acquires ownership and other real rights through the lapse of time in the manner and under the
conditions laid down by law.
636
Art. 1117

164
2. Requires possession by a claimant who is not the owner
3. Applicable to ownership and other real rights
4. Vests ownership or other real rights in the occupant
5. Results in the acquisition of ownership or other real rights in a
person as well as the loss of said ownership or real rights in another
6. Can be proven under the general issue without its being
affirmatively pleaded

2. Ordinary637

a. Good Faith

The good faith of the possessor consists in the reasonable

belief that the person from whom he received the thing was the
owner thereof, and could transmit his ownership.638

b. Just title

For the purposes of prescription, there is just title when the

adverse claimant came into possession of the property through one
of the modes recognized by law for the acquisition of ownership or
other real rights, but the grantor was not the owner or could not
transmit any right.639

The title for prescription must be true and valid.640

3. Extraordinary

The ownership of personal property also prescribes through

uninterrupted possession for eight years, without need of any other
condition.641

Ownership and other real rights over immovables also

prescribe through uninterrupted adverse possession thereof for
thirty years, without need of title or of good faith.642

4. Requisites

637
requires possession of things in good faith and with just title for the time fixed by law
638
Art. 1127
639
Art. 1129
640
Art. 1130
641
Art. 1132, 2nd par.
642
Art. 1137

165
 Possession has to be in the concept of an owner, public,
peaceful and uninterrupted.643

Acts of possessory character executed in virtue of license or by

mere tolerance of the owner shall not be available for the purposes
of possession.644

Possession is interrupted for the purposes of prescription,

naturally or civilly.645
Possession is naturally interrupted when through any cause it
should cease for more than one year.

The old possession is not revived if a new possession should be

exercised by the same adverse claimant.646

If the natural interruption is for only one year or less, the time
elapsed shall be counted in favor of the prescription.647

Civil interruption is produced by judicial summons to the

possessor.648

Judicial summons shall be deemed not to have been issued and

shall not give rise to interruption:

(1) If it should be void for lack of legal solemnities;

(2) If the plaintiff should desist from the complaint or should allow
the proceedings to lapse;

(3) If the possessor should be absolved from the complaint.

In all these cases, the period of the interruption shall be

counted for the prescription.649

643
Art. 1118
644
Art. 1119
645
Art. 1120
646
Art. 1121
647
Art. 1122
648
Art. 1123
649
Art. 1124

166
 Any express or tacit recognition which the possessor may make
of the owner's right also interrupts possession.650

5. Period

The ownership of movables prescribes through uninterrupted

possession for four years in good faith.

The ownership of personal property also prescribes through

uninterrupted possession for eight years, without need of any other
condition.

With regard to the right of the owner to recover personal

property lost or of which he has been illegally deprived, as well as
with respect to movables acquired in a public sale, fair, or market, or
from a merchant's store the provisions of articles 559 and 1505 651 of
this Code shall be observed.652

Ownership and other real rights over immovable property are

acquired by ordinary prescription through possession of ten years.653

In the computation of time necessary for prescription the

following rules shall be observed:

(1) The present possessor may complete the period necessary for
prescription by tacking his possession to that of his grantor or
predecessor in interest;

(2) It is presumed that the present possessor who was also the
possessor at a previous time, has continued to be in possession
during the intervening time, unless there is proof to the contrary;

(3) The first day shall be excluded and the last day included. 654

6. What cannot be acquired by acquisitive

prescription

650
Art. 1125
651
See Reference
652
Art. 1132
653
Art. 1134
654
Art. 1138

167
 Movables possesses through a crime can never be acquired
through prescription by the offender 655 but his successors-in-interest
may claim prescription, although for purposes of computing the
period of prescription, the possession by the offender may not be
tacked to the successors possession656

Lands registered under the Torrens system cannot be acquired

by prescription657 but this rule can be invoked only by one under
whose name658 it was registered.659

B. Extinctive660

1. Characteristics

1. One does not look to the act of the possessor but to the neglect of
the owner
2. Requires inaction of the owner or neglect of one with a right to
bring his action
3. Applies to all kinds of rights, whether real or personal
4. Produces the extinction of rights or bars a right of action
5. Results in the loss of a real or personal right, or bars the cause of
action to enforce said right
6. Should be affirmatively pleaded and proved to bar the action or
claim of the adverse party

2. Requisites

1. capacity to acquire by prescription

2. a thing capable of acquisition by prescription
3. possession of thing under certain conditions
4. lapse of time provided by law

3. Periods

Movables Immovables
1. Good Faith

655
Art. 1133
656
See Arts. 533-534
657
Alfonso vs.Jaime, L-12754, Jan. 30, 1960
658
or under whose predecessors name
659
Jocson, et al. vs. Silos,L-12998, July 25, 1960
660
rights and actions are lost through the lapse of time in the manner and under the conditions laid down
by law.

168
 4 years 10 years
2. Bad Faith
8 years661 30 years

II. No Prescription Applicable

A. By Offender

Movables possessed through a crime can never be acquired

through prescription by the offender.662

B. Registered Lands PD 1529663

C. The following rights, among others, are not extinguished by

prescription:

1. Action legal to demand a right of way

The owner, or any person who by virtue of a real right may

cultivate or use any immovable, which is surrounded by other
immovables pertaining to other persons and without adequate outlet
to a public highway, is entitled to demand a right of way through the
neighboring estates, after payment of the proper indemnity.

Should this easement be established in such a manner that its

use may be continuous for all the needs of the dominant estate,
establishing a permanent passage, the indemnity shall consist of the
value of the land occupied and the amount of the damage caused to
the servient estate.

In case the right of way is limited to the necessary passage for

the cultivation of the estate surrounded by others and for the

661
except where the loss was due to a crime in which case, the offender can not acquire the movable by
prescription, and an action to recover it from him is imprescriptible.
662
Art. 1133
663
See reference

169
gathering of its crops through the servient estate without a
permanent way, the indemnity shall consist in the payment of the
damage caused by such encumbrance.

This easement is not compulsory if the isolation of the

immovable is due to the proprietor's own acts.664

2. To abate a nuisance665

D. Action to quiet title if plaintiff in possession

If the plaintiff is in possession of the property, the action does

not prescribe.666

E. Void contracts

The action or defense for the declaration of the inexistence

of a contract does not prescribe.667

F. Action to demand partition

No co-owner shall be obliged to remain in the co-ownership.

Each co-owner may demand at any time the partition of the thing
owned in common, insofar as his share is concerned.

Nevertheless, an agreement to keep the thing undivided for a

certain period of time, not exceeding ten years, shall be valid. This
term may be extended by a new agreement.

A donor or testator may prohibit partition for a period which

shall not exceed twenty years.

Neither shall there be any partition when it is prohibited by

law.

664
Art. 649
665
Art. 1143
666
Reason: While the owner continues to be liable to an action, proceeding or suit upon the adverse claim,
he has a continuing right to be given aid by the court to ascertain and determine the nature of such claim
and its effect on his title, or to assert any superior equity in his favor. He may wait until his possession is
disturbed or his title is attacked before taking steps to vindicate his right.
667
Art. 1410

170
 No prescription shall run in favor of a co-owner or co-heir
against his co-owners or co-heirs so long as he expressly or impliedly
recognizes the co-ownership.668

1. Distinguished from laches

Laches or Stale demands

Failure or neglect, for an unreasonable and unexplained length
of time, to do that which, by exercising due diligence, could or
should have been done earlier; it is negligence or omission to assert
a right within reasonable time, warranting a presumption that the
party entitled to assert it either has abandoned it or declined to
assert it.

LACHES PRESCRIPTION

1. concerned with 1. concerned with

effect of delay fact of delay

2. question of 2. question or
inequity of matter of time
permitting the claim
to be enforced

3. not statutory 3. statutory

4. applies in equity 4. applies at law

5. not based on a 5. based on a fixed

fixed time time

G. Property of public dominion

a. For public use669

b. For public service670
c. For the development of the national wealth.
668
Art. 494
669
e.g. roads, canals, rivers
670
e.g. public buildings

171
III. Prescription or Limitation of Actions

A. To recover movables

Actions to recover movables shall prescribe eight years from

the time the possession thereof is lost, unless the possessor has
acquired the ownership by prescription for a less period, according
to articles 1132, and without prejudice to the provisions of articles
559, 1505, and 1133.671

B. To recover immovables

Real actions over immovables prescribe after thirty years.

This provision is without prejudice to what is established for
the acquisition of ownership and other real rights by prescription.672

C. Other actions

A mortgage action prescribes after ten years.673

The following rights, among others specified elsewhere in this

Code, are not extinguished by prescription:

(1) To demand a right of way, regulated in article 649;674

(2) To bring an action to abate a public or private nuisance.675

The following actions must be brought within ten years from

the time the right of action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;
(3) Upon a judgment.676

671
Art. 1140; see Reference for the Articles mentioned
672
Art. 1141
673
Art. 1142
674
See reference
675
Art. 1143
676
Art. 1144

172
 The following actions must be commenced within six years:

(1) Upon an oral contract;

(2) Upon a quasi-contract.677

The following actions must be instituted within four years:

(1) Upon an injury to the rights of the plaintiff;

(2) Upon a quasi-delict;

However, when the action arises from or out of any act,

activity, or conduct of any public officer involving the exercise of
powers or authority arising from Martial Law including the arrest,
detention and/or trial of the plaintiff, the same must be brought
within one (1) year.678

The following actions must be filed within one year:

(1) For forcible entry and detainer;

(2) For defamation.679
The limitations of action mentioned in articles 1140 to 1142,
and 1144 to 1147680 are without prejudice to those specified in other
parts of this Code, in the Code of Commerce, and in special laws.681

All other actions whose periods are not fixed in this Code or in
other laws must be brought within five years from the time the right
of action accrues.682

IV. Interruption

The prescription of actions is interrupted when they are filed

before the court, when there is a written extrajudicial demand by the
creditors, and when there is any written acknowledgment of the debt
by the debtor.683

677
Art. 1145
678
Art. 1146
679
Art. 1147
680
see Reference
681
Art. 1148
682
Art. 1149
683
Art. 1155

173
V. Nuisance684

A. Definition685

B. Classification

1. Public nuisance - the doing of or the failure to do something that

injuriously affects safety, health, or morals of the public, or works
some substantial annoyance, inconvenience, or injury to the
public;

2. Private nuisance - one which violates only private rights and

produces damage to but one or few persons, and cannot be said to
be public

3. Mixed nuisances: a thing may be a private nuisance without being

a public one or a public nuisance without being a private one

C. Remedies

Remedies against a public nuisance686

1. prosecution under the Penal Code or any other local ordinance;

2. civil action;
3. abatement, without judicial proceedings687
Remedies against a private nuisance

(1) A civil action; or

684
may be both public and private in character
685
See X. Nuisance, supra
686
Art. 699
687
The remedies are not exclusive but cumulative;
All of the may be availed of by public officers, and the last two by private persons, if the nuisance is
especially injurious to the latter
Role of district health officer and others with respect to public nuisance:
The district health officer is charged with the duty to see to it that one or all of the remedies against a
public nuisance are availed of;
He shall determine whether the third remedy, a is the best remedy against a public nuisance;
the remedy must be availed of only with the intervention of the district health officer;
It does not necessarily follow that the failure to observe art. 702 is in itself a ground for the award for
damages;
Art. 702 does not empower the district officer to abate a public nuisance to the exclusion of all other
authorities;
The action must be commenced by the city or municipal mayor; but a private person may also file an
action if the public nuisance is especially injurious to him

174
(2) Abatement, without judicial proceedings.688

Any person injured by a private nuisance may abate it by

removing, or if necessary, by destroying the thing which constitutes
the nuisance, without committing a breach of the peace or doing
unnecessary injury. However, it is indispensable that the procedure
for extrajudicial abatement of a public nuisance by a private person
be followed.689

OBLIGATIONS

I. Definition

A juridical necessity to give, to do or not to do690, one

impressed with the character of enforceability.

II. Elements of an Obligation

1) an active subject:691 the possessor of a right; he in whose favor the

obligation is constituted;
2) a passive subject: 692 he who has the duty of giving, doing or not
doing;
3) the object or prestation:693 it may consist of giving a thing, or
doing or not doing a certain act694and
4) the efficient cause:695 the reason why the obligation exists

III. Different Kinds of Prestations

1. To give - consists in the delivery of a movable or an immovable

thing, in order to create a real right or for the use of the recipient or
for its simple possession or in order to return to its owner

688
Art. 705
689
Art. 706
690
Art. 1156
691
obligee or creditor
692
obligor or debtor
693
the subject matter of the obligation
694
Requisites:
i. it must be licit
ii. it must be possible, physically & juridically
iii. it must be determinate or determinable
iv. it must have a possible equivalent in money
695
vinculum or juridical tie

175
2. To do - all kinds of work or services, whether mental or physical

3. Not to do - consists in abstaining from some act, includes not to

give, both being negative obligations

IV. Classification of Obligations

1. According to criteria of demandability:

a. Pure - one w/c is not subject to a condition or a term.

b. Conditional - the acquisition of rights, as well as the
extinguishment or loss of those already acquired, shall depend upon
the happening of the event which constitutes the condition.696
c. W/ a term697 -

2. According to plurality of objects:

a. Single
b. Alternative - where the debtor must perform any of the
prestations698
c. Facultative - where only one thing is due but the debtor has
reserved the right to substitute it w/ another699

3. According to Plurality of subjects:

a. Joint - one in w/c each of the debtors is liable only for a

proportionate part of the debt or each creditor is entitled only to a
proportionate part of the credit.700
696
Art. 1181
A past thing can never be a condition. A condition is always future and uncertain.
Past event unknown to the parties.-- It is really the knowledge of the event w/c constitutes the future. It
is the knowledge w/c is future and uncertain.
Effect of Impossible Condition.-- It annuls the obligation w/c depends upon them. The entire
juridical tie is tainted by the impossible condition.
697
see Reference
698
The characteristic of alternative obligations is that, several objects being due, the fulfillment of one is
sufficient (Tolentino)
699
Art. 1206
700
there are as many obligations as there are debtors multiplied by the number of creditors.
Effects of Joint Liability:
1. The demand by one creditor upon one debtor, produces the effects of default only w/ respect to the
creditor who demanded and the debtor on whom the demand was made, but not w/ respect to the others;
2. The interruption of prescription by the judicial demand of one creditor upon a debtor, does not benefit
the other creditors nor interrupt the prescription as to other debtors. On the same principle, a partial

176
 b. Solidary - one in w/c the debtor is liable for the entire
obligation or each creditor is entitled to demand the whole
obligation. There is only one obligation is a solidary obligation.

4. According to Performance:

a. Divisible - one susceptible of partial performance.

b. Indivisible - one that must be performed in one act.701

5. According to Sanctions for Breach:

a. Simple
b. W/ a penal clause - an accessory undertaking to assume
greater liability in case of breach.702

V. Sources of Obligations703

A. A single act or omission can give rise to different causes of action

payment or acknowledgement made by one of several joint debtors does not stop the running of the
statute of limitations as to the others;
3. The vices of each obligation arising from the personal defect of a particular debtor or creditor does not
affect the obligation or rights of the others;
4. The insolvency of a debtor does not increase the responsibility of his co-debtors, nor does it authorize
a creditor to demand anything from his co-creditors;
5. In the joint divisible obligation, the defense of res judicata is not extended from one debtor to another.
(Manresa.)
701
General rule: Obligation is indivisible w/c means that it has to be performed in one act singly. Why?
Bec. the law provides so: Unless there is an express stipulation to that effect, the creditor cannot be
compelled partially to receive the prestations in which the obligation consists. Neither may the debtor be
required to make partial payments. xxx (Art. 1248, par. 1.)
Three Exceptions to the Rule on Indivisibility:
1. When the parties so provide. (Art. 1248, par. 1.)
2. When the nature of the obligation necessarily entails performance in parts.
3. Where the law provides otherwise.
702
The purpose is to strengthen the coercive force of the obligation. When a penal clause is present,
damages do not have to be proved.
703
Obligations arise from:
(1) Law
(2) Contracts
(3) Quasi-contracts
(4) Acts or omissions punished by law and
(5) Quasi-delicts.

177
 It is a source of obligation because of the provision in Article
100 of the Revised code that every person criminally liable is also
civilly liable.704

B. Natural Obligations705

They are real obligations to which the law denies an action, but
which the debtor may perform voluntarily.

Examples of natural obligations enumerated under the Civil

Code:

1. Performance after the civil obligation has prescribed;

2. Reimbursement of a third person for a debt that has prescribed;
3. Restitution by minor after annulment of contract;
4. Delivery by minor of money or fungible thing in fulfillment of
obligation;
5. Performance after action to enforce civil obligation has failed;
6. Payment by heir of debt exceeding value of property inherited; and
7. Payment of legacy after will have been declared void.

C. Extra-contractual Obligations706

1. Quasi-contract707 - That juridical relation resulting from a lawful,

voluntary and unilateral act, and which has for its purpose, the
payment of indemnity to the end that no one shall be unjustly
enriched or benefited at the expense of another

2 kinds:

a. Negotiorum gestio - unauthorized management708

704
Nolledo, Jose N., The Philippine Law on Obligations and Contracts Explained, 1980 Ed., p. 2
705
a. Based not on positive law but on equity and natural law
b. Do not grant such right of action to enforce their performance
706
Arts. 2142 to 2194
707
obligation ex quasi-contractu
708
This takes place when a person voluntarily takes charge of anothers abandoned business or property
without the owners authority

178
 b. Solutio indebiti - undue payment 709

2. Quasi-delict/torts710 - It is a fault or act of negligence ( or omission

of care ) which causes damage to another, there being no pre-
existing contractual relations between the parties.711

VI. Nature and Effect of obligations

A. Obligation to give712

1. A determinate or specific thing

When what is to be delivered is a determinate thing, the

creditor, in addition to the right granted him by Article 1170, 713 may
compel the debtor to make the delivery.714

The obligation to give a determinate thing includes that of

delivering all its accessions and accessories, even though they may
not have been mentioned.715

2. An indeterminate or generic thing

If the thing is indeterminate or generic, he may ask that the

obligation be complied with at the expense of the debtor. 716

B. Obligation to do or not to do

709
This takes place when something is received when there is no right to demand it, and it was unduly
delivered thru mistake
710
obligation ex quasi-delicto or ex quasi maleficio
711
Elements:
a) There must be fault or negligence attributable to the person charged
b) There must be damage or injury
c) There must be a direct relation of cause and effect between the fault or negligence on the one hand and
the damage or injury on the other hand ( proximate cause )
712
Three Accessory Obligations:
1. To take care of the thing w/ the diligence of a good father of a family until actual delivery.(Art. 1163)
2. To deliver the fruits to the creditor (fruits produced after obligation to deliver arises).(Art. 1164)
3. To deliver accessions and accessories(Art. 1166)
713
See reference
714
Art. 1165, 1st par.
715
Art. 1166
716
Art. 1165 , 2nd par.

179
 In Obligations to do

If a person is obliged to do something, it must be done as

promised, and it cannot be substituted by another act or forbearance
against the obligees will717. If the obligor fails to do it, the same shall
be executed at his cost718 albeit he may not be compelled to do so
personally or by himself.

This same rule shall be observed if he does it in contravention

of the tenor of the obligation. Furthermore, it may be decreed that
what has been poorly done be undone.719

In Obligations not to do

When the obligation consists in not doing, and the obligor does
what has been forbidden him, it shall also be undone at his
expense.720

C. Breaches of obligations

1. Complete failure to perform

Debtor is unable to comply with his obligation because of fortuitous

event.721

2. Default, delay or mora 722 no default unless creditors

makes a demand

GENERAL RULE:

There must be a demand (judicial or extra-judicial) before

delay may be incurred.

EXCEPTIONS:

1. obligation or law expressly so declares

2. time is of the essence of the contract
717
see Art. 1244
718
see Chavez vs. Gonzales, 32 SCRA 547
719
Art. 1167
720
see Art. 1168; Cui vs. Chan, 41 Phil. 523
721
debtor is not liable for damages
722
Non-fulfillment of the obligation with respect to time

180
 3. demand is useless as when obligor has rendered beyond his
power to perform
4. there is acknowledgment of default

In reciprocal obligations, one party incurs in delay from the

moment the other party fulfills his obligation, while he himself does
not comply or is not ready to comply in a proper manner with what is
incumbent upon him.723

a. Mora solvendi

Delay of the debtor to perform his obligation. It may be:

a. Ex re obligation is to give
b. Ex persona obligation is to do724

b. Mora accipiendi

Delay of the creditor to accept the delivery of the thing w/c is

the object of the obligation

c. Compesatio morae

Delay of the parties or obligors in reciprocal obligation

3. Fraud in the performance of obligation725

a. Waiver of future fraud is void

Responsibility arising from fraud is demandable in all

obligations. Any waiver of an action for future fraud is void.726

723
see Art. 1169
The general rule is that fulfillment by both parties should be simultaneous except when different dates for
the performance of obligation is fixed by the parties.
Demand is still necessary if their respective obligations are to be performed on separate dates.
724
There can be delay only in positive obligations (to give/to do). There can be no delay in negative
obligations (not to give/not to do).
725
Deliberate and intentional evasion of the fulfillment of an obligation
726
Art. 1171
Future fraud cannot be waived because it would result to illusory obligation.

181
 4. Negligence (culpa)727 in the performance of
obligation

a. Diligence normally required is ordinary

diligence or diligence of a good father of a
family; exceptions: common carriers
requiring extraordinary diligence

The deposit of effects made by travellers in hotels or inns shall

also be regarded as necessary. The keepers of hotels or inns shall be
responsible for them as depositaries, provided that notice was given
to them, or to their employees, of the effects brought by the guests
and that, on the part of the latter, they take the precautions which
said hotel-keepers or their substitutes advised relative to the care
and vigilance of their effects.728

The hotel-keeper is liable for the vehicles, animals and articles

which have been introduced or placed in the annexes of the hotel. 729

The responsibility referred to in the two preceding articles

shall include the loss of, or injury to the personal property of the
guests caused by the servants or employees of the keepers of hotels
or inns as well as strangers; but not that which may proceed from
any force majeure. The fact that travellers are constrained to rely on
the vigilance of the keeper of the hotels or inns shall be considered
in determining the degree of care required of him.730

The act of a thief or robber, who has entered the hotel is not
deemed force majeure, unless it is done with the use of arms or
through an irresistible force.731

727
Omission of that diligence which is required by the nature of the obligation and corresponds with the
circumstances of the persons, of the time and of the place
Negligence can be waived unless the nature of the obligation or public policy requires extraordinary
diligence as in common carrier.
728
Art. 1998
729
Art. 1999
730
Art. 2000
731
Art. 2001

182
 The hotel-keeper is not liable for compensation if the loss is
due to the acts of the guest, his family, servants or visitors, or if the
loss arises from the character of the things brought into the hotel.732

5. Contravention of the tenor of obligation

The faithful observance of an obligation according to its tenor

is mandated by law; an unexcused failure thereof renders the obligor
liable for losses and damages caused thereby.733
6. Legal excuse for breach of obligation fortuitous
event; requisites

Fortuitous event734

An event which could not be foreseen or which though foreseen

was inevitable.

Requisites:

1. cause is independent of the will of the debtor735

2. the event must be unforeseeable or unavoidable
3. occurrence must be such as to render it impossible for the debtor
to fulfill his obligation in a normal manner
4. debtor must be free from any participation in
the aggravation of the injury resulting to the creditor736

D. Remedies available to creditor in cases of breach

1. Specific Performance737

732
Art. 2002
733
see Art. 1170
734
General Rule: No liability in case of fortuitous event.
Exceptions:
1. When expressly declared by law (e.g. Article 552(2), 1165(3), 1268, 1942, 2147, 2148 and 2159 of the
Civil Code.)
2. When expressly declared by stipulation or contract
3. When the nature of the obligation requires the assumption of risk
4 When the obligor is in default or has promised to deliver the same thing to 2 or more persons who do
not have the same interest [Article 1165(3)].
735
It must not only be the proximate cause but it must be the ONLY and SOLE CAUSE.
736
Lasam vs. Smith, 45 Phil. 657
737
in obligation to give specific thing

183
 When what is to be delivered is a determinate thing, the
creditor, in addition to the right granted him by Art 1170
(indemnification for damages), may compel the debtor to make the
delivery.738

a. Substituted performance by a third person

on obligation to deliver generic thing and
in obligation to do, unless a purely
personal act

In obligation to give generic thing

If the thing is indeterminate or generic, he may ask that the

obligation be
complied with at the expense of the debtor.739

In obligation to do

If a person obliged to do something fails to do it, the same shall

be executed at his cost. This same rule shall be observed if he does it
in contravention of the tenor of the obligation. Furthermore, it may
be decreed that what has been done poorly be undone.740

2. Rescission741

738
Art. 1165, par 1; see also ROC Rule 39, Sec 10
739
Art 1165, Par 2
Delivery of anything belonging to the species stipulated will be sufficient.
Debtor cannot avoid obligation by paying damages if the creditor insists on the performance.
740
Art. 1167
The court has no discretion to merely award damages to the creditor when the act can be done in spite
of the refusal or failure of debtor to do so.
EXCEPTION: Imposition of personal force or coercion upon the debtor to comply with his obligation -
tantamount to involuntary servitude and imprisonment for debt
741
resolution in reciprocal obligations
Only applies to reciprocal obligations, where there is reciprocity between the parties i.e. creditor
debtor relations arise from the same cause or identity of cause.
Reciprocal obligations have a TACIT RESOLUTORY CONDITION

184
 The power to rescind obligations is implied in reciprocal ones,
in case one of the obligors should not comply with what is incumbent
upon him.742

The injured party may choose between the fulfillment and the
rescission of the obligation,743 with the payment of damages in either
case. He may also seek rescission, even after he has chosen
fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed, unless there be
just cause authorizing the fixing of a period.

This is understood to be without prejudice to the rights of third

persons who have acquired the thing, in accordance with articles
1385744 and 1388745 and the Mortgage Law.746

In case both parties have committed a breach of the obligation,

the liability of the first infractor shall be equitably tempered by the
courts. If it cannot be determined which of the parties first violated
the contract, the same shall be deemed extinguished, and each shall
bear his own damages.747

3. Damages, in any event

In case of breach of the obligation, 748 exclusive or in addition to

specific performance.
742
Power to rescind:
Pertains to the injured party, party who did not perform not entitled to insist upon the performance of
the contract by the defendant or recover damages by reason of his own breach
Rights of injured party subordinated to the rights of a 3rd person to whom bad faith is not imputable
Not absolute, not permitted in casual/slight breach, may only be claimed in substantial breach
(Song Fo v. Hawaiian Philippines)
Rescission requires judicial approval to produce legal effect
EXCEPTION: object is not yet delivered AND obligation has not yet been performed
If the obligation has not yet been performed: extrajudicial declaration of party willing to perform
would suffice; can refuse to perform if the other party is not yet ready to comply
If the injured party has already performed: cannot extrajudicially rescind IF the other party opposes
the rescission (otherwise, rescission produces legal effect). In the case the other party impugns rescission,
the court comes in either to: a. Declare the rescission as properly made b. Give a period to the debtor in
which to perform
743
The remedy is alternative. Party seeking rescission can only elect one between fulfillment and
rescission. There can be no partial performance and partial rescission.
744
See Reference
745
ibid
746
Art. 1191
747
Art. 1192
748
Art. 1170; See Reference

185
 4. Subsidiary remedies of creditors

a. Accion subrogatoria749

Action which the creditor may exercise in place of the

negligent debtor in order to preserve or recover for the patrimony of
the debtor the product of such action, and then obtain therefrom the
satisfaction of his own credit.750

b. Accion pauliana751

Creditors have the right to set aside or revoke acts which the
debtor may have done to defraud them. All acts of the debtor which
reduce his patrimony in fraud of his creditors, whether by gratuitous
or onerous title, can be revoked by this action.

c. Accion directa752

Right of the lessor to go directly to sublessee for unpaid rents

of the lessee.753

Recoverable damages include any and all damages that a human being may suffer. Responsibility for
damages is indivisible
749
An action against the debtors debtor
750
subrogatory action; See Art. 1177
Previous approval of court is not necessary
Plaintiff entitled only to so much as is needed to satisfy his credit, any balance shall pertain to the
debtor
Patrimony of the debtor (includes both present and future property) is liable for the obligations he may
contract by being a legal guaranty in favor of his creditors. Hence, he cannot maliciously reduce such
guaranty
751
rescissory action
An action to rescind contracts entered into by the debtor in fraud of creditors ( Arts. 1177, last sentence
and 1381, par. 3, See Reference
Payments of pre-existing obligations already due, whether natural or civil, cannot be impugned by an
accion pauliana
752
Arts. 1652, 1608, 1729 & 1893; see reference
753
See Art. 1652

186
 Right of the laborers or persons who furnish materials for a
piece of work undertaken by a contractor to go directly to the owner
for any unpaid claims due to the contractor.754

VII. Kinds of civil obligations

A. Pure

Every obligation whose performance does not depend upon a

future or uncertain event, or upon a past event unknown to the
parties, is demandable at once.755

Every obligation which contains a resolutory condition shall

also be demandable, without prejudice to the effects of the
happening of the event.

When the debtor binds himself to pay when his means permit
him to do so, the obligation shall be deemed to be one with a period,
subject to the provisions of article 1197.756

B. Conditional

In conditional obligations, the acquisition of rights, as well as

the extinguishment or loss of those already acquired, shall depend
upon the happening of the event which constitutes the condition.757
1. Suspensive condition758 - wherein the
happening of the event gives birth to an
obligation

2. Resolutory condition759 - wherein the happening

of the event will extinguish the obligation

3. Potestative, casual or mixed

Potestative Condition - one w/c depends solely on the will of

either one party.760

754
See Art. 1729
755
Art. 1179
756
Art. 1180
757
Art. 1181
758
condition precedent
759
condition subsequent
760
e.g., "I will give you my plantation in Davao provided you reside in Davao permanently."

187
 Casual Condition - one where the condition is made to depend
upon a third person or upon chance.761

Mixed Condition - one w/c depends partly upon the will of one
of the parties and partly on either chance or the will of a third
person

a. Obligations subject to potestative

suspensive conditions are void

When the fulfillment of the condition depends upon the sole

will of the debtor, the conditional obligation shall be void. If it
depends upon chance or upon the will of a third person, the
obligation shall take effect in conformity with the provisions of this
Code.762

4. Effect of the happening of suspensive condition

The effects of a conditional obligation to give, once the

condition has been fulfilled, shall retroact to the day of the
constitution of the obligation. When the obligation imposes
reciprocal prestations upon the parties, the fruits and interests
during the pendency of the condition shall be deemed to have been
mutually compensated. If the obligation is unilateral, the debtor shall
appropriate the fruits and interests received, unless from the nature
and circumstances of the obligation it should be inferred that the
intention of the person constituting the same was different.

In obligations to do and not to do, the courts shall determine,

in each case, the retroactive effect of the condition that has been
complied with.763

Resolutory condition no retroactivity

761
e.g., "I will give you my land in Pampanga if you will pass the bar exams this year."
762
Art. 1182
763
Art. 1187

188
 Every obligation which contains a resolutory condition shall
also be demandable, without prejudice to the effects of the
happening of the event.764

In conditional obligations, the acquisition of rights, as well as

the extinguishment or loss of those already acquired, shall depend
upon the happening of the event which constitutes the condition.765

5. Effect of loss of specific thing or deterioration or

improvement of specific thing before suspensive
condition; if this occurs in resolutory condition
in obligation to do or not to do

When the conditions have been imposed with the intention of

suspending the efficacy of an obligation to give, the following rules
shall be observed in case of the improvement, loss or deterioration of
the thing during the pendency of the condition:

(1) If the thing is lost without the fault of the debtor, the obligation
shall be extinguished;

(2) If the thing is lost through the fault of the debtor, he shall be
obliged to pay damages; it is understood that the thing is lost when it
perishes, or goes out of commerce, or disappears in such a way that
its existence is unknown or it cannot be recovered;

(3) When the thing deteriorates without the fault of the debtor, the
impairment is to be borne by the creditor;

(4) If it deteriorates through the fault of the debtor, the creditor may
choose between the rescission of the obligation and its fulfillment,
with indemnity for damages in either case;

(5) If the thing is improved by its nature, or by time, the

improvement shall inure to the benefit of the creditor;

(6) If it is improved at the expense of the debtor, he shall have no

other right than that granted to the usufructuary.766

764
Article 1179, par. 2
765
Art. 1181
766
Art. 1189

189
 As for the obligations to do and not to do, the provisions of the
second paragraph of article 1187 767 shall be observed as regards the
effect of the extinguishment of the obligation.768

C. Obligation with a period or a term769

Obligations for whose fulfillment a day certain has been fixed,

shall be demandable only when that day comes.

Obligations with a resolutory period take effect at once, but

terminate upon arrival of the day certain.

A day certain is understood to be that which must necessarily

come, although it may not be known when.

If the uncertainty consists in whether the day will come or not,

the obligation is conditional, and it shall be regulated by the rules of
the preceding Section.770

1. Suspensive period; effect if suspensive period is

for the benefit of both debtor and of creditor,
unless given in favor of one of them; if given to
debtor alone, debtor losses benefit of period in any
of the five cases in Art. 1198 obligation retroact
to the day of its constitution

Suspensive period

- the obligation has already arisen except that it is not yet

demandable

If the term is for the benefit of the creditor -

The creditor can demand performance anytime; but the

debtor cannot insist on payment before the period.
767
supra
768
Art. 1190, par. 3
769
General rule:
If a period is attached in an obligation, the presumption is that it is for the benefit of both parties. The
consequence is that the creditor cannot compel the performance before the arrival of the term; the debtor
cannot compel acceptance before the arrival of the term.
770
Art. 1193

190
 If the term is for the benefit of the debtor -

The creditor cannot demand performance anytime; but

the debtor can insist on performance anytime.771

The debtor shall lose every right to make use of the period:

(1) After the obligation has been contracted, he becomes insolvent,

unless he gives a guaranty or security for the debt;

(2) He does not furnish to the creditor the guaranties or securities

which he has promised;

(3) By his own acts he has impaired said guaranties or securities

after their establishment, and when through a fortuitous event they
disappear, unless he immediately gives new ones equally
satisfactory;

(4) Debtor violates any undertaking, in consideration of which the

creditor agreed to the period;

(5) Debtor attempts to abscond772

2. Resolutory period

Obligations with a resolutory period take effect at once, but

terminate upon arrival of the day certain.773

3. Definite or indefinite period

a. Instances when courts may fix the period

If the obligation does not fix a period, but from its nature and
the circumstances it can be inferred that a period was intended, the
courts may fix the duration thereof.
771
Illustrations: "I promise to pay within 60 days." This is a term for the benefit of the debtor.
"I promise to pay Clara the sum of P100,000 on or before Oct. 31, 1996." This is a term for the benefit of
the debtor.
772
Art. 1198
773
in diem, or resolutory

191
 The courts shall also fix the duration of the period when it
depends upon the will of the debtor.

In every case, the courts shall determine such period as may

under the circumstances have been probably contemplated by the
parties. Once fixed by the courts, the period cannot be changed by
them.774

b. Creditor must ask court to set the period,

before he can demand payment

D. Alternative or Facultative775

1. Difference between alternative and facultative

obligations776

As to contents of the obligation: In the alternative, there are

various prestations all of w/c constitute parts of the obligation; while
in facultative, only the principal prestation constitutes the obligation,
the accessory being only a means to facilitate payment.

As to nullity: In alternative obligations, the nullity of one

prestation does not invalidate the obligation, w/c is still in force w/
respect to those w/c have no vice; while in facultative, the nullity of
the principal prestation invalidates the obligation and the creditor
cannot demand the substitute even when this is valid.

As to choice: In alternative, the right to choose may be given

to the creditor; while in facultative, only the debtor can choose the
substitute prestation.

As to effect of loss: In alternative, only the impossibility of all

the prestations due w/o fault of the debtor extinguishes the
obligation; while in facultative, the impossibility of the principal

774
Art. 1197
775
Art. 1199. A person alternatively bound by different prestations shall completely perform one of them.
The creditor cannot be compelled to receive part of one and part of the other undertaking.
776
Facultative obligations always involve choice by the debtor.
In theory, it is easy to distinguish a facultative obligation from an alternative one. But in practice, it is
difficult to distinguish the two. You just have to find out what the parties really intended (Balane)

192
prestation is sufficient to extinguish the obligation, even if the
substitute is possible.777
2. Effect of loss of specific things or impossibility of
performance of alternative, through fault of
debtor/creditor or through fortuitous events

If the choice is debtor's

a. When only one prestation is left (whether or not the the rest
of the prestations have been lost through fortuitous event or through
the fault of the debtor), the debtor may perform the one that is
left.778

b. If the choice is limited through the creditor's own acts, the

debtor can ask for resolution plus damages.779

c. If everything is lost through the debtor's fault, the latter is

liable to indemnify the creditor for damages.780
d. If some things are lost through the debtor's fault, the debtor
can still choose from those remaining.

e. If all are lost through fortuitous event, the obligation is

extinguished.

f. If all prestations but one are lost through fortuitous event,

and the remaining prestation was lost through the debtor's fault, the
latter is liable to indemnify the creditor for damages.

g. If all but one are lost through the fault of the debor and the
last one was lost through through fortuitous event, the obligation is
extinguished.

Choice is the creditor's

a. If one or some are lost through fortuitous event, the

creditor may choose from those remaining.781

777
IV Tolentino
778
Art. 1202
779
Art. 1203
780
Art. 1204
781
Art. 1205 (1)

193
 b. If one or some are lost through the debtor's fault, the
creditor has choice from the remainder or the value of the things lost
plus damages.782

c. If all are lost through the debtor's fault, the choice of the
creditor shall fall upon the price of any of them, w/ indemnity for
damages.783

d. If some are lost through the creditor's fault, the creditor

may choose from the remainder.

e. If all are lost through fortuitous event, the obligation is

extinguished.

f. If all are lost through the creditor's fault, the obligation is

extinguished.

VIII. Joint and Solidary obligation

A. Joint (divisible) obligation

1. Concurrence of two or more creditors and or

two or more debtors

a. Joint obligation is presumed, unless

otherwise indicated by the law or nature
of obligation

The concurrence of two or more creditors or of two or more

debtors in one and the same obligation does not imply that each one
of the former has a right to demand, or that each one of the latter is
bound to render, entire compliance with the prestation. There is a
solidary liability only when the obligation expressly so states, or
when the law or the nature of the obligation requires solidarity. 784

b. Obligation presumed to be divided into as

many equal shares as there are creditors
or debtors

782
Art. 1205 (2)
783
Art. 1205 (3)
784
Art. 1207

194
 The credit or debt or deemed divided into as many shares as
there are creditors or debtors to each other, each resulting credit or
debt being considered distinct from one another.785

c. Each credit is distinct from one another,

therefore a joint debtor cannot be
required to pay for the share of another
with debtor, although he may pay if he
wants to

If the division is impossible, the right of the creditors may be

prejudiced only by their collective acts, and the debt can be enforced
only by proceeding against all the debtors. If one of the latter should
be insolvent, the others shall not be liable for his share.786

d. Insolvency of a joint debtor, others not

liable for his share787

B. Joint Indivisible Obligation

1. Obligation cannot be performed in parts but

debtors are bound jointly

Generally, obligations are indivisible since the integrity of the

obligations requires their payment or performance completely.788

2. In case of failure of one joint debtor to perform

his part (share), there is default but only debtor
guilty shall be liable for damages

A joint indivisible obligation gives rise to indemnity for

damages from the time anyone of the debtors does not comply with
his undertaking. The debtors who may have been ready to fulfill their
promises shall not contribute to the indemnity beyond the
corresponding portion of the price of the thing or of the value of the
service in which the obligation consists.789

C. Solidary obligation

785
see Art. 1208
786
Art. 1209
787
ibid
788
Arts. 1233 and 1248.
789
Art. 1224

195
 1. Anyone of the solidary creditors may collect or
demand payment of whole obligation; there is
mutual agency among solidary debtors

The debtor may pay any one of the solidary creditors; but if any
demand, judicial or extrajudicial, has been made by one of them,
payment should be made to him.790

Novation, compensation, confusion or remission of the debt,

made by any of the solidary creditors or with any of the solidary
debtors, shall extinguish the obligation, without prejudice to the
provisions of article 1219.

The creditor who may have executed any of these acts, as well
as he who collects the debt, shall be liable to the others for the share
in the obligation corresponding to them.791

2. Any of the solidary debtor may be required to

pay the whole obligation; there is mutual
guaranty among solidary debtors

The creditor may proceed against any one of the solidary

debtors or some or all of them simultaneously. The demand made
against one of them shall not be an obstacle to those which may
subsequently be directed against the others, so long as the debt has
not been fully collected.792

Payment made by one of the solidary debtors extinguishes the

obligation. If two or more solidary debtors offer to pay, the creditor
may choose which offer to accept.

He who made the payment may claim from his co-debtors only
the share which corresponds to each, with the interest for the
payment already made. If the payment is made before the debt is
due, no interest for the intervening period may be demanded.

When one of the solidary debtors cannot, because of his

insolvency, reimburse his share to the debtor paying the obligation,

790
Art. 1214
791
Art. 1215
792
Art. 1216

196
such share shall be borne by all his co-debtors, in proportion to the
debt of each.793

A solidary debtor may, in actions filed by the creditor, avail

himself of all defenses which are derived from the nature of the
obligation and of those which are personal to him, or pertain to his
own share. With respect to those which personally belong to the
others, he may avail himself thereof only as regards that part of the
debt for which the latter are responsible.794

3. Each one of solidary creditors may do whatever

maybe useful to the others, but not anything
prejudicial to them; however, any novation,
compensation, confusion or remission of debt
executed by any solidary creditor shall
extinguish the obligation without prejudice to
his liability for the shares of the other solidary
creditors

Each one of the solidary creditors may do whatever may be

useful to the others, but not anything which may be prejudicial to the
latter.795

D. Divisible and Indivisible

For the purposes of the preceding articles, obligations to give

definite things and those which are not susceptible of partial
performance shall be deemed to be indivisible.

When the obligation has for its object the execution of a certain
number of days of work, the accomplishment of work by metrical
units, or analogous things which by their nature are susceptible of
partial performance, it shall be divisible.

However, even though the object or service may be physically

divisible, an obligation is indivisible if so provided by law or intended
by the parties.

793
Art. 1217
794
Art. 1222
795
Art. 1222

197
 In obligations not to do, divisibility or indivisibility shall be
determined by the character of the prestation in each particular
case.796

E. Obligations with a Penal Clause

In obligations with a penal clause, the penalty shall substitute

the indemnity for damages and the payment of interests in case of
noncompliance, if there is no stipulation to the contrary.
Nevertheless, damages shall be paid if the obligor refuses to pay the
penalty or is guilty of fraud in the fulfillment of the obligation.

The penalty may be enforced only when it is demandable in

accordance with the provisions of this Code.797

Proof of actual damages suffered by the creditor is not

necessary in order that the penalty may be demanded. 798

The judge shall equitably reduce the penalty when the

principal obligation has been partly or irregularly complied with by
the debtor. Even if there has been no performance, the penalty may
also be reduced by the courts if it is iniquitous or unconscionable.799

The nullity of the penal clause does not carry with it that of the
principal obligation.

The nullity of the principal obligation carries with it that of the

penal clause.800

IX. Extinguishment of Obligations

A. Payment

The creditor is not bound to accept payment or performance by

a third person who has no interest in the fulfillment of the obligation,
unless there is a stipulation to the contrary.

796
Art. 1225
797
Art. 1226
798
Art. 1228
799
Art. 1229
800
Art. 1230

198
 Whoever pays for another may demand from the debtor what
he has paid, except that if he paid without the knowledge or against
the will of the debtor, he can recover only insofar as the payment has
been beneficial to the debtor. 801

Whoever pays on behalf of the debtor without the knowledge

or against the will of the latter, cannot compel the creditor to
subrogate him in his rights, such as those arising from a mortgage,
guaranty, or penalty.802

Payment made by a third person who does not intend to be

reimbursed by the debtor is deemed to be a donation, which requires
the debtor's consent. But the payment is in any case valid as to the
creditor who has accepted it803
1. Dation in payment

Dation in payment, whereby property is alienated to the

creditor in satisfaction of a debt in money, shall be governed by the
law of sales.804
2. Form of payment

The payment of debts in money shall be made in the currency

stipulated, and if it is not possible to deliver such currency, then in
the currency which is legal tender in the Philippines.

The delivery of promissory notes payable to order, or bills of

exchange or other mercantile documents shall produce the effect of
payment only when they have been cashed, or when through the
fault of the creditor they have been impaired.
In the meantime, the action derived from the original
obligation shall be held in the abeyance.805

3. Extraordinary inflation or deflation

In case an extraordinary inflation or deflation of the currency

stipulated should supervene, the value of the currency at the time of
801
Art. 1236
802
Art. 1237
803
Art. 1238
804
Art. 1245
Dation in payment is governed by the law on sales because it is as if the creditor is now the
vendee,and the debtor becomes now the vendor.
805
Art. 1249

199
the establishment of the obligation shall be the basis of payment,
unless there is an agreement to the contrary.806

4. Application of payment807

He who has various debts of the same kind in favor of one and
the same creditor, may declare at the time of making the payment, to
which of them the same must be applied. Unless the parties so
stipulate, or when the application of payment is made by the party
for whose benefit the term has been constituted, application shall not
be made as to debts which are not yet due.

If the debtor accepts from the creditor a receipt in which an

application of the payment is made, the former cannot complain of
the same, unless there is a cause for invalidating the contract.808

If the debt produces interest, payment of the principal shall not

be deemed to have been made until the interests have been
covered.809

When the payment cannot be applied in accordance with the

preceding rules, or if application cannot be inferred from other
circumstances, the debt which is most onerous to the debtor, among
those due, shall be deemed to have been satisfied.

If the debts due are of the same nature and burden, the
payment shall be applied to all of them proportionately.810

5. Tender of Payment and Consignation

If the creditor to whom tender of payment has been made

refuses without just cause to accept it, the debtor shall be released
from responsibility by the consignation of the thing or sum due.

Consignation alone shall produce the same effect in the

following cases:

806
Art. 1250
807
the designation of a debt which is being paid by the debtor who has several obligations of the same
kind in favor of the creditor to whom the payment is made (quoting Tolentino.)
808
Art. 1252
809
Art. 1253
810
Art. 1254

200
(1) When the creditor is absent or unknown, or does not appear at
the place of payment;
(2) When he is incapacitated to receive the payment at the time it is
due;
(3) When, without just cause, he refuses to give a receipt;
(4) When two or more persons claim the same right to collect;
(5) When the title of the obligation has been lost.811

In order that the consignation of the thing due may release the
obligor, it must first be announced to the persons interested in the
fulfillment of the obligation.

The consignation shall be ineffectual if it is not made strictly in

consonance with the provisions which regulate payment.812

Consignation shall be made by depositing the things due at the

disposal of judicial authority, before whom the tender of payment
shall be proved, in a proper case, and the announcement of the
consignation in other cases.

The consignation having been made, the interested parties

shall also be notified thereof.813

The expenses of consignation, when properly made, shall be

charged against the creditor.814

Once the consignation has been duly made, the debtor may ask
the judge to order the cancellation of the obligation.

Before the creditor has accepted the consignation, or before a

judicial declaration that the consignation has been properly made,
the debtor may withdraw the thing or the sum deposited, allowing
the obligation to remain in force.815

If, the consignation having been made, the creditor should

authorize the debtor to withdraw the same, he shall lose every

811
Art.1256
812
Art. 1257
813
Art. 1258
814
Art. 1259
815
Art. 1260

201
preference which he may have over the thing. The co-debtors,
guarantors and sureties shall be released.816

B. Loss of Determinate Thing Due or Impossibility or difficulty of

performance

An obligation which consists in the delivery of a determinate

thing shall be extinguished if it should be lost or destroyed without
the fault of the debtor, and before he has incurred in delay.

When by law or stipulation, the obligor is liable even for

fortuitous events, the loss of the thing does not extinguish the
obligation, and he shall be responsible for damages. The same rule
applies when the nature of the obligation requires the assumption of
risk.817

The debtor in obligations to do shall also be released when the

prestation becomes legally or physically impossible without the fault
of the obligor.818

When the service has become so difficult as to be manifestly

beyond the contemplation of the parties, the obligor may also be
released therefrom, in whole or in part.819

C. Condonation or Remission of Debt820

816
Art. 1261
817
Art. 1262
818
Art. 1266
819
Art. 1267
820
an act of liberality by virtue of w/c, w/o receiving any equivalent, the creditor renounces enforcement
of an obligation w/c is extinguished in whole or in part.
Four (4) requisites:
1. Debt that is existing. You can remit a debt even before it is due.
2. Renunciation must be gratuitous. If renunciation is for a consideration, the mode of
extinguishment may be something else. It may be novation, compromise of dacion en pago.
3. Acceptance by the debtor
4. Capacity of the parties.
The form of donation must be observed. If the condonation involves movables, apply Art. 748. If it
involves immovables, apply Art. 749. But note that the creditor may just refuse to collect (w/o observing
any form.) In this case, the obligation will be extinguished not by virtue of condonation but by waiver

202
 1. Express Formality of Donation

Condonation or remission is essentially gratuitous, and

requires the acceptance by the obligor. It may be made expressly or
impliedly.

One and the other kind shall be subject to the rules which
govern inofficious donations. Express condonation shall,
furthermore, comply with the forms of donation.821

2. Implied

The delivery of a private document evidencing a credit, made

voluntarily by the creditor to the debtor, implies the renunciation of
the action which the former had against the latter.

If in order to nullify this waiver it should be claimed to be

inofficious, the debtor and his heirs may uphold it by proving that the
delivery of the document was made in virtue of payment of the
debt.822

Whenever the private document in which the debt appears is

found in the possession of the debtor, it shall be presumed that the
creditor delivered it voluntarily, unless the contrary is proved.823

It is presumed that the accessory obligation of pledge has been

remitted when the thing pledged, after its delivery to the creditor, is
found in the possession of the debtor, or of a third person who owns
the thing.824
D. Confusion

The obligation is extinguished from the time the characters of

creditor and debtor are merged in the same person.825

E. Compensation

under Art. 6.
821
Art. 1270
822
Art. 1271
823
Art. 1272
824
Art. 1274
825
Art. 1275

203
 1. Kinds

Compensation shall take place when two persons, in their own

right, are creditors and debtors of each other.826

In order that compensation may be proper, it is necessary:

(1) That each one of the obligors be bound principally, and that he be
at the same time a principal creditor of the other;

(2) That both debts consist in a sum of money, or if the things due
are consumable, they be of the same kind, and also of the same
quality if the latter has been stated;

(3) That the two debts be due;

(4) That they be liquidated and demandable;

(5) That over neither of them there be any retention or controversy,

commenced by third persons and communicated in due time to the
debtor.827

a. Legal compensation

Compensation takes place by operation of law, even though the

debts may be payable at different places, but there shall be an
indemnity for expenses of exchange or transportation to the place of
payment.828

Compensation shall not be proper when one of the debts arises

from a depositum or from the obligations of a depositary or of a
bailee in commodatum.

Neither can compensation be set up against a creditor who has

a claim for support due by gratuitous title, without prejudice to the
provisions of paragraph 2 of article 301.829
Neither shall there be compensation if one of the debts
consists in civil liability arising from a penal offense.830
826
Art. 1278
827
Art. 1279
828
Art. 1286
829
Art. 1287
830
Art. 1288

204
 If a person should have against him several debts which are
susceptible of compensation, the rules on the application of
payments shall apply to the order of the compensation.831

When all the requisites mentioned in article 1279 are present,

compensation takes effect by operation of law, and extinguishes both
debts to the concurrent amount, even though the creditors and
debtors are not aware of the compensation.832

b. Agreement

The parties may agree upon the compensation of debts which

are not yet due.833

c. Voluntary834

d. Judicial

If one of the parties to a suit over an obligation has a claim for

damages against the other, the former may set it off by proving his
right to said damages and the amount thereof.835
e. Facultative

Takes place when compensation is claimable by only one of the

parties but not of the other.836

2. Obligations not compensable

Compensation shall not be proper when one of the debts arises

from a depositum or from the obligations of a depositary or of a
bailee in commodatum.

Neither can compensation be set up against a creditor who has

a claim for support due by gratuitous title, without prejudice to the
provisions of paragraph 2 of article 301.837
831
Art. 1289
832
Art. 1290
833
Art. 1282
834
See (b) Agreement
835
Art. 1283
836
e.g., Arts. 1287, 1288
837
Art. 1287

205
 Neither shall there be compensation if one of the debts
consists in civil liability arising from a penal offense.838

F. Novation

Obligations may be modified by:

(1) Changing their object or principal conditions;

(2) Substituting the person of the debtor;

(3) Subrogating a third person in the rights of the creditor.839

In order that an obligation may be extinguished by another

which substitute the same, it is imperative that it be so declared in
unequivocal terms, or that the old and the new obligations be on
every point incompatible with each other.840

Novation which consists in substituting a new debtor in the

place of the original one, may be made even without the knowledge
or against the will of the latter, but not without the consent of the
creditor. Payment by the new debtor gives him the rights mentioned
in articles 1236 and 1237.841

If the substitution is without the knowledge or against the will

of the debtor, the new debtor's insolvency or non-fulfillment of the
obligations shall not give rise to any liability on the part of the
original debtor.842

The insolvency of the new debtor, who has been proposed by

the original debtor and accepted by the creditor, shall not revive the
action of the latter against the original obligor, except when said
insolvency was already existing and of public knowledge, or known
to the debtor, when the delegated his debt.843

838
Art. 1288
839
Art. 1291
840
Art. 1292
841
Art. 1293
842
Art. 1294
843
Art. 1295

206
 When the principal obligation is extinguished in consequence
of a novation, accessory obligations may subsist only insofar as they
may benefit third persons who did not give their consent.844

If the new obligation is void, the original one shall subsist,

unless the parties intended that the former relation should be
extinguished in any event.845

The novation is void if the original obligation was void, except

when annulment may be claimed only by the debtor or when
ratification validates acts which are voidable.846

If the original obligation was subject to a suspensive or

resolutory condition, the new obligation shall be under the same
condition, unless it is otherwise stipulated.847

Subrogation of a third person in the rights of the creditor is

either legal or conventional. The former is not presumed, except in
cases expressly mentioned in this Code; the latter must be clearly
established in order that it may take effect.848

Conventional subrogation of a third person requires the

consent of the original parties and of the third person.849

It is presumed that there is legal subrogation:

(1) When a creditor pays another creditor who is preferred, even

without the debtor's knowledge;

(2) When a third person, not interested in the obligation, pays with
the express or tacit approval of the debtor;

(3) When, even without the knowledge of the debtor, a person

interested in the fulfillment of the obligation pays, without prejudice
to the effects of confusion as to the latter's share.850

844
Art. 1296
845
Art. 1297
846
Art. 1298
847
Art. 1299
848
Art. 1300
849
Art. 1301
850
Art. 1302

207
 Subrogation transfers to the persons subrogated the credit
with all the rights thereto appertaining, either against the debtor or
against third person, be they guarantors or possessors of mortgages,
subject to stipulation in a conventional subrogation.851

A creditor, to whom partial payment has been made, may

exercise his right for the remainder, and he shall be preferred to the
person who has been subrogated in his place in virtue of the partial
payment of the same credit.852

CONTRACTS

I. Essential Requisites

There is no contract unless the following requisites concur:

(1) Consent of the contracting parties;

(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established.853

II. Kinds of Contracts

A. Consensual - perfected by mere consent and from that

moment, the parties are bound not only to the
fulfillment of what has been expressly stipulated but
also to all consequences which, according to their
nature may be in keeping with good faith, usage and
law.

B. Real - like deposit, pledge and commodatum requires

delivery of object for perfection.

C. Formal or Solemn

Requires compliance with certain formalities prescribed by

law, such prescribed form being an essential element
851
Art. 1303
852
Art. 1304
853
Art. 1381

208
 1. Donations

The donation of a movable may be made orally or in writing.

An oral donation requires the simultaneous delivery of the

thing or of the document representing the right donated.

If the value of the personal property donated exceeds five

thousand pesos, the donation and the acceptance shall be made in
writing. Otherwise, the donation shall be void.854

In order that the donation of an immovable may be valid, it

must be made in a public document, specifying therein the property
donated and the value of the charges which the donee must satisfy.

The acceptance may be made in the same deed of donation or

in a separate public document, but it shall not take effect unless it is
done during the lifetime of the donor.

If the acceptance is made in a separate instrument, the donor

shall be notified thereof in an authentic form, and this step shall be
noted in both instruments.855

2. Partnership where real property contributed

A partnership may be constituted in any form, except where

immovable property or real rights are contributed thereto, in which
case a public instrument shall be necessary.856

A contract of partnership is void, whenever immovable

property is contributed thereto, if an inventory of said property is not
made, signed by the parties, and attached to the public
instrument.857

3. Antichresis

854
Art. 748
855
Art. 749
856
Art. 1771
857
Art. 1773

209
 The amount of the principal and of the interest shall be
specified in writing; otherwise, the contract of antichresis shall be
void.858

4. Agency to sell real property or an interest

therein

When a sale of a piece of land or any interest therein is

through an agent, the authority of the latter shall be in writing;
otherwise, the sale shall be void.859

5. Stipulation to charge interest

No interest shall be due unless it has been expressly stipulated

in writing.860

6. Stipulation limiting common carriers duty of

extraordinary diligence to ordinary diligence

A stipulation between the common carrier and the shipper or

owner limiting the liability of the former for the loss, destruction, or
deterioration of the goods to a degree less than extraordinary
diligence shall be valid, provided it be:

(1) In writing, signed by the shipper or owner;

(2) Supported by a valuable consideration other than the
service rendered by the common carrier; and
(3) Reasonable, just and not contrary to public policy.861

7. Chattel mortgage

By a chattel mortgage, personal property is recorded in the

Chattel Mortgage Register as a security for the performance of an
obligation. If the movable, instead of being recorded, is delivered to
the creditor or a third person, the contract is a pledge and not a
chattel mortgage.862

858
Art. 2134
859
Art. 1874
860
Art. 1956
861
Art. 1744
862
Art. 2140

210
 8. Sale of large cattle

The sale of large cattle is governed by special law863 which

requires that the same be in a public instrument.

No person, partnership, association, corporation or entity shall

engage in the business of buy and sell of large cattle without first
securing a permit for the said purpose from the Provincial
Commander of the province where it shall conduct such business and
the city/municipal treasurer of the place of residence of such person,
partnership, association, corporation or entity. The permit shall only
be valid in such province.864

III. Formality

Contracts shall be obligatory, in whatever form they may have

been entered into, provided all the essential requisites for their
validity are present. However, when the law requires that a contract
be in some form in order that it may be valid or enforceable, or that
a contract be proved in a certain way, that requirement is absolute
and indispensable. In such cases, the right of the parties stated in
the following article cannot be exercised.865

If the law requires a document or other special form, as in the

acts and contracts enumerated in the following article, the
contracting parties may compel each other to observe that form,
once the contract has been perfected. This right may be exercised
simultaneously with the action upon the contract.866

The following must appear in a public document:

(1) Acts and contracts which have for their object the creation,
transmission, modification or extinguishment of real rights over
immovable property; sales of real property or of an interest therein
are governed by articles 1403, No. 2, and 1405;

(2) The cession, repudiation or renunciation of hereditary rights or of

those of the conjugal partnership of gains;

863
Act No. 1147
864
Sec. 5, P.D. 533
865
Art. 1356
866
Art. 1357

211
(3) The power to administer property, or any other power which has
for its object an act appearing or which should appear in a public
document, or should prejudice a third person;

(4) The cession of actions or rights proceeding from an act appearing

in a public document.

All other contracts where the amount involved exceeds five

hundred pesos must appear in writing, even a private one. But sales
of goods, chattels or things in action are governed by articles, 1403,
No. 2 and 1405.867

IV. Defective Contracts

A. Rescissible Contracts868

The following contracts are rescissible:

(1) Those which are entered into by guardians whenever the wards
whom they represent suffer lesion by more than one-fourth of the
value of the things which are the object thereof;

(2) Those agreed upon in representation of absentees, if the latter

suffer the lesion stated in the preceding number;

(3) Those undertaken in fraud of creditors when the latter cannot in

any other manner collect the claims due them;

(4) Those which refer to things under litigation if they have been
entered into by the defendant without the knowledge and approval of
the litigants or of competent judicial authority;

(5) All other contracts specially declared by law to be subject to

rescission.869

(6) Payments made in a state of insolvency on account of obligations

not yet enforceable

1. Difference with Rescission (resolution)

867
Art. 1358
868
Contracts validly agreed upon but, by reason of lesion or economic prejudice may be rescinded in
cases established by law.
869
Art. 1381

212
 The power to rescind obligations is implied in reciprocal ones,
in case one of the obligors should not comply with what is incumbent
upon him.

The injured party may choose between the fulfillment and the
rescission of the obligation, with the payment of damages in either
case. He may also seek rescission, even after he has chosen
fulfillment, if the latter should become impossible.

The court shall decree the rescission claimed, unless there be

just cause authorizing the fixing of a period.

This is understood to be without prejudice to the rights of third

persons who have acquired the thing, in accordance with articles
1385 and 1388 and the Mortgage Law.870

Rescission in Rescission Proper

Article 1191 in Article 1381
1. It is a principal 1. It is a subsidiary
action retaliatory in remedy.
character.
2. The only ground is 2. There are 5
non-performance of grounds to rescind.
ones obligation/s or Non-performance by
what is incumbent the other party is not
upon him. important.
3. It applies only to 3. It applies to both
reciprocal obligation unilateral and

870
Art. 1191

213
 reciprocal
obligations.
4. Only a party to the 4. Even a 3rd person
contract may demand who is prejudiced by
fulfillment or seek the contract may
the rescission of the demand the
contract. rescission of the
contract.
5. Court may fix a 5. Court cannot grant
period or grant extension of time for
extension of time for fulfillment of the
the fulfillment of the obligation.
obligation.
6. Its purpose is to 6. Its purpose is to
cancel the contract. seek reparation for
the damage or injury
caused, thus allowing
partial rescission of
the contract.

B. Voidable Contracts871

Contracts entered into during a lucid interval are valid.

Contracts agreed to in a state of drunkenness or during a hypnotic
spell are voidable.872

The incapacity declared in article 1327 is subject to the

modifications determined by law, and is understood to be without
prejudice to special disqualifications established in the laws.873

871
Art. 1409
Those in which all of the essential elements for validity are present, although the element of consent is
vitiated either by lack of capacity of one of the contracting parties or by VIMFU.
What contracts are voidable:
1. Those where one of the parties is incapable of giving consent to a contract
2. Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud
3. By loss of the thing which is the object of the contract through fraud or fault of the person who is
entitled to annul the contract.
Ratification
Requisites:
a. there must be knowledge of the reason which renders the contract voidable
b. such reason must have ceased and
c. the injured party must have executed an act which expressly or impliedly conveys an intention to waive
his right
If the object is lost through fortuitous event, the contract can still be annulled, but the person obliged to
return the same can be held liable only for the value of the thing at the time of
Art. 1409
872
Art. 1328
873
Art. 1329

214
 A contract where consent is given through mistake, violence,
intimidation, undue influence, or fraud is voidable.874

In order that mistake may invalidate consent, it should refer to

the substance of the thing which is the object of the contract, or to
those conditions which have principally moved one or both parties to
enter into the contract.

Mistake as to the identity or qualifications of one of the parties

will vitiate consent only when such identity or qualifications have
been the principal cause of the contract.

A simple mistake of account shall give rise to its correction. 875

When one of the parties is unable to read, or if the contract is
in a language not understood by him, and mistake or fraud is
alleged, the person enforcing the contract must show that the terms
thereof have been fully explained to the former.876

There is no mistake if the party alleging it knew the doubt,

contingency or risk affecting the object of the contract.877

Mutual error as to the legal effect of an agreement when the

real purpose of the parties is frustrated, may vitiate consent.878

There is violence when in order to wrest consent, serious or

irresistible force is employed.

There is intimidation when one of the contracting parties is

compelled by a reasonable and well-grounded fear of an imminent
and grave evil upon his person or property, or upon the person or
property of his spouse, descendants or ascendants, to give his
consent.

To determine the degree of intimidation, the age, sex and

condition of the person shall be borne in mind.

874
Art. 1330
875
Art. 1331
876
Art. 1332
877
Art. 1333
878
Art. 1334

215
 A threat to enforce one's claim through competent authority, if
the claim is just or legal, does not vitiate consent.879

Violence or intimidation shall annul the obligation, although it

may have been employed by a third person who did not take part in
the contract.880

There is undue influence when a person takes improper

advantage of his power over the will of another, depriving the latter
of a reasonable freedom of choice. The following circumstances shall
be considered: the confidential, family, spiritual and other relations
between the parties, or the fact that the person alleged to have been
unduly influenced was suffering from mental weakness, or was
ignorant or in financial distress.881

There is fraud when, through insidious words or machinations

of one of the contracting parties, the other is induced to enter into a
contract which, without them, he would not have agreed to.882

Failure to disclose facts, when there is a duty to reveal them,

as when the parties are bound by confidential relations, constitutes
fraud.883

The usual exaggerations in trade, when the other party had an

opportunity to know the facts, are not in themselves fraudulent.884

A mere expression of an opinion does not signify fraud, unless

made by an expert and the other party has relied on the former's
special knowledge.885

Misrepresentation by a third person does not vitiate consent,

unless such misrepresentation has created substantial mistake and
the same is mutual.886

879
Art. 1335
880
Art. 1336
881
Art. 1337
882
Art. 1338
883
Art. 1339
884
Art. 1340
885
Art. 1341
886
Art. 1342

216
 Misrepresentation made in good faith is not fraudulent but may
constitute error.887

In order that fraud may make a contract voidable, it should be

serious and should not have been employed by both contracting
parties.

Incidental fraud only obliges the person employing it to pay

damages.888

The following contracts are voidable or annullable, even

though there may have been no damage to the contracting parties:

(1) Those where one of the parties is incapable of giving consent to a

contract;

(2) Those where the consent is vitiated by mistake, violence,

intimidation, undue influence or fraud.

These contracts are binding, unless they are annulled by a

proper action in court. They are susceptible of ratification. 889

The action for annulment shall be brought within four years.

This period shall begin:

In cases of intimidation, violence or undue influence, from the time

the defect of the consent ceases.

In case of mistake or fraud, from the time of the discovery of the

same.

And when the action refers to contracts entered into by minors

or other incapacitated persons, from the time the guardianship
ceases.890

Ratification extinguishes the action to annul a voidable

contract.891

887
Art. 1343
888
Art. 1344
889
Art. 1390
890
Art. 1391
891
Art. 1392

217
 Ratification may be effected expressly or tacitly. It is
understood that there is a tacit ratification if, with knowledge of the
reason which renders the contract voidable and such reason having
ceased, the person who has a right to invoke it should execute an act
which necessarily implies an intention to waive his right.892

Ratification may be effected by the guardian of the

incapacitated person.893

Ratification does not require the conformity of the contracting

party who has no right to bring the action for annulment.894

Ratification cleanses the contract from all its defects from the
moment it was constituted.895

The action for the annulment of contracts may be instituted by

all who are thereby obliged principally or subsidiarily. However,
persons who are capable cannot allege the incapacity of those with
whom they contracted; nor can those who exerted intimidation,
violence, or undue influence, or employed fraud, or caused mistake
base their action upon these flaws of the contract.896

An obligation having been annulled, the contracting parties

shall restore to each other the things which have been the subject
matter of the contract, with their fruits, and the price with its
interest, except in cases provided by law.

In obligations to render service, the value thereof shall be the

basis for damages.897

When the defect of the contract consists in the incapacity of

one of the parties, the incapacitated person is not obliged to make
any restitution except insofar as he has been benefited by the thing
or price received by him.898

892
Art. 1393
893
Art. 1394
894
Art. 1395
895
Art. 1396
896
Art. 1397
897
Art. 1398
898
Art. 1399

218
 Whenever the person obliged by the decree of annulment to
return the thing can not do so because it has been lost through his
fault, he shall return the fruits received and the value of the thing at
the time of the loss, with interest from the same date.899

The action for annulment of contracts shall be extinguished

when the thing which is the object thereof is lost through the fraud
or fault of the person who has a right to institute the proceedings.

If the right of action is based upon the incapacity of any one of

the contracting parties, the loss of the thing shall not be an obstacle
to the success of the action, unless said loss took place through the
fraud or fault of the plaintiff.900

As long as one of the contracting parties does not restore what

in virtue of the decree of annulment he is bound to return, the other
cannot be compelled to comply with what is incumbent upon him.901

C. Unenforceable Contracts902
899
Art. 1400
900
Art. 1401
901
Art. 1402
902
Those which cannot be enforced by proper action in court unless they are ratified
What contracts are unenforceable
1. those entered into in the name of another by one without or acting in excess of authority;
2. those where both parties are incapable of giving consent; and
3. those which do not comply with the Statute of Frauds
Agreements within the scope of the Statute of Frauds (exclusive list):

219
 The following contracts are unenforceable, unless they are
ratified:

(1) Those entered into in the name of another person by one who has
been given no authority or legal representation, or who has acted
beyond his powers;

(2) Those that do not comply with the Statute of Frauds as set forth
in this number. In the following cases an agreement hereafter made
shall be unenforceable by action, unless the same, or some note or
memorandum, thereof, be in writing, and subscribed by the party
charged, or by his agent; evidence, therefore, of the agreement
cannot be received without the writing, or a secondary evidence of
its contents:

(a) An agreement that by its terms is not to be performed

within a year from the making thereof;

(b) A special promise to answer for the debt, default, or

miscarriage of another;

(c) An agreement made in consideration of marriage, other

than a mutual promise to marry;

(d) An agreement for the sale of goods, chattels or things in

action, at a price not less than five hundred pesos, unless the
buyer accept and receive part of such goods and chattels, or
the evidences, or some of them, of such things in action or pay
1. Agreements not to be performed within one year from the making thereof;
2. Special promise to answer for the debt, default or miscarriage of another;
This does not refer to the original or independent promise of the debtor to his own creditor. It refers
rather to a collateral promise.
3. Agreement in consideration of marriage other than a mutual promise to marry;
4. Agreement for the sale of goods, etc. at a price not less than P500.00;
5. Contracts of lease for a period longer than one year;
6. Agreements for the sale of real property or interest therein; and
7. Representation as to the credit of a third person.
The contracts/agreements under the Statute of Frauds require that the same be evidenced by some note,
memorandum or writing, subscribed by the party charged or by his agent, otherwise, the said contracts
shall be unenforceable.
The statute of frauds applies only to executory contracts, not to those that are partially or completely
fulfilled.
Ratification of contracts in violation of the Statute of Frauds
1. Failure to object to the presentation of oral evidence to prove such contracts
2. Acceptance of benefits under these contracts

220
 at the time some part of the purchase money; but when a sale
is made by auction and entry is made by the auctioneer in his
sales book, at the time of the sale, of the amount and kind of
property sold, terms of sale, price, names of the purchasers
and person on whose account the sale is made, it is a sufficient
memorandum;

(e) An agreement for the leasing for a longer period than one
year, or for the sale of real property or of an interest therein;

( f ) A representation as to the credit of a third person.

(3) Those where both parties are incapable of giving consent to a

contract.903

Unauthorized contracts are governed by article 1317 and the

principles of agency in Title X of this Book.904

Contracts infringing the Statute of Frauds, referred to in No. 2

of article 1403, are ratified by the failure to object to the
presentation of oral evidence to prove the same, or by the
acceptance of benefit under them.905

When a contract is enforceable under the Statute of Frauds,

and a public document is necessary for its registration in the
Registry of Deeds, the parties may avail themselves of the right
under Article 1357.906

In a contract where both parties are incapable of giving

consent, express or implied, ratification by the parent, or guardian,
as the case may be, of one of the contracting parties shall give the
contract the same effect as if only one of them were incapacitated.

If ratification is made by the parents or guardians, as the case

may be, of both contracting parties, the contract shall be validated
from the inception.

No one may contract in the name of another without being

authorized by the latter, or unless he has by law a right to represent
him.

903
Art. 1403
904
Art. 1404
905
Art. 1405
906
Art. 1406

221
 A contract entered into in the name of another by one who has
no authority or legal representation, or who has acted beyond his
powers, shall be unenforceable, unless it is ratified, expressly or
impliedly, by the person on whose behalf it has been executed, before
it is revoked by the other contracting party.907

D. Void Contracts908

The following contracts are inexistent and void from the

beginning:

(1) Those whose cause, object or purpose is contrary to law, morals,

good customs, public order or public policy;
(2) Those which are absolutely simulated or fictitious;
(3) Those whose cause or object did not exist at the time of the
transaction;
(4) Those whose object is outside the commerce of men;
(5) Those which contemplate an impossible service;
(6) Those where the intention of the parties relative to the principal
object of the contract cannot be ascertained;
(7) Those expressly prohibited or declared void by law.

These contracts cannot be ratified. Neither can the right to set

up the defense of illegality be waived.909

An absolutely simulated or fictitious contract is void. A relative

simulation, when it does not prejudice a third person and is not
intended for any purpose contrary to law, morals, good customs,
public order or public policy binds the parties to their real
agreement.910

1. Pactum commissorium

The following contracts are voidable or annullable, even

though there may have been no damage to the contracting parties:

907
Art. 1407
908
Those where all of the requisites of a contract are present but the cause, object or purpose is contrary to
law, morals, good customs, public order or public policy, or contract itself is prohibited or declared void
by law.
909
Art. 1409
910
Art. 1346

222
(1) Those where one of the parties is incapable of giving consent to a
contract;

(2) Those where the consent is vitiated by mistake, violence,

intimidation, undue influence or fraud.

These contracts are binding, unless they are annulled by a

proper action in court. They are susceptible of ratification. 911

The creditor cannot appropriate the things given by way of

pledge or mortgage, or dispose of them. Any stipulation to the
contrary is null and void.912

2. Pactum de non alienando

A stipulation forbidding the owner from alienating the

immovable mortgaged shall be void.913

3. Pactum leonina

A stipulation which excludes one or more partners from any

share in the profits or losses is void.914

Comparative table of defective contracts

911
Art. 1390
912
Art. 2088
913
Art. 2130
914
Art. 1799

223
VOID VOIDABLE RESCISSIBLE UNENFORCEABLE

1. Defect is caused Defect is caused by vice Defect is caused by Defect is caused by

by lack of essential of consent injury/ damage either lack of form,
elements or illegality to one of the parties of authority, or capacity
to a 3rd person of both parties not
cured by prescription

2. Do not, as a Valid and enforceable Valid and enforceable Cannot be enforced

general rule produce until they are annulled until they are rescinded by a proper action in
any legal effect by a competent court by a competent court court

3. Action for the Action for annulment or Action for rescission Corresponding action
declaration or nullity defense of annulability may prescribe for recovery, if there
or inexistence or may prescribe was total or partial
defense of nullity or performance of the
inexistence does not unenforceable
prescribe contract under No. 1
or 3 of Article 1403
may prescribe

4. Not cured by Cured by prescription Cured by prescription Not cured by

prescription prescription

5. Cannot be ratified Can be ratified Need not be ratified Can be ratified

6. Assailed not only Assailed only by a Assailed not only by a Assailed only by a
by a contracting contracting party contracting party but contracting party
party but even by a even by a third person
third person whose who is prejudiced or
interest is directly damaged by the
affected contract

7. Assailed directly Assailed directly or Assailed directly only Assailed directly or

or collaterally collaterally collaterally

224
V. Effect of Contracts

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 nature, or by stipulation or by
provision of law. The heir is not liable beyond the value of the
property he received from the decedent.

If a contract should contain some stipulation in favor of a third

person, he may demand its fulfillment provided he communicated his
acceptance to the obligor before its revocation. A mere incidental
benefit or interest of a person is not sufficient. The contracting parties
must have clearly and deliberately conferred a favor upon a third
person.915

SALES916

I. Introduction

A. Definition of Sales

By the contract of sale one of the contracting parties obligates

himself to transfer the ownership and to deliver a determinate thing,
and the other to pay therefor a price certain in money or its
equivalent.

A contract of sale may be absolute or conditional.917

Gross inadequacy of price does not affect a contract of sale,

except as it may indicate a defect in the consent, or that the parties
really intended a donation or some other act or contract.918

B. Essential Requisites of a Contract of Sale

915
Art. 1311
916
A nominate contract whereby one of the contracting parties obligates himself to transfer the ownership
of and to deliver a determinate thing and the other to pay therefor a price certain in money or its equivalent.
Delivery and payment in a contract of sale are so interrelated and intertwined with each other that
without delivery of the goods there is no corresponding obligation to pay. The two complement each other.
It is clear that the two elements cannot be dissociated, for the contract of purchase and sale is essentially a
bilateral contract, as it gives rise to reciprocal obligations. (Pio Barretto Sons, Inc. vs. Compania Maritima,
62 SCRA 167).
Neither is the delivery of the thing bought nor the payment of the price necessary for the perfection of
the contract of sale. Being consensual, it is perfected by mere consent.
917
Art. 1458
918
Art. 1470

225
 Subject to the provisions of this Title, where goods are sold by a
person who is not the owner thereof, and who does not sell them
under authority or with the consent of the owner, the buyer acquires
no better title to the goods than the seller had, unless the owner of
the goods is by his conduct precluded from denying the seller's
authority to sell.

Nothing in this Title, however, shall affect:

(1) The provisions of any factors' act, recording laws, or any other
provision of law enabling the apparent owner of goods to dispose of
them as if he were the true owner thereof;

(2) The validity of any contract of sale under statutory power of sale
or under the order of a court of competent jurisdiction;

(3) Purchases made in a merchant's store, or in fairs, or markets, in

accordance with the Code of Commerce and special laws.919

C. Stages of Contract of Sale

1. negotiation
2. perfection by mere consent; performance may be demanded
(specific performance)
3. consummation

D. Obligations Created

When what is to be delivered is a determinate thing, the

creditor, in addition to the right granted him by article 1170, may
compel the debtor to make the delivery.
If the thing is indeterminate or generic, he may ask that the
obligation be complied with at the expense of the debtor.

If the obligor delays, or has promised to deliver the same thing

to two or more persons who do not have the same interest, he shall be
responsible for any fortuitous event until he has effected the
delivery.920

E. Characteristics of a Contract of Sale

1. Principal - can stand on its own; unlike accessory contract

919
Art. 1505
920
Art. 1165

226
2. Consensual - meeting of minds makes a perfect contract of sale but
needs delivery to consummate.
3. Bilateral - imposes obligation on both parties921
4. Nominate - law gave it a name
5. Commutative - with valuable consideration922
6. Onerous - with valuable consideration
7. Title & not a mode title gives rise to an obligation to transfer; it is a mode w/c
actually transfers ownership

F. Sale is Title and Not Mode

The contract of sale by itself is not a mode of acquiring

ownership. The contact transfers no real rights; it merely causes
certain obligations to arise.

G. Sale Distinguished From Other Contracts

Donation

Donation is gratuitous; sale is onerous

Donation is formal contract; sale is consensual
Donation is governed by law on donation; sale is governed by law on
sales

Barter923

In barter, the consideration is the giving of a thing; in sale, it is giving

of money as payment
Both are governed by law on sales; both are species of the genus sales
If consideration consists party in money & partly by thing look at
manifest intention;

if intention is not clear924:

a. value of thing is equal or less than amount of money sale

b. value of thing is more than amount of money barter

921
obligation of seller transfer ownership & deliver
obligation of buyer pay price
Consequence: power to rescind is implied in bilateral contracts
922
Test: subjective as long as parties believe in all honesty that he is receiving equal value then it
complies with the test & would not be deemed a donation; but must not be absurd.
Inadequacy of price or aleatory character not sufficient ground to cancel contract of sale;
inadequacy can show vitiation of consent & sale may be annulled based on vice but not on inadequacy
923
The only point difference between contract of sale and barter is in the element which is present in sale
but not in barter, namely: price certain in money or its equivalent
924
Art. 1468

227
 Contract for piece of work925

Test:

a. contract for delivery of an article which the vendor in the

ordinary course of business manufactures or procures for
general market (whether on hand or not) sale
b. goods are to be manufactured specially for a customer and
upon special order and not for the general market contract
for piece of work.

Agency to sell

In sale, buyer pays for price of object; in agency to sell, agent not
obliged to pay for price, merely obliged to deliver price received from
buyer.

In sale, buyer becomes owner of thing; in agency; principal remains

owner even if object delivered to agent

In sale, seller warrants; in agency, agent assumes no risk/liability as

long as within the authority given

In sale, not unilaterally revocable; in agency, may be revoked

unilaterally because fiduciary & even if revoked w/o ground

In sale, seller receives profit; in agency, agent not allowed to profit

Agency is a personal contract; sale is a real contract (to give)

rescission is not available in agency

Dacion en pago

Dacion: contract where property is alienated to satisfy/extinguish

obligation to pay debt

In dacion: novates creditor-debtor relationship into seller-buyer

In dacion: delivery is required (real contract)

Lease

925
Art. 1467
main factor in decision of the SC: essence of why parties enter into it:
a. essence is object contract of sale
b. essence is service contract for piece of work

228
In sale: obligation to absolutely transfer ownership of thing; in lease:
use of thing is for a specified period only with an obligation to return

In sale: consideration is price; in lease: consideration is rent

In sale: seller needs to be owner of thing to transfer ownership;

in lease: lessor need not be owner
Conditional Sale Contract to
Sell
As to reservation of title to the subject Lease with option to buy: really
a property contract of sale but designated
as In both cases the seller may reserve the lease in name only; it is a sale by
title to the subject property until
fulfillment of the suspensive condition i.e. installments
full payment of the price
As to effect of fulfillment of suspensive
condition
1. Upon fulfillment of 1. Upon
the suspensive fulfillment of the
condition, the suspensive
Contract contract for of sale Saleis condition, which Sale Dation in Payment
Piece of Work perfected, is
thereby the full 1. No pre-existing 1. Pre-existing credit
1. The thing
suchtransferred
that if isthere1. The
hadthingpayment
transferred of is the credit
one not been
in existence and delivery
previous one whichpurchasewould haveprice, 2. Obligations are 2. Obligations are
which never
of would
the have existed and
subject ownership would have will created extinguished
property
existed but to
for the orderthe buyer, not 3. Consideration on the 3. Consideration of the
Sale Agency to sellof sale
been the subject
part of the seller is the debtor is the
ownership
of the party desiring to thereto
to some other automatically
person,
1. Buyer receives 1. Agent receives price; on the part of extinguishment of the
acquire itautomatically even if the transfer order had not to the
the goods as owner the goods as goods the buyer is the debt; on the part of the
transfers to been the
given buyer although acquisition of the creditor, it is the
of the principal who
buyer by operation the property may object acquisition of the
retains his
of law without2. The anyprimary
haveobjective been object offered in lieu of
2. The services dominate ownership over
further act by the previously the original credit
the contract even though them of the contract is a sale of
seller. delivered to him. 1. Greater freedom 1. Less Freedom in
2. Buyer
there pays
is a sale the 2.
of goods the Agent
manufactured delivers
item;
The prospective in determining the determining the
price
involved the
it is aprice of which
sale seller
goods stillin
even has price price
turn
though he gotthe from
item hisis title
to convey
buyer
manufactured to by labor the
3. Buyer, as a 3. Agent prospective
furnished canthe
by return
seller
2. Buyer still has to 2. The payment is
pay the price received by the
general rule, cannot the and goods in caseorder
buyer
upon previous he by
return the object isof unable to sell the debtor before the
entering into a
the customer contract is
sold same tocontract a third of perfected.
person
3. Not within the Statute 3. Within the absolute
Statutesale.of
4. Seller warrants 4.
of Frauds Agent makes no
Frauds
the thing Assoldto effect warranty
of sale of for thewhich subject
property to 3rd he assumes personal
persons
1. liability as
Constructive 1. longThirdasperson
/actual knowledge he actson buyingwithin his the
the part of the authority and in thedespite
2 nd property
buyer of the defect nameinof the seller of the
fulfilment
5. Buyer the can deal
sellers 5. Agent in
title suspensive dealing
with the thing sold with
renders him not a condition the thingcannot
as he pleases
registrant beingin received,
good bemustdeemed act a
the owner faith. and is
Such second buyer in bad bound
buyer cannot accordingdefeat faith to the and
the first buyersinstructions
title. prospectiveof the
principal
Ratio: Fulfilment of buyer cannot
the suspensive seek the relief of
conditions affects the reconveyance of
sellers title to the property.
property and previous Exception: If
delivery of the There was 229 no
property previous sale of
automatically the property.
transfers
ownership/title to the
buyer.
 H. Contract of Sale/Contract to Sell

Contract to sell926

A bilateral contract whereby the prospective seller, while

expressly reserving the ownership of the subject property despite
delivery thereof to the prospective buyer binds himself to sell the said
property exclusively to the prospective buyer upon fulfilment of the
condition agreed upon, that is, full payment of the purchase price.

Contract of Sale927

Contract of Contract to
Sale Sell
1. Title passes to the 1. Ownership is
buyer upon delivery reserved in the
of the thing sold seller and is not to
pass until full
payment of the
purchase price
2. Non-payment of 2. Full payment is a
the price is a positive suspensive
negative resolutory condition, the
condition and the failure of which is
remedy of the seller not a breach
is to exact fulfilment casual or serious
or to rescind the but simply
contract prevents the
obligation of the
vendor to convey
title from having
binding force
3. Vendor loses and 3. Title remains in

926
Absent a proviso in the contract that the title to the property is reserved in the vendor until full payment
of the purchase price or a stipulation giving the vendor the right to unilaterally rescind the contract the
moment the vendee fails to pay within the fixed period, the transaction is an absolute contract of sale and
not a contract to sell. (Dignos vs. CA [1988])
927
See I.A. Definition of Sales, supra

230
 cannot recover the vendor if the
ownership of the vendee does not
thing sold and comply with the
delivered until the condition
contract of sale is precedent of
resolved and set making payment at
aside the time specified
in the contract

II. Parties to a Contract of Sale

A. Capacity of parties

All persons who are authorized in this Code to obligate

themselves, may enter into a contract of sale, saving the modifications
contained in the following articles.

Where necessaries are those sold and delivered to a minor or

other person without capacity to act, he must pay a reasonable price
therefor. Necessaries are those referred to in article 290. 928

The husband and the wife cannot sell property to each other,
except:

(1) When a separation of property was agreed upon in the marriage

settlements; or
(2) When there has been a judicial separation of property under
article 191.929

The following persons cannot acquire by purchase, even at a

public or judicial auction, either in person or through the mediation of
another:

(1) The guardian, the property of the person or persons who may be
under his guardianship;

(2) Agents, the property whose administration or sale may have been
intrusted to them, unless the consent of the principal has been given;

(3) Executors and administrators, the property of the estate under

administration;

(4) Public officers and employees, the property of the State or of any
subdivision thereof, or of any government-owned or controlled

928
Art. 1489
929
Art. 1490

231
corporation, or institution, the administration of which has been
intrusted to them; this provision shall apply to judges and government
experts who, in any manner whatsoever, take part in the sale;

(5) Justices, judges, prosecuting attorneys, clerks of superior and

inferior courts, and other officers and employees connected with the
administration of justice, the property and rights in litigation or levied
upon an execution before the court within whose jurisdiction or
territory they exercise their respective functions; this prohibition
includes the act of acquiring by assignment and shall apply to
lawyers, with respect to the property and rights which may be the
object of any litigation in which they may take part by virtue of their
profession;

(6) Any others specially disqualified by law.

The prohibitions in the two preceding articles are applicable to

sales in legal redemption, compromises and renunciations.930

B. Absolute incapacity

The following cannot give consent to a contract:

(1) Unemancipated minors;

(2) Insane or demented persons, and deaf-mutes who do not know
how to write931

The action for the annulment of contracts may be instituted by

all who are thereby obliged principally or subsidiarily. However,
persons who are capable cannot allege the incapacity of those with
whom they contracted; nor can those who exerted intimidation,
violence, or undue influence, or employed fraud, or caused mistake
base their action upon these flaws of the contract.932

When the defect of the contract consists in the incapacity of one

of the parties, the incapacitated person is not obliged to make any
restitution except insofar as he has been benefited by the thing or
price received by him.933

C. Relative incapacity: Married Persons

930
Art. 1491
931
Art. 1327
932
Art. 1397
933
Art. 1399

232
The husband and the wife cannot cannot sell property to each other,
except:

(1)When separation of property was agreed upon in the

marriage settlements: or
(2)When there has been a judicial separation of property
between the spouses.934

D. Special disqualifications

The prohibitions in the two preceding articles are applicable to

sales in legal redemption, compromises and renunciations.935

III. Subject Matter

A. Requisites of a valid subject matter

The thing must be licit and the vendor must have a right to
transfer the ownership thereof at the time it is delivered.936

A thing is determinate when it is particularly designated or

physical segregated from all others of the same class.

The requisite that a thing be determinate is satisfied if at the

time the contract is entered into, the thing is capable of being made
determinate without the necessity of a new or further agreement
between the parties.937

Things having a potential existence may be the object of the

contract of sale.

The efficacy of the sale of a mere hope or expectancy is deemed

subject to the condition that the thing will come into existence.

The sale of a vain hope or expectancy is void.938

The goods which form the subject of a contract of sale may be

either existing goods, owned or possessed by the seller, or goods to be

934
Art. 1490
935
Art. 1492
936
Art. 1459
937
Art. 1460
938
Art. 1461

233
manufactured, raised, or acquired by the seller after the perfection of
the contract of sale, in this Title called "future goods."

There may be a contract of sale of goods, whose acquisition by

the seller depends upon a contingency which may or may not
happen.939

The sole owner of a thing may sell an undivided interest

therein.940

In the case of fungible goods, there may be a sale of an

undivided share of a specific mass, though the seller purports to sell
and the buyer to buy a definite number, weight or measure of the
goods in the mass, and though the number, weight or measure of the
goods in the mass, and though the number, weight or measure of the
goods in the mass is undetermined. By such a sale the buyer becomes
owner in common of such a share of the mass as the number, weight
or measure bought bears to the number, weight or measure of the
mass. If the mass contains less than the number, weight or measure
bought, the buyer becomes the owner of the whole mass and the
seller is bound to make good the deficiency from goods of the same
kind and quality, unless a contrary intent appears.941

Things subject to a resolutory condition may be the object of the

contract of sale.942

B. Particular kinds

1. Generic things943
2. Future Goods944
1. Sale of undivided interest or share945
2. Sale of things in litigation946
3. Things subject to a resolutory condition947

IV. Obligations of the Seller to Transfer Ownership

A. Sale by a person not the owner at time of delivery

939
Art. 1462
940
Art. 1463
941
Art. 1464
942
Art. 1465
943
see Arts. 1246 & 1409
944
Art. 1462
945
Arts. 1463 & 1464
946
Arts. 1381 & 1385
947
Art. 1465

234
 The goods which form the subject of a contract of sale may be
either existing goods, owned or possessed by the seller, or goods to be
manufactured, raised, or acquired by the seller after the perfection of
the contract of sale, in this Title called "future goods."

There may be a contract of sale of goods, whose acquisition by

the seller depends upon a contingency which may or may not
happen.948

Subject to the provisions of this Title, where goods are sold by a

person who is not the owner thereof, and who does not sell them
under authority or with the consent of the owner, the buyer acquires
no better title to the goods than the seller had, unless the owner of
the goods is by his conduct precluded from denying the seller's
authority to sell.

Nothing in this Title, however, shall affect:

(1) The provisions of any factors' act, recording laws, or any other
provision of law enabling the apparent owner of goods to dispose of
them as if he were the true owner thereof;

(2) The validity of any contract of sale under statutory power of sale
or under the order of a court of competent jurisdiction;

(3) Purchases made in a merchant's store, or in fairs, or markets, in

accordance with the Code of Commerce and special laws.949

The thing must be licit and the vendor must have a right to
transfer the ownership thereof at the time it is delivered.950

1. Exceptions

B. Sale by a person having a voidable title

Where the seller of goods has a voidable title thereto, but his
title has not been avoided at the time of the sale, the buyer acquires a
good title to the goods, provided he buys them in good faith, for value,
and without notice of the seller's defect of title.951

948
Art. 1462
949
Art. 1505
950
Art. 1459
951
Art. 1506

235
 The possession of movable property acquired in good faith is
equivalent to a title. Nevertheless, one who has lost any movable or
has been unlawfully deprived thereof, may recover it from the person
in possession of the same.

If the possessor of a movable lost or which the owner has been

unlawfully deprived, has acquired it in good faith at a public sale, the
owner cannot obtain its return without reimbursing the price paid
therefor.952

V. Price953

A. Meaning of price

In order that the price may be considered certain, it shall be

sufficient that it be so with reference to another thing certain, or that
the determination thereof be left to the judgment of a special person
or persons.

Should such person or persons be unable or unwilling to fix it,

the contract shall be inefficacious, unless the parties subsequently
agree upon the price.

If the third person or persons acted in bad faith or by mistake,

the courts may fix the price.

Where such third person or persons are prevented from fixing

the price or terms by fault of the seller or the buyer, the party not in
fault may have such remedies against the party in fault as are allowed
the seller or the buyer, as the case may be.954

Gross inadequacy of price does not affect a contract of sale,

except as it may indicate a defect in the consent, or that the parties
really intended a donation or some other act or contract.955

If the price is simulated, the sale is void, but the act may be
shown to have been in reality a donation, or some other act or
contract.956

952
Art. 559
953
The sum stipulated as the equivalent of the thing sold and also every incident taken into consideration
for the fixing of the price, put to the debit of the vendee and agreed to by him.
954
Art. 1469
955
Art. 1470
956
Art. 1471

236
 The price of securities, grain, liquids, and other things shall also
be considered certain, when the price fixed is that which the thing
sold would have on a definite day, or in a particular exchange or
market, or when an amount is fixed above or below the price on such
day, or in such exchange or market, provided said amount be
certain.957

The fixing of the price can never be left to the discretion of one
of the contracting parties. However, if the price fixed by one of the
parties is accepted by the other, the sale is perfected.958

Where the price cannot be determined in accordance with the

preceding articles, or in any other manner, the contract is
inefficacious. However, if the thing or any part thereof has been
delivered to and appropriated by the buyer he must pay a reasonable
price therefor. What is a reasonable price is a question of fact
dependent on the circumstances of each particular case.959

B. Requisites for a valid price

1. Must be real960
2. Must be in money or its equivalent

957
Art. 1472
958
Art. 1473
959
Art. 1474
960
Real
1. When price stated is one intended by parties
If fictitious: no intention with respect to price - VOID
If False/simulated: what appears in contract is not the true price
a. Valid if there is true consideration
b. Void but if none (because it is fictitious)
2. Valuable
When not valuable Void
When contract is onerous, presumed to have valuable consideration
Nominal consideration w/c is common law concept does not apply (P1.00)
Gross inadequacy of price in ordinary sale does not render contract void unless it is shocking to
conscience of man.
Except:
a. Judicial sale
Shocking to conscience of man
Higher price can be obtained at re-sale
b. Rescissible contracts due to lesion
c. Sales with right to repurchase (raises presumption of equitable mortgage) Remedy is reformation

237
 3. Must be certain or ascertainable961 at the time of the perfection
of the contract
4. Manner of payment provided for

C. How price is determined962

It is not necessary that the certainty of the price be actual or

determined at the time of the execution of the contract. The price
is certain in the following cases:

1. If the parties have fixed or agreed upon a definite amount;963

2. If it be certain with reference to another thing certain
3. If the determination of the price is left to the judgment of a
specified person or persons even before such determination
4. In the cases provided under Art. 1472 NCC964

961
1.Sufficient that it is fixed with reference to another thing certain
That thing will have on a definite day, or in a particular exchange or market, or when an amount is
fixed above or below the price on such day, or in such exchange or market provided said amount be certain
2. Determination be left to judgment of specified person/s
If contract states that price is to be determined by 3rd party, contract is already perfected (there is just a
suspensive condition actual fixing of price)
3rd party fixes price in bad faith or mistake court remedy can be made
3rd party is unable or unwilling to fix price parties have no cause of action
Reason:
a. suspensive condition does not happen yet courts have no jurisdiction
b. enforceable contract have not yet arisen court with no jurisdiction to create contract between parties
Result: inefficacious
When price can not be determined in accordance with any of the preceding rules, contract of sale is
inefficacious
However, when SM delivered, buyer must pay reasonable rice therefore court can fix price
962
Effect of Failure to determine price:
1. Where contract executory
The contract is inefficacious
2. Where the thing has been delivered to and appropriated by the buyer
The buyer must pay a reasonable price therefore
963
The fixing of the price can never be left to the discretion of one of the contracting parties. However if
the price fixed by one of the parties is accepted by the other, the sale is perfected.
964
Article 1472. The price of securities, grain, liquids, and other things shall also be considered certain,
when the price fixed is that which the thing sold would have on a definite day, or in a particular exchange
or market, or when an amount is fixed above or below the price on such day, or in such exchange or
market, provided said amount be certain.

238
 D. Inadequacy of price965

Except in cases specified by law, lesion or inadequacy of cause

shall not invalidate a contract, unless there has been fraud, mistake or
undue influence.966

Gross inadequacy of price does not affect a contract of sale,

except as it may indicate a defect in the consent, or that the parties
really intended a donation or some other act or contract.967

E. When no price agreed

Where the price cannot be determined in accordance with the

preceding articles, or in any other manner, the contract is
inefficacious. However, if the thing or any part thereof has been
delivered to and appropriated by the buyer he must pay a reasonable
price therefor. What is a reasonable price is a question of fact
dependent on the circumstances of each particular case.968

F. Manner of payment must be agreed upon

Deemed to be an essential requisite because it is part of the

presentation of the contract.
Integral part of concept of price
If there is failure to meet minds as regards term of payment:
cash basis
Must be certain or at least ascertainable

965
Effect of Gross Inadequacy of Price:
1. Voluntary sales
General rule: Mere inadequacy of the price does not affect validity of the sale.
A valuable consideration, however small or nominal, if given or stipulated in good faith is, in the absence
of fraud, sufficient.(Rodriguez vs. CA, 207 SCRA 553)
Future inheritance cannot be sold.
Exceptions:
a. Where low price indicates vice of consent, sale may be annulled; or contract is presumed to be an
equitable mortgage
b. Where the price is so low as to be shocking to conscience, sale may be set aside.
2. Involuntary or Forced sales
General rule: Mere inadequacy of the price is not a sufficient ground for the cancellation of the sale if
property is real.
Exceptions:
a. Where the price is so low as to be shocking to the moral conscience, judicial sale of personal property
will be set aside
b. In the event of a resale, a better price can be obtained
The validity of the sale is not necessarily affected where the law gives to the owner the right to redeem,
upon the theory that the lesser the price, the easier it is for the owner to effect redemption.
966
Art. 1355
967
Art. 1470
968
Art. 1474

239
 Effect if absent: no contract situation

G. Earnest money969 vs. option money

Whenever earnest money is given in a contract of sale, it shall

be considered as part of the price and as proof of the perfection of the
contract.970

Earnest money Option money

1. Title passes to 1. Ownership is
the buyer upon reserved to the
delivery of the seller and is not to
thing sold pass until full
payment
2. In case of 2. In case of
non-payment, an non-payment, there
action for specific can be action for
performance or specific performance
for rescission can
be filed by the
injured party
3. Part of the 3. Money given as a
purchase price distinct
consideration for an
option contract
4. When given, 4. The would-be
the buyer is bound buyer is not required
to pay the balance to buy
5. Given when 5. Applies to a sale
there is already a not yet perfected
sale

VI. Formation of Contract of Sale971

A. Preparatory

969
or Arras is something of value to show that the buyer was really in earnest, and given to the seller to
bind the bargain. It is considered as:
a) part of the purchase price
b) proof of perfection of the contract
It shall be deducted from the total price.
Old concept: subject to forfeiture when BUYER backs out
New concept: can not be forfeited part of purchase price; must be restored
Qualification: if old concept is stipulated valid
Presumption of perfection of contract of sale and such earnest money as part of purchase price is
disputable
970
Art. 1482
971
3 Stages in life of a contract of sale
1. Policitacion/negotiation Stage offer is floated, acceptance is floated but they do not meet; time
parties indicate their interest but no concurrence of offer & acceptance
2. Perfection concurrence of all requisites; meeting of the minds
3. Consummation parties perform their respective undertakings

240
 A promise to buy and sell a determinate thing for a price certain
is reciprocally demandable.

An accepted unilateral promise to buy or to sell a determinate

thing for a price certain is binding upon the promisor if the promise is
supported by a consideration distinct from the price.972

1. Offer

The contract of sale is perfected at the moment there is a

meeting of minds upon the thing which is the object of the contract
and upon the price.

From that moment, the parties may reciprocally demand performance,

subject to the provisions of the law governing the form of contracts.973

2. Option Contract974

When the offerer has allowed the offeree a certain period to

accept, the offer may be withdrawn at any time before acceptance by
communicating such withdrawal, except when the option is founded
upon a consideration, as something paid or promised.975

A promise to buy and sell a determinate thing for a price certain

is reciprocally demandable.

An accepted unilateral promise to buy or to sell a determinate

thing for a price certain is binding upon the promisor if the promise is
supported by a consideration distinct from the price.976

3. Right of First Refusal

It is a right of first priority all things and conditions being equal;

there should be identity of the terms and conditions to be offered to

972
Art. 1479
973
Art. 1475
974
A contract granting a privilege in one person, for which he has paid a consideration, which gives him the
right to buy certain merchandise, at anytime within the agreed period, at a fixed price.
An option without consideration is void and the effect is the same as if there was no option
However, in Sanchez vs. Rigos (1972), even though the option was not supported by a consideration, the
moment it was accepted, a perfected contract of sale resulted, applying Art. 1324 of the NCC. In view of
the ruling of the Supreme Court, the only importance of the consideration for an option is that the option
cannot be withdrawn by the grantor after acceptance.
In an option to buy, the party who has an option may validly and effectively exercise his right by merely
notifying the owner of the formers decision to buy and expressing his readiness to pay the stipulated price.
975
Art. 1324
976
Art. 1479

241
the optionee and all other prospective buyers, with optionee to enjoy
the right of first priority. A deed of sale executed in favor of a third
party who cannot be deemed a purchaser in good faith, and which is
in violation of the of the right of first refusal granted to the optionee
is NOT voidable under the Statute of Frauds, such contract is valid
BUT rescissible under Article 1380 to 1381(3) of the New Civil
Code.977

The basis of the right of first refusal must be the current offer to
sell of the seller or offer to purchase of any prospective buyer. Only
after the optionee fails to exercise its right of first priority under the
same terms and within the period contemplated could the owner
validly offer to sell the property to a third person, again, under the
same terms as offered to the optionee.978

OPTION CONTRACT & RIGHT OF FIRST REFUSAL

DISTINGUISHED

OPTION CONTRACT RIGHT OF FIRST REFUSAL

Principal contract; stands on its own Accessory; can not stand on its own
Needs separate consideration Does not need separate
consideration
Subject matter & price must be valid There must be subject matter but
price not important
Not conditional Conditional
Not subject to specific performance Subject to specific performance

4. Mutual Promise to Buy and Sell979

One party accepts the others promise to buy and the latter, the
formers promise to sell a determinate thing for a price certain

It is reciprocally demandable

It requires no consideration distinct from the selling price

B. Perfection980

977
Guzman Bocaling & Co. vs. Bonnavie; Riviera Filipina, Inc vs. CA et.al. GR No. 117355, April 5, 2002
978
Paranaque Kings Enterprises, Inc. vs. CA GR No. 111538, February 26, 1997
979
This is as good as a perfected sale. No title of dominion is transferred as yet, the parties being given
only the right to demand fulfillment or damages
980
Sale is a consensual contract, hence, delivery and payment are not essential for its perfection
GENERAL RULE: It is perfected at the moment there is meeting of the minds upon a determinate thing
(object), and a certain price (consideration), even if neither is delivered. A choice between rescission and
fulfilment, with damages in either case)
EXCEPTION: When the sale is subject to a suspensive condition by virtue of law or stipulation.

242
 Consent is manifested by the meeting of the offer and the
acceptance upon the thing and the cause which are to constitute the
contract. The offer must be certain and the acceptance absolute. A
qualified acceptance constitutes a counter-offer.981

Acceptance made by letter or telegram does not bind the offerer

except from the time it came to his knowledge. The contract, in such a
case, is presumed to have been entered into in the place where the
offer was made.982

Unless it appears otherwise, business advertisements of things

for sale are not definite offers, but mere invitations to make an offer. 983

Advertisements for bidders are simply invitations to make

proposals, and the advertiser is not bound to accept the highest or
lowest bidder, unless the contrary appears.984

The contract of sale is perfected at the moment there is a

meeting of minds upon the thing which is the object of the contract
and upon the price.

The terms and conditions of payment are merely accidental, not essential elements of the contract of sale
except where the parties themselves stipulate that in addition to the subject-matter and the price, they are
essential or material to the contract.
981
Meeting of Minds:
1. Offer certain
2. Acceptance absolute
Qualified acceptance merely a counter-offer which needs to be absolutely accepted to give rise to
perfected contract of sale
Business ads are mere invitations to make an offer except when it appears to be otherwise
Acceptance by letter/telegram binds only at time it came to knowledge of SELLER; prior thereto
offer may still be withdrawn
Must be exact terms to be considered absolute
When deviations allowed:
a. anything that refers to price is material
b. small items are insignificant, does not make acceptable unconditional
When sale is subject to suspensive condition, no perfected contract of sale yet; becomes perfected only
upon happening of condition
In sales at auction, perfected when auctioneer announces its perfection by the fall of the hammer or in
other customary manner may impose terms under bidder may retract his bid; owner of property sold at
auction may impose terms under w/c the auction will proceed & it shall be binding w/n the bidders are
aware
Place of perfection: where the meeting of minds happen; when acceptance sent by mail, perfection is
deemed where the offer is made
Performance has nothing to do with perfection stage
982
Art. 1319
983
Art. 1325
984
Art. 1326

243
 From that moment, the parties may reciprocally demand
performance, subject to the provisions of the law governing the form
of contracts.985

C. Formalities of the Contract

The following contracts are unenforceable, unless they are

ratified:

(1) Those entered into in the name of another person by one who has
been given no authority or legal representation, or who has acted
beyond his powers;

(2) Those that do not comply with the Statute of Frauds as set forth in
this number. In the following cases an agreement hereafter made shall
be unenforceable by action, unless the same, or some note or
memorandum, thereof, be in writing, and subscribed by the party
charged, or by his agent; evidence, therefore, of the agreement
cannot be received without the writing, or a secondary evidence of its
contents:

(a) An agreement that by its terms is not to be performed within a

year from the making thereof;

(b) A special promise to answer for the debt, default, or miscarriage of

another;

(c) An agreement made in consideration of marriage, other than a

mutual promise to marry;

(d) An agreement for the sale of goods, chattels or things in action, at

a price not less than five hundred pesos, unless the buyer accept and
receive part of such goods and chattels, or the evidences, or some of
them, of such things in action or pay at the time some part of the
purchase money; but when a sale is made by auction and entry is
made by the auctioneer in his sales book, at the time of the sale, of
the amount and kind of property sold, terms of sale, price, names of
the purchasers and person on whose account the sale is made, it is a
sufficient memorandum;

(e) An agreement for the leasing for a longer period than one year, or
for the sale of real property or of an interest therein;986

VII. Transfer of Ownership

985
Art. 1475
986
Art. 1403

244
 A. Manner of Transfer

The ownership of the thing sold shall be transferred to the

vendee upon the actual or constructive delivery thereof.987

The ownership of the thing sold is acquired by the vendee from

the moment it is delivered to him in any of the ways specified in
articles 1497 to 1501, or in any other manner signifying an agreement
that the possession is transferred from the vendor to the vendee.988

The thing sold shall be understood as delivered, when it is

placed in the control and possession of the vendee.989

When the sale is made through a public instrument, the

execution thereof shall be equivalent to the delivery of the thing
which is the object of the contract, if from the deed the contrary does
not appear or cannot clearly be inferred.

With regard to movable property, its delivery may also be made

by the delivery of the keys of the place or depository where it is stored
or kept.990

The delivery of movable property may likewise be made by the

mere consent or agreement of the contracting parties, if the thing sold
cannot be transferred to the possession of the vendee at the time of
the sale, or if the latter already had it in his possession for any other
reason.991

There may also be tradition constitutum possessorium.992

With respect to incorporeal property, the provisions of the first

paragraph of article 1498 shall govern. In any other case wherein said
provisions are not applicable, the placing of the titles of ownership in
the possession of the vendee or the use by the vendee of his rights,
with the vendor's consent, shall be understood as a delivery.993

B. When delivery does not transfer title

987
Art. 1477
988
Art. 1496
989
Art. 1497
990
Art. 1498
991
Art. 1499
992
Art. 1500
993
Art. 1501

245
 Instances where Seller is still the Owner despite Delivery:

1. Sale on trial, approval or satisfaction

2. Contrary intention appears by the term of the contract;
3. Implied reservation of ownership994

a. If under the bill of lading, the goods are deliverable to seller

or agent or their order;
b. If the bill of lading, although stating that the goods are to be
delivered to the buyer or his agent, is kept by the seller or his agent;
c. When the buyer, although the goods are deliverable to order
of buyer, and although the bill of lading is given to him, does not
honor the bill of exchange sent along with it.

C. Kinds of delivery

1. Actual or real placing the thing under the control and possession
of the buyer.
2. Legal or constructive995 delivery is represented by other signs or
acts indicative thereof

a. delivery by the execution of a public instrument.996

b. traditio symbolica - to effect delivery, the parties make use of a
token or symbol to represent the thing delivered
c. traditio longa manu seller pointing out to the buyer the things
which are transferred, which at the time must be in sight.
d. traditio brevi manu buyer simply continues in possession of
the thing but under title of ownership.
e. traditio constitutum possessorium seller continues in
possession but under a different title other than ownership.

3. Quasi-tradition delivery of rights, credits or incorporeal property,

made by:
a. placing titles of ownership in the hands of buyer
b. allowing buyer to make use of rights

4. Tradition by operation of law

D. Double Sales997
994
Article 1503
995
Three things before ownership may be transferred:
1 The seller must have control over the thing
2. The buyer must be put under control
3. There must be the intention to deliver the thing for purposes of ownership
996
Gives rise only to a prima facie presumption of delivery which is destroyed when actual delivery is not
effected because of a legal impediment (Ten Forty Realty vs. Cruz, 10 Sept. 2003)
997
Requisites: VOCS

246
 If the same thing should have been sold to different vendees, the
ownership shall be transferred to the person who may have first taken
possession thereof in good faith, if it should be movable property.

Should it be immovable property, the ownership shall belong to

the person acquiring it who in good faith first recorded it in the
Registry of Property.

Should there be no inscription, the ownership shall pertain to

the person who in good faith was first in the possession; and, in the
absence thereof, to the person who presents the oldest title, provided
there is good faith998.

E. Property Registration Decree

1. Requisites for registration of deed of sale in good

faith

No deed, conveyance, mortgage, lease, or other voluntary

instrument affecting land not registered under the Torrens system
shall be valid, except as between the parties thereto, unless such
instrument shall have been recorded in the manner herein prescribed
in the office of the Register of Deeds for the province or city where
the land lies.

(a) The Register of Deeds for each province or city shall keep a
Primary Entry Book and a Registration Book. The Primary Entry Book
shall contain, among other particulars, the entry number, the names
of the parties, the nature of the document, the date, hour and minute
it was presented and received. The recording of the deed and other
instruments relating to unregistered lands shall be effected by any of

1. two or more transactions must constitute valid sales;

2. they must pertain exactly to the same object or subject matter;
3. they must be bought from the same or immediate seller; AND
4. two or more buyers who are at odds over the rightful ownership of the subject matter must represent
conflicting interests.
Rules of preference:
1. Personal Property
a. first possessor in good faith
2. Real Property
a. first registrant in good faith
b. first possessor in good faith
c. person with oldest title in good faith
998
Art. 1544
To be entitled to priority, the second buyer must not only show prior recording of his deed but must have
acted in good faith, without knowledge of the existence of another alienation by the vendor to another

247
annotation on the space provided therefor in the Registration Book,
after the same shall have been entered in the Primary Entry Book.

(b) If, on the face of the instrument, it appears that it is sufficient in

law, the Register of Deeds shall forthwith record the instrument in the
manner provided herein. In case the Register of Deeds refuses its
administration to record, said official shall advise the party in interest
in writing of the ground or grounds for his refusal, and the latter may
appeal the matter to the Commissioner of Land Registration in
accordance with the provisions of Section 117 of this Decree. It shall
be understood that any recording made under this section shall be
without prejudice to a third party with a better right.

(c) After recording on the Record Book, the Register of Deeds shall
endorse among other things, upon the original of the recorded
instruments, the file number and the date as well as the hour and
minute when the document was received for recording as shown in
the Primary Entry Book, returning to the registrant or person in
interest the duplicate of the instrument, with appropriate annotation,
certifying that he has recorded the instrument after reserving one
copy thereof to be furnished the provincial or city assessor as
required by existing law.
(d) Tax sale, attachment and levy, notice of lis pendens, adverse claim
and other instruments in the nature of involuntary dealings with
respect to unregistered lands, if made in the form sufficient in law,
shall likewise be admissible to record under this section.999

2. Accompanied by vendors duplicate certificate of

title, payment of capital gains tax, and documentary
tax registration fees

(e) For the services to be rendered by the Register of Deeds under

this section, he shall collect the same amount of fees prescribed for
similar services for the registration of deeds or instruments
concerning registered lands.1000

VIII. Risk of Loss

A. General rule

When the conditions have been imposed with the intention of

suspending the efficacy of an obligation to give, the following rules
shall be observed in case of the improvement, loss or deterioration of
the thing during the pendency of the condition:
999
Sec. 113, P.D. 1529
1000
ibid

248
(1) If the thing is lost without the fault of the debtor, the obligation
shall be extinguished;

(2) If the thing is lost through the fault of the debtor, he shall be
obliged to pay damages; it is understood that the thing is lost when it
perishes, or goes out of commerce, or disappears in such a way that
its existence is unknown or it cannot be recovered;

(3) When the thing deteriorates without the fault of the debtor, the
impairment is to be borne by the creditor;

(4) If it deteriorates through the fault of the debtor, the creditor may
choose between the rescission of the obligation and its fulfillment,
with indemnity for damages in either case;

(5) If the thing is improved by its nature, or by time, the improvement

shall inure to the benefit of the creditor;

(6) If it is improved at the expense of the debtor, he shall have no

other right than that granted to the usufructuary.1001

In an obligation to deliver a generic thing, the loss or

destruction of anything of the same kind does not extinguish the
obligation.1002

B. When loss occurred before perfection

Seller bears the loss.

C. When loss occurred at time of perfection1003

If at the time the contract of sale is perfected, the thing which is

the object of the contract has been entirely lost, the contract shall be
without any effect.

But if the thing should have been lost in part only, the vendee
may choose between withdrawing from the contract and demanding
the remaining part, paying its price in proportion to the total sum
agreed upon.1004

1001
Art. 1189
1002
Art. 1263
1003
Contract is void or inexistent.
1004
Art. 1493

249
 Where the parties purport a sale of specific goods, and the
goods without the knowledge of the seller have perished in part or
have wholly or in a material part so deteriorated in quality as to be
substantially changed in character, the buyer may at his option treat
the sale:

(1) As avoided; or
(2) As valid in all of the existing goods or in so much thereof as
have not deteriorated, and as binding the buyer to pay the
agreed price for the goods in which the ownership will pass, if
the sale was divisible.1005
D. When loss occurred after perfection but before delivery1006

General rule:

Who bears the risk of loss is governed by the stipulations in the

contract

Exceptions:

1. when object sold consists of fungible goods for a price fixed

according to weight, number or measure
2. seller is guilty of fraud, negligence, default or violation of
contractual terms
3. object sold is generic1007

E. When ownership is transferred1008

1005
Art. 1494
1006
In the absence of any stipulation:
First view:
Buyer bears the loss as an exception to the rule of res perit domino.
Contrary view:
Where the ownership is transferred by delivery, as in our code, the application of the axiom res perit
domino, imposes the risk of loss upon the vendor; hence, if the thing is lost by fortuitous event before
delivery, the vendor suffers the loss and cannot recover the price from the vendee (Commentaries and
Jurisprudence on the Civil Code of the Philippines, Tolentino)
1007
Civil Code of the Philippines, Paras . This view conforms with Manresas view. Buyer would have been the
one to profit from the thing had it not been lost or destroyed.
1008
Transfer of ownership
General rule:
While a contract of sale is consensual, ownership of the thing sold is acquired only upon its delivery,
actual or constructive, to the buyer. (Daus vs. Sps. De Leon, 16 June 2003)
This is true even if the purchase has been made on credit. Payment of the purchase price is not
essential to the transfer of ownership, as long as the property sold has been delivered. (Sampaguita
Pictures, Inc vs. Jalwindor Manufacturers, Inc. 93 SCRA 420)
Nonpayment only creates a right to demand payment or to rescind the contract, or to criminal
prosecution in the case of bouncing checks. (EDCA Publishing and Distributing Corp. vs. Santos, 184
SCRA 614)
Exceptions:

250
 Unless otherwise agreed, the goods remain at the seller's risk
until the ownership therein is transferred to the buyer, but when the
ownership therein is transferred to the buyer the goods are at the
buyer's risk whether actual delivery has been made or not, except
that:

(1) Where delivery of the goods has been made to the buyer or
to a bailee for the buyer, in pursuance of the contract and the
ownership in the goods has been retained by the seller merely
to secure performance by the buyer of his obligations under the
contract, the goods are at the buyer's risk from the time of such
delivery;

(2) Where actual delivery has been delayed through the fault of
either the buyer or seller the goods are at the risk of the party
in fault.1009

IX. Documents of Title

A. Definition

"Document of title to goods" includes any bill of lading, dock

warrant, "quedan," or warehouse receipt or order for the delivery of
goods, or any other document used in the ordinary course of business
in the sale or transfer of goods, as proof of the possession or control
of the goods, or authorizing or purporting to authorize the possessor
of the document to transfer or receive, either by indorsement or by
delivery, goods represented by such document.1010

B. Purpose of documents of title

1. evidence of existence & possession of goods described therein

2. medium by which seller is able to transfer possession of goods

1. Contrary stipulation or Pactum reservati dominii (contractual reservation of title) a stipulation,

usually in sales by installment, whereby, despite delivery of the property sold, ownership remains with the
seller until full payment of the price is made.
2. Contract to sell
3. Contract of insurance a perfected contract of sale, even without delivery, vests in the vendee an
equitable title, an existing interest over the goods sufficient to be the subject of insurance
1009
Art. 1504
1010
Art. 1636

251
 C. Negotiable documents of title1011

Those by the terms of which the bailee undertakes to deliver the

goods to thebearer and those by the terms of which the bailee
undertakes to deliver the goods to the order of a specified person.

May be negotiated by delivery or indorsement.

D. Non-negotiable documents of title

Those by the terms of which the goods covered are deliverable

to a specified person

E. Warranties of seller of documents of title

A person who for value negotiates or transfers a document of

title by indorsement or delivery, including one who assigns for value a
claim secured by a document of title unless a contrary intention
appears, warrants:

(1) That the document is genuine;

(2) That he has a legal right to negotiate or transfer it;
(3) That he has knowledge of no fact which would impair the validity
or worth of the document; and
(4) That he has a right to transfer the title to the goods and that the
goods are merchantable or fit for a particular purpose, whenever such
warranties would have been implied if the contract of the parties had
been to transfer without a document of title the goods represented
thereby.1012

F. Rules on levy/garnishment of goods

A person to whom a document of title has been transferred, but

not negotiated, acquires thereby, as against the transferor, the title to
the goods, subject to the terms of any agreement with the transferor.

If the document is non-negotiable, such person also acquires the

right to notify the bailee who issued the document of the transfer
thereof, and thereby to acquire the direct obligation of such bailee to
hold possession of the goods for him according to the terms of the
document.

1011
A document of title in which it is stated that the goods referred to therein will be delivered to the bearer,
or to the order of any person named in such document ( Art. 1507)
1012
Art. 1516

252
 Prior to the notification to such bailee by the transferor or
transferee of a non-negotiable document of title, the title of the
transferee to the goods and the right to acquire the obligation of such
bailee may be defeated by the levy of an attachment of execution upon
the goods by a creditor of the transferor, or by a notification to such
bailee by the transferor or a subsequent purchaser from the
transferor of a subsequent sale of the goods by the transferor.1013

If goods are delivered to a bailee by the owner or by a person

whose act in conveying the title to them to a purchaser in good faith
for value would bind the owner and a negotiable document of title is
issued for them they cannot thereafter, while in possession of such
bailee, be attached by garnishment or otherwise or be levied under an
execution unless the document be first surrendered to the bailee or its
negotiation enjoined. The bailee shall in no case be compelled to
deliver up the actual possession of the goods until the document is
surrendered to him or impounded by the court.1014

A creditor whose debtor is the owner of a negotiable document

of title shall be entitled to such aid from courts of appropriate
jurisdiction by injunction and otherwise in attaching such document
or in satisfying the claim by means thereof as is allowed at law or in
equity in regard to property which cannot readily be attached or
levied upon by ordinary legal process.1015

X. Remedies of an Unpaid Seller

A. Definition of unpaid seller

The seller of goods is deemed to be an unpaid seller within the

meaning of this Title:

(1) When the whole of the price has not been paid or tendered;

(2) When a bill of exchange or other negotiable instrument has been

received as conditional payment, and the condition on which it was
received has been broken by reason of the dishonor of the instrument,
the insolvency of the buyer, or otherwise.

In articles 1525 to 1535 the term "seller" includes an agent of

the seller to whom the bill of lading has been indorsed, or a consignor

1013
Art. 1514
1014
Art. 1519
1015
Art. 1520

253
or agent who has himself paid, or is directly responsible for the price,
or any other person who is in the position of a seller.1016

B. Remedies of unpaid seller

In case of movables

1. Ordinary Remedies

a. Movables in General Failure of the vendee to appear to receive

delivery or, having appeared, failure to tender the price at the
same time, unless, a longer period for its payment has been
stipulated

- action to rescind the sale1017

b. Sale of Goods

- action for the price1018

- action for damages1019

2. Unpaid Seller1020

Remedies:

1. Possessory lien over the goods

2. Right of stoppage in transitu after he has parted with the
possession of the goods and the buyer becomes insolvent
3. Special Right of resale
4. Special Right to rescind the sale
5. Action for the price
6. Action for damages

3. Remedies of vendor in sale of personal property by installments1021

1016
Art. 1525
1017
Art. 1593
1018
Art. 1595
1019
Art. 1596
1020
Types:
a. The seller of the goods who has not been paid or to whom the price has not been tendered
b. The seller of the goods, in case a bill of exchange or other negotiable instrument has been received as
conditional payment, AND the condition on which it was received has been broken by reason of the
dishonor of the instrument, insolvency of the buyer or otherwise.
1021
Article 1484 or Recto Law

254
 Remedies:

1. Specific performance upon vendees failure to pay1022

2. Rescission of the sale if vendee shall have failed to pay two or
more installments1023
3. Foreclosure of the chattel mortgage on the thing sold if vendee
shall have failed to pay two or more installments. In this case,
there shall be no further action against the purchaser to recover
unpaid balance of the price.1024
In case of immovable:

1. Ordinary Remedies

a. In case of anticipatory breach

Apply likewise to contracts purporting to be leases of personal property with option to buy
Does not apply to a sale:
1. Payable on straight terms (partly in cash and partly in one term)
2. Of Real property
Requisites:
1. Contract of sale
2. Personal property
3. Payable in installments
4. In the case of the second and third remedies, that there has been a failure to pay two or more installments
1022
Does not bar full recovery for judgment secured may be executed on all personal and real properties of
the buyer which are not exempt from execution (Palma v. CA.)
1023
Nature of the remedy which requires mutual restitution bars further action on the purchase price
(Nonato vs. IAC.)
General rule:
Cancellation of sale requires mutual restitution, that is all partial payments of price or rents must be
returned
Exceptions:
A stipulation that the installments or rents paid shall not be returned to the vendee or lessee shall be
valid insofar as the same may not be unconscionable under the circumstan-ces (Article 1486).
1024
Further recovery barred only from the time of actual sale at public auction conducted pursuant to
foreclosure (Macondray vs. Tan.)
Other chattels given as security cannot be foreclosed if they are not subject of the installment sale
(Ridad vs. Filipinas investment and Finance Corp. GR 39806, Jan. 28, 1983)
If the vendor assigns his right to a financing company, the latter may be regarded as a collecting agency
of the vendor and cannot therefore recover any deficiency from the vendee (Zayas vs. Luneta Motors Co.)
When the vendor assigns his credit to another person, the latter is likewise bound by the same law.
Accordingly, when the assignee forecloses on the mortgage, there can be no further recovery of the
deficiency and the vendor-mortgagee is deemed to have renounced any right thereto (Borbon II vs.
Servicewide Specialist, Inc. 258SCRA658)
However, Article 1484(3) does not bar one to whom the vendor has assigned on with a recourse basis his
credit against the vendee from recovering from the vendor the assigned credit in full although the vendor
may have no right of recovery against the vendee for the deficiency (Filipinas Invest. & Finance Corp. vs.
Vitug, Jr. 28SCRA658)
Remedies are alternative and exclusive

255
 - rescission1025

b. Failure to pay the purchase price

- rescission upon judicial or notarial demand for

rescission1026
- the vendee may pay, even after the expiration of the
period, as long as no demand for rescission has been
made upon him

XI. Performance of Contract

A. Delivery of thing sold

1. Sale of Movables

Where the seller delivers to the buyer a quantity of goods less

than he contracted to sell, the buyer may reject them, but if the buyer
accepts or retains the goods so delivered, knowing that the seller is
not going to perform the contract in full, he must pay for them at the
contract rate. If, however, the buyer has used or disposed of the goods
delivered before he knows that the seller is not going to perform his
contract in full, the buyer shall not be liable for more than the fair
value to him of the goods so received.

Where the seller delivers to the buyer a quantity of goods larger

than he contracted to sell, the buyer may accept the goods included in
the contract and reject the rest. If the buyer accepts the whole of the
goods so delivered he must pay for them at the contract rate.

Where the seller delivers to the buyer the goods he contracted

to sell mixed with goods of a different description not included in the
contract, the buyer may accept the goods which are in accordance
with the contract and reject the rest.

In the preceding two paragraphs, if the subject matter is

indivisible, the buyer may reject the whole of the goods.

1025
Article 1591
1026
Article 1592
Does not apply to:
1) Sale on installment of real estate
2) Contract to sell
3) Conditional sale
4) Cases covered by RA 6552: Realty Installment buyer protection act

256
 The provisions of this article are subject to any usage of trade,
special agreement, or course of dealing between the parties.1027

The vendor is bound to deliver the thing sold and its accessions
and accessories in the condition in which they were upon the
perfection of the contract.

All the fruits shall pertain to the vendee from the day on which
the contract was perfected.1028

Any injury to or benefit from the thing sold, after the contract
has been perfected, from the moment of the perfection of the contract
to the time of delivery, shall be governed by articles 1163 to 1165, and
1262.

This rule shall apply to the sale of fungible things, made

independently and for a single price, or without consideration of their
weight, number, or measure.

Should fungible things be sold for a price fixed according to

weight, number, or measure, the risk shall not be imputed to the
vendee until they have been weighed, counted, or measured and
delivered, unless the latter has incurred in delay.1029

2. Sale of Immovables

The obligation to deliver the thing sold includes that of placing

in the control of the vendee all that is mentioned in the contract, in
conformity with the following rules:

If the sale of real estate should be made with a statement of its

area, at the rate of a certain price for a unit of measure or number,
the vendor shall be obliged to deliver to the vendee, if the latter
should demand it, all that may have been stated in the contract; but,
should this be not possible, the vendee may choose between a
proportional reduction of the price and the rescission of the contract,
provided that, in the latter case, the lack in the area be not less than
one-tenth of that stated.

The same shall be done, even when the area is the same, if any
part of the immovable is not of the quality specified in the contract.

1027
Art. 1522
1028
Art. 1537
1029
Art. 1480

257
 The rescission, in this case, shall only take place at the will of
the vendee, when the inferior value of the thing sold exceeds one-
tenth of the price agreed upon.

Nevertheless, if the vendee would not have bought the

immovable had he known of its smaller area of inferior quality, he may
rescind the sale.1030
The actions arising from articles 1539 and 1542 shall prescribe
in six months, counted from the day of delivery.1031

3. Inspections and Acceptance

A. Right of inspection

The buyer is entitled to examine the goods to decide whether he

will become the owner, and until the examination is completed or
waived, he is under NO obligation to accept them. He may however
waive this right by simply refusing to inspect the goods, taking them
as they are or by any other similar act.1032

B. Manifestation of Acceptance

The buyer is deemed to have accepted the goods when:

1. he intimates to the seller that the has accepted them

2. the goods have been delivered to him and he does any act in
relation to them which is
inconsistent with the ownership of the seller

3. after the lapse of a reasonable time, he retains the goods without

intimating to the
seller that he has rejected them.

Exercise of acts of ownership over the goods is a manifestation

of acceptance, such as making use of them as owner, making
alterations in the goods or subjecting it to the process of manufacture.

EXCEPTION:

Buyers right to make a test of goods, but only if necessary, to

enable him to determine whether to accept or reject the goods

1030
Art. 1539
1031
Art. 1543
1032
See Art. 1584

258
 C. Breach of warranty

The purpose of the notice of breach of warranty is to PROTECT

the seller against belated damage claims which would prevent the
seller from making an adequate and proper investigation of his
alleged liability.1033

Acceptance of delivery means an assent to become owner of the

goods on the part of the buyer, but not an assent that the goods fulfill
the description and terms of the contract.

D. Refusal to accept

Unless otherwise agreed, when the goods are delivered to the

buyer and he has a right to refuse to accept them, he need not return
them. It is sufficient that the buyer notifies the seller that
he refuses to accept the goods, and thereafter, the former becomes
the depository of the
rejected goods.1034

However, where title already passed to the buyer and there was
a breach of warranty, the buyer may rescind the contract by returning
or offering to return the goods to the seller and recover the price
which had been paid.

B. Payment of price

When may be exercised:

1. Where the ownership has passed to the buyer and he wrongfully

neglects or refuses to pay for the price
2. Where the price is payable on a day certain and he wrongfully
neglects or refuses to pay for the price, irrespective of the
delivery or transfer of title
3. Where the goods cannot readily be resold for a reasonable price
and the buyer wrongfully refuses to accept them even before
the ownership of the goods has passed, if Article 1596 is
inapplicable.

1033
See Art. 1586
1034
See Arts. 1587 to 89

259
XII. Warranties

A. Express warranties

Where one party expressly promised that the contingency or

some act fixed by the contract shall be performed, like a promise that
the goods are of a certain kind and character or that certain state of
facts would exist, the promise constitutes a warranty, and failure of
which gives rise to an action for its breach.

1. it must be an affirmation of fact or any promise by seller

relating to the subject matter of sale
2. natural tendency of affirmation or promise is to induce buyer to
purchase subject matter
3. buyer purchases the subject matter relying thereon1035

B. Implied warranties

In a contract of sale, unless a contrary intention appears, there

is:

(1) An implied warranty on the part of the seller that he has a

right to sell the thing at the time when the ownership is to pass, and
that the buyer shall from that time have and enjoy the legal and
peaceful possession of the thing;

(2) An implied warranty that the thing shall be free from any
hidden faults or defects, or any charge or encumbrance not declared
or known to the buyer.

This article shall not, however, be held to render liable a sheriff,

auctioneer, mortgagee, pledgee, or other person professing to sell by
virtue of authority in fact or law, for the sale of a thing in which a
third person has a legal or equitable interest.1036

C. Effects of warranties

Where there is a breach of warranty by the seller, the buyer

may, at his election:

(1) Accept or keep the goods and set up against the seller, the breach
of warranty by way of recoupment in diminution or extinction of the
price;

1035
when breached, seller is liable for damages
1036
Art. 1547

260
(2) Accept or keep the goods and maintain an action against the seller
for damages for the breach of warranty;

(3) Refuse to accept the goods, and maintain an action against the
seller for damages for the breach of warranty;

(4) Rescind the contract of sale and refuse to receive the goods or if
the goods have already been received, return them or offer to return
them to the seller and recover the price or any part thereof which has
been paid.

When the buyer has claimed and been granted a remedy in

anyone of these ways, no other remedy can thereafter be granted,
without prejudice to the provisions of the second paragraph of article
1191.

Where the goods have been delivered to the buyer, he cannot

rescind the sale if he knew of the breach of warranty when he
accepted the goods without protest, or if he fails to notify the seller
within a reasonable time of the election to rescind, or if he fails to
return or to offer to return the goods to the seller in substantially as
good condition as they were in at the time the ownership was
transferred to the buyer. But if deterioration or injury of the goods is
due to the breach or warranty, such deterioration or injury shall not
prevent the buyer from returning or offering to return the goods to
the seller and rescinding the sale.

Where the buyer is entitled to rescind the sale and elects to do

so, he shall cease to be liable for the price upon returning or offering
to return the goods. If the price or any part thereof has already been
paid, the seller shall be liable to repay so much thereof as has been
paid, concurrently with the return of the goods, or immediately after
an offer to return the goods in exchange for repayment of the price.

Where the buyer is entitled to rescind the sale and elects to do

so, if the seller refuses to accept an offer of the buyer to return the
goods, the buyer shall thereafter be deemed to hold the goods as
bailee for the seller, but subject to a lien to secure the payment of any
portion of the price which has been paid, and with the remedies for
the enforcement of such lien allowed to an unpaid seller by article
1526.

(5) In the case of breach of warranty of quality, such loss, in the

absence of special circumstances showing proximate damage of a
greater amount, is the difference between the value of the goods at

261
the time of delivery to the buyer and the value they would have had if
they had answered to the warranty.1037

D. Effects of waivers

Parties may increase or diminish implied warranty against

eviction; but effect depends on good faith or bad faith on the part of
the seller.

1. seller in bad faith & there is waiver against eviction null &
void
2. buyer without knowledge of a particular risk made general
renunciation of warranty not waiver but merely limits
liability of seller in case of eviction (pay value of subject
matter at time of eviction)
3. buyer with knowledge of risk of eviction assumed its
consequences & made a waiver vendor not liable1038

E. Buyers options in case of breach of warranty

Where there is a breach of warranty by the seller, the buyer

may, at his election:

(1) Accept or keep the goods and set up against the seller, the
breach of warranty by way of recoupment in diminution or extinction
of the price;

(2) Accept or keep the goods and maintain an action against the
seller for damages for the breach of warranty;

(3) Refuse to accept the goods, and maintain an action against

the seller for damages for the breach of warranty;

(4) Rescind the contract of sale and refuse to receive the goods
or if the goods have already been received, return them or offer to
return them to the seller and recover the price or any part thereof
which has been paid.

1037
Art. 1599
1038
applicable only to waiver of warranty against eviction
When goods delivered to buyer he cannot rescind sale if he knew of the breach of warranty when he
accepted goods without protest if he fails to return or offer to return goods to seller in substantially as good
condition as they were at time ownership was transferred
When goods deteriorated, buyer can still return them in that condition if such is due to breach or
warranty

262
 When the buyer has claimed and been granted a remedy in
anyone of these ways, no other remedy can thereafter be granted,
without prejudice to the provisions of the second paragraph of article
1191.

Where the goods have been delivered to the buyer, he cannot

rescind the sale if he knew of the breach of warranty when he
accepted the goods without protest, or if he fails to notify the seller
within a reasonable time of the election to rescind, or if he fails to
return or to offer to return the goods to the seller in substantially as
good condition as they were in at the time the ownership was
transferred to the buyer. But if deterioration or injury of the goods is
due to the breach or warranty, such deterioration or injury shall not
prevent the buyer from returning or offering to return the goods to
the seller and rescinding the sale.

Where the buyer is entitled to rescind the sale and elects to do

so, he shall cease to be liable for the price upon returning or offering
to return the goods. If the price or any part thereof has already been
paid, the seller shall be liable to repay so much thereof as has been
paid, concurrently with the return of the goods, or immediately after
an offer to return the goods in exchange for repayment of the price.

Where the buyer is entitled to rescind the sale and elects to do

so, if the seller refuses to accept an offer of the buyer to return the
goods, the buyer shall thereafter be deemed to hold the goods as
bailee for the seller, but subject to a lien to secure the payment of any
portion of the price which has been paid, and with the remedies for
the enforcement of such lien allowed to an unpaid seller by article
1526.

(5) In the case of breach of warranty of quality, such loss, in the

absence of special circumstances showing proximate damage of a
greater amount, is the difference between the value of the goods at
the time of delivery to the buyer and the value they would have had if
they had answered to the warranty.1039
XIII. Breach of Contract

A. Remedies of the Seller

Actions for breach of the contract of sale of goods shall be

governed particularly by the provisions of this Chapter, and as to

1039
Art. 1599

263
matters not specifically provided for herein, by other applicable
provisions of this Title.1040

In the preceding articles in this Title governing the sale of

goods, unless the context or subject matter otherwise requires:

(1) "Document of title to goods" includes any bill of lading, dock

warrant, "quedan," or warehouse receipt or order for the delivery of
goods, or any other document used in the ordinary course of business
in the sale or transfer of goods, as proof of the possession or control
of the goods, or authorizing or purporting to authorize the possessor
of the document to transfer or receive, either by indorsement or by
delivery, goods represented by such document.

"Goods" includes all chattels personal but not things in action or

money of legal tender in the Philippines. The term includes growing
fruits or crops.

"Order" relating to documents of title means an order by indorsement

on the documents.

"Quality of goods" includes their state or condition.

"Specific goods" means goods identified and agreed upon at the time a
contract of sale is made.

An antecedent or pre-existing claim, whether for money or not,

constitutes "value" where goods or documents of title are taken either
in satisfaction thereof or as security therefor.

(2) A person is insolvent within the meaning of this Title who either
has ceased to pay his debts in the ordinary course of business or
cannot pay his debts as they become due, whether insolvency
proceedings have been commenced or not.

(3) Goods are in a "deliverable state" within the meaning of this Title
when they are in such a state that the buyer would, under the
contract, be bound to take delivery of them.1041

1040
Art. 1594
1041
Art. 1636

264
 1. Sale of Movables

B. Recto Law: Sale of Movables on Installment

The Recto law1042 provides for remedies of a seller in contracts

of sale of personal property by installment, as follows:

(1) Exact fulfillment of the obligation, should the vendee fail to pay;

(2) Cancel the sale, should the vendee's failure to pay cover two or
more installments;

(3) Foreclose the chattel mortgage on the thing sold, if one has been
constituted, should the vendee's failure to pay cover two or more
installments. In this case, he shall have no further action against the
purchaser to recover any unpaid balance of the price. Any agreement
to the contrary shall be void.1043

The preceding article shall be applied to contracts purporting to

be leases of personal property with option to buy, when the lessor has
deprived the lessee of the possession or enjoyment of the thing.1044

In the case referred to in the two preceding articles, a

stipulation that the installments or rents paid shall not be returned to
the vendee or lessee shall be valid insofar as the same may not be
unconscionable under the circumstances.1045

1. Sale of Immovables

a. PD 957

Non-Forfeiture of Payments. No installment payment made by a

buyer in a subdivision or condominium project for the lot or unit he
contracted to buy shall be forfeited in favor of the owner or developer
when the buyer, after due notice to the owner or developer, desists
from further payment due to the failure of the owner or developer to
develop the subdivision or condominium project according to the
approved plans and within the time limit for complying with the same.
Such buyer may, at his option, be reimbursed the total amount paid

1042
Installment Sales Law
1043
Art. 1484
1044
Art. 1485
1045
Art. 1486

265
including amortization interests but excluding delinquency interests,
with interest thereon at the legal rate.1046

Failure to pay installments. The rights of the buyer in the event

of this failure to pay the installments due for reasons other than the
failure of the owner or developer to develop the project shall be
governed by Republic Act No. 6552.

Where the transaction or contract was entered into prior to the

effectivity of Republic Act No. 6552 on August 26, 1972, the
defaulting buyer shall be entitled to the corresponding refund based
on the installments paid after the effectivity of the law in the absence
of any provision in the contract to the contrary.1047

b. Maceda Law1048

It covers sales on installments of residential real estate and

financing of such acquisitions.

Where the buyer has paid at least two (2) years of installment,
the buyer is entitled to the following rights in case he defaults in
payments of succeeding installments:

1) To pay, without additional interest, the unpaid installments

due within the total grace period earned by him which is
fixed at the rate of one month grace period for every one year
of installments.
2) If the contract is cancelled, the seller shall refund to the
buyer the cash surrender value of the payments on the
property equivalent to the 50% of the total payment made
every year but not to exceed 90% of the total payments
made.

Where the buyer has paid less than two years, he shall be
entitled to a grace period of 60 days from the date the installment
became due. If he fails to pay the installments due at the expiration
of the grace period, the seller may cancel the contract after 30
days from receipt by the buyer of the notice of cancellation, or the
demand for rescission of the contract by a notarial act.

C. Remedies of the Buyer

1046
Sec. 23
1047
Sec. 24
1048
Sale of Immovables on Installment

266
 1. Sale of Movable

When seller fails to deliver, buyer may seek specific

performance without giving seller option to retain goods on payment
of damages.

2. Sale of Immovables

If disturbed in possession or with reasonable grounds to fear

disturbance

i. Suspend payment

In case of subdivision or condo projects: If real estate developer

fails to comply with obligations according to approved plan:

i. Rescind
ii. Suspend payment until seller complies

XIV. Extinguishment of the Sale

A. Causes

Obligations are extinguished:

(1) By payment or performance;

(2) By the loss of the thing due;
(3) By the condonation or remission of the debt;
(4) By the confusion or merger of the rights of creditor and debtor;
(5) By compensation;
(6) By novation.

Other causes of extinguishment of obligations, such as

annulment, rescission, fulfillment of a resolutory condition, and
prescription, are governed elsewhere in this Code.1049

Sales are extinguished by the same causes as all other

obligations, by those stated in the preceding articles of this Title, and
by conventional or legal redemption.1050

B. Conventional redemption

1049
Art. 1231
1050
Art. 1600

267
 Conventional redemption shall take place when the vendor
reserves the right to repurchase the thing sold, with the obligation to
comply with the provisions of article 1616 and other stipulations
which may have been agreed upon.1051

C. Equitable mortgage

The contract shall be presumed to be an equitable mortgage, in

any of the following cases:

(1) When the price of a sale with right to repurchase is unusually

inadequate;
(2) When the vendor remains in possession as lessee or otherwise;
(3) When upon or after the expiration of the right to repurchase
another instrument extending the period of redemption or granting a
new period is executed;
(4) When the purchaser retains for himself a part of the purchase
price;
(5) When the vendor binds himself to pay the taxes on the thing sold;
(6) In any other case where it may be fairly inferred that the real
intention of the parties is that the transaction shall secure the
payment of a debt or the performance of any other obligation.

In any of the foregoing cases, any money, fruits, or other benefit

to be received by the vendee as rent or otherwise shall be considered
as interest which shall be subject to the usury laws.1052

In case of doubt, a contract purporting to be a sale with right to

repurchase shall be construed as an equitable mortgage.1053

The provisions of article 1602 shall also apply to a contract

purporting to be an absolute sale.1054

D. Distinguish from option to buy

The contract shall be presumed to be an equitable mortgage, in

any of the following cases:

(1) When the price of a sale with right to repurchase is unusually

inadequate;

(2) When the vendor remains in possession as lessee or otherwise;

1051
Art. 1601
1052
Art. 1602
1053
Art. 1603
1054
Art. 1604

268
(3) When upon or after the expiration of the right to repurchase
another instrument extending the period of redemption or granting a
new period is executed;

(4) When the purchaser retains for himself a part of the purchase
price;

(5) When the vendor binds himself to pay the taxes on the thing sold;

(6) In any other case where it may be fairly inferred that the real
intention of the parties is that the transaction shall secure the
payment of a debt or the performance of any other obligation.

In any of the foregoing cases, any money, fruits, or other benefit

to be received by the vendee as rent or otherwise shall be considered
as interest which shall be subject to the usury laws.1055

E. Period of redemption

The right referred to in article 1601, 1056 in the absence of an

express agreement, shall last four years from the date of the contract.

Should there be an agreement, the period cannot exceed ten

years.

However, the vendor may still exercise the right to repurchase

within thirty days from the time final judgment was rendered in a civil
action on the basis that the contract was a true sale with right to
repurchase.1057

F. Exercise of the right to redeem

The vendor cannot avail himself of the right of repurchase without

returning to the vendee the price of the sale, and in addition:

(1) The expenses of the contract, and any other legitimate payments
made by reason of the sale;
(2) The necessary and useful expenses made on the thing sold.1058

1055
Art. 1602
1056
supra
1057
Art. 1606
1058
Art. 1616

269
 G. Legal redemption

Legal redemption is the right to be subrogated, upon the same

terms and conditions stipulated in the contract, in the place of one
who acquires a thing by purchase or dation in payment, or by any
other transaction whereby ownership is transmitted by onerous
title.1059

H. Age redemption1060

XV. The Law on Sale of Subdivision and Condominium1061

XVI. The Condominium Act1062

SUCCESSION

I. General Provisions

Succession is a mode of acquisition by virtue of which the

property, rights and obligations to the extent of the value of the
inheritance, of a person are transmitted through his death to another
or others either by his will or by operation of law.1063

In this Title, "decedent" is the general term applied to the

person whose property is transmitted through succession, whether or
not he left a will. If he left a will, he is also called the testator. 1064

The inheritance includes all the property, rights and obligations

of a person which are not extinguished by his death.1065

The rights to the succession are transmitted from the moment of

the death of the decedent.1066

Succession may be:

(1) Testamentary;
(2) Legal or intestate; or

1059
Art. 1619
1060
ibid
1061
PD 957, see Reference
1062
RA 4726, ibid
1063
Art. 774
1064
Art. 775
1065
Art. 776
1066
Art. 777

270
 (3) Mixed.1067

Testamentary succession is that which results from the

designation of an heir, made in a will executed in the form prescribed
by law.1068

Mixed succession is that effected partly by will and partly by

operation of law.1069

A. Definition/What is transmitted

The inheritance of a person includes not only the property and

the transmissible rights and obligations existing at the time of his
death, but also those which have accrued thereto since the opening of
the succession.1070

B. Succession occurs at the moment of death1071

C. Kinds of Successors Heirs, Devisees, Legatees

An heir is a person called to the succession either by the

provision of a will or by operation of law.

Devisees and legatees are persons to whom gifts of real and

personal property are respectively given by virtue of a will.1072

II. Testamentary Succession

A. Wills

1. In General

a. Definition and characteristics

1067
Art. 778
1068
Art. 779
1069
Art. 780
1070
Art. 781; see also Arts. 774 & 776, General Provisions, supra
1071
Art. 777, supra
1072
Art. 782

271
 A will is an act whereby a person is permitted, with the
formalities prescribed by law, to control to a certain degree the
disposition of this estate, to take effect after his death.1073
The testator may not make a testamentary disposition in such manner
that another person has to determine whether or not it is to be
operative.1074

(1)Personal Act; Non-delegability of will-

making; exception

The making of a will is a strictly personal act; it cannot be left in

whole or in part to the discretion of a third person, or accomplished
through the instrumentality of an agent or attorney.1075

The duration or efficacy of the designation of heirs, devisees or

legatees, or the determination of the portions which they are to take,
when referred to by name, cannot be left to the discretion of a third
person.1076

The testator may entrust to a third person the distribution of

specific property or sums of money that he may leave in general to
specified classes or causes, and also the designation of the persons,
institutions or establishments to which such property or sums are to
be given or applied.1077

(2)Rules of Construction and

Interpretation/Law
Governing Formal Validity

If a testamentary disposition admits of different interpretations,

in case of doubt, that interpretation by which the disposition is to be
operative shall be preferred.1078

When there is an imperfect description, or when no person or

property exactly answers the description, mistakes and omissions
must be corrected, if the error appears from the context of the will or
from extrinsic evidence, excluding the oral declarations of the testator
as to his intention; and when an uncertainty arises upon the face of
the will, as to the application of any of its provisions, the testator's
intention is to be ascertained from the words of the will, taking into

1073
Art. 783
1074
Art. 787
1075
Art. 784
1076
Art. 785
1077
Art. 786
1078
Art. 788

272
consideration the circumstances under which it was made, excluding
such oral declarations.1079

The words of a will are to be taken in their ordinary and

grammatical sense, unless a clear intention to use them in another
sense can be gathered, and that other can be ascertained.

Technical words in a will are to be taken in their technical

sense, unless the context clearly indicates a contrary intention, or
unless it satisfactorily appears that the will was drawn solely by the
testator, and that he was unacquainted with such technical sense.1080

The words of a will are to receive an interpretation which will

give to every expression some effect, rather than one which will
render any of the expressions inoperative; and of two modes of
interpreting a will, that is to be preferred which will prevent
intestacy.1081

The invalidity of one of several dispositions contained in a will

does not result in the invalidity of the other dispositions, unless it is to
be presumed that the testator would not have made such other
dispositions if the first invalid disposition had not been made.1082

Property acquired after the making of a will shall only pass thereby, as
if the testator had possessed it at the time of making the will, should it
expressly appear by the will that such was his intention.1083

Every devise or legacy shall cover all the interest which the
testator could device or bequeath in the property disposed of, unless
it clearly appears from the will that he intended to convey a less
interest.1084

The validity of a will as to its form depends upon the observance

of the law in force at the time it is made.1085

2. Testamentary Capacity1086 and Intent

a. Age Requirement

1079
Art. 789
1080
Art. 790
1081
Art. 791
1082
Art. 792
1083
Art. 793
1084
Art. 794
1085
Art. 795
1086
Testamentary capacity:
1. All persons who are not expressly prohibited by law
2. 18 years old and above
3. Of sound mind, at the time of its execution

273
 All persons who are not expressly prohibited by law may make a
will.1087

Persons of either sex under eighteen years of age cannot make a

will. 1088

b. Soundness of Mind; Presumptions

In order to make a will it is essential that the testator be of

sound mind at the time of its execution.1089

To be of sound mind, it is not necessary that the testator be in

full possession of all his reasoning faculties, or that his mind be wholly
unbroken, unimpaired, or unshattered by disease, injury or other
cause.

It shall be sufficient if the testator was able at the time of

making the will to know the nature of the estate to be disposed of, the
proper objects of his bounty, and the character of the testamentary
act.1090

The law presumes that every person is of sound mind, in the

absence of proof to the contrary.

The burden of proof that the testator was not of sound mind at
the time of making his dispositions is on the person who opposes the
probate of the will; but if the testator, one month, or less, before
making his will was publicly known to be insane, the person who
maintains the validity of the will must prove that the testator made it
during a lucid interval.1091

Supervening incapacity does not invalidate an effective will, nor

is the will of an incapable validated by the supervening of capacity.1092

A married woman may make a will without the consent of her

husband, and without the authority of the court.1093

1087
Art. 796
1088
Art. 797
1089
Art. 798
1090
Art. 799
1091
Art. 800
1092
Art. 801
1093
Art. 802

274
 A married woman may dispose by will of all her separate
property as well as her share of the conjugal partnership or absolute
community property.1094

3. Form

a. Formal Validity Rules

The forms and solemnities of contracts, wills, and other public

instruments shall be governed by the laws of the country in which
they are executed.

When the acts referred to are executed before the diplomatic or

consular officials of the Republic of the Philippines in a foreign
country, the solemnities established by Philippine laws shall be
observed in their execution.

Prohibitive laws concerning persons, their acts or property, and

those which have for their object public order, public policy and good
customs shall not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions agreed upon in a
foreign country.1095

When a Filipino is in a foreign country, he is authorized to make

a will in any of the forms established by the law of the country in
which he may be. Such will may be probated in the Philippines. 1096

The will of an alien who is abroad produces effect in the

Philippines if made with the formalities prescribed by the law of the
place in which he resides, or according to the formalities observed in
his country, or in conformity with those which this Code prescribes.1097

A will made in the Philippines by a citizen or subject of another

country, which is executed in accordance with the law of the country
of which he is a citizen or subject, and which might be proved and
allowed by the law of his own country, shall have the same effect as if
executed according to the laws of the Philippines.1098

Wills, prohibited by the preceding article, executed by Filipinos

in a foreign country shall not be valid in the Philippines, even though

1094
Art. 803
1095
Art. 17
1096
Art. 815
1097
Art. 816
1098
Art. 817

275
authorized by the laws of the country where they may have been
executed.1099

(1)See Law Governing Substantive

Validity

Laws relating to family rights and duties, or to the status,

condition and legal capacity of persons are binding upon citizens of
the Philippines, even though living abroad.1100

Real property as well as personal property is subject to the law

of the country where it is stipulated.1101

Capacity to succeed is governed by the law of the nation of the

decedent.1102

b. Common requirements

(1)In Writing
(2)Language/Dialect Requirement

Every will must be in writing and executed in a language or

dialect known to the testator.1103

c. Notarial Wills

(1)Arts. 805-806

Requisites for valid notarial will:

1. In writing

2. In a language or dialect known to the testator

3. Subscribed at the end by the testator himself or by the testators

name written by some other person in his presence, and by his
express direction

1099
Art. 819
1100
Art. 15
1101
Art. 16
1102
Art. 1039
1103
Art. 804

276
4. Attested & subscribed by three or more credible witnesses in the
presence of the testator and of one another

5. Each and every page, except the last, must be signed by the
testator or by the person requested by him to write his name, and by
the instrumental witnesses of the will, on the left margin

6. Each and every page of the will must be numbered correlatively in

letters placed on the upper part of each page

7. It must contain an attestation clause, stating the following:

a. The number of pages used upon which the will is written

b. The fact that the testator signed the will and every page, or
caused some other person to write his name, under his express
direction, in the presence of the instrumental witnesses

c. All the instrumental witnesses witnessed and signed the will

and all its pages in the presence of the testator and of one another

8. It must be acknowledged before a notary public by the testator and

the witnesses

(2)Special rules for handicapped

testators

If the testator be deaf or a deaf-mute:

1. Testator must personally read the will, if able to do so;

2. Otherwise, he shall designate two persons to read it and
communicate to him, in some practicable manner, its contents.1104

If the testator be blind:

The will shall be read to the testator twice

1. Once by one of the subscribing witnesses

2. Once by the notary public before whom the will is
acknowledged.1105

(3)Substantial Compliance

1104
Art. 807
1105
Art. 808

277
 In the absence of bad faith, forgery, or fraud, or undue and
improper pressure and influence, defects and imperfections in the
form of attestation or in the language used therein shall not render
the will invalid if it is proved that the will was in fact executed and
attested in substantial compliance with all the requirements of article
805.1106

(4)Requisites

Any person of sound mind and of the age of eighteen years or

more, and not blind, deaf or dumb, and able to read and write, may be
a witness to the execution of a will mentioned in article 805 of this
Code.1107

The following are disqualified from being witnesses to a will:

(1) Any person not domiciled in the Philippines;

(2) Those who have been convicted of falsification of a
document, perjury or false testimony.1108

If the witnesses attesting the execution of a will are competent

at the time of attesting, their becoming subsequently incompetent
shall not prevent the allowance of the will.1109

If a person attests the execution of a will, to whom or to whose

spouse, or parent, or child, a devise or legacy is given by such will,
such devise or legacy shall, so far only as concerns such person, or
spouse, or parent, or child of such person, or any one claiming under
such person or spouse, or parent, or child, be void, unless there are
three other competent witnesses to such will. However, such person
so attesting shall be admitted as a witness as if such devise or legacy
had not been made or given.1110

1106
Art. 809
1107
Art. 820
Qualifications of witnesses to a notarial will:
1. Of sound mind
2. Of the age of 18 years or more
3. Not blind, deaf or dumb
4. Able to read and write
5. Domiciled in the Philippines
6. Have not been convicted of falsification of a document, perjury or false testimony
1108
Art. 821
1109
Art. 822
1110
Art. 823

278
 A mere charge on the estate of the testator for the payment of
debts due at the time of the testator's death does not prevent his
creditors from being competent witnesses to his will.1111

d. Holographic Wills

(1)Requirements

A person may execute a holographic will which must be entirely

written, dated, and signed by the hand of the testator himself. It is
subject to no other form, and may be made in or out of the
Philippines, and need not be witnessed.1112

In holographic wills, the dispositions of the testator written

below his signature must be dated and signed by him in order to make
them valid as testamentary dispositions.1113

When a number of dispositions appearing in a holographic will

are signed without being dated, and the last disposition has a
signature and a date, such date validates the dispositions preceding it,
whatever be the time of prior dispositions.1114

(2)Witnesses Required for Probate

In the probate of a holographic will, it shall be necessary that at

least one witness who knows the handwriting and signature of the
testator explicitly declare that the will and the signature are in the
handwriting of the testator. If the will is contested, at least three of
such witnesses shall be required.

In the absence of any competent witness referred to in the

preceding paragraph, and if the court deem it necessary, expert
testimony may be resorted to.1115

(3)Alterations, Requirements

In case of any insertion, cancellation, erasure or alteration in a

holographic will, the testator must authenticate the same by his full
signature.1116

1111
Art. 824
1112
Art. 810
1113
Art. 812
1114
Art. 813
1115
Art. 811
1116
Art. 814

279
 e. Joint Wills

Two or more persons cannot make a will jointly, or in the same

instrument, either for their reciprocal benefit or for the benefit of a
third person.1117

Wills, prohibited by the preceding article, executed by Filipinos

in a foreign country shall not be valid in the Philippines, even though
authorized by the laws of the country where they may have been
executed.1118

4. Codicils, Definition and Formal Requirements

A codicil is supplement or addition to a will, made after the

execution of a will and annexed to be taken as a part thereof, by which
disposition made in the original will is explained, added to, or
altered.1119

In order that a codicil may be effective, it shall be executed as in

the case of a will.1120

5. Incorporate by Reference

Requisites:

1. the document or paper referred to in the will must be in

existence at the time of the execution of the will

2. the will must clearly describe and identify the same, stating
among other things the number of pages thereof

3. it must be identified by clear and satisfactory proof as the

document or paper referred to therein

4. it must be signed by the testator and the witnesses on each and

every page, except in case of voluminous books of account or
inventories

6. Revocation; kinds
1117
Art. 818
1118
Art. 819
1119
Art. 825
1120
Art. 826

280
 A will may be revoked by the testator at any time before his
death. Any waiver or restriction of this right is void.1121

A revocation done outside the Philippines, by a person who does

not have his domicile in this country, is valid when it is done according
to the law of the place where the will was made, or according to the
law of the place in which the testator had his domicile at the time; and
if the revocation takes place in this country, when it is in accordance
with the provisions of this Code.1122

No will shall be revoked except in the following cases:

(1) By implication of law; or

(2) By some will, codicil, or other writing executed as provided

in case of wills; or

(3) By burning, tearing, cancelling, or obliterating the will with

the intention of revoking it, by the testator himself, or by some other
person in his presence, and by his express direction. If burned, torn,
cancelled, or obliterated by some other person, without the express
direction of the testator, the will may still be established, and the
estate distributed in accordance therewith, if its contents, and due
execution, and the fact of its unauthorized destruction, cancellation,
or obliteration are established according to the Rules of Court.1123

Subsequent wills which do not revoke the previous ones in an

express manner, annul only such dispositions in the prior wills as are
inconsistent with or contrary to those contained in the later wills.1124
A revocation made in a subsequent will shall take effect, even if
the new will should become inoperative by reason of the incapacity of
the heirs, devisees or legatees designated therein, or by their
renunciation.1125

A revocation of a will based on a false cause or an illegal cause

is null and void1126.

1121
Art. 828
1122
Art. 829
1123
Art. 830
1124
Art. 831
1125
Art. 832
1126
Art. 833

281
 The recognition of an illegitimate child does not lose its legal
effect, even though the will wherein it was made should be
revoked.1127

7. Allowance and Disallowance of Wills

a. Probate Requirement

No will shall pass either real or personal property unless it is

proved and allowed in accordance with the Rules of Court.

The testator himself may, during his lifetime, petition the court
having jurisdiction for the allowance of his will. In such case, the
pertinent provisions of the Rules of Court for the allowance of wills
after the testator's a death shall govern.

The Supreme Court shall formulate such additional Rules of

Court as may be necessary for the allowance of wills on petition of the
testator.

Subject to the right of appeal, the allowance of the will, either

during the lifetime of the testator or after his death, shall be
conclusive as to its due execution.1128

(1)Issues to be Resolved in Probate

Proceedings

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;

(3) If it was executed through force or under duress, or the influence

of fear, or threats;

(4) If it was procured by undue and improper pressure and influence,

on the part of the beneficiary or of some other person;

1127
Art. 834
1128
Art. 838

282
(5) If the signature of the testator was procured by fraud;

(6) If the testator acted by mistake or did not intend that the
instrument he signed should be his will at the time of affixing his
signature thereto.1129

(a) Exceptions when practical

considerations demand the
intrinsic validity of the will be
resolved

(2)Effect of Final Decree of Probate, Res

Judicata on Formal Validity

A final judgment rendered on a petition for the probate of a will is

binding upon the whole world;1130 and public policy and sound
practice demand that at the risk of occasional errors judgment of
courts should become final at some definite date fixed by law.

b. Grounds for Denying Probate1131

B. Institution of Heirs

Institution of heir is an act by virtue of which a testator

designates in his will the person or persons who are to succeed him in
his property and transmissible rights and obligations.1132

A will shall be valid even though it should not contain an

institution of an heir, or such institution should not comprise the
entire estate, and even though the person so instituted should not
accept the inheritance or should be incapacitated to succeed.

In such cases the testamentary dispositions made in accordance

with law shall be complied with and the remainder of the estate shall
pass to the legal heirs.1133

One who has no compulsory heirs may dispose by will of all his
estate or any part of it in favor of any person having capacity to
1129
Art. 839
1130
Manalo vs. Paredes, 47 Phil. 938; In re Estates of Johnson, 39 Phil. 156
1131
See Art. 839, supra
1132
Art. 840
1133
Art. 841

283
succeed.

One who has compulsory heirs may dispose of his estate

provided he does not contravene the provisions of this Code with
regard to the legitime of said heirs.1134

The testator shall designate the heir by his name and surname,
and when there are two persons having the same names, he shall
indicate some circumstance by which the instituted heir may be
known.

Even though the testator may have omitted the name of the heir,
should he designate him in such manner that there can be no doubt as
to who has been instituted, the institution shall be valid.1135

An error in the name, surname, or circumstances of the heir

shall not vitiate the institution when it is possible, in any other
manner, to know with certainty the person instituted.

If among persons having the same names and surnames, there

is a similarity of circumstances in such a way that, even with the use
of other proof, the person instituted cannot be identified, none of
them shall be an heir.1136

Every disposition in favor of an unknown person shall be void,

unless by some event or circumstance his identity becomes certain.
However, a disposition in favor of a definite class or group of persons
shall be valid.1137

Heirs instituted without designation of shares shall inherit in

equal parts.1138

When the testator institutes some heirs individually and others

collectively as when he says, "I designate as my heirs A and B, and the
children of C," those collectively designated shall be considered as
individually instituted, unless it clearly appears that the intention of
the testator was otherwise.1139

1134
Art. 842
1135
Art. 843
1136
Art. 844
1137
Art. 845
1138
Art. 846
1139
Art. 847

284
 If the testator should institute his brothers and sisters, and he
has some of full blood and others of half blood, the inheritance shall
be distributed equally unless a different intention appears.1140

When the testator calls to the succession a person and his

children they are all deemed to have been instituted simultaneously
and not successively.1141

The statement of a false cause for the institution of an heir shall

be considered as not written, unless it appears from the will that the
testator would not have made such institution if he had known the
falsity of such cause.1142

If the testator has instituted only one heir, and the institution is
limited to an aliquot part of the inheritance, legal succession takes
place with respect to the remainder of the estate.

The same rule applies if the testator has instituted several heirs,
each being limited to an aliquot part, and all the parts do not cover
the whole inheritance.1143

If it was the intention of the testator that the instituted heirs

should become sole heirs to the whole estate, or the whole free
portion, as the case may be, and each of them has been instituted to
an aliquot part of the inheritance and their aliquot parts together do
not cover the whole inheritance, or the whole free portion, each part
shall be increased proportionally.1144

If each of the instituted heirs has been given an aliquot part of

the inheritance, and the parts together exceed the whole inheritance,
or the whole free portion, as the case may be, each part shall be
reduced proportionally.1145

The share of a child or descendant omitted in a will must first be

taken from the part of the estate not disposed of by the will, if any; if
that is not sufficient, so much as may be necessary must be taken
proportionally from the shares of the other compulsory heirs.1146

1140
Art. 848
1141
Art. 849
1142
Art. 850
1143
Art. 851
1144
Art. 852
1145
Art. 853
1146
Art. 855

285
 A voluntary heir who dies before the testator transmits nothing
to his heirs.

A compulsory heir who dies before the testator, a person

incapacitated to succeed, and one who renounces the inheritance,
shall transmit no right to his own heirs except in cases expressly
provided for in this Code.1147

1. Preterition Definition, Requisites and Effects

The preterition or omission of one, some, or all of the

compulsory heirs in the direct line, whether living at the time of the
execution of the will or born after the death of the testator, shall annul
the institution of heir; but the devises and legacies shall be valid
insofar as they are not inofficious.

If the omitted compulsory heirs should die before the testator,

the institution shall be effectual, without prejudice to the right of
representation.1148

2. Concept1149

3. Compulsory Heirs in the Direct Line1150

4. Preterition vs. Disposition less than

Legitime/Donation Inter Vivos

Any compulsory heir to whom the testator has left by any title
less than the legitime belonging to him may demand that the same be
fully satisfied.1151

Testamentary dispositions that impair or diminish the legitime

of the compulsory heirs shall be reduced on petition of the same,
insofar as they may be inofficious or excessive.1152

To determine the legitime, the value of the property left at the

death of the testator shall be considered, deducting all debts and
charges, which shall not include those imposed in the will.

1147
Art. 856
1148
Art. 854
1149
ibid
1150
see E. Legitime, infra
1151
Art. 906
1152
Art. 907

286
 To the net value of the hereditary estate, shall be added the
value of all donations by the testator that are subject to collation, at
the time he made them.1153

Donations given to children shall be charged to their legitime.

Donations made to strangers shall be charged to that part of the

estate of which the testator could have disposed by his last will.

Insofar as they may be inofficious or may exceed the disposable

portion, they shall be reduced according to the rules established by
this Code.1154

Donations which an illegitimate child may have received during

the lifetime of his father or mother, shall be charged to his legitime.
Should they exceed the portion that can be freely disposed of,
they shall be reduced in the manner prescribed by this Code.1155

After the legitime has been determined in accordance with the

three preceding articles, the reduction shall be made as follows:

(1) Donations shall be respected as long as the legitime can be

covered, reducing or annulling, if necessary, the devises or legacies
made in the will;

(2) The reduction of the devises or legacies shall be pro rata, without
any distinction whatever.

If the testator has directed that a certain devise or legacy be

paid in preference to others, it shall not suffer any reduction until the
latter have been applied in full to the payment of the legitime.

(3) If the devise or legacy consists of a usufruct or life annuity, whose

value may be considered greater than that of the disposable portion,
the compulsory heirs may choose between complying with the
testamentary provision and delivering to the devisee or legatee the
part of the inheritance of which the testator could freely dispose.1156

If the devise subject to reduction should consist of real property,

which cannot be conveniently divided, it shall go to the devisee if the
reduction does not absorb one-half of its value; and in a contrary case,
to the compulsory heirs; but the former and the latter shall reimburse
each other in cash for what respectively belongs to them.
1153
Art. 908
1154
Art. 909
1155
Art. 910
1156
Art. 911

287
 The devisee who is entitled to a legitime may retain the entire
property, provided its value does not exceed that of the disposable
portion and of the share pertaining to him as legitime.1157

If the heirs or devisees do not choose to avail themselves of the

right granted by the preceding article, any heir or devisee who did not
have such right may exercise it; should the latter not make use of it,
the property shall be sold at public auction at the instance of any one
of the interested parties.1158

The testator may devise and bequeath the free portion as he

may deem fit.1159

A compulsory heir may, in consequence of disinheritance, be

deprived of his legitime, for causes expressly stated by law.1160
Disinheritance can be effected only through a will wherein the
legal cause therefor shall be specified.1161

The burden of proving the truth of the cause for disinheritance

shall rest upon the other heirs of the testator, if the disinherited heir
should deny it.1162

Disinheritance without a specification of the cause, or for a

cause the truth of which, if contradicted, is not proved, or which is not
one of those set forth in this Code, shall annul the institution of heirs
insofar as it may prejudice the person disinherited; but the devises
and legacies and other testamentary dispositions shall be valid to such
extent as will not impair the legitime.1163

5. Effects of Preterition, devisees only entitled to

completion of legitime1164

C. Substitution of Heirs

If heirs instituted in unequal shares should be reciprocally

substituted, the substitute shall acquire the share of the heir who
dies, renounces, or is incapacitated, unless it clearly appears that the
intention of the testator was otherwise. If there are more than one

1157
Art. 912
1158
Art. 913
1159
Art. 914
1160
Art. 915
1161
Art. 916
1162
Art. 917
1163
Art. 918
1164
See 1. Preterition, etc., supra

288
substitute, they shall have the same share in the substitution as in the
institution.1165

The substitute shall be subject to the same charges and

conditions imposed upon the instituted heir, unless and testator has
expressly provided the contrary, or the charges or conditions are
personally applicable only to the heir instituted.1166

The following shall not take effect:

(1) Fideicommissary substitutions which are not made in an express

manner, either by giving them this name, or imposing upon the
fiduciary the absolute obligation to deliver the property to a second
heir;

(2) Provisions which contain a perpetual prohibition to alienate, and

even a temporary one, beyond the limit fixed in article 863;

(3) Those which impose upon the heir the charge of paying to various
persons successively, beyond the limit prescribed in article 863, a
certain income or pension;

(4) Those which leave to a person the whole or part of the hereditary
property in order that he may apply or invest the same according to
secret instructions communicated to him by the testator.1167

The nullity of the fideicommissary substitution does not

prejudice the validity of the institution of the heirs first designated;
the fideicommissary clause shall simply be considered as not
written.1168

The dispositions of the testator declaring all or part of the estate

inalienable for more than twenty years are void.1169

1. Definition

Substitution is the appointment of another heir so that he may

enter into the inheritance in default of the heir originally instituted.1170

2. Kinds
1165
Art. 861
1166
Art. 862
1167
Art. 867
1168
Art. 868
1169
Art. 870
1170
Art. 857

289
 Substitution of heirs may be:

(1) Simple or common;

(2) Brief or compendious;
(3) Reciprocal; or
(4) Fideicommissary.1171

The testator may designate one or more persons to substitute

the heir or heirs instituted in case such heir or heirs should die before
him, or should not wish, or should be incapacitated to accept the
inheritance.

A simple substitution, without a statement of the cases to which

it refers, shall comprise the three mentioned in the preceding
paragraph, unless the testator has otherwise provided.1172

Two or more persons may be substituted for one; and one

person for two or more heirs.1173

3. Simple Substitution1174

4. Fideicommissary Substitution1175

A fideicommissary substitution by virtue of which the fiduciary

or first heir instituted is entrusted with the obligation to preserve and
to transmit to a second heir the whole or part of the inheritance, shall
be valid and shall take effect, provided such substitution does not go
beyond one degree from the heir originally instituted, and provided
further, that the fiduciary or first heir and the second heir are living at
the time of the death of the testator.1176

A fideicommissary substitution can never burden the legitime.1177

1171
Art. 858
1172
Art. 859
1173
Art. 860
1174
See Art. 859, supra
1175
Requisites for a fideicommissary substitution:
1. A fiduciary or first heir instituted entrusted with the obligation to preserve and to transmit to a
fideicommissary substitute or second heir the whole or part of the inheritance
2. Such substitution must not go beyond one degree from the heir originally instituted
3. The fiduciary or first heir and the second heir are living at the time of the death of the testator
4. The fideicommissary substitution must be expressly made
5. The fideicommissary substitution is imposed on the free portion of the estate and never on the legitime
1176
Art. 863
1177
Art. 864

290
 Every fideicommissary substitution must be expressly made in
order that it may be valid.

The fiduciary shall be obliged to deliver the inheritance to the

second heir, without other deductions than those which arise from
legitimate expenses, credits and improvements, save in the case
where the testator has provided otherwise.1178

The second heir shall acquire a right to the succession from the
time of the testator's death, even though he should die before the
fiduciary. The right of the second heir shall pass to his heirs.1179

A provision whereby the testator leaves to a person the whole or

part of the inheritance, and to another the usufruct, shall be valid. If
he gives the usufruct to various persons, not simultaneously, but
successively, the provisions of article 863 shall apply.1180

D. Conditional Testamentary Dispositions and Testamentary Dispositions

with a Term

The institution of an heir may be made conditionally, or for a

certain purpose or cause.1181

The testator cannot impose any charge, condition, or

substitution whatsoever upon the legitimes prescribed in this Code.
Should he do so, the same shall be considered as not imposed.1182

Impossible conditions and those contrary to law or good

customs shall be considered as not imposed and shall in no manner
prejudice the heir, even if the testator should otherwise provide.1183

An absolute condition not to contract a first or subsequent

marriage shall be considered as not written unless such condition has
been imposed on the widow or widower by the deceased spouse, or by
the latter's ascendants or descendants.

Nevertheless, the right of usufruct, or an allowance or some

personal prestation may be devised or bequeathed to any person for
the time during which he or she should remain unmarried or in
widowhood.1184

1178
Art. 865
1179
Art. 866
1180
Art. 869
1181
Art. 871
1182
Art. 872
1183
Art. 873
1184
Art. 874

291
 Any disposition made upon the condition that the heir shall
make some provision in his will in favor of the testator or of any other
person shall be void.1185

Any purely potestative condition imposed upon an heir must be

fulfilled by him as soon as he learns of the testator's death.

This rule shall not apply when the condition, already complied
with, cannot be fulfilled again.1186

If the condition is casual or mixed, it shall be sufficient if it

happen or be fulfilled at any time before or after the death of the
testator, unless he has provided otherwise.

Should it have existed or should it have been fulfilled at the time

the will was executed and the testator was unaware thereof, it shall
be deemed as complied with.

If he had knowledge thereof, the condition shall be considered

fulfilled only when it is of such a nature that it can no longer exist or
be complied with again.1187

A disposition with a suspensive term does not prevent the

instituted heir from acquiring his rights and transmitting them to his
heirs even before the arrival of the term.1188

If the potestative condition imposed upon the heir is negative, or

consists in not doing or not giving something, he shall comply by
giving a security that he will not do or give that which has been
prohibited by the testator, and that in case of contravention he will
return whatever he may have received, together with its fruits and
interests.1189

If the heir be instituted under a suspensive condition or term,

the estate shall be placed under administration until the condition is
fulfilled, or until it becomes certain that it cannot be fulfilled, or until
the arrival of the term.

1185
Art. 875
1186
Art. 876
1187
Art. 877
1188
Art. 878
1189
Art. 879

292
 The same shall be done if the heir does not give the security
required in the preceding article.1190

The appointment of the administrator of the estate mentioned in

the preceding article, as well as the manner of the administration and
the rights and obligations of the administrator shall be governed by
the Rules of Court.1191

The statement of the object of the institution, or the application

of the property left by the testator, or the charge imposed by him,
shall not be considered as a condition unless it appears that such was
his intention.

That which has been left in this manner may be claimed at once
provided that the instituted heir or his heirs give security for
compliance with the wishes of the testator and for the return of
anything he or they may receive, together with its fruits and interests,
if he or they should disregard this obligation.1192

When without the fault of the heir, an institution referred to in

the preceding article cannot take effect in the exact manner stated by
the testator, it shall be complied with in a manner most analogous to
and in conformity with his wishes.

If the person interested in the condition should prevent its

fulfillment, without the fault of the heir, the condition shall be deemed
to have been complied with.1193

Conditions imposed by the testator upon the heirs shall be

governed by the rules established for conditional obligations in all
matters not provided for by this Section.1194

The designation of the day or time when the effects of the

institution of an heir shall commence or cease shall be valid.

In both cases, the legal heir shall be considered as called to the

succession until the arrival of the period or its expiration. But in the
first case he shall not enter into possession of the property until after
having given sufficient security, with the intervention of the instituted
heir.1195
1190
Art. 880
1191
Art. 881
1192
Art. 882
1193
Art. 883
1194
Art. 884
1195
Art. 885

293
 E. Legitime

1. Definition

Legitime is that part of the testator's property which he cannot

dispose of because the law has reserved it for certain heirs who are,
therefore, called compulsory heirs.1196

2. Compulsory Heirs1197 and Various Combinations

The following are compulsory heirs:

(1) Legitimate children and descendants, with respect to their

legitimate parents and ascendants;

(2) In default of the foregoing, legitimate parents and ascendants,

with respect to their legitimate children and descendants;

(3) The widow or widower;

(4) Acknowledged natural children, and natural children by legal

fiction;

(5) Other illegitimate children referred to in article 287.

Compulsory heirs mentioned in Nos. 3, 4, and 5 are not

excluded by those in Nos. 1 and 2; neither do they exclude one
another.

In all cases of illegitimate children, their filiation must be duly

proved.

The father or mother of illegitimate children of the three classes

mentioned, shall inherit from them in the manner and to the extent
established by this Code.1198

1196
Art. 886
1197
Classes of compulsory heirs:
1.Primary those who have precedence over and exclude other compulsory heirs
a. Legitimate children and descendants (legitimate), with respect to their legitimate parents and
ascendants
2.Secondary those who succeed only in the absence of the primary heirs
a. Legitimate parents and ascendants (legitimate), with respect to their legitimate children and
descendants
3.Concurring those who succeed together with the primary or the secondary compulsory heirs
a. Widow or widower (legitimate)
b. Illegitimate children and descendants (legitimate or illegitimate)
1198
Art. 887

294
 The legitime of legitimate children and descendants consists of
one-half of the hereditary estate of the father and of the mother.

The latter may freely dispose of the remaining half, subject to

the rights of illegitimate children and of the surviving spouse as
hereinafter provided.1199

The legitime of legitimate parents or ascendants consists of one-

half of the hereditary estates of their children and descendants.

The children or descendants may freely dispose of the other half,

subject to the rights of illegitimate children and of the surviving
spouse as hereinafter provided.1200

The legitime reserved for the legitimate parents shall be divided

between them equally; if one of the parents should have died, the
whole shall pass to the survivor.

If the testator leaves neither father nor mother, but is survived

by ascendants of equal degree of the paternal and maternal lines, the
legitime shall be divided equally between both lines. If the ascendants
should be of different degrees, it shall pertain entirely to the ones
nearest in degree of either line.1201

If only one legitimate child or descendant of the deceased

survives, the widow or widower shall be entitled to one-fourth of the
hereditary estate. In case of a legal separation, the surviving spouse
may inherit if it was the deceased who had given cause for the same.

If there are two or more legitimate children or descendants, the

surviving spouse shall be entitled to a portion equal to the legitime of
each of the legitimate children or descendants.

In both cases, the legitime of the surviving spouse shall be taken

from the portion that can be freely disposed of by the testator. 1202

If the testator leaves no legitimate descendants, but leaves

legitimate ascendants, the surviving spouse shall have a right to one-
fourth of the hereditary estate.

1199
Art. 888
1200
Art. 889
1201
Art. 890
1202
Art. 892

295
 This fourth shall be taken from the free portion of the estate.1203

If the testator leaves illegitimate children, the surviving spouse

shall be entitled to one-third of the hereditary estate of the deceased
and the illegitimate children to another third. The remaining third
shall be at the free disposal of the testator.1204

The legitime of each of the acknowledged natural children and

each of the natural children by legal fiction shall consist of one-half of
the legitime of each of the legitimate children or descendants.

The legitime of an illegitimate child who is neither an

acknowledged natural, nor a natural child by legal fiction, shall be
equal in every case to four-fifths of the legitime of an acknowledged
natural child.

The legitime of the illegitimate children shall be taken from the

portion of the estate at the free disposal of the testator, provided that
in no case shall the total legitime of such illegitimate children exceed
that free portion, and that the legitime of the surviving spouse must
first be fully satisfied.1205

Illegitimate children who may survive with legitimate parents or

ascendants of the deceased shall be entitled to one-fourth of the
hereditary estate to be taken from the portion at the free disposal of
the testator.1206

When the widow or widower survives with legitimate children or

descendants, and acknowledged natural children, or natural children
by legal fiction, such surviving spouse shall be entitled to a portion
equal to the legitime of each of the legitimate children which must be
taken from that part of the estate which the testator can freely
dispose of.1207

If the widow or widower survives with legitimate children or

descendants, and with illegitimate children other than acknowledged
natural, or natural children by legal fiction, the share of the surviving
spouse shall be the same as that provided in the preceding article.1208

1203
Art. 893
1204
Art. 894
1205
Art. 895
1206
Art. 896
1207
Art. 897
1208
Art. 898

296
 When the widow or widower survives with legitimate parents or
ascendants and with illegitimate children, such surviving spouse shall
be entitled to one-eighth of the hereditary estate of the deceased
which must be taken from the free portion, and the illegitimate
children shall be entitled to one-fourth of the estate which shall be
taken also from the disposable portion. The testator may freely
dispose of the remaining one-eighth of the estate.1209

If the only survivor is the widow or widower, she or he shall be

entitled to one-half of the hereditary estate of the deceased spouse,
and the testator may freely dispose of the other half.

If the marriage between the surviving spouse and the testator

was solemnized in articulo mortis, and the testator died within three
months from the time of the marriage, the legitime of the surviving
spouse as the sole heir shall be one-third of the hereditary estate,
except when they have been living as husband and wife for more than
five years. In the latter case, the legitime of the surviving spouse shall
be that specified in the preceding paragraph.1210

When the testator dies leaving illegitimate children and no other

compulsory heirs, such illegitimate children shall have a right to one-
half of the hereditary estate of the deceased.

The other half shall be at the free disposal of the testator.1211

The rights of illegitimate children set forth in the preceding

articles are transmitted upon their death to their descendants,
whether legitimate or illegitimate.1212

The legitime of the parents who have an illegitimate child, when

such child leaves neither legitimate descendants, nor a surviving
spouse, nor illegitimate children, is one-half of the hereditary estate of
such illegitimate child. If only legitimate or illegitimate children are
left, the parents are not entitled to any legitime whatsoever. If only
the widow or widower survives with parents of the illegitimate child,
the legitime of the parents is one-fourth of the hereditary estate of the
child, and that of the surviving spouse also one-fourth of the estate.1213

SUMMARY OF LEGITIMES OF COMPULSORY

HEIRS:
1209
Art. 899
1210
Art. 900
1211
Art. 901
1212
Art. 902
1213
Art. 903

297
Surviving Legitimat Surviving Illegitima Legitimat Illegitima
relatives e children spouse te e parents te
& children & parents
descenda ascendant
nts s
Legitimate (divided
children alone by the # of
children)
1 legitimate
child surviving
spouse

Legitimate (divided Same as

children by no. of the share
Surviving children) @ legit
spouse child

Legitimate of the
children share of @
Illegitimate legit child
children

1 legitimate of the
child surviving (preferred) share of @
spouse legit child
illegitimate
children

2 or more (divided Same as of the

legitimate by no. of the share share of @
children children) of @ legit legit child
surviving child
spouse
Illegitimate
children

Legitimate
parents alone
Legitimate
parents
Illegitimate
children

298
Legitimate
parents and
Surviving
spouse

Legitimate 1/8
parents
Surviving
spouse
Illegitimate
children
Illegitimate (divided
children alone by no. of
children)
Illegitimate 1/3 1/3
children (divided by
Surviving no. of
spouse children)
Surviving or 1/3 if
spouse alone marriage
in articulo
mortis
Illegitimate
parents alone
Illegitimate
parents
Surviving
spouse

The testator cannot deprive his compulsory heirs of their

legitime, except in cases expressly specified by law.

Neither can he impose upon the same any burden,

encumbrance, condition, or substitution of any kind whatsoever.1214

Every renunciation or compromise as regards a future legitime

between the person 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 collation whatever they may have received by virtue of the
renunciation or compromise.1215

Any compulsory heir to whom the testator has left by any title
less than the legitime belonging to him may demand that the same be
fully satisfied.1216
1214
Art. 904
1215
Art. 905
1216
Art. 906

299
 Testamentary dispositions that impair or diminish the legitime
of the compulsory heirs shall be reduced on petition of the same,
insofar as they may be inofficious or excessive.1217

To determine the legitime, the value of the property left at the

death of the testator shall be considered, deducting all debts and
charges, which shall not include those imposed in the will.

To the net value of the hereditary estate, shall be added the

value of all donations by the testator that are subject to collation, at
the time he made them.1218

Donations given to children shall be charged to their legitime.

Donations made to strangers shall be charged to that part of the

estate of which the testator could have disposed by his last will.

Insofar as they may be inofficious or may exceed the disposable

portion, they shall be reduced according to the rules established by
this Code.1219

Donations which an illegitimate child may have received during

the lifetime of his father or mother, shall be charged to his legitime.

Should they exceed the portion that can be freely disposed of,
they shall be reduced in the manner prescribed by this Code.1220

After the legitime has been determined in accordance with the

three preceding articles, the reduction shall be made as follows:

(1) Donations shall be respected as long as the legitime can be

covered, reducing or annulling, if necessary, the devises or legacies
made in the will;

(2) The reduction of the devises or legacies shall be pro rata, without
any distinction whatever.

If the testator has directed that a certain devise or legacy be

paid in preference to others, it shall not suffer any reduction until the
latter have been applied in full to the payment of the legitime.

1217
Art. 907
1218
Art. 908
1219
Art. 909
1220
Art. 910

300
(3) If the devise or legacy consists of a usufruct or life annuity, whose
value may be considered greater than that of the disposable portion,
the compulsory heirs may choose between complying with the
testamentary provision and delivering to the devisee or legatee the
part of the inheritance of which the testator could freely dispose.1221

If the devise subject to reduction should consist of real property,

which cannot be conveniently divided, it shall go to the devisee if the
reduction does not absorb one-half of its value; and in a contrary case,
to the compulsory heirs; but the former and the latter shall reimburse
each other in cash for what respectively belongs to them.

The devisee who is entitled to a legitime may retain the entire

property, provided its value does not exceed that of the disposable
portion and of the share pertaining to him as legitime.1222

If the heirs or devisees do not choose to avail themselves of the

right granted by the preceding article, any heir or devisee who did not
have such right may exercise it; should the latter not make use of it,
the property shall be sold at public auction at the instance of any one
of the interested parties.1223

The testator may devise and bequeath the free portion as he

may deem fit.1224

3. Reserva Troncal1225

The ascendant who inherits from his descendant any property

which the latter may have acquired by gratuitous title from another
ascendant, or a brother or sister, is obliged to reserve such property
as he may have acquired by operation of law for the benefit of
relatives who are within the third degree and who belong to the line
from which said property came.

1221
Art. 911
1222
Art. 912
1223
Art. 913
1224
Art. 914
1225
Requisites
1) that the property was acquired by a descendant from an ascendant or from a brother or sister by
gratuitous title
2) that said descendant died without an issue
3) that the property is inherited by another ascendant by operation of law
4) that there are relatives within the 3rd degree belonging to the line from which said property came

301
 4. Disinheritance1226

a. Disinheritance for cause

The following shall be sufficient causes for the disinheritance of

children and descendants, legitimate as well as illegitimate:

(1) When a child or descendant has been found guilty of an attempt

against the life of the testator, his or her spouse, descendants, or
ascendants;

(2) When a child or descendant has accused the testator of a crime for
which the law prescribes imprisonment for six years or more, if the
accusation has been found groundless;

(3) When a child or descendant has been convicted of adultery or

concubinage with the spouse of the testator;

(4) When a child or descendant by fraud, violence, intimidation, or

undue influence causes the testator to make a will or to change one
already made;

(5) A refusal without justifiable cause to support the parent or

ascendant who disinherits such child or descendant;

(6) Maltreatment of the testator by word or deed, by the child or

descendant;

(7) When a child or descendant leads a dishonorable or disgraceful

life;

(8) Conviction of a crime which carries with it the penalty of civil

interdiction.1227

1226
It is the act by which the testator, for just cause, deprives a compulsory heir of his right to the legitime.
Requisites for a valid disinheritance:
1. Heir disinherited must be designated by name or in such a manner as to leave no room for doubt as to
who is intended
2. It must be for a cause designated by law
3. It must be made in valid will
4. It must be made expressly, stating the cause in the will itself
5. The cause must be certain and true, and must be proved by the interested heir if the person disinherited
should deny it
6 .It must unconditional
7. It must be total
1227
Art. 919

302
 Summary of causes of disinheritance:

GROUNDS FOR CHILDREN/ PARENTS/ SPOUSE UNWORTHINES

DISINHERITANCE DESCENDANT ASCENDANTS S
S
1 Guilty/convicted * * * *
of attempt
against life of
testator/spouse/
ascendant/desce
ndant

2 Accused * * * *
testator/deceden
t of crime
punishable by
imprisonment of
more than 6
years, found
groundless, false

3 Causes * * * *
testator/deceden
t to make will or
change one by
fraud, violence,
intimidation, or
undue influence

4 Unjustified * * *
refusal to
support testator

5 Convicted of * * *
adultery or
concubinage
with spouse of
testator/deceden
t

6 Maltreatment of *
testator by word
and deed

303
7 Leading a *
dishonorable or
disgraceful life

8 Conviction of *
crime which
carries penalty
of civil
interdiction

9 Abandonment of * *
children or
inducing
children to live
corrupt and
immoral life or
attempted
against virtue

1 Loss of parental * *
0 authority

1 Attempt by one *
1 parent against
life of the other
UNLESS there is
reconciliation
between parents

1 Spouses given *
2 cause for legal
separation

1 Failure to report *
3 violent death of
decedent within
one month,
unless

304
 authorities have
already taken
action

1 Force, violence, *
4 intimidation or
undue influence
to prevent
another from
making a will or
revoking one
already made or
who supplants or
alters the latters
will

1 Falsifies or *
5 forges a
supposed will of
the decedent

(1)Reconciliation

A subsequent reconciliation between the offender and the

offended person deprives the latter of the right to disinherit, and
renders ineffectual any disinheritance that may have been made.1228

(2)Rights of descendants of person

disinherited

The children and descendants of the person disinherited shall

take his or her place and shall preserve the rights of compulsory heirs
with respect to the legitime; but the disinherited parent shall not have
the usufruct or administration of the property which constitutes the
legitime.1229

b. Disinheritance without cause

Disinheritance without a specification of the cause, or for a

cause the truth of which, if contradicted, is not proved, or which is not
one of those set forth in this Code, shall annul the institution of heirs
insofar as it may prejudice the person disinherited; but the devises

1228
Art. 922
1229
Art. 923

305
and legacies and other testamentary dispositions shall be valid to such
extent as will not impair the legitime.1230

1. Legacies and Devisees

All things and rights which are within the commerce of man be
bequeathed or devised.1231

A testator may charge with legacies and devises not only his
compulsory heirs but also the legatees and devisees.

The latter shall be liable for the charge only to the extent of the
value of the legacy or the devise received by them. The compulsory
heirs shall not be liable for the charge beyond the amount of the free
portion given them.1232

When the testator charges one of the heirs with a legacy or

devise, he alone shall be bound.

Should he not charge anyone in particular, all shall be liable in

the same proportion in which they may inherit.1233

If two or more heirs take possession of the estate, they shall be

solidarily liable for the loss or destruction of a thing devised or
bequeathed, even though only one of them should have been
negligent.1234

The heir who is bound to deliver the legacy or devise shall be

liable in case of eviction, if the thing is indeterminate and is indicated
only by its kind.1235

If the testator, heir, or legatee owns only a part of, or an interest

in the thing bequeathed, the legacy or devise shall be understood
limited to such part or interest, unless the testator expressly declares
that he gives the thing in its entirety.1236

The legacy or devise of a thing belonging to another person is

void, if the testator erroneously believed that the thing pertained to
him. But if the thing bequeathed, though not belonging to the testator

1230
Art. 918
1231
Art. 924
1232
Art. 925
1233
Art. 926
1234
Art. 927
1235
Art. 928
1236
Art. 929

306
when he made the will, afterwards becomes his, by whatever title, the
disposition shall take effect.1237

If the testator orders that a thing belonging to another be

acquired in order that it be given to a legatee or devisee, the heir
upon whom the obligation is imposed or the estate must acquire it and
give the same to the legatee or devisee; but if the owner of the thing
refuses to alienate the same, or demands an excessive price therefor,
the heir or the estate shall only be obliged to give the just value of the
thing.1238

The legacy or devise of a thing which at the time of the

execution of the will already belonged to the legatee or devisee shall
be ineffective, even though another person may have some interest
therein.

If the testator expressly orders that the thing be freed from such
interest or encumbrance, the legacy or devise shall be valid to that
extent.1239

If the thing bequeathed belonged to the legatee or devisee at

the time of the execution of the will, the legacy or devise shall be
without effect, even though it may have subsequently alienated by
him.

If the legatee or devisee acquires it gratuitously after such time,

he can claim nothing by virtue of the legacy or devise; but if it has
been acquired by onerous title he can demand reimbursement from
the heir or the estate.1240

If the testator should bequeath or devise something pledged or

mortgaged to secure a recoverable debt before the execution of the
will, the estate is obliged to pay the debt, unless the contrary
intention appears.

The same rule applies when the thing is pledged or mortgaged

after the execution of the will.

Any other charge, perpetual or temporary, with which the thing

bequeathed is burdened, passes with it to the legatee or devisee.1241

1237
Art. 930
1238
Art. 931
1239
Art. 932
1240
Art. 933
1241
Art. 934

307
 The legacy of a credit against a third person or of the remission
or release of a debt of the legatee shall be effective only as regards
that part of the credit or debt existing at the time of the death of the
testator.

In the first case, the estate shall comply with the legacy by
assigning to the legatee all rights of action it may have against the
debtor. In the second case, by giving the legatee an acquittance,
should he request one.

In both cases, the legacy shall comprise all interests on the

credit or debt which may be due the testator at the time of his
death.1242

The legacy referred to in the preceding article shall lapse if the

testator, after having made it, should bring an action against the
debtor for the payment of his debt, even if such payment should not
have been effected at the time of his death.

The legacy to the debtor of the thing pledged by him is

understood to discharge only the right of pledge.1243

A generic legacy of release or remission of debts comprises

those existing at the time of the execution of the will, but not
subsequent ones.1244

A legacy or devise made to a creditor shall not be applied to his

credit, unless the testator so expressly declares.

In the latter case, the creditor shall have the right to collect the
excess, if any, of the credit or of the legacy or devise.1245

If the testator orders the payment of what he believes he owes

but does not in fact owe, the disposition shall be considered as not
written. If as regards a specified debt more than the amount thereof is
ordered paid, the excess is not due, unless a contrary intention
appears.

The foregoing provisions are without prejudice to the fulfillment

of natural obligations.1246

1242
Art. 935
1243
Art. 936
1244
Art. 937
1245
Art. 938
1246
Art. 939

308
 In alternative legacies or devises, the choice is presumed to be
left to the heir upon whom the obligation to give the legacy or devise
may be imposed, or the executor or administrator of the estate if no
particular heir is so obliged.

If the heir, legatee or devisee, who may have been given the
choice, dies before making it, this right shall pass to the respective
heirs.

Once made, the choice is irrevocable.

In the alternative legacies or devises, except as herein provided,

the provisions of this Code regulating obligations of the same kind
shall be observed, save such modifications as may appear from the
intention expressed by the testator.1247

A legacy of generic personal property shall be valid even if there

be no things of the same kind in the estate.

A devise of indeterminate real property shall be valid only if

there be immovable property of its kind in the estate.

The right of choice shall belong to the executor or administrator

who shall comply with the legacy by the delivery of a thing which is
neither of inferior nor of superior quality.1248

Whenever the testator expressly leaves the right of choice to the

heir, or to the legatee or devisee, the former may give or the latter
may choose whichever he may prefer.1249

If the heir, legatee or devisee cannot make the choice, in case it

has been granted him, his right shall pass to his heirs; but a choice
once made shall be irrevocable. 1250

A legacy for education lasts until the legatee is of age, or

beyond the age of majority in order that the legatee may finish some
professional, vocational or general course, provided he pursues his
course diligently.

A legacy for support lasts during the lifetime of the legatee, if

the testator has not otherwise provided.

1247
Art. 940
1248
Art. 941
1249
Art. 942
1250
Art. 943

309
 If the testator has not fixed the amount of such legacies, it shall
be fixed in accordance with the social standing and the circumstances
of the legatee and the value of the estate.

If the testator or during his lifetime used to give the legatee a

certain sum of money or other things by way of support, the same
amount shall be deemed bequeathed, unless it be markedly
disproportionate to the value of the estate.1251

If a periodical pension, or a certain annual, monthly, or weekly

amount is bequeathed, the legatee may petition the court for the first
installment upon the death of the testator, and for the following ones
which shall be due at the beginning of each period; such payment
shall not be returned, even though the legatee should die before the
expiration of the period which has commenced.1252

If the thing bequeathed should be subject to a usufruct, the

legatee or devisee shall respect such right until it is legally
extinguished.1253

The legatee or devisee acquires a right to the pure and simple

legacies or devises from the death of the testator, and transmits it to
his heirs.1254

If the legacy or devise is of a specific and determinate thing

pertaining to the testator, the legatee or devisee acquires the
ownership thereof upon the death of the testator, as well as any
growing fruits, or unborn offspring of animals, or uncollected income;
but not the income which was due and unpaid before the latter's
death.

From the moment of the testator's death, the thing bequeathed

shall be at the risk of the legatee or devisee, who shall, therefore,
bear its loss or deterioration, and shall be benefited by its increase or
improvement, without prejudice to the responsibility of the executor
or administrator.1255

If the bequest should not be of a specific and determinate thing,

but is generic or of quantity, its fruits and interests from the time of

1251
Art. 944
1252
Art. 945
1253
Art. 946
1254
Art. 947
1255
Art. 948

310
the death of the testator shall pertain to the legatee or devisee if the
testator has expressly so ordered.1256

If the estate should not be sufficient to cover all the legacies or

devises, their payment shall be made in the following order:

(1) Remuneratory legacies or devises;

(2) Legacies or devises declared by the testator to be preferential;
(3) Legacies for support;
(4) Legacies for education;
(5) Legacies or devises of a specific, determinate thing which forms a
part of the estate;
(6) All others pro rata.1257

The thing bequeathed shall be delivered with all its accessories

and accessories and in the condition in which it may be upon the
death of the testator.1258

The heir, charged with a legacy or devise, or the executor or

administrator of the estate, must deliver the very thing bequeathed if
he is able to do so and cannot discharge this obligation by paying its
value.

Legacies of money must be paid in cash, even though the heir or

the estate may not have any.

The expenses necessary for the delivery of the thing bequeathed

shall be for the account of the heir or the estate, but without prejudice
to the legitime.1259

The legatee or devisee cannot take possession of the thing

bequeathed upon his own authority, but shall request its delivery and
possession of the heir charged with the legacy or devise, or of the
executor or administrator of the estate should he be authorized by the
court to deliver it.1260

The legatee or devisee cannot accept a part of the legacy or

devise and repudiate the other, if the latter be onerous.

Should he die before having accepted the legacy or devise,

leaving several heirs, some of the latter may accept and the others
1256
Art. 949
1257
Art. 950
1258
Art. 951
1259
Art. 952
1260
Art. 953

311
may repudiate the share respectively belonging to them in the legacy
or devise.1261

The legatee or devisee of two legacies or devises, one of which

is onerous, cannot renounce the onerous one and accept the other. If
both are onerous or gratuitous, he shall be free to accept or renounce
both, or to renounce either. But if the testator intended that the two
legacies or devises should be inseparable from each other, the legatee
or devisee must either accept or renounce both.

Any compulsory heir who is at the same time a legatee or

devisee may waive the inheritance and accept the legacy or devise, or
renounce the latter and accept the former, or waive or accept both.1262

If the legatee or devisee cannot or is unwilling to accept the

legacy or devise, or if the legacy or devise for any reason should
become ineffective, it shall be merged into the mass of the estate,
except in cases of substitution and of the right of accretion. 1263

The legacy or devise shall be without effect:

(1) If the testator transforms the thing bequeathed in such a manner

that it does not retain either the form or the denomination it had;

(2) If the testator by any title or for any cause alienates the thing
bequeathed or any part thereof, it being understood that in the latter
case the legacy or devise shall be without effect only with respect to
the part thus alienated. If after the alienation the thing should again
belong to the testator, even if it be by reason of nullity of the contract,
the legacy or devise shall not thereafter be valid, unless the
reacquisition shall have been effected by virtue of the exercise of the
right of repurchase;

(3) If the thing bequeathed is totally lost during the lifetime of the
testator, or after his death without the heir's fault. Nevertheless, the
person obliged to pay the legacy or devise shall be liable for eviction if
the thing bequeathed should not have been determinate as to its kind,
in accordance with the provisions of article 928.1264

1261
Art. 954
1262
Art. 955
1263
Art. 956
1264
Art. 957

312
 A mistake as to the name of the thing bequeathed or devised, is
of no consequence, if it is possible to identify the thing which the
testator intended to bequeath or devise.1265

A disposition made in general terms in favor of the testator's

relatives shall be understood to be in favor of those nearest in
degree.1266

III. Legal or Intestate Succession

A. General Provisions

Legal or intestate succession takes place:1267

(1) If a person dies without a will, or with a void will, or one which has
subsequently lost its validity;

(2) When the will does not institute an heir to, or dispose of all the
property belonging to the testator. In such case, legal succession shall
take place only with respect to the property of which the testator has
not disposed;

(3) If the suspensive condition attached to the institution of heir does

not happen or is not fulfilled, or if the heir dies before the testator, or
repudiates the inheritance, there being no substitution, and no right
of accretion takes place;

(4) When the heir instituted is incapable of succeeding, except in

cases provided in this Code.1268

In default of testamentary heirs, the law vests the inheritance,

in accordance with the rules hereinafter set forth, in the legitimate
1265
Art. 958
1266
Art. 959
1267
Causes for legal or intestate succession:
1. If a person dies without a will
2 .If a person dies with a void will
3. If a person dies with a will which has subsequently lost its validity
4. When the will does not institute an heir to, or dispose of all the property belonging to the testator (legal
succession shall take place only with respect to the property of which the testator has not disposed)
5. If the suspensive condition attached to the institution of the heir does not happen or is not fulfilled
6. If the heir dies before the testator,
7. If the heir repudiates the inheritance, there being no substitution, and no right of accretion takes place
8. When the heir instituted is incapable of succeeding, except in cases provided in the Code
Fundamental underlying principles in legal or intestate succession:
1. Rule of Proximity the relative nearest in degree excludes the farther one
2. Rule of Equal Division the relatives who are in the same degree shall inherit in equal shares
1268
Art. 960

313
and illegitimate relatives of the deceased, in the surviving spouse, and
in the State.1269

In every inheritance, the relative nearest in degree excludes the

more distant ones, saving the right of representation when it properly
takes place.

Relatives in the same degree shall inherit in equal shares,

subject to the provisions of article 1006 with respect to relatives of
the full and half blood, and of article 987, paragraph 2, concerning
division between the paternal and maternal lines.1270

1. Relationship

Proximity of relationship is determined by the number of

generations. Each generation forms a degree.1271

A series of degrees forms a line, which may be either direct or

collateral.

A direct line is that constituted by the series of degrees among

ascendants and descendants.

A collateral line is that constituted by the series of degrees

among persons who are not ascendants and descendants, but who
come from a common ancestor.1272

The direct line is either descending or ascending.

The former unites the head of the family with those who
descend from him.

The latter binds a person with those from whom he descends.1273

In the line, as many degrees are counted as there are

generations or persons, excluding the progenitor.

In the direct line, ascent is made to the common ancestor. Thus,

the child is one degree removed from the parent, two from the
grandfather, and three from the great-grandparent.

1269
Art. 961
1270
Art. 962
1271
Art. 963
1272
Art. 964
1273
Art. 965

314
 In the collateral line, ascent is made to the common ancestor
and then descent is made to the person with whom the computation is
to be made. Thus, a person is two degrees removed from his brother,
three from his uncle, who is the brother of his father, four from his
first cousin, and so forth.1274

Full blood relationship is that existing between persons who

have the same father and the same mother.

Half-blood relationship is that existing between persons who

have the same father, but not the same mother, or the same mother,
but not the same father.1275

If there are several relatives of the same degree, and one or

some of them are unwilling or incapacitated to succeed, his portion
shall accrue to the others of the same degree, save the right of
representation when it should take place.1276

If the inheritance should be repudiated by the nearest relative,

should there be one only, or by all the nearest relatives called by law
to succeed, should there be several, those of the following degree
shall inherit in their own right and cannot represent the person or
persons repudiating the inheritance.1277

2. Right of Representation

Representation is a right created by fiction of law, by virtue of

which the representative is raised to the place and the degree of the
person represented, and acquires the rights which the latter would
have if he were living or if he could have inherited.1278

The representative is called to the succession by the law and not

by the person represented. The representative does not succeed the
person represented but the one whom the person represented would
have succeeded.1279

The right of representation takes place in the direct descending

line, but never in the ascending.

1274
Art. 966
1275
Art. 967
1276
Art. 968
1277
Art. 969
1278
Art. 970
1279
Art. 971

315
 In the collateral line, it takes place only in favor of the children
of brothers or sisters, whether they be of the full or half blood.1280

In order that representation may take place, it is necessary that

the representative himself be capable of succeeding the decedent.1281

Whenever there is succession by representation, the division of

the estate shall be made per stirpes, in such manner that the
representative or representatives shall not inherit more than what the
person they represent would inherit, if he were living or could
inherit.1282

When children of one or more brothers or sisters of the

deceased survive, they shall inherit from the latter by representation,
if they survive with their uncles or aunts. But if they alone survive,
they shall inherit in equal portions.1283

A person may represent him whose inheritance he has

renounced.1284

Heirs who repudiate their share may not be represented.1285

B. Order of Intestate Succession

Succession pertains, in the first place, to the descending direct

line. 1286

Legitimate children and their descendants succeed the parents

and other ascendants, without distinction as to sex or age, and even if
they should come from different marriages.

An adopted child succeeds to the property of the adopting

parents in the same manner as a legitimate child.1287

The children of the deceased shall always inherit from him in

their own right, dividing the inheritance in equal shares.1288

1280
Art. 972
1281
Art. 973
1282
Art. 974
1283
Art. 975
1284
Art. 976
1285
Art. 977
1286
Art. 978
1287
Art. 979
1288
Art. 980

316
 Should children of the deceased and descendants of other
children who are dead, survive, the former shall inherit in their own
right, and the latter by right of representation.1289

The grandchildren and other descendants shall inherit by right

of representation, and if any one of them should have died, leaving
several heirs, the portion pertaining to him shall be divided among the
latter in equal portions.1290

If illegitimate children survive with legitimate children, the

shares of the former shall be in the proportions prescribed by article
895.1291

In case of the death of an adopted child, leaving no children or

descendants, his parents and relatives by consanguinity and not by
adoption, shall be his legal heirs.1292

In default of legitimate children and descendants of the

deceased, his parents and ascendants shall inherit from him, to the
exclusion of collateral relatives.1293

The father and mother, if living, shall inherit in equal shares.

Should one only of them survive, he or she shall succeed to the

entire estate of the child.1294

In default of the father and mother, the ascendants nearest in

degree shall inherit.

Should there be more than one of equal degree belonging to the

same line they shall divide the inheritance per capita; should they be
of different lines but of equal degree, one-half shall go to the paternal
and the other half to the maternal ascendants. In each line the
division shall be made per capita.1295

In the absence of legitimate descendants or ascendants, the

illegitimate children shall succeed to the entire estate of the
deceased.1296

1289
Art. 981
1290
Art. 982
1291
Art. 983
1292
Art. 984
1293
Art. 985
1294
Art. 986
1295
Art. 987
1296
Art. 988

317
 If, together with illegitimate children, there should survive
descendants of another illegitimate child who is dead, the former shall
succeed in their own right and the latter by right of representation.1297

The hereditary rights granted by the two preceding articles to

illegitimate children shall be transmitted upon their death to their
descendants, who shall inherit by right of representation from their
deceased grandparent.1298

If legitimate ascendants are left, the illegitimate children shall

divide the inheritance with them, taking one-half of the estate,
whatever be the number of the ascendants or of the illegitimate
children.1299

An illegitimate child has no right to inherit ab intestato from the

legitimate children and relatives of his father or mother; nor shall
such children or relatives inherit in the same manner from the
illegitimate child.1300

If an illegitimate child should die without issue, either legitimate

or illegitimate, his father or mother shall succeed to his entire estate;
and if the child's filiation is duly proved as to both parents, who are
both living, they shall inherit from him share and share alike.1301

In default of the father or mother, an illegitimate child shall be

succeeded by his or her surviving spouse who shall be entitled to the
entire estate.

If the widow or widower should survive with brothers and

sisters, nephews and nieces, she or he shall inherit one-half of the
estate, and the latter the other half.1302

In the absence of legitimate descendants and ascendants, and

illegitimate children and their descendants, whether legitimate or
illegitimate, the surviving spouse shall inherit the entire estate,
without prejudice to the rights of brothers and sisters, nephews and
nieces, should there be any, under article 1001.1303

1297
Art. 989
1298
Art. 990
1299
Art. 991
1300
Art. 992
1301
Art. 993
1302
Art. 994
1303
Art. 995

318
 If a widow or widower and legitimate children or descendants
are left, the surviving spouse has in the succession the same share as
that of each of the children.1304

When the widow or widower survives with legitimate parents or

ascendants, the surviving spouse shall be entitled to one-half of the
estate, and the legitimate parents or ascendants to the other half. 1305

If a widow or widower survives with illegitimate children, such

widow or widower shall be entitled to one-half of the inheritance, and
the illegitimate children or their descendants, whether legitimate or
illegitimate, to the other half.1306

When the widow or widower survives with legitimate children or

their descendants and illegitimate children or their descendants,
whether legitimate or illegitimate, such widow or widower shall be
entitled to the same share as that of a legitimate child.1307

If legitimate ascendants, the surviving spouse, and illegitimate

children are left, the ascendants shall be entitled to one-half of the
inheritance, and the other half shall be divided between the surviving
spouse and the illegitimate children so that such widow or widower
shall have one-fourth of the estate, and the illegitimate children the
other fourth.1308

Should brothers and sisters or their children survive with the

widow or widower, the latter shall be entitled to one-half of the
inheritance and the brothers and sisters or their children to the other
half.1309

In case of a legal separation, if the surviving spouse gave cause

for the separation, he or she shall not have any of the rights granted
in the preceding articles.1310

If there are no descendants, ascendants, illegitimate children, or

a surviving spouse, the collateral relatives shall succeed to the entire
estate of the deceased in accordance with the following articles.1311

1304
Art. 996
1305
Art. 997
1306
Art. 998
1307
Art. 999
1308
Art. 1000
1309
Art. 1001
1310
Art. 1002
1311
Art. 1003

319
 Should the only survivors be brothers and sisters of the full
blood, they shall inherit in equal shares.1312

Should brothers and sisters survive together with nephews and

nieces, who are the children of the descendant's brothers and sisters
of the full blood, the former shall inherit per capita, and the latter per
stirpes.1313

Should brother and sisters of the full blood survive together

with brothers and sisters of the half blood, the former shall be entitled
to a share double that of the latter.1314

In case brothers and sisters of the half blood, some on the

father's andsome on the mother's side, are the only survivors, all shall
inherit in equal shares without distinction as to the origin of the
property.1315

Children of brothers and sisters of the half-blood shall succeed

per capita or per stirpes, in accordance with the rules laid down for
brothers and sisters of the full blood.1316

Should there be neither brothers nor sisters nor children of

brothers or sisters, the other collateral relatives shall succeed to the
estate.

The latter shall succeed without distinction of lines or

preference among them by reason of relationship by the whole
blood.1317

The right to inherit ab intestato shall not extend beyond the fifth
degree of relationship in the collateral line.1318

In default of persons entitled to succeed in accordance with the

provisions of the preceding Sections, the State shall inherit the whole
estate.1319

ORDER OF LEGAL OR INTESTATE SUCCESSION:

LEGITIMATE CHILD ILLEGITIMATE CHILD ADOPTED CHILD

1312
Art. 1004
1313
Art. 1005
1314
Art. 1006
1315
Art. 1007
1316
Art. 1008
1317
Art. 1009
1318
Art. 1010
1319
Art. 1011

320
1 Legitimate child and legitimate child and legitimate child and
legitimate legitimate legitimate
descendants descendants descendants

2 Legitimate parents illegitimate children illegitimate children

and legitimate and legitimate or and legitimate or
ascendants illegitimate illegitimate
descendants descendants

3 Illegitimate children illegitimate parents legitimate or

and legitimate or illegitimate parents
illegitimate and legitimate
descendants ascendants, adoptive
parents
4 Surviving spouse surviving spouse surviving spouse

5 Legitimate siblings, illegitimate siblings, siblings, nephews,

nephews, nieces nephews, nieces nieces

6 Legitimate collateral State State

relatives

7 State

CONCURRENCE IN LEGAL OR INTESTATE SUCCESSION

INTESTATE HEIR EXCLUDES EXCLUDED BY CONCURS WITH

Legitimate Ascendants, No one Surviving spouse
children and collaterals and Illegitimate
Legitimate state children
descendants

Illegitimate Illegitimate No one Surviving spouse

children and parents, Legitimate
Descendants collaterals and children and
state legitimate
parents
Legitimate Collaterals and Legitimate Illegitimate
parents and state children children and
legitimate surviving spouse
ascendants

Illegitimate Collaterals and Legitimate Surviving spouse

parents state children and
illegitimate
children
Surviving spouse Collaterals other No one Legitimate
than siblings, children
nephews and Illegitimate

321
 nieces children
Legitimate
parents and
Illegitimate
parents

Siblings, nephews All other Legitimate Surviving spouse

nieces collaterals and children,
state illegitimate
children,
Legitimate
parents and
illegitimate
parents

Other collaterals Collateral Legitimate Collaterals in the

th
within 5 degree remoter in degree children same degree
and state Illegitimate
children
Legitimate
parents
Illegitimate
parents and
Surviving spouse

State No one Everyone No one

A MORE DETAILED SUMMARY OF INTESTATE SHARES:

1. Legitimate children and legitimate descendants alone

INTESTATE HEIR SHARE AS SHARE AS FREE TOTAL INTESTATE

LEGITIME DISPOSAL SHARE
Legitimate 1
children

TOTAL 1

2. One legitimate child and surviving spouse

INTESTATE HEIR SHARE AS SHARE AS FREE TOTAL INTESTATE

LEGITIME DISPOSAL SHARE
Legitimate child

322
Surviving spouse

TOTAL 1

3. Legitimate children and surviving spouse

INTESTATE HEIR SHARE AS SHARE AS FREE TOTAL INTESTATE

LEGITIME DISPOSAL SHARE
Legitimate Remaining Whole estate
children portion of estate divided equally
after paying between total
legitimes number of
children plus the
surviving spouse

Surviving spouse Same as share of Legitimes to be No. of children

@ legitimate child divided equally plus the surviving
between total no. spouse (see
of children plus above)
the surviving
spouse

TOTAL Varies on no. of Varies on no. of 1

children children

4. Legitimate children and illegitimate children

INTESTATE HEIR SHARE AS SHARE AS FREE TOTAL INTESTATE

LEGITIME DISPOSAL SHARE

Legitimate Remaining Whole estate

children portion of estate divided by the
after paying ratio of 2:1 for
legitimes each legitimate
child as compared
to the illegitimate
child

Illegitimate share of @ Legitimes to be 1 for @

children legitimate child divided by the illegitimate child
ratio of 2 for @ provided that
legitimate child, 1 legitimes
for @ illegitimate wouldnt be
child impaired

TOTAL Varies on no. of Varies on no. of

children children

323
 5. One legitimate child, illegitimate child, and surviving spouse

INTESTATE HEIR SHARE AS SHARE AS FREE TOTAL INTESTATE

LEGITIME DISPOSAL SHARE
Legitimate child Remaining Whole estate
portion of estate divided by the
after paying ratio of 2 @
legitimes to be legitimate child
divided by the
ratio of 2:1 for @
legitimate child
and @
illegitimate child,
respectively

Illegitimate child share of @ 1 for @ 1 for @

legitimate child illegitimate child illegitimate child
(see above)

Surviving spouse Same share as a Legitimes

legitimate child wouldnt be
impaired
TOTAL Varies depending Varies depending 1
on no. of on no. of
illegitimate illegitimate
children children

6. Legitimate children, illegitimate children and surviving spouse

INTESTATE HEIR SHARE AS SHARE AS FREE TOTAL INTESTATE

LEGITIME DISPOSAL SHARE
Legitimate Remaining Whole estate
children portion of estate, divided by the
if any after ratio of 2:1 for @
paying legitimes legitimate child
to be divided by and illegitimate
the ratio of 2 for child respectively
@ legitimate
child

Illegitimate share of @ 1 for @ 1 for @

children legit child illegitimate child illegitimate child
(see above) (see above)

Surviving spouse Same share as a Same share as a

legitimate child, legitimate child,
provided provided
legitimes are not legitimes are not
impaired impaired

324
TOTAL Varies depending Varies depending 1
on no. of on no. of
illegitimate illegitimate
children children

7. Legitimate parents alone

INTESTATE HEIR SHARE AS SHARE AS FREE TOTAL INTESTATE

LEGITIME DISPOSAL SHARE
Legitimate 1
parents
TOTAL 1

8. Legitimate parents and illegitimate children

INTESTATE HEIR SHARE AS SHARE AS FREE TOTAL INTESTATE

LEGITIME DISPOSAL SHARE
Legitimate
parents
Illegitimate
children

TOTAL 1

9. Legitimate parents and surviving spouse

INTESTATE HEIR SHARE AS SHARE AS FREE TOTAL INTESTATE

LEGITIME DISPOSAL SHARE
Legitimate
parents

Surviving spouse

TOTAL 1

10.Legitimate parents, surviving spouse and illegitimate children

INTESTATE HEIR SHARE AS SHARE AS FREE TOTAL INTESTATE

LEGITIME DISPOSAL SHARE
Legitimate
parents

Surviving spouse 1/8 1/8

Illegitimate
children

TOTAL 7/8 1/8 1

325
 11.Illegitimate children alone

INTESTATE HEIR SHARE AS SHARE AS FREE TOTAL INTESTATE

LEGITIME DISPOSAL SHARE
Illegitimate 1
children alone
TOTAL 1

12.Illegitimate children and surviving spouse

INTESTATE HEIR SHARE AS SHARE AS FREE TOTAL INTESTATE

LEGITIME DISPOSAL SHARE
Illegitimate 1/3 1/6
children

Surviving spouse 1/3 1/6

TOTAL 2/3 1/3 1

13.Surviving spouse

INTESTATE HEIR SHARE AS SHARE AS FREE TOTAL INTESTATE

LEGITIME DISPOSAL SHARE
Surviving spouse or 1/3 or 1/3 1

TOTAL or 1/3 or 1/3 1

14.Illegitimate parents alone

INTESTATE HEIR SHARE AS SHARE AS FREE TOTAL INTESTATE

LEGITIME DISPOSAL SHARE
Illegitimate 1
parents

TOTAL 1

15.Illegitimate parents and surviving spouse

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE
Illegitimate
parents

326
Surviving spouse

TOTAL 1

16.Siblings, nephews and nieces alone

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE
Siblings, nephews, 1
nieces
TOTAL 1

17.Surviving spouse, siblings, nephews and nieces

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE
Surviving spouse

Siblings, nephews,
nieces

TOTAL 1

In order that the State may take possession of the property

mentioned in the preceding article, the pertinent provisions of the
Rules of Court must be observed.1320

After the payment of debts and charges, the personal property

shall be assigned to the municipality or city where the deceased last
resided in the Philippines, and the real estate to the municipalities or
cities, respectively, in which the same is situated.

If the deceased never resided in the Philippines, the whole

estate shall be assigned to the respective municipalities or cities
where the same is located.

Such estate shall be for the benefit of public schools, and public
charitable institutions and centers, in such municipalities or cities.

1320
Art. 1012

327
The court shall distribute the estate as the respective needs of each
beneficiary may warrant.

The court, at the instance of an interested party, or on its own

motion, may order the establishment of a permanent trust, so that
only the income from the property shall be used.1321

If a person legally entitled to the estate of the deceased appears

and files a claim hereto with the court within five years from the date
the property was delivered to the State, such person shall be entitled
to the possession of the same, or if sold, the municipality or city shall
be accountable to him for such part of the proceeds as may not have
been lawfully spent.1322

IV. Provisions Common to Testate and Intestate Succession

Property left by will is not deemed subject to collation, if the

testator has not otherwise provided, but the legitime shall in any case
remain unimpaired.1323

When the grandchildren, who survive with their uncles, aunts,

or cousins, inherit from their grandparents in representation of their
father or mother, they shall bring to collation all that their parents, if
alive, would have been obliged to bring, even though such
grandchildren have not inherited the property.

They shall also bring to collation all that they may have received
from the decedent during his lifetime, unless the testator has provided
otherwise, in which case his wishes must be respected, if the legitime
of the co-heirs is not prejudiced.1324

Parents are not obliged to bring to collation in the inheritance of

their ascendants any property which may have been donated by the
latter to their children.1325

Neither shall donations to the spouse of the child be brought to

collation; but if they have been given by the parent to the spouses
jointly, the child shall be obliged to bring to collation one-half of the
thing donated.1326

1321
Art. 1013
1322
Art. 1014
1323
Art. 1063
1324
Art. 1064
1325
Art. 1065
1326
Art. 1066

328
 Expenses for support, education, medical attendance, even in
extraordinary illness, apprenticeship, ordinary equipment, or
customary gifts are not subject to collation.1327

Expenses incurred by the parents in giving their children a

professional, vocational or other career shall not be brought to
collation unless the parents so provide, or unless they impair the
legitime; but when their collation is required, the sum which the child
would have spent if he had lived in the house and company of his
parents shall be deducted therefrom.1328

Any sums paid by a parent in satisfaction of the debts of his

children, election expenses, fines, and similar expenses shall be
brought to collation.1329

Wedding gifts by parents and ascendants consisting of jewelry,

clothing, and outfit, shall not be reduced as inofficious except insofar
as they may exceed one-tenth of the sum which is disposable by
will.1330

The same things donated are not to be brought to collation and

partition, but only their value at the time of the donation, even though
their just value may not then have been assessed.

Their subsequent increase or deterioration and even their total

loss or destruction, be it accidental or culpable, shall be for the
benefit or account and risk of the donee.1331

In the collation of a donation made by both parents, one-half

shall be brought to the inheritance of the father, and the other half, to
that of the mother. That given by one alone shall be brought to
collation in his or her inheritance.1332

The donee's share of the estate shall be reduced by an amount

equal to that already received by him; and his co-heirs shall receive an
equivalent, as much as possible, in property of the same nature, class
and quality.1333

1327
Art. 1067
1328
Art. 1068
1329
Art. 1069
1330
Art. 1070
1331
Art. 1071
1332
Art. 1072
1333
Art. 1073

329
 Should the provisions of the preceding article be impracticable,
if the property donated was immovable, the co-heirs shall be entitled
to receive its equivalent in cash or securities, at the rate of quotation;
and should there be neither cash or marketable securities in the
estate, so much of the other property as may be necessary shall be
sold at public auction.

If the property donated was movable, the co-heirs shall only

have a right to select an equivalent of other personal property of the
inheritance at its just price.1334

The fruits and interest of the property subject to collation shall

not pertain to the estate except from the day on which the succession
is opened.

For the purpose of ascertaining their amount, the fruits and

interest of the property of the estate of the same kind and quality as
that subject to collation shall be made the standard of assessment. 1335

The co-heirs are bound to reimburse to the donee the necessary

expenses which he has incurred for the preservation of the property
donated to him, though they may not have augmented its value.

The donee who collates in kind an immovable which has been

given to him must be reimbursed by his co-heirs for the improvements
which have increased the value of the property, and which exist at the
time the partition if effected.

As to works made on the estate for the mere pleasure of the

donee, no reimbursement is due him for them; he has, however, the
right to remove them, if he can do so without injuring the estate.1336

Should any question arise among the co-heirs upon the

obligation to bring to collation or as to the things which are subject to
collation, the distribution of the estate shall not be interrupted for this
reason, provided adequate security is given.1337

A. Right of Accretion

1. Definition and Requisites

1334
Art. 1074
1335
Art. 1075
1336
Art. 1076
1337
Art. 1077

330
 Accretion is a right by virtue of which, when two or more
persons are called to the same inheritance, devise or legacy, the part
assigned to the one who renounces or cannot receive his share, or
who died before the testator, is added or incorporated to that of his
co-heirs, co-devisees, or co-legatees.1338

In order that the right of accretion may take place in a

testamentary succession, it shall be necessary:

(1) That two or more persons be called to the same inheritance, or to

the same portion thereof, pro indiviso; and

(2) That one of the persons thus called die before the testator, or
renounce the inheritance, or be incapacitated to receive it.1339

The words "one-half for each" or "in equal shares" or any others
which, though designating an aliquot part, do not identify it by such
description as shall make each heir the exclusive owner of
determinate property, shall not exclude the right of accretion.

In case of money or fungible goods, if the share of each heir is

not earmarked, there shall be a right of accretion. 1340

In legal succession the share of the person who repudiates the

inheritance shall always accrue to his co-heirs.1341

The heirs to whom the portion goes by the right of accretion

take it in the same proportion that they inherit.1342

The heirs to whom the inheritance accrues shall succeed to all

the rights and obligations which the heir who renounced or could not
receive it would have had.1343

Among the compulsory heirs the right of accretion shall take

place only when the free portion is left to two or more of them, or to
any one of them and to a stranger.

1338
Art. 1015
1339
Art. 1016
1340
Art. 1017
1341
Art. 1018
1342
Art. 1019
1343
Art. 1020

331
 Should the part repudiated be the legitime, the other co-heirs
shall succeed to it in their own right, and not by the right of
accretion.1344

In testamentary succession, when the right of accretion does not

take place, the vacant portion of the instituted heirs, if no substitute
has been designated, shall pass to the legal heirs of the testator, who
shall receive it with the same charges and obligations.1345

Accretion shall also take place among devisees, legatees and

usufructuaries under the same conditions established for heirs.1346

B. Capacity to Succeed by Will or Intestacy

Persons not incapacitated by law may succeed by will or ab

intestato.

The provisions relating to incapacity by will are equally

applicable to intestate succession.1347

In order to be capacitated to inherit, the heir, devisee or legatee

must be living at the moment the succession opens, except in case of
representation, when it is proper.

A child already conceived at the time of the death of the

decedent is capable of succeeding provided it be born later under the
conditions prescribed in article 41.1348

A testamentary disposition may be made to the State, provinces,

municipal corporations, private corporations, organizations, or
associations for religious, scientific, cultural, educational, or
charitable purposes.

All other corporations or entities may succeed under a will,

unless there is a provision to the contrary in their charter or the laws
of their creation, and always subject to the same.1349

The prohibitions mentioned in article 739, concerning donations

inter vivos shall apply to testamentary provisions.1350

1344
Art. 1021
1345
Art. 1022
1346
Art. 1023
1347
Art. 1024
1348
Art. 1025
1349
Art. 1026
1350
Art 1028

332
 Should the testator dispose of the whole or part of his property
for prayers and pious works for the benefit of his soul, in general
terms and without specifying its application, the executor, with the
court's approval shall deliver one-half thereof or its proceeds to the
church or denomination to which the testator may belong, to be used
for such prayers and pious works, and the other half to the State, for
the purposes mentioned in article 1013. 1351

Testamentary provisions in favor of the poor in general, without

designation of particular persons or of any community, shall be
deemed limited to the poor living in the domicile of the testator at the
time of his death, unless it should clearly appear that his intention
was otherwise.

The designation of the persons who are to be considered as poor

and the distribution of the property shall be made by the person
appointed by the testator for the purpose; in default of such person,
by the executor, and should there be no executor, by the justice of the
peace, the mayor, and the municipal treasurer, who shall decide by a
majority of votes all questions that may arise. In all these cases, the
approval of the Court of First Instance shall be necessary.

The preceding paragraph shall apply when the testator has

disposed of his property in favor of the poor of a definite locality.1352

A testamentary provision in favor of a disqualified person, even

though made under the guise of an onerous contract, or made through
an intermediary, shall be void.1353

The cause of unworthiness shall be without effect if the testator

had knowledge thereof at the time he made the will, or if, having
known of them subsequently, he should condone them in writing.1354

In order to judge the capacity of the heir, devisee or legatee, his

qualification at the time of the death of the decedent shall be the
criterion.

In cases falling under Nos. 2, 3, or 5 of article 1032, it shall be

necessary to wait until final judgment is rendered, and in the case
falling under No. 4, the expiration of the month allowed for the report.

1351
Art. 1029
1352
Art. 1030
1353
Art. 1031
1354
Art. 1033

333
 If the institution, devise or legacy should be conditional, the
time of the compliance with the condition shall also be considered.1355

If the person excluded from the inheritance by reason of

incapacity should be a child or descendant of the decedent and should
have children or descendants, the latter shall acquire his right to the
legitime.

The person so excluded shall not enjoy the usufruct and

administration of the property thus inherited by his children.1356

Alienations of hereditary property, and acts of administration

performed by the excluded heir, before the judicial order of exclusion,
are valid as to the third persons who acted in good faith; but the co-
heirs shall have a right to recover damages from the disqualified
heir.1357

The unworthy heir who is excluded from the succession has a

right to demand indemnity or any expenses incurred in the
preservation of the hereditary property, and to enforce such credits as
he may have against the estate.1358

Any person incapable of succession, who, disregarding the

prohibition stated in the preceding articles, entered into the
possession of the hereditary property, shall be obliged to return it
together it its accessions.

He shall be liable for all the fruits and rents he may have
received, or could have received through the exercise of due
diligence.1359

Capacity to succeed is governed by the law of the nation of the

decedent.1360

The action for a declaration of incapacity and for the recovery of

the inheritance, devise or legacy shall be brought within five years
from the time the disqualified person took possession thereof. It may
be brought by any one who may have an interest in the succession. 1361

1355
Art. 1034
1356
Art. 1035
1357
Art. 1036
1358
Art. 1037
1359
Art. 1038
1360
Art. 1039
1361
Art. 1040

334
 1. Persons Incapable of Succeeding

The following are incapable of succeeding:

(1) The priest who heard the confession of the testator during his last
illness, or the minister of the gospel who extended spiritual aid to him
during the same period;

(2) The relatives of such priest or minister of the gospel within the
fourth degree, the church, order, chapter, community, organization, or
institution to which such priest or minister may belong;

(3) A guardian with respect to testamentary dispositions given by a

ward in his favor before the final accounts of the guardianship have
been approved, even if the testator should die after the approval
thereof; nevertheless, any provision made by the ward in favor of the
guardian when the latter is his ascendant, descendant, brother, sister,
or spouse, shall be valid;

(4) Any attesting witness to the execution of a will, the spouse,

parents, or children, or any one claiming under such witness, spouse,
parents, or children;

(5) Any physician, surgeon, nurse, health officer or druggist who took
care of the testator during his last illness;

(6) Individuals, associations and corporations not permitted by law to

inherit.1362

The following donations shall be void:

(1) Those made between persons who were guilty of adultery or

concubinage at the time of the donation;

(2) Those made between persons found guilty of the same criminal
offense, in consideration thereof;

(3) Those made to a public officer or his wife, descendants and

ascendants, by reason of his office.

In the case referred to in No. 1, the action for declaration of

nullity may be brought by the spouse of the donor or donee; and the
guilt of the donor and donee may be proved by preponderance of
evidence in the same action.1363
1362
Art. 1027
1363
Art. 739

335
 The following are incapable of succeeding by reason of
unworthiness:

(1) Parents who have abandoned their children or induced their

daughters to lead a corrupt or immoral life, or attempted against their
virtue;

(2) Any person who has been convicted of an attempt against the life
of the testator, his or her spouse, descendants, or ascendants;

(3) Any person who has accused the testator of a crime for which the
law prescribes imprisonment for six years or more, if the accusation
has been found groundless;

(4) Any heir of full age who, having knowledge of the violent death of
the testator, should fail to report it to an officer of the law within a
month, unless the authorities have already taken action; this
prohibition shall not apply to cases wherein, according to law, there is
no obligation to make an accusation;

(5) Any person convicted of adultery or concubinage with the spouse

of the testator;

(6) Any person who by fraud, violence, intimidation, or undue

influence should cause the testator to make a will or to change one
already made;

(7) Any person who by the same means prevents another from making
a will, or from revoking one already made, or who supplants, conceals,
or alters the latter's will;

(8) Any person who falsifies or forges a supposed will of the

decedent.1364

2. Unworthiness vs. Disinheritance

Unworthiness

A person cannot succeed for reasons provided for by law.1365

Disinheritance

1364
Art. 1032
1365
supra

336
 A testamentary disposition by which a person is deprived of, or
excluded from, the inheritance to which he has a right.

C. Acceptance and Repudiation of the Inheritance

The acceptance or repudiation of the inheritance is an act which

is purely voluntary and free.1366

The effects of the acceptance or repudiation shall always

retroact to the moment of the death of the decedent.1367

No person may accept or repudiate an inheritance unless he is

certain of the death of the person from whom he is to inherit, and of
his right to the inheritance.1368

Any person having the free disposal of his property may accept
or repudiate an inheritance.

Any inheritance left to minors or incapacitated persons may be

accepted by their parents or guardians. Parents or guardians may
repudiate the inheritance left to their wards only by judicial
authorization.

The right to accept an inheritance left to the poor shall belong

to the persons designated by the testator to determine the
beneficiaries and distribute the property, or in their default, to those
mentioned in article 1030.1369

The lawful representatives of corporations, associations,

institutions and entities qualified to acquire property may accept any
inheritance left to the latter, but in order to repudiate it, the approval
of the court shall be necessary.1370

Public official establishments can neither accept nor repudiate

an inheritance without the approval of the government.1371

A married woman of age may repudiate an inheritance without

the consent of her husband.1372

1366
Art. 1041
1367
Art. 1042
1368
Art. 1043
1369
Art. 1044
1370
Art. 1045
1371
Art. 1046
1372
Art. 1047

337
 Deaf-mutes who can read and write may accept or repudiate the
inheritance personally or through an agent. Should they not be able to
read and write, the inheritance shall be accepted by their guardians.
These guardians may repudiate the same with judicial approval.1373

Acceptance may be express or tacit.

An express acceptance must be made in a public or private

document.

A tacit acceptance is one resulting from acts by which the

intention to accept is necessarily implied, or which one would have no
right to do except in the capacity of an heir.

Acts of mere preservation or provisional administration do not

imply an acceptance of the inheritance if, through such acts, the title
or capacity of an heir has not been assumed.1374

An inheritance is deemed accepted:

(1) If the heirs sells, donates, or assigns his right to a stranger, or to

his co-heirs, or to any of them;

(2) If the heir renounces the same, even though gratuitously, for the
benefit of one or more of his co-heirs;

(3) If he renounces it for a price in favor of all his co-heirs

indiscriminately; but if this renunciation should be gratuitous, and the
co-heirs in whose favor it is made are those upon whom the portion
renounced should devolve by virtue of accretion, the inheritance shall
not be deemed as accepted.1375

The repudiation of an inheritance shall be made in a public or

authentic instrument, or by petition presented to the court having
jurisdiction over the testamentary or intestate proceedings.1376

If the heir repudiates the inheritance to the prejudice of his own

creditors, the latter may petition the court to authorize them to accept
it in the name of the heir.1377

1373
Art. 1048
1374
Art. 1049
1375
Art. 1050
1376
Art. 1051
1377
Art. 1052

338
 The acceptance shall benefit the creditors only to an extent
sufficient to cover the amount of their credits. The excess, should
there be any, shall in no case pertain to the renouncer, but shall be
adjudicated to the persons to whom, in accordance with the rules
established in this Code, it may belong.

If the heir should die without having accepted or repudiated the

inheritance his right shall be transmitted to his heirs.1378

Should there be several heirs called to the inheritance, some of

them may accept and the others may repudiate it.1379

If a person, who is called to the same inheritance as an heir by

will and ab intestato, repudiates the inheritance in his capacity as a
testamentary heir, he is understood to have repudiated it in both
capacities.

Should he repudiate it as an intestate heir, without knowledge of

his being a testamentary heir, he may still accept it in the latter
capacity.1380

The acceptance or repudiation of an inheritance, once made, is

irrevocable, and cannot be impugned, except when it was made
through any of the causes that vitiate consent, or when an unknown
will appears.1381

Within thirty days after the court has issued an order for the
distribution of the estate in accordance with the Rules of Court, the
heirs, devisees and legatees shall signify to the court having
jurisdiction whether they accept or repudiate the inheritance.

If they do not do so within that time, they are deemed to have

accepted the inheritance.1382

D. Collation

To determine the legitime, the value of the property left at the

death of the testator shall be considered, deducting all debts and
charges, which shall not include those imposed in the will.

1378
Art. 1053
1379
Art. 1054
1380
Art. 1055
1381
Art. 1056
1382
Art. 1057

339
 To the net value of the hereditary estate, shall be added the
value of all donations by the testator that are subject to collation, at
the time he made them.1383

Donations given to children shall be charged to their legitime.

Donations made to strangers shall be charged to that part of the

estate of which the testator could have disposed by his last will.

Insofar as they may be inofficious or may exceed the disposable

portion, they shall be reduced according to the rules established by
this Code.1384

Donations which an illegitimate child may have received during

the lifetime of his father or mother, shall be charged to his legitime.

Should they exceed the portion that can be freely disposed of,
they shall be reduced in the manner prescribed by this Code.1385

Every compulsory heir, who succeeds with other compulsory

heirs, must bring into the mass of the estate any property or right
which he may have received from the decedent, during the lifetime of
the latter, by way of donation, or any other gratuitous title, in order
that it may be computed in the determination of the legitime of each
heir, and in the account of the partition.1386

Collation shall not take place among compulsory heirs if the

donor should have so expressly provided, or if the donee should
repudiate the inheritance, unless the donation should be reduced as
inofficious.1387

E. Partition and Distribution of Estate

Where there are two or more heirs, the whole estate of the
decedent is, before its partition, owned in common by such heirs,
subject to the payment of debts of the deceased.1388

A person may, by an act inter vivos or mortis causa, intrust the

mere power to make the partition after his death to any person who is
not one of the co-heirs.
1383
Art. 908
1384
Art. 909
1385
Art. 910
1386
Art. 1061
1387
Art. 1062
1388
Art. 1078

340
 The provisions of this and of the preceding article shall be
observed even should there be among the co-heirs a minor or a person
subject to guardianship; but the mandatary, in such case, shall make
an inventory of the property of the estate, after notifying the co-heirs,
the creditors, and the legatees or devisees.1389

Every act which is intended to put an end to indivision among

co-heirs and legatees or devisees is deemed to be a partition, although
it should purport to be a sale, and exchange, a compromise, or any
other transaction.1390

Every co-heir has a right to demand the division of the estate

unless the testator should have expressly forbidden its partition, in
which case the period of indivision shall not exceed twenty years as
provided in article 494. This power of the testator to prohibit division
applies to the legitime.

Even though forbidden by the testator, the co-ownership

terminates when any of the causes for which partnership is dissolved
takes place, or when the court finds for compelling reasons that
division should be ordered, upon petition of one of the co-heirs.1391

Voluntary heirs upon whom some condition has been imposed

cannot demand a partition until the condition has been fulfilled; but
the other co-heirs may demand it by giving sufficient security for the
rights which the former may have in case the condition should be
complied with, and until it is known that the condition has not been
fulfilled or can never be complied with, the partition shall be
understood to be provisional.1392

In the partition of the estate, equality shall be observed as far as

possible, dividing the property into lots, or assigning to each of the co-
heirs things of the same nature, quality and kind.1393

Should a thing be indivisible, or would be much impaired by its

being divided, it may be adjudicated to one of the heirs, provided he
shall pay the others the excess in cash.

1389
Art. 1081
1390
Art. 1082
1391
Art. 1083
1392
Art. 1084
1393
Art. 1085

341
 Nevertheless, if any of the heirs should demand that the thing
be sold at public auction and that strangers be allowed to bid, this
must be done.1394

In the partition the co-heirs shall reimburse one another for the
income and fruits which each one of them may have received from any
property of the estate, for any useful and necessary expenses made
upon such property, and for any damage thereto through malice or
neglect.1395

Should any of the heirs sell his hereditary rights to a stranger

before the partition, any or all of the co-heirs may be subrogated to
the rights of the purchaser by reimbursing him for the price of the
sale, provided they do so within the period of one month from the time
they were notified in writing of the sale by the vendor.1396

The titles of acquisition or ownership of each property shall be

delivered to the co-heir to whom said property has been
adjudicated.1397

When the title comprises two or more pieces of land which have
been assigned to two or more co-heirs, or when it covers one piece of
land which has been divided between two or more co-heirs, the title
shall be delivered to the one having the largest interest, and authentic
copies of the title shall be furnished to the other co-heirs at the
expense of the estate. If the interest of each co-heir should be the
same, the oldest shall have the title.1398

After the partition has been made, the co-heirs shall be

reciprocally bound to warrant the title to, and the quality of, each
property adjudicated.1399

The reciprocal obligation of warranty referred to in the

preceding article shall be proportionate to the respective hereditary
shares of the co-heirs, but if any one of them should be insolvent, the
other co-heirs shall be liable for his part in the same proportion,
deducting the part corresponding to the one who should be
indemnified.

1394
Art. 1086
1395
Art. 1087
1396
Art. 1088
1397
Art. 1089
1398
Art. 1090
1399
Art. 1092

342
 Those who pay for the insolvent heir shall have a right of action
against him for reimbursement, should his financial condition
improve.1400

An action to enforce the warranty among heirs must be brought

within ten years from the date the right of action accrues.1401

If a credit should be assigned as collectible, the co-heirs shall

not be liable for the subsequent insolvency of the debtor of the estate,
but only for his insolvency at the time the partition is made.

The warranty of the solvency of the debtor can only be enforced

during the five years following the partition.

Co-heirs do not warrant bad debts, if so known to, and accepted

by, the distributee. But if such debts are not assigned to a co-heir, and
should be collected, in whole or in part, the amount collected shall be
distributed proportionately among the heirs.1402

The obligation of warranty among co-heirs shall cease in the

following cases:

(1) When the testator himself has made the partition, unless it
appears, or it may be reasonably presumed, that his intention was
otherwise, but the legitime shall always remain unimpaired;

(2) When it has been so expressly stipulated in the agreement of

partition, unless there has been bad faith;

(3) When the eviction is due to a cause subsequent to the partition, or

has been caused by the fault of the distributee of the property.1403

A partition, judicial or extra-judicial, may also be rescinded on

account of lesion, when any one of the co-heirs received things whose
value is less, by at least one-fourth, than the share to which he is
entitled, considering the value of the things at the time they were
adjudicated.1404

The partition made by the testator cannot be impugned on the

ground of lesion, except when the legitime of the compulsory heirs is

1400
Art. 1093
1401
Art. 1094
1402
Art. 1095
1403
Art. 1096
1404
Art. 1098

343
thereby prejudiced, or when it appears or may reasonably be
presumed, that the intention of the testator was otherwise.1405

The heir who is sued shall have the option of indemnifying the
plaintiff for the loss, or consenting to a new partition.

Indemnity may be made by payment in cash or by the delivery of

a thing of the same kind and quality as that awarded to the plaintiff.

If a new partition is made, it shall affect neither those who have

not been prejudiced nor those have not received more than their just
share.1406

An heir who has alienated the whole or a considerable part of

the real property adjudicated to him cannot maintain an action for
rescission on the ground of lesion, but he shall have a right to be
indemnified in cash.1407

The omission of one or more objects or securities of the

inheritance shall not cause the rescission of the partition on the
ground of lesion, but the partition shall be completed by the
distribution of the objects or securities which have been omitted.1408

1. Partition

Partition, in general, is the separation, division and assignment

of a thing held in common among those to whom it may belong. The
thing itself may be divided, or its value.1409

Should a person make partition of his estate by an act inter

vivos, or by will, such partition shall be respected, insofar as it does
not prejudice the legitime of the compulsory heirs.

A parent who, in the interest of his or her family, desires to keep

any agricultural, industrial, or manufacturing enterprise intact, may
avail himself of the right granted him in this article, by ordering that
the legitime of the other children to whom the property is not
assigned, be paid in cash.1410

3. Effects of Partition
1405
Art. 1099
1406
Art. 1101
1407
Art. 1102
1408
Art. 1103
1409
Art. 1079
1410
Art. 1080

344
 A partition legally made confers upon each heir the exclusive
ownership of the property adjudicated to him.1411

A partition may be rescinded or annulled for the same causes as

contracts.1412

The action for rescission on account of lesion shall prescribe

after four years from the time the partition was made.1413

A partition made with preterition of any of the compulsory heirs

shall not be rescinded, unless it be proved that there was bad faith or
fraud on the part of the other persons interested; but the latter shall
be proportionately obliged to pay to the person omitted the share
which belongs to him.1414

A partition which includes a person believed to be an heir, but

who is not, shall be void only with respect to such person.1415

PARTNERSHIP

I. Contract of partnership1416

1411
Art. 1091
1412
Art. 1097
1413
Art. 1100
1414
Art. 1104
1415
Art. 1105
1416
A partnership has a juridical personality which is separate and distinct from that of the partners.
A partnership may sue and be sued in its name or by its duly authorized representatives. A managing
partner of the partnership may execute all acts of administration including the right to sue debtors of the
partnership in the case of their failure to pay their obligation when it becomes demandable. (Tai Tong
Chuache & Co. vs. Insurance Commission 158 SCRA 336 [1988])

345
 A. Definition

By the contract of partnership two or more persons bind

themselves to contribute money, property or industry to a common
fund, with the intention of dividing the profits among themselves.

Two or more persons may also form a partnership for the

exercise of a profession.

B. Elements

1. consensual;
2. there must be a contribution of money, property or industry to a
common fund;
3. the subject must be a lawful one;
4. there must be an intention of dividing the profit among the
partners;
5. there must be a desire to formulate an active union1417 ;
6. a new personality, that of the firm must arise, distinct from the
separate personality of each of the members

C. Rules to determine existence1418

1. General rule:

Persons who are not partners as to each other are not partners as
to third persons.

Exception:

partnership by estoppel

2. Co-ownership of a property does not itself establish a partnership,

even though the co-owners share in the profits derived from the
incident of joint ownership.

3. Sharing of gross returns alone does not indicate a partnership,

whether or not the persons sharing them have a joint or common
right or interest in any property from which the returns are
derived.

1417
affectio societatis
1418
Art. 1769

346
4. Receipt of share in the profits is a strong presumptive evidence of
partnership. However, no such inference will be drawn if such
profits were received in payment:

(a) as a debt by installments or otherwise;

(b) as wages of an employee or rent to a landlord;
(c)as an annuity to a widow or representative of a deceased
partner;
(d)as interest on a loan, though the amount of payment vary
with the profits of the business; and
(e)as the consideration for the sale of a goodwill of a business or
other property by installments or otherwise.

D. How partnership is formed

General rule:

No special form is required for the validity or existence of the contract

of partnership.

Exceptions:

1. Where immovable property or real rights are contributed, the

partnership contract shall be void unless:

a. It is reduced to writing in a public instrument1419 .

b. An inventory of the property contributed is made, signed

by the parties and attached to the public instrument.1420

2. Where the contract is by its terms not to be performed within a

year from the making thereof, such partnership contract is
covered by the statute of frauds and thus requires a written
agreement to be enforceable.

3. Where the contract of partnership has a capital of 3,000 pesos

or more, in money or property, it shall appear in a public
instrument and must be recorded in the Office of the Securities
and Exchange Commission. However, a partnership has a

1419
Art. 1771
1420
Art.1773
A partnership contract which states that the partnership is established to operate a fishpond is not
rendered void because no inventory of the fishpond was made (where it did not clearly appear in the
articles of partnership that the real property had been contributed by anyone of the partners). (Agad vs.
Mabolo and Mabolo Agad and Co., 23 SCRA 1223[1968])

347
 juridical personality even in case of failure to comply with this
requirement.

E. Partnership term

Unlimited in the sense that no time limit is fixed by law; may be

agreed upon.1421

F. Universal vs. Particular; General vs. Limited

Universal partnership of all present property 1422 - wherein the

partners contribute all the property which actually belong to them to
a common fund, with the intention of dividing the same among
themselves, as well as all the profits which they may acquire
therewith.

Universal partnership of profits1423 - comprises all that the

partners may acquire by their industry or work during the existence
of the partnership and the usufruct of movable or immovable property
which each of the partners may posses at the time of the celebration
of the contract.

Particular partnership - one which has for its object determinate

things, their use and fruits, or a specific undertaking, or the exercise
of a profession or vocation.

General partnership - consisting of general partners who are

liable pro rata and subsidiarily and sometimes solidarily with their
separate property for partnership debts.

1421
expressly or impliedly
1422
In a universal partnership of all present property, the property which belongs to each of the partners at
the time of the constitution of the partnership, becomes the common property of all the partners, as well as
the profits which they may acquire therewith.
A stipulation for the common enjoyment of any other profits may also be made; but the properties
which the partners may acquire subsequently by inheritance, legacy or donation cannot be included in such
stipulation, except the fruits thereof.
Where the articles of partnership do not specify the nature of the universal partnership, whether it is one
of present property or of profits only, it will be presumed that the parties intended merely a partnership
of profits.
Future properties cannot be contributed. Thus, property subsequently acquired by (1) inheritance, (2)
legacy or (3) donation cannot be included by stipulation except the fruits thereof
1423
Movable or immovable property which each of the partners may posses at the time of the celebration of
the contract shall continue to pertain exclusively to each, only the usufruct passing to the partnership.
Persons who are prohibited from giving each other any donation or advantage cannot enter into a
universal partnership. (Art. 739, Art. 87, Family Code)
Profits acquired by their partners through chance (i.e. lottery) without employment of any physical or
intellectual efforts are not included.

348
 Limited partnership - one formed by two or more persons having
as members one or more general partners and one or more limited
partners, the latter not being personally liable for the obligations of
the partnership.

G. Partnership by estoppel1424

Arises when a person, by words spoken or written or by

conduct, represents himself or consents to another representing him
to anyone, as partner in an existing partnership, or with one or more
persons not actual partners; he is liable to any such person to whom
such representation has been made, who has, on the faith of such
representation given credit to the actual or apparent partnership. 1425

Liabilities in estoppel

All partners consented to representation Partnership is liable

No existing partnership & all those represented Person who
consented; represented himself &
Not all partners of existing partnership consents all those who made
to representation representation liable
pro-rata/jointly
No existing partnership & not all represented Person who
consented; represented himself
None of partners in existing partnership liable & those who
consented made/consented to
representation
separately liable

H. Partnership v. Joint Venture

Joint Venture1426

1424
Elements to establish liability as a partner on ground of estoppel:
1.Defendant represented himself as partner/represented by others as such and not denied/refuted by
defendant
2.Plaintiff relied on such representation
3.Statement of defendant not refuted
1425
Art 1825
It does not create a partnership as between the alleged partners. A contract, express or implied is
essential to the creation of partnership. The law considers them partners and the association as a
partnership insofar as it is favorable to third persons. However, partnership liability is created only in
favor of persons who on the faith of such representation given credit to the actual or apparent partnership
1426
In Kilosbayan, Incorporated vs. Guingona, Jr 232 SCRA 110 [1994], the court defined a joint venture as
an association of persons or companies jointly undertaking some commercial enterprise; generally all
contribute assets and share risks. Its requisites are:
a. A community of interest in the performance of the subject matter;
b. A right to direct and govern the policy in connection therewith;
c. Duty to share profits and losses.

349
 It is hardly distinguishable from partnership, since their
elements are similar, i.e. community of interest in the business,
sharing of profits and losses, and a mutual right of control.

The main distinction in common law jurisdiction is that

partnership contemplates a general business with some degree of
continuity, while joint venture is formed for the execution of a single
transaction and is thus of temporary nature

I. Professional partnership

Partnerships formed by persons for the sole purpose of

exercising their common profession, no part of the income of which is
derived from engaging in any trade or business.

J. Management1427

I. When the manner of management has been provided for in the

partnership agreement

A. When a managing partner has been appointed

1) Appointment in the articles of partnership

a. Power is irrevocable without just or lawful

cause

i. to remove him for just cause, vote of partners

representing controlling interest is necessary
ii. to remove him without just cause or for an unjust
cause, there must be unanimity including his own
vote

b. Extent of power

i. if he acts in good faith, he may do all acts of

administration, despite opposition of his partners

ii. if in bad faith, he cannot.

2) Appointment other than in the articles of

partnership
1427
Arts. 1800-1803

350
 a. Power to act may be revoked at any time, with or without
just cause
b. Extent of power: as long as he remains manager, he can
perform all acts of administration, but if others oppose
and he persists, he can be removed

B. When two or more managing partners have been entrusted

with the management of partnership

1) Without specification of their respective duties and without

stipulation requiring unanimity of action

GENERAL RULE: Each managing partner may execute all acts of

administration

EXCEPTION: If any of the managing partners should oppose,

a) Decision of the majority of the managing partners shall

prevail
b) In case of a tie, decision of the partners representing
the controlling interest shall prevail

2) With stipulation requiring unanimity of action

GENERAL RULE: Unanimous consent of all the managing

partners shall be necessary for the validity of the acts and
absence or inability of any managing partner cannot be alleged

EXCEPTION: When there is an imminent danger of grave or

irreparable injury to the partnership, partner may act alone
without the consent of the partner who is absent or under
disability

II. When manner of management has not been agreed upon

a) All partners shall be considered managers and agents

b) Unanimous consent required for alteration of immovable
property

II. Rights and obligations of partnership

The partnership can, in general:

a) enter into contracts

b) acquire and possess property of all kinds

351
c) incur obligations
d) bring civil and criminal actions
e) be adjudged insolvent even if the individual members be each
financially solvent
f) bear risk of loss1428
g) reimburse1429
h) operate under firm name1430
i) bound by partners admission1431
j) bound by notice to partner1432
k) liable for wrongful act of partner1433

1428
Partnership bears the risk: when what is contributed is a fungible thing, thing which cant be kept
without deteriorating, if the thing was contributed to be sold, and contributions are appraised in the
inventory (Art. 1795, CC)
1429
3 obligations of the partnership:
1. refund disbursements with legal interest
2. answer for obligations contracted in good faith in the partnerships interest
3. answer for risks (Art. 1796, CC)
Partner = agent. Being a mere agent, he isnt personally liable as long as hes not at fault (Art. 1912,
CC) and acted within the scope of his authority. But unlike an ordinary agent, the paying partner doesnt
have the right of retention if he isnt paid.
1430
Required: every partnership shall operate under a firm name (Art. 1815, CC) to distinguish the
partnership from other entities & from the individual partners.
Non-members whose names were used: dont have the rights of a partner but are liable to 3rd persons
without notice as partners (Art. 1815, CC). They become partners by estoppel (PNB v. Lo).
Use of deceased partners name in law firm: permissible as long as its indicated in the firms
communications that the partner is deceased (Rule 3.02, CPR)
Other rules:
1. a person continuing the partnership after a dissolution uses the firm name/name of deceased partner
as part of the name: deceased partners individual property isnt liable for debts contracted (Art. 1840, CC)
2. the limited partners surname shall not appear in the firm name unless
a. its also the surname of a general partner
b. before the limited partner became such, the business had been carried on under a name in which his
surname appeared (Art. 1846, CC)
1431
Requisites to be admissible against the partnership:
1. it must be connected with partnership affairs
2. its within the scope of the partners authority (Art. 1820, CC) as may be just and equitable under
the circumstances according to capital contribution.
3. Purely industrial partner not liable for losses
Exception: when a partner makes admissions for himself only without purporting to act for the
partnership
Admission by a former partner not admissible in evidence against the partnership. (Congco vs. Trillana)
1432
Notice to the firm:
1. Notice to a partner while already a partner
2. Knowledge is acquired by a partner whos acting in a particular matter, WON a partner at the time as
long as he still remembers the partnership matter
3. The partner who acquired it has reason to believe that it be the subject of the business, and couldve
communicated it to the acting partner (Art. 1821, CC)
1433
Extent of liability for wrongful acts, omissions of a partner: firm is liable to the same extent as the
partner (Art. 1822, CC).
Misapplication of money/property resulting in losses: if loss is suffered by the 3rd person who
delivered the money/property, the partnership is solidarily liable with the misappropriating partner (Art.
1823, CC).

352
III. Rights and obligations of partners among themselves

I. Obligation with respect to contribution of property

a) To contribute what had been promised

b) To answer for eviction in case the partnership is deprived
of determinate property contributed
c) To answer to the partnership for the fruits of the property
the contribution of which is delayed, from the date they
should have been contributed to the time of actual
delivery
d) To preserve the property with the diligence of a good
father of a family pending delivery to the partnership
e) To indemnify the partners for any damages caused to it by
the retention of the same or by delay in its contribution.

II. Obligations with respect to contribution of money and money

converted to personal use

a) To contribute on the date due the amount he has

undertaken to contribute to the partnership
b) To reimburse any amount he may have taken from
the partnership coffers and converted to his own
personal use
c) To pay the agreed or legal interest, if he fails to
pay his contribution on time or in case he takes
any amount from the common fund and converted
to his own personal use
d) To indemnify the partnership for the damages
caused to it by the delay in the contribution or the
conversion of any sum for his personal benefit.

Obligation Not to Engage in Other Business for Himself

1. Industrial partner- cannot engage in any business for himself

unless the partnership expressly permits him to do so. The other
partners have the remedy of either excluding the erring partner

353
 from the firm or of availing themselves of the benefits which he
may have obtained.1434
2. Capitalist partner- The prohibition extends only to any operation
which is of the same kind of business in which the partnership is
engaged unless there is a stipulation to the contrary.

Obligation to Contribute Additional Capital

As a general rule, a capitalist partner is not bound to

contribute to the partnership more than what he agreed to
contribute but in case of an imminent loss of the business, and
there is no agreement to the contrary, he is under obligation to
contribute an additional share to save the venture. If he refuses
to contribute, he shall be obliged to sell his interest in the
partnership to other partners.

Obligation of Managing Partner who Collects Debt

Where a person is separately indebted to the partnership

and to the managing partner at the same time, any sum received
by the managing partner shall be applied to the two credits in
proportion to their amounts, except where he received it
entirely for the account of the partnership, in which case the
whole sum shall be applied to the partnership credit only.

Obligation of Partner Who Receives Share in Partnership

Credit

A partner who receives, in whole or in part, his share in

the partnership, when the others have not collected theirs, shall
be obliged, if the debtor should thereafter become insolvent, to
bring to the partnership capital what he received even though
he may have given receipt for his share only.1435

Obligation of Partner for Damages to Partnership

Every partner is responsible to the partnership for

damages suffered by it through his fault. He cannot compensate
1434
The prohibition is absolute and applies whether the industrial partner is to engage in the same business
in which the partnership is engaged or in any kind of business. It is clear that the reason for the prohibition
exists in both cases, which is to prevent any conflict of interest between the industrial partner and the
partnership and to insure faithful compliance by said partner with his prestation (Evangelista & Co. vs.
Abad Santos, 51 SCRA 416, 1973)
1435
Requisites for application of rule:
1) A partner has received, in whole or in part, his share in the partnership credit
2) The other partners have not collected their shares.
3) The partnership debtor has become insolvent.

354
 them with the profits and benefits which he may have earned for
the partnership by his industry.

Duty to Render Information

Partners shall render on demand true and full information

of all things affecting the partnership to any partner or the legal
representative of any deceased partner of any partner under
legal disability.

Obligation to account for any benefit and hold as trustee

unauthorized personal profits

Every partner must account to the partnership for any

benefit, and hold as trustee for it any profits derived by him
without the consent of the other partners from any transaction
connected with the formation, conduct, liquidation of the
partnership or form any use by him of its property.

IV. Obligations of partnership/partners to third persons

Liability for contractual obligations1436

1. All partners, including industrial partners, are

personally liable with all their property. Their
individual liability is pro rata and subsidiary, unless
otherwise stipulated
2. Liability of partnership for acts of partners

a) Acts for apparently carrying

on in the usual way the
business of the partnership

GENERAL RULE: Act binds the partnership.

EXCEPTION: Partnership is not bound if:

i. acting partner has in fact no authority and

ii. the third person knows that the acting partner has no authority

b) Acts of Strict Dominion or

Ownership1437

GENERAL RULE: Act does not bind the partnership.

1436
ART 1816
1437
acts which are not apparently for carrying on in the usual way the business of the partnership

355
 EXCEPTION: Partnership is bound if:

i. the act is authorized by all the partners; or

ii. they have abandoned the business
c) Acts in contravention of a
restriction on authority

Partnership is not liable to third persons having actual or

presumptive knowledge of the restrictions

Liability arising from partners tort or Breach of Trust

1. Where, by any wrongful act or omission of any partner

acting in the ordinary course of business of the
partnership or with authority of his co-partners, loss or
injury is caused to any person, not being a partner in the
partnership1438

2. Where one partner, acting within the scope of his

apparent authority, receives money or property of a third
person and misapplies it1439

3. Where the partnership, in the course of its business,

receives money or property and it is misapplied by any
partner while it is in the custody of the partnership1440

V. Dissolution

Change in the relation of the partners caused by any partner

ceasing to be associated in carrying on the business.1441

It is the point in time when the partners cease to carry on the

business together. It represents the demise of a partnership.

Causes of Dissolution:

1438
Art. 1822
1439
Art. 1823
1440
Ibid
Criminal liability of partnership:
Partnership liability does not extend to criminal liability where the wrongdoing is regarded as
individual in character. But where the crime is statutory, especially when it involves a fine rather than
imprisonment, criminal liability may be imposed
All partners are solidarily liable with the partnership for any penalty or damage arising from a
partnership tort or breach of trust
1441
Art. 1828

356
1. Extrajudicial dissolution - the parties may agree to expand the
grounds provided under Art 1830 but not to delimit them. The causes
enumerated are as follows:

a. Without violation of the agreement between the partners

i. By the termination of the definite term or particular

undertaking specified in the agreement;
ii. By the express will of any partner, who must act in
good faith, when no definite term or particular
undertaking is specified;
iii. By the express will of all the partners who have not
assigned their interest or suffered them to be
charged for their separate debts, either before or
after the termination of any specified term or
particular undertaking;
iv. By the expulsion of any partner from the business
bona fide in accordance with such power conferred
by the agreement between the partners;

b. In contravention of the agreement between the partners,

where the circumstances do nor permit a dissolution
under any other provision of this article by the express
will of any partner at any time.

c. By any event which makes it unlawful for the business of

the partnership to be carried on or for the members to
carry it on in partnership.

d. When a specific thing, a partner had promised to

contribute, perishes before its delivery. Or where the
partner only contributed the use or enjoyment of the thing
and has reserved ownership thereof, its loss, before or
after delivery

e. dissolves the partnership.

f. By the death of any partner;

g. By the insolvency of any partner or the partnership;

h. By the civil interdiction of any partner;

357
2. Judicial dissolution - when so decreed by the court, the presiding
judge may place the partnership under receivership and direct an
accounting to be made towards winding up the partnership affairs.1442

On application by or for any partner, the court shall decree a

dissolution whenever:

i. A partner has been declared insane in any judicial

proceeding or is shown to be of unsound mind;

ii. A partner becomes in any other way incapable of

performing his part of the partnership contract;

iii. A partner has been guilty of such conduct as tend to affect

prejudicially the carrying on of the business;

iv. A partner willfully or persistently commits a breach of the

partnership agreement, or otherwise so conducts himself in
matters relating to the partnership business that it is not
reasonably practicable to carry on the business in
partnership with him.

v. The business of the partnership can only be carried on in a

loss;

vi. Other circumstances render a dissolution equitable.

On application of the purchaser of a partners interest:1443

i. After the termination of the specified term or particular

undertaking;
ii. At any time if the partnership was a partnership at will
when the interest was assigned or when the charging
order was issued.

VI. Limited partnership1444

A. Definition

1442
Art 1831
1443
under Art. 1813 or 1814
1444
The Supreme Court, declared a firm to be a general partnership in a case where it appears that the
inclusion of Ltd. (limited) in the firm was only a subterfuge resorted to by the partners in order to evade
liability for possible losses, while assuming their enjoyment of advantages to be derived from the relation.
Jo Chung Cang vs. Pacific Commercial Co. 45 PHIL 142 [1923]). In other words if the parties intended a
general partnership, they are general partners although their purpose is to avoid the creation of such a
relation.

358
 One formed by two or more persons having as members one or
more general partners and one or more limited partners, the latter
not being personally liable for the obligations of the partnership.

B. How limited partnership is formed/amended1445

Formation:

1. Certificate of articles of the limited partnership must state the ff.

matters:

a. Name of partnership + word "ltd."

b. Character of business
c. Location of principal place of business
d. Name/place of residence of members
e. Term for partnership is to exist
f. Amount of cash/value of property contributed
g. Additional contributions
h. Time agreed upon to return contribution of limited partner
i. Sharing of profits/other compensation
j. Right of limited partner (if given) to substitute an assignee
k. Right to admit additional partners

2. Such certificate must be filed for record in the Office of the

Securities and Exchange Commission.

Amendment:

a. Change in name of partnership, amount/character of

contribution of ltd. partner
b. Substitution of limited partner
c. Admission of additional limited partner
d. Admission of general partner
e. Death, insolvency, insanity, civil interdiction of general partner
& business is continued
1445
A strict compliance with the legal requirements is not necessary. It is sufficient that there is substantial
compliance in good faith. If there is no substantial compliance, the partnership becomes a general
partnership as far as third persons are concerned, in which all the members are liable as general partners.
(Jo Chung Cang vs. Pacific Commercial Co., 45 PHIL 142 [1923].)
However, a firm which fails to substantially comply with the formal requirements of a limited
partnership is a general partnership only as to its relations to third persons. The firm is a limited
partnership, subject to all rules applicable to such partnership; and as between the partners they are bound
by their agreement; and that all the limited partners relations to his co-partners and their obligations to him
growing out of the relation remain unimpaired.
As to third persons or creditors guilty of estoppel, the firm shall not be treated as a general partnership
despite lack of substantial compliance to the requirements of a limited partnership. If creditors deal with the
firm as a limited partnership, they will be estopped from insisting that there is no such partnership, or that
the terms of the partnership were not sufficiently stated in the notice of its formation. (40 Am. Jur. 476.)

359
 f. Change in character of business
g. False/erroneous statement in certificate
h. Change in time as stated in the certificate for dissolution of
partnership/return of contribution
i. Time is fixed for dissolution of partnership. Return of
contribution if no orig. time specified
j. Change in other statement in certificate

C. Rights and obligations of a limited partner

Rights of a limited partner

1. To have the partnership books kept at the principal place of

business of the partnership
2. To inspect, at a reasonable hour, partnership books and copy
any of them
3. To demand true and full information of the things affecting the
partnership
4. To demand a formal account of the partnership affairs whenever
circumstances render it just and reasonable
5. To ask for dissolution and winding up by decree of court
6. To receive a share in the profits or other compensation by way
of income
provided: that the partnership assets are in excess of partnership
liabilities after such payment
7. To receive the return of his contribution provided:

a) All the liabilities of the partnership have been paid OR the

partnership assets are sufficient to pay partnership
liabilities
b) The consent of all the members (general and limited
partners) has been obtained

EXCEPTION:

When the return of the contribution may be rightfully demanded:

1) On the dissolution of the partnership

2) Upon the arrival of the date specified in the
certificate for the return
3) After he has given 6 months notice in writing to all
other partners, if no time is specified in the
certificate there for the return of the contribution
or for the dissolution of the partnership

360
 c) The certificate is cancelled or so amended as to set forth
the withdrawal or reduction

AGENCY1446

I. Definition of agency

A contract whereby a person (agent) binds himself to render

some service or to do something in representation or on behalf of
another (principal), with the consent or authority of the latter. 1447

II. Powers

An agency couched in general terms comprises only acts of

administration, even if the principal should state that he withholds no
power or that the agent may execute such acts as he may consider
appropriate, or even though the agency should authorize a general
and unlimited management.1448

Special powers of attorney are necessary in the following cases:

(1) To make such payments as are not usually considered as acts of

administration;

(2) To effect novations which put an end to obligations already in

existence at the time the agency was constituted;

(3) To compromise, to submit questions to arbitration, to renounce the

right to appeal from a judgment, to waive objections to the venue of
an action or to abandon a prescription already acquired;

(4) To waive any obligation gratuitously;

(5) To enter into any contract by which the ownership of an

immovable is transmitted or acquired either gratuitously or for a
valuable consideration;

1446
General rule: There are no formal requirements governing the appointment of an agent. The agents
authority may be oral or written. It may be in a public or private writing.
Exception: When the law requires a specific form
1447
Art. 1868
1448
Art. 1877

361
(6) To make gifts, except customary ones for charity or those made to
employees in the business managed by the agent;

(7) To loan or borrow money, unless the latter act be urgent and
indispensable for the preservation of the things which are under
administration;

(8) To lease any real property to another person for more than one
year;

(9) To bind the principal to render some service without

compensation;

(10) To bind the principal in a contract of partnership;

(11) To obligate the principal as a guarantor or surety;

(12) To create or convey real rights over immovable property;

(13) To accept or repudiate an inheritance;

(14) To ratify or recognize obligations contracted before the agency;

(15) Any other act of strict dominion.1449

A. To bind principal1450

The agent who acts as such is not personally liable to the party
with whom he contracts, unless he expressly binds himself or exceeds
the limits of his authority without giving such party sufficient notice of
his powers.1451

1449
Art. 1878
SPA to sell does not include the power to mortgage; and vice versa.
SPA to mortgage includes the power to allow the extrajudicial foreclosure of the mortgaged property.
SPA to compromise does not authorize submission to arbitration
SPA for an agent to institute any action in court to eject all persons in the principals lots so that the
principal could take material possession thereof, and for this purpose, to appear at the pre-trial and enter
into any stipulation of facts and/or compromise agreement but only insofar as this is protective of the rights
and interests of the principal in the property, does not grant any power to the agent to sell the subject
property nor a portion thereof. (Cosmic Lumber Corp vs. CA
1450
General Rule: The principal is not bound by the acts of the agent beyond his limited powers.
Exceptions:
1. Where the principals acts have contributed to deceive the third person in good faith;
2. Where the limitations upon the power created by him could not have been known by the third person;
3. Where the principal has placed in the hands of the agent instruments signed by him in blank (Strong
vs. Gutierrez Repide 6 PHIL 680 [1906])
4. Where the principal has ratified the acts of the agent.
1451
Art. 1897

362
 If the agent contracts in the name of the principal, exceeding
the scope of his authority, and the principal does not ratify the
contract, it shall be void if the party with whom the agent contracted
is aware of the limits of the powers granted by the principal. In this
case, however, the agent is liable if he undertook to secure the
principal's ratification.1452

If a duly authorized agent acts in accordance with the orders of

the principal, the latter cannot set up the ignorance of the agent as to
circumstances whereof he himself was, or ought to have been,
aware.1453

So far as third persons are concerned, an act is deemed to have

been performed within the scope of the agent's authority, if such act is
within the terms of the power of attorney, as written, even if the agent
has in fact exceeded the limits of his authority according to an
understanding between the principal and the agent.1454

A third person cannot set up the fact that the agent has
exceeded his powers, if the principal has ratified, or has signified his
willingness to ratify the agent's acts.1455

A third person with whom the agent wishes to contract on

behalf of the principal may require the presentation of the power of
attorney, or the instructions as regards the agency. Private or secret
orders and instructions of the principal do not prejudice third persons
who have relied upon the power of attorney or instructions shown
them.1456

B. Exception

If an agent acts in his own name, the principal has no right of

action against the persons with whom the agent has contracted;
neither have such persons against the principal.
In such case the agent is the one directly bound in favor of the
person with whom he has contracted, as if the transaction were his
own, except when the contract involves things belonging to the
principal.

1452
Art. 1898
1453
Art. 1899
1454
Art. 1900
1455
Art. 1901
1456
Art. 1902

363
 The provisions of this article shall be understood to be without
prejudice to the actions between the principal and agent.1457

III. Express vs. Implied Agency

Express- one where the agent has been actually authorized by

the principal, either orally or in writing;

Implied1458- one which is implied from the

i. acts of the principal- from his silence or lack of
action, or his failure to repudiate the agency
knowing that another person is acting on his behalf
without authority.
ii. Acts of the agent- when he carries out the agency, or
from his silence or inaction according to the
circumstances.

IV. Agency by estoppel

One who clothes another with apparent authority as his agent,

and holds him out to the public as such, cannot be permitted to deny
the authority of such person in good faith, and in the honest belief
that he is what he appears to be.1459

Implied Agency by
acceptance estoppel
1. De Jure 1. Not really
Agent an agent
2. Binds the 2. Only the
principal for purported
acts within agent is
the scope of liable.
his authority.

V. General vs. Special Agency

General- one which comprises all the business of the principal;

Special- one which comprises one or more specific transactions

1457
Art. 1883
1458
the principal is still bound by the acts of the agent just as in case of express agency
1459
Cuison vs. CA, GR.88531, October 26, 1993

364
 General Special
Agent Agent

1. Scope of Authority
Authorized
Usually to do only
authorized to acts in
do all acts pursuance
connected with of
the business or particular
employment in instruction
which he is s or with
engaged. restrictions
necessarily
implied
from the
acts to be
done

2. Continuity

Conducts a Usually
series of involves a
transactions single
involving a transaction
continuity of or a series
service. of
transaction
s not
involving
continuity
3. Extent by which
agent may bind
principal
Binds his Cannot
principal by an bind his
act within the principal in
scope of his a manner
authority beyond or
although it may outside the
be contrary to specific
his special acts which
instructions he is
authorized
to perform
on behalf
of the
principal

365
 4. Termination of
Authority
Apparent Mere
authority does revocation
not terminate is effective
by the mere to
revocation of terminate
his authority the
without notice authority
to the third as to third
party persons
because
the third
person has
a duty to
inquire
5. Construction of
Instructions of
Principal
Statement of Authority of
principal agent
with respect must be
to the strictly
agents pursued
authority
would
ordinarily
regarded as
advisory only

VI. Agency couched in general terms

One which is created in general terms and is deemed to

comprise only acts of administration

VII. Agency requiring special power of attorney

The scope of the agents authority is what appears in the written

terms of the power of attorney. While third persons are bound to
inquire into the extent or scope of the agents authority, they are not
required to go beyond the terms of the written power of attorney.
Third persons cannot be adversely affected by an understanding
between the principal and his agent as to the limits of the latters
authority. In the same way, third persons need not concern
themselves with instructions given by the principal to his agent
outside the written power of attorney.1460
1460
Siredy Enterprises, Inc. vs. CA, et al. GR 129039, September 27, 2002

366
VIII. Agency by operation of law

The concept is essentially one of estoppel and has been

explained in this manner:

"The principal is bound by the acts of his agent with the

apparent authority which he knowingly permits the agent to assume,
or which he holds the agent out to the public as possessing. The
question in every case is whether the principal has by his voluntary
act placed the agent in such a situation that a person of ordinary
prudence, conversant with business usages and the nature of the
particular business, is justified in presuming that such agent has
authority to perform the particular act in question.1461

IX. Rights and Obligations of Principal

The principal must comply with all the obligations which the
agent may have contracted within the scope of his authority.

As for any obligation wherein the agent has exceeded his power,
the principal is not bound except when he ratifies it expressly or
tacitly.1462

When the agent has exceeded his authority, the principal is

solidarily liable with the agent if the former allowed the latter to act
as though he had full powers.1463

The principal must advance to the agent, should the latter so

request, the sums necessary for the execution of the agency.

Should the agent have advanced them, the principal must

reimburse him therefor, even if the business or undertaking was not
successful, provided the agent is free from all fault.

A third person with whom the agent wishes to contract on behalf of the principal may require the
presentation of the power of attorney or the instructions as regards the agency; except private or secret
orders.
1461
Irving v. Doctors Hospital of Lake Worth, Inc., 415 So. 2d 55 (1982), quoting Arthur v. St. Peters
Hospital, 169 N.J. 575, 405 A. 2d 443 (1979)
Agency by estoppel is defined as "one created by operation of law and established by proof of such acts
of the principal as reasonably lead third persons to the conclusion of its existence. Arises where principal
by negligence in failing to supervise agents affairs, allows agent to exercise powers not granted to him,
thus justifying others in believing the agent possesses requisite authority
1462
Art. 1910
1463
Art. 1911

367
 The reimbursement shall include interest on the sums advanced,
from the day on which the advance was made.1464

The principal must also indemnify the agent for all the damages
which the execution of the agency may have caused the latter, without
fault or negligence on his part.1465

The agent may retain in pledge the things which are the object
of the agency until the principal effects the reimbursement and pays
the indemnity set forth in the two preceding articles.1466

If two or more persons have appointed an agent for a common

transaction or undertaking, they shall be solidarily liable to the agent
for all the consequences of the agency.1467

When two persons contract with regard to the same thing, one
of them with the agent and the other with the principal, and the two
contracts are incompatible with each other, that of prior date shall be
preferred, without prejudice to the provisions of article 1544.1468

In the case referred to in the preceding article, if the agent has

acted in good faith, the principal shall be liable in damages to the
third person whose contract must be rejected. If the agent acted in
bad faith, he alone shall be responsible.1469

The principal is not liable for the expenses incurred by the agent
in the following cases:

(1) If the agent acted in contravention of the principal's instructions,

unless the latter should wish to avail himself of the benefits derived
from the contract;

(2) When the expenses were due to the fault of the agent;

(3) When the agent incurred them with knowledge that an

unfavorable result would ensue, if the principal was not aware
thereof;

1464
Art. 1912
1465
Art. 1913
1466
Art. 1914
1467
Art. 1915
1468
Art. 1916
1469

368
(4) When it was stipulated that the expenses would be borne by the
agent, or that the latter would be allowed only a certain sum.1470

X. Irrevocable agency

An agency cannot be revoked if a bilateral contract depends

upon it, or if it is the means of fulfilling an obligation already
contracted, or if a partner is appointed manager of a partnership in
the contract of partnership and his removal from the management is
unjustifiable.1471

The agent may withdraw from the agency by giving due notice
to the principal. If the latter should suffer any damage by reason of
the withdrawal, the agent must indemnify him therefor, unless the
agent should base his withdrawal upon the impossibility of continuing
the performance of the agency without grave detriment to himself. 1472

The agent, even if he should withdraw from the agency for a

valid reason, must continue to act until the principal has had
reasonable opportunity to take the necessary steps to meet the
situation.1473

The agency shall remain in full force and effect even after the
death of the principal, if it has been constituted in the common
interest of the latter and of the agent, or in the interest of a third
person who has accepted the stipulation in his favor.1474

XI. Modes of extinguishment

1. Expiration of the period

2. Death, civil interdiction, insanity or insolvency of the principal or of
the agent
3. Withdrawal of the agent1475
4. Accomplishment of the object or the purpose of the agency
5. Revocation
6. Dissolution of the firm or corporation, which entrusted or accepted
the agency

1470
Art. 1918
1471
Art. 1927
1472
Art. 1928
1473
Art. 1929
1474
Art. 1930
1475
Agent may withdraw by giving notice to the principal, but must indemnify the principal for damages
that he may suffer by reason of such withdrawal.

369
 COMPROMISE

I. Definition

A compromise is a contract whereby the parties, by making

reciprocal concessions, avoid a litigation or put an end to one already
commenced.1476

II. Void Compromise

No compromise upon the following questions shall be valid:

(1) The civil status of persons;

(2) The validity of a marriage or a legal separation;
(3) Any ground for legal separation;
(4) Future support;
(5) The jurisdiction of courts;
(6) Future legitime 1477

III. Effect

A compromise has upon the parties the effect and authority of

res judicata; but there shall be no execution except in compliance with
a judicial compromise.1478

If one of the parties fails or refuses to abide by the compromise,

the other party may either enforce the compromise or regard it as
rescinded and insist upon his original demand.1479

CREDIT TRANSACTIONS

I. Loan

1476
Art. 2028
1477
Art. 2035
1478
Art. 2037
1479
Art. 2041

370
 A. Commodatum1480 vs. Mutuum1481

Commodatum when the bailor (lender) delivers to the bailee

(borrower) a non-consumable thing so that the latter may use it for a
certain time and return the identical thing.

Simple loan or mutuum where the lender delivers to the borrower

money or other consumable thing upon the condition that the latter
shall pay the same amount of the same kind and quality.

Commodatum Mutuum

1. Object
Non- Consumable
consumabl
e
2. Cause
Gratuitous May or may
not be
gratuitous
3. Purpose
Use or Consumption
temporary
possession
4. Subject Matter
Real or Only personal
personal property
property
5. Ownership of the thing
Retained by Passes to the
the bailor debtor
6. Thing to be returned

1480
Kinds:
a. Ordinary Commodatum use by the borrower of the thing is for a certain period of time
b. Precarium - one whereby the bailor may demand the thing loaned at will and it exists in the
following cases:
i. neither the duration nor purpose of the contract is stipulated
ii. the use of the thing is merely tolerated by the owner
1481
A contract whereby one party delivers to another, money or other consumable thing with the
understanding that the same amount of the same kind and quality shall be paid. (Art. 1953)
The mere issuance of the checks does not result in the perfection of the contract of loan. The Civil
Code provides that the delivery of bills of exchange and mercantile documents, such as checks, shall
produce the effect of payment only when they have been encashed (Gerales vs. CA 218 SCRA 638). It is
only after the checks have produced the effect of payment that the contract of loan may be deemed
perfected.
The obligation is to pay and not to return because the consumption of the thing loaned is the
distinguishing character of the contract of mutuum from that of commodatum.
No estafa is committed by a person who refuses to pay his debt or denies its existence.

371
 Exact thing Equal amount
loaned of the same
kind and
quality
7. Who bears risk of loss
Bailor Debtor
8. When to return
In case of Only after the
urgent need, expiration of
even before the term
the expiration
of the term

B. Obligations of Bailor and Bailee

Obligations of the Bailee:

1. To pay for the ordinary expenses for the use and preservation
of the thing loaned.1482

2. To be liable for the loss of the thing even if it should be through

a fortuitous event in the following cases:

a. when he keeps it longer than the period stipulated, or after the

accomplishment of its use
b. when he lends or leases it to third persons who are not
members of his household
c. when the thing loaned has been delivered with appraisal of its
value
d. when, being able to save either of the thing borrowed or his
own things, he chose to save the latter; or
e. when the bailee devoted the thing for any purpose different
from that for which it has been loaned1483

3. To be liable for the deterioration of thing loaned

(a) if expressly stipulated;

(b) if guilty of fault or negligence; or

1482
Art. 1941
1483
Art. 1942

372
 (c) if he devotes the thing to any purpose different from that for
which it has been loaned

4. To pay for extraordinary expenses arising from the actual use of the
thing by the bailee, which shall be borne equally by both the bailor
and the bailee, even though the bailee acted without fault, unless
there is a stipulation to the contrary1484

5. To return the thing loaned1485

Obligations of the bailor:1486

1. To respect the duration of the loan

GENERAL RULE:

Allow the bailee the use of the thing loaned for the duration of the
period stipulated or until the accomplishment of the purpose for
which the commodatum was instituted.

EXCEPTIONS:

a. In case of urgent need in which case bailee may demand its

return or temporary use;

b. The bailor may demand immediate return of the thing if the

bailee commits any act of ingratitude specified in Art. 765.

2. To refund to the bailee extraordinary expenses for the

preservation of the thing loaned, provided the bailee brings the
same to the knowledge of the bailor before incurring them, except
when they are so urgent that the reply to the notification cannot be
awaited without danger.

3. To be liable to the bailee for damages for known hidden

flaws.1487
1484
Art. 1949, par. 2
1485
The bailee has no right to retain the thing loaned as security for claims he has against the bailor even for
extraordinary expenses except for a claim for damages suffered because of the flaws of the thing loaned.
However, the bailees right extends no further than retention of the thing loaned until he is reimbursed
for the damages suffered by him.
He cannot lawfully sell the thing to satisfy such damages without courts approval.
In case there are two or more bailees, their obligation shall be solidary.
1486
Arts. 1946 1952
1487
Requisites:
a. There is flaw or defect in the thing loaned;
b. The flaw or defect is hidden;

373
 C. Interest and the suspension of Usury Law

General rule: Unpaid interest shall not earn interest.

Exceptions:

1. when judicially demanded

2. when there is an express stipulation (must be in writing in view of
Art. 1956)

Guidelines for the application of proper interest rates:

1. If there is stipulation: that rate shall be applied

2. The following are the rules of thumb for the
application/imposition of interest rates:

a) When an obligation, regardless of its source, i.e., law, contracts,

quasi-contracts, delicts or quasi-delicts is breached, the
contravenor can be held liable for damages.

b) With regard particularly to an award of interest in the concept

of actual and compensatory damages, the rate of interest, as
well as the accrual thereof, is imposed, as follows:

i. When the obligation breached consists of payment of a sum

of money,1488 the interest shall be that which is stipulated or
agreed upon by the parties. In absence of an agreement, the
rate shall be the legal rate1489 computed from default.1490

ii. In other cases, the rate of interest shall be six percent (6%)
per annum.1491

c. The bailor is aware thereof;

d. He does not advise the bailee of the same; and
e. The bailee suffers damages by reason of said flaw or defect
If the above requisites concur, the bailee has the right of retention for damages.
The bailor cannot exempt himself from the payment of expenses or damages by abandoning the thing to
the
1488
loan or forbearance of money
1489
i.e. 12% per annum
1490
The interest due shall itself earn legal interest from the time it is judicially demanded
1491
No interest, however, shall be adjudged on unliquidated claims or damages except when or until the
demand can be established with reasonable certainty. When the demand cannot be established, the interest
shall begin to run only from the date of the judgment of the court is made.

374
 iii. When the judgment of the court awarding a sum of money
becomes final and executory, the rate of legal interest,
whether the case falls under paragraph i or ii above, shall be
12% per annum from such finality until its satisfaction, this
interim period being deemed to be by then an equivalent to a
forbearance of credit.1492

Central Bank Circular No. 416 fixing the rate of interest at 12%
per annum deals with loans, forbearance of any money, goods or
credits and judgments involving such loans, or forbearance in the
absence of express agreement to such rate

Interest as indemnity for damages is payable only in case of

default or non-performance of the contract. As they are distinct
claims, they may be demanded separately.1493

Validity of unconscionable interest rate in a loan:

The Supreme Court in Sps. Solangon vs. Jose Salazar, 1494 said
that since the usury law had been repealed by CB Cir. No. 905 there is
no more maximum rate of interest and the rate will just depend on the
mutual agreement of the parties1495. But the Supreme Court said that
nothing in said circular grants lenders carta blanche authority to raise
interest rates to level which will either enslave their borrowers or
lead to a hemorrhaging of their assets 1496. In Medel vs. CA,1497, it was
ruled that while stipulated interest of 5.5% per month on a loan is
usurious pursuant to CB Circular No. 905, the same must be equitably
reduced for being iniquitous, unconscionable and exorbitant. It is
contrary to morals1498. It was reduced to 12% per annum in consonant

1492
Eastern Shipping Lines vs. CA, July 12, 1994
1493
Sentinel Insurance Co., Inc. vs CA, 182 SCRA 517
1494
G.R. No. 125944, June 29, 2001
1495
citing Lim Law vs. Olympic Sawmill Co., 129 SCRA 439
1496
citing Almeda vs. CA, 256 SCRA 292)
1497
299 SCRA 481
1498
contra bonos mores

375
with justice and fair play.

II. Deposit1499

A. Voluntary deposit1500

One wherein the delivery is made by the will of the depositor or

by two or more persons each of whom believes himself entitled to the
thing deposited.1501

B. Necessary deposit1502

One made in compliance with a legal obligation, or on the

occasion of any calamity, or by travellers in hotels and inns 1503, or by
travellers with common carriers1504.

C. Judicial deposit1505

When an attachment or seizure of property in litigation is

ordered.

Judicial Extra-judicial
1. Creation
Will of the Will of the
court parties or
contract
2. Purpose
Security or to Custody and
insure the safekeeping
right of a party
to property or
to recover in
case of
favorable
judgment
3. Subject Matter

1499
A contract constituted from the moment a person receives a thing belonging to another, with the
obligation of safely keeping it and of returning the same.
The chief difference between a voluntary deposit and a necessary deposit is that in the former, the
depositor has a complete freedom in choosing the depositary, whereas in the latter, there is lack of free
choice in the depositor.
1500
Extra-judicial
1501
Arts. 1968 1995
1502
Extra-judicial
1503
Arts. 1996 - 2004
1504
Arts. 1734 1735
1505
Sequestration

376
 Movables or Movables only
immovables,
but generally
immovables
4. Cause
Always May be
onerous compen-sated
or not, but
generally
gratuitous
5. When must the thing be
returned
Upon order of Upon demand
the court or of
when litigation depositor
is ended
6. In whose behalf it is held
Person who Depositor or
has a right third person
designated

III. Guaranty and Suretyship

A. Nature and extent of guaranty

A contract whereby a person (guarantor) binds himself to the

creditor to fulfill the obligation of the principal debtor in case the
latter fail to do so.

Extent of Guarantors liability1506:

1. Where the guaranty definite: It is limited in whole or in part to the

principal debt, to the exclusion of accessories.
2. Where guaranty indefinite or simple: It shall comprise not only the
principal obligation, but also all its accessories, including the
judicial costs, provided with respect to the latter, that the
guarantor shall only be liable for those costs incurred after he has
been judicially required to pay.

Guaranty Suretyship

1. Liability depends 1. Surety assumes

upon an independent liability as regular
agreement to pay the party to the
obligation if primary undertaking
debtor fails to do so

1506
Art. 2055

377
 2. Collateral under- 2. Surety is an
taking original promisor

3. Guarantor is 3. Surety is
secondarily liable primarily liable

1. Guarantor binds 4. Surety undertakes

himself to pay if to pay if the principal
the principal DOES NOT PAY
CANNOT PAY

5. Insurer of 5. Insurer of the

solvency of debtor debt

6. Guarantor can 6. Surety cannot

avail of the benefit avail of the benefit of
of excussion and excussion and division
division in case
creditor proceeds
against him

B. Effects of guaranty

When there are two or more guarantors of the same debtor and
for the same debt, the one among them who has paid may demand of
each of the others the share which is proportionally owing from him.

If any of the guarantors should be insolvent, his share shall be

borne by the others, including the payer, in the same proportion.
The provisions of this article shall not be applicable, unless the
payment has been made by virtue of a judicial demand or unless the
principal debtor is insolvent.1507

In the case of the preceding article, the co-guarantors may set

up against the one who paid, the same defenses which would have
pertained to the principal debtor against the creditor, and which are
not purely personal to the debtor.1508

A sub-guarantor, in case of the insolvency of the guarantor for

whom he bound himself, is responsible to the co-guarantors in the
same terms as the guarantor.1509

C. Extinguishment of guaranty

1507
Art. 2073
1508
Art. 2074
1509
Art. 2075

378
1. Release in favor of one of the guarantors, without the consent of
the others, benefits all to the extent of the share of the guarantor
to whom it has been granted1510;

2. If the creditor voluntarily accepts immovable or other properties in

payment of the debt, even if he should afterwards lose the same
through eviction or conveyance of property1511 ;
3. Whenever by some act of the creditor, the guarantors even though
they are solidarily liable cannot be subrogated to the rights,
mortgages and preferences of the former1512;

4. For the same causes as all other obligations1513;

5. When the principal obligation is extinguished;

6. Extension granted to the debtor by the creditor without the

consent of the guarantor1514

D. Legal and judicial bonds1515

Judicial bonds constitute merely a special class of contracts of

guaranty by the fact that they are given in virtue of a judicial
order.

If the person required to give a legal or judicial bond should not

be able to do so, a pledge or mortgage sufficient to cover the
obligation shall admitted in lieu thereof1516

IV. Pledge

A. Definition

A contract wherein the debtor delivers to the creditor or to a

third person a movable or document evidencing incorporeal rights for
the purpose of securing fulfillment of a principal obligation with the

1510
Art. 2078
1511
Art. 2077
1512
Art. 2080
1513
Art. 1231
1514
Art. 2079
1515
Bond
An undertaking that is sufficiently secured, and not cash or currency
Bondsman
A surety offered in virtue of a provision of law or a judicial order. He must have the qualifications required
of a guarantor and in special laws like the Rules of Court. (Art. 2082)
1516
Art 2083

379
understanding that when the obligation is fulfilled, the thing delivered
shall be returned with all its fruits and accessions.

B. Kinds

1. Conventional /Voluntary created by contract

2. Legal created by operation of law1517

C. Essential requirements

1. Secures the fulfillment of a principal obligation;

2. Pledgor, mortgagor, antichretic debtor must be the absolute owner

of the thing pledged or mortgaged;1518 and

3. Pledgor, mortgagor, antichretic debtor must have free disposal of

their property, or be legally authorized for such purpose.

4. Possession of the thing pledged must be transferred to the creditor

or a third person by agreement1519;

5. It can only cover movable property and incorporeal rights

evidenced by documents of title and the instruments proving the right
pledged shall be delivered to the creditor, and if negotiable must be
endorsed;1520 and

6. The description of the thing pledged and the date must appear in a
public instrument to bind third persons, but not for the validity of the
contract.1521

D. Obligations of pledge

Obligations of pledgor:

1. To advise the pledgee of the flaws of the thing1522

1517
examples: Art. 546, 1731 and 1914 NCC
1518
The reason being that in anticipation of a possible foreclosure sale in case of default which is still a sale,
the rule is that the seller must be the owner of the thing sold (Cavite Development Bank vs. Lim, 324
SCRA 346)
1519
Art. 2093
1520
Art. 2094
1521
Art. 2096
1522
Art. 2101

380
2. Not to demand the return of the thing until after full payment of
the debt, including interest due thereon and expenses incurred for
its preservation1523

Obligations of pledgee:

1. Take care of the thing with the diligence of a good father of a

family1524
2. Not to use thing unless authorized or by the owner or its
preservation requires its use1525
3. Not to deposit the thing with a 3rd person unless so stipulated1526
4. Responsibility for acts of agents and employees as regards the
thing1527
5. To advise pledgor of danger to the thing1528
6. To advise pledgor of the result of the public auction1529

E. Rights of pledgor

1. To demand return in case of reasonable grounds to fear

destruction or impairment of the thing without the pledgees fault,
subject to the duty of replacement1530
2. To bid and be preferred at the public auction1531
3. To alienate the thing pledged provided the pledgee consents to
the sale1532
4. To ask that the thing pledged be deposited1533

F. Perfection

In addition to the requisites prescribed in article 2085, it is

necessary, in order to constitute the contract of pledge, that the thing
pledged be placed in the possession of the creditor, or of a third
person by common agreement.1534

1523
Art. 2105
1524
Art. 2099
1525
Art. 2104
1526
Art. 2100
1527
ibid
1528
Art. 2107
1529
Art. 2116
1530
ibid
1531
Art. 2113
1532
Art. 2097
1533
Arts. 2104 & 2106
1534
Art. 2093

381
 A pledge shall not take effect against third persons if a
description of the thing pledged and the date of the pledge do not
appear in a public instrument.1535

G. Foreclosure

The creditor to whom the credit has not been satisfied in due
time, may proceed before a Notary Public to the sale of the thing
pledged. This sale shall be made at a public auction, and with
notification to the debtor and the owner of the thing pledged in a
proper case, stating the amount for which the public sale is to be held.
If at the first auction the thing is not sold, a second one with the same
formalities shall be held; and if at the second auction there is no sale
either, the creditor may appropriate the thing pledged. In this case he
shall be obliged to give an acquittance for his entire claim.1536

The sale of the thing pledged shall extinguish the principal

obligation, whether or not the proceeds of the sale are equal to the
amount of the principal obligation, interest and expenses in a proper
case. If the price of the sale is more than said amount, the debtor
shall not be entitled to the excess, unless it is otherwise agreed. If the
price of the sale is less, neither shall the creditor be entitled to
recover the deficiency, notwithstanding any stipulation to the
contrary.1537

H. Pledge by Operation of Law

Pledges created by operation of law, such as those referred to in

articles 546, 1731, and 19941538, are governed by the foregoing
articles on the possession, care and sale of the thing as well as on the
termination of the pledge. However, after payment of the debt and
expenses, the remainder of the price of the sale shall be delivered to
the obligor.1539

A thing under a pledge by operation of law may be sold only

after demand of the amount for which the thing is retained. The public

1535
Art. 2096
1536
Art. 2112
1537
Art. 2115
1538
See Reference
1539
Art. 2121

382
auction shall take place within one month after such demand. If,
without just grounds, the creditor does not cause the public sale to be
held within such period, the debtor may require the return of the
thing.1540

I. Distinguished from Chattel Mortgage

In a contract of sale of personal property the price of which is

payable in installments, the vendor may exercise any of the following
remedies:

(1) Exact fulfillment of the obligation, should the vendee fail to pay;

(2) Cancel the sale, should the vendee's failure to pay cover two or
more installments;

(3) Foreclose the chattel mortgage on the thing sold, if one has been
constituted, should the vendee's failure to pay cover two or more
installments. In this case, he shall have no further action against the
purchaser to recover any unpaid balance of the price. Any agreement
to the contrary shall be void.1541

By a chattel mortgage, personal property is recorded in the

Chattel Mortgage Register as a security for the performance of an
obligation. If the movable, instead of being recorded, is delivered to
the creditor or a third person, the contract is a pledge and not a
chattel mortgage.1542

V. Real Mortgage

A. Definition and characteristics

A contract whereby the debtor secures to the creditor the

fulfilment of a principal obligation, specially subjecting to such
security immovable property or real rights over immovable property
in case the principal obligation is not complied with at the time
stipulated.

Characteristics:

1. Real
1540
Art. 2122
1541
Art. 1484
1542
Art. 2140

383
2. Accessory - its consideration is that of the principal contract from
which it receives life.

3. Subsidiary

4. Unilateral it creates only an obligation on the part of the creditor

who must free the property from the encumbrance once the obligation
is fulfilled.

B. Essential requisites

1. It can cover only immovable property and alienable real rights

imposed upon immovables1543;

3. It must appear in a public instrument1544; and

4. Registration in the registry of property is necessary to bind third

persons, but not for the validity of the contract1545.

C. Foreclosure

The remedy available to the mortgagee by which he subjects the

mortgaged property to the satisfaction of the obligation to secure that
for which the mortgage was given.

Pledge Real
mortgage
1. Constituted 1. Constituted
on movables on immovables
2. Property is 2. Delivery is
delivered to not necessary
pledgee or by
common
consent to a
third person
3. Not valid 3. Not valid
against third against third
persons unless persons unless
a description of registered
the thing
pledged and
date of pledge

1543
Art. 2124
1544
Art. 2125
1545
Art. 2125

384
appear in a
public
instrument

VI. Antichresis

A. Definition and characteristics

A contract whereby the creditor acquires the right to receive

the fruits of an immovable of the debtor, with the obligation to apply
them to the payment of the interest, if owing, and thereafter to the
principal of his credit (Art 2132)

Characteristics:

1. Accessory contract it secures the performance of a principal

obligation
2. Formal contract it must be in a specified form to be valid, i.e., in
writing. (Art 2134)

B. Obligations of antichretic creditor

1. To pay taxes and charges on the estate, including necessary

expenses1546
2. To apply all the fruits, after receiving them, to the payment of
interest, if owing, and thereafter to the principal
3. To render an account of the fruits to the debtor
4. To bear the expenses necessary for its preservation and repair

Antichresis Pledge
1. Refers to 1. Refers to
real property personal
property
2. Perfected by 2. Perfected by
mere consent delivery of the
thing pledged
3. Consensual 3. Real
contract Contract

Antichresis Real Mortgage

1. Property is 1. Debtor

1546
Creditor may avoid said obligation by:
a. compelling debtor to reacquire enjoyment of the property or
b. by stipulation to the contrary

385
 delivered to usually retains
creditor possession of
the property
2. Creditor 2. Creditor
acquires only does not have
the right to any right to
receive the receive the
fruits of the fruits; but the
property, mortgage
hence, it does creates a real
not produce a right over the
real right property
3. The creditor, 3. The creditor
unless there is has no such
stipulation to obligation
the contrary, is
obliged to pay
the taxes and
charges upon
the estate
4. It is 4. There is no
expressly such obligation
stipulated that on part of
the creditor mortgagee
given
possession of
the property
shall apply all
the fruits
thereof to the
payment of
interest, if
owing, and
thereafter to
the principal
Subject matter of both is real
property

VII. Chattel Mortgage

A. Definition and characteristics

A contract by virtue of which personal property is recorded in

the Chattel Mortgage Register as a security for the performance of an
obligation1547.

Characteristics

1547
Art. 2140

386
1. Accessory contract it is for the purpose of securing the
performance of a principal obligation
2. Formal contract registration in the Chattel Mortgage Register is
indispensable for its validity
3. Unilateral contract it produces only obligations on the part of the
creditor to free the thing from the encumbrance on fulfillment of
the obligation.

B. Registration

The registration of the chattel mortgage is an effective and

binding notice to other creditors of its existence and creates a real
right or a lien which, being recorded, follows the chattel wherever it
goes. The registration gives the mortgagee symbolical possession1548.

Chattel Pledge
Mortgage
1. Delivery of 1. Delivery of
the personal the thing
property to the pledged is
mortgage is not necessary
necessary
2. registration 2. registration
in the Chattel not necessary
Mortgage to be valid
Registry is
necessary for
its validity
3. If property is3. Debtor is not
foreclosed, the entitled to
excess over the excess unless
amount due otherwise
goes to theagreed or
debtor except in case
of legal pledge
4. If there is 4. If there is
deficiency after deficiency,

1548
Northern Motors, Inc. vs. Coquia, 68 SCRA 374
Effect of failure to register chattel mortgage in the chattel mortgage registry:
Article 2140 makes the recording in the Chattel Mortgage Register an essential requisite but if the
instrument is not recorded, the mortgage is nevertheless binding between the parties. But the person in
whose favor the law establishes a mortgage has no other right than to demand the execution and the
recording of the document.

387
foreclosure, creditor is not
creditor is entitled to
entitled to recover
recover the notwithstandin
deficiency from g any
the debtor, stipulation to
except under the contrary
Art. 1484
Subject matter of both is
movable property

VIII. Quasi-Contracts

A. Negotiorum Gestio -

Arises whenever a person voluntarily takes charge of the agency

or management of the business or property of another without any
power or authority from the latter.

B. Solutio Indebiti -

Arises whenever a person unduly delivers a thing through

mistake to another who has no right to demand it.

IX. Concurrence and Preference of Credits1549

A. Meaning of concurrence and preference

Concurrence of Credits
1549
The rules on preference of credits apply only when two or more creditors have separate and distinct
claims against the same debtor who has insufficient property.
Preference creates no lien on property, and, therefore, gives no interest in property, specific or general,
to the preferred creditor but a preference in application of the proceeds after the sale. (Molina vs. Somes,
31 Phil. 76)
The preferential right of credit attains significance only after the properties of the debtor have been
inventoried and liquidated, and the claims held by his various creditors have been established. (DBP vs.
NLRC, 183 SCRA 328)

388
 Possession by two or more creditors of equal rights or privileges
over the same property or all of the property of the debtor

Preference of Credits

Right held by a creditor to be preferred in the payment of his

claim above others out of the debtors assets

B. Preferred Credits on Specific Movables

With reference to specific movable property of the debtor, the

following claims or liens shall be preferred:

(1) Duties, taxes and fees due thereon to the State or any subdivision
thereof;

(2) Claims arising from misappropriation, breach of trust, or

malfeasance by public officials committed in the performance of their
duties, on the movables, money or securities obtained by them;

(3) Claims for the unpaid price of movables sold, on said movables, so
long as they are in the possession of the debtor, up to the value of the
same; and if the movable has been resold by the debtor and the price
is still unpaid, the lien may be enforced on the price; this right is not
lost by the immobilization of the thing by destination, provided it has
not lost its form, substance and identity; neither is the right lost by
the sale of the thing together with other property for a lump sum,
when the price thereof can be determined proportionally;

(4) Credits guaranteed with a pledge so long as the things pledged are
in the hands of the creditor, or those guaranteed by a chattel
mortgage, upon the things pledged or mortgaged, up to the value
thereof;

(5) Credits for the making, repair, safekeeping or preservation of

personal property, on the movable thus made, repaired, kept or
possessed;

(6) Claims for laborers' wages, on the goods manufactured or the

work done;

(7) For expenses of salvage, upon the goods salvaged;

389
(8) Credits between the landlord and the tenant, arising from the
contract of tenancy on shares, on the share of each in the fruits or
harvest;

(9) Credits for transportation, upon the goods carried, for the price of
the contract and incidental expenses, until their delivery and for thirty
days thereafter;

(10) Credits for lodging and supplies usually furnished to travellers by

hotel keepers, on the movables belonging to the guest as long as such
movables are in the hotel, but not for money loaned to the guests;

(11) Credits for seeds and expenses for cultivation and harvest
advanced to the debtor, upon the fruits harvested;

(12) Credits for rent for one year, upon the personal property of the
lessee existing on the immovable leased and on the fruits of the same,
but not on money or instruments of credit;

(13) Claims in favor of the depositor if the depositary has wrongfully

sold the thing deposited, upon the price of the sale.

In the foregoing cases, if the movables to which the lien or

preference attaches have been wrongfully taken, the creditor may
demand them from any possessor, within thirty days from the unlawful
seizure.

C. Exempt Property

1. Present property those provided under Arts. 155 and 205 of

the Family Code,1550 Sec. 13, Rule 39 of the Rules of Court, 1551
and Sec. 118 of the Public Land Act1552

2. Future property a debtor who obtains a discharge from his

debts on account of his insolvency, is not liable for the
unsatisfied claims of his creditors with said property subject to
certain exceptions expressly provided by law.1553

3. Property under legal custody and those owned by municipal

corporations necessary for governmental purposes

1550
See Reference
1551
ibid
1552
ibid
1553
Secs. 68, 69, The Insolvency Law [Act No. 1956]

390
 D. Classification of credits

With reference to specific movable property of the debtor, the

following claims or liens shall be preferred:

(1) Duties, taxes and fees due thereon to the State or any subdivision
thereof;

(2) Claims arising from misappropriation, breach of trust, or

malfeasance by public officials committed in the performance of their
duties, on the movables, money or securities obtained by them;

(3) Claims for the unpaid price of movables sold, on said movables, so
long as they are in the possession of the debtor, up to the value of the
same; and if the movable has been resold by the debtor and the price
is still unpaid, the lien may be enforced on the price; this right is not
lost by the immobilization of the thing by destination, provided it has
not lost its form, substance and identity; neither is the right lost by
the sale of the thing together with other property for a lump sum,
when the price thereof can be determined proportionally;

(4) Credits guaranteed with a pledge so long as the things pledged are
in the hands of the creditor, or those guaranteed by a chattel
mortgage, upon the things pledged or mortgaged, up to the value
thereof;

(5) Credits for the making, repair, safekeeping or preservation of

personal property, on the movable thus made, repaired, kept or
possessed;

(6) Claims for laborers' wages, on the goods manufactured or the

work done;

(7) For expenses of salvage, upon the goods salvaged;

(8) Credits between the landlord and the tenant, arising from the
contract of tenancy on shares, on the share of each in the fruits or
harvest;

(9) Credits for transportation, upon the goods carried, for the price of
the contract and incidental expenses, until their delivery and for thirty
days thereafter;

(10) Credits for lodging and supplies usually furnished to travellers by

hotel keepers, on the movables belonging to the guest as long as such

391
movables are in the hotel, but not for money loaned to the guests;

(11) Credits for seeds and expenses for cultivation and harvest
advanced to the debtor, upon the fruits harvested;

(12) Credits for rent for one year, upon the personal property of the
lessee existing on the immovable leased and on the fruits of the same,
but not on money or instruments of credit;

(13) Claims in favor of the depositor if the depositary has wrongfully

sold the thing deposited, upon the price of the sale.
In the foregoing cases, if the movables to which the lien or
preference attaches have been wrongfully taken, the creditor may
demand them from any possessor, within thirty days from the unlawful
seizure.1554

With reference to specific immovable property and real rights of

the debtor, the following claims, mortgages and liens shall be
preferred, and shall constitute an encumbrance on the immovable or
real right:

(1) Taxes due upon the land or building;

(2) For the unpaid price of real property sold, upon the immovable
sold;

(3) Claims of laborers, masons, mechanics and other workmen, as well

as of architects, engineers and contractors, engaged in the
construction, reconstruction or repair of buildings, canals or other
works, upon said buildings, canals or other works;

(4) Claims of furnishers of materials used in the construction,

reconstruction, or repair of buildings, canals or other works, upon
said buildings, canals or other works;

(5) Mortgage credits recorded in the Registry of Property, upon the

real estate mortgaged;

(6) Expenses for the preservation or improvement of real property

when the law authorizes reimbursement, upon the immovable
preserved or improved;

(7) Credits annotated in the Registry of Property, in virtue of a judicial

order, by attachments or executions, upon the property affected, and

1554
Art. 2241

392
only as to later credits;

(8) Claims of co-heirs for warranty in the partition of an immovable

among them, upon the real property thus divided;

(9) Claims of donors or real property for pecuniary charges or other

conditions imposed upon the donee, upon the immovable donated;

(10) Credits of insurers, upon the property insured, for the insurance
premium for two years.1555

The claims or credits enumerated in the two preceding articles

shall be considered as mortgages or pledges of real or personal
property, or liens within the purview of legal provisions governing
insolvency. Taxes mentioned in No. 1, article 2241, and No. 1, article
2242, shall first be satisfied.1556

With reference to other property, real and personal, of the

debtor, the following claims or credits shall be preferred in the order
named:

(1) Proper funeral expenses for the debtor, or children under his or
her parental authority who have no property of their own, when
approved by the court;

(2) Credits for services rendered the insolvent by employees, laborers,

or household helpers for one year preceding the commencement of
the proceedings in insolvency;

(3) Expenses during the last illness of the debtor or of his or her
spouse and children under his or her parental authority, if they have
no property of their own;

(4) Compensation due the laborers or their dependents under laws

providing for indemnity for damages in cases of labor accident, or
illness resulting from the nature of the employment;

(5) Credits and advancements made to the debtor for support of

himself or herself, and family, during the last year preceding the
insolvency;

(6) Support during the insolvency proceedings, and for three months
thereafter;

1555
Art. 2242
1556
Art. 2243

393
(7) Fines and civil indemnification arising from a criminal offense;

(8) Legal expenses, and expenses incurred in the administration of the

insolvent's estate for the common interest of the creditors, when
properly authorized and approved by the court;

(9) Taxes and assessments due the national government, other than
those mentioned in articles 2241, No. 1, and 2242, No. 1;1557

(10) Taxes and assessments due any province, other than those
referred to in articles 2241, No. 1, and 2242, No. 1;1558

(11) Taxes and assessments due any city or municipality, other than
those indicated in articles 2241, No. 1, and 2242, No. 1;1559

(12) Damages for death or personal injuries caused by a quasi-delict;

(13) Gifts due to public and private institutions of charity or

beneficence;

(14) Credits which, without special privilege, appear in (a) a public

instrument; or (b) in a final judgment, if they have been the subject of
litigation. These credits shall have preference among themselves in
the order of priority of the dates of the instruments and of the
judgments, respectively.1560

Credits of any other kind or class, or by any other right or title

not comprised in the four preceding articles, shall enjoy no
preference.1561

E. Order of preference of credits

Those credits which enjoy preference with respect to specific

movables, exclude all others to the extent of the value of the personal
property to which the preference refers.1562

If there are two or more credits with respect to the same

specific movable property, they shall be satisfied pro rata, after the

1557
supra
1558
ibid
1559
ibid
1560
Art. 2244
1561
Art. 2245
1562
Art. 2246

394
payment of duties, taxes and fees due the State or any subdivision
thereof.1563

Those credits which enjoy preference in relation to specific real

property or real rights, exclude all others to the extent of the value of
the immovable or real right to which the preference refers.1564

If there are two or more credits with respect to the same

specific real property or real rights, they shall be satisfied pro rata,
after the payment of the taxes and assessments upon the immovable
property or real right.1565

The excess, if any, after the payment of the credits which enjoy
preference with respect to specific property, real or personal, shall be
added to the free property which the debtor may have, for the
payment of the other credits.1566

Those credits which do not enjoy any preference with respect to

specific property, and those which enjoy preference, as to the amount
not paid, shall be satisfied according to the following rules:

(1) In the order established in article 2244;1567

(2) Common credits referred to in article 2245 1568 shall be paid

pro rata regardless of dates.1569

X. Insolvency Law

A. Definition of insolvency

The relative condition of mans assets and liabilities that the

former, if all made immediately available, would not be sufficient to
discharge the latter.1570

1563
Art. 2247
1564
Art. 2248
1565
Art. 2249
1566
Art. 2250
1567
supra
1568
ibid
1569
Art. 2251
1570
Philippine Commercial Law by C. Villanueva, 1998 Ed., p.729

395
 B. Suspension of payments

Proceedings for suspension of payments seek the postponement

of the debts of a debtor who possesses sufficient property to cover his
debts, but foresees the impossibility of meeting them when they
respectively fall due.1571 The debtor has sufficient properties in value
to meet his debts but there is not enough cash; thus, he cannot pay
his debts as they fall due. He can ask for the suspension of payments
of his debts for a given period within which to convert some of his
properties to cash so that he can pay his debts.

C. Voluntary insolvency

The situation of a debtor who, having debts exceeding P1,000

cannot discharge all of them with all of his existing assets, and who,
as a consequence, voluntarily goes to court to have himself declared
as an insolvent so that his assets may be equitably distributed among
his creditors.

D. Involuntary insolvency

Instituted by three (3) or more resident creditors for an

individual debtor whose credits aggregating not less than P1,000
accrued in the Philippines against a debtor who has committed any of
the acts of insolvency.

LEASE

I. Lease of things

One of the parties binds himself to give to another the

enjoyment or use of a thing for a price certain and for a period which
may be definite or indefinite. However, no lease for more than ninety-
nine years shall be valid.1572

II. Lease of work or services

One of the parties binds himself to execute a piece of work or to

render to the other some service for a price certain, but the relations
of principal and agent does not exist between them.1573

III. Lease of rural and urban lands

1571
Sec. 2
1572
Art. 1643
1573
Art. 1644

396
 A. Qualified persons

Those not covered within the scope as provided for under

Articles 1490 and 1491 of the Civil Code.1574

B. Registration

Every lease of real estate may be recorded in the Registry of

Property. Unless a lease is recorded, it shall not be binding upon third
persons.1575

C. Prohibitions

The lessee cannot assign the lease without the consent of the
lessor, unless there is a stipulation to the contrary.1576

IV. Rights and obligations of lessor and lessee

When in the contract of lease of things there is no express

prohibition, the lessee may sublet the thing leased, in whole or in
part, without prejudice to his responsibility for the performance of the
contract toward the lessor.1577

Without prejudice to his obligation toward the sublessor, the

sublessee is bound to the lessor for all acts which refer to the use and
preservation of the thing leased in the manner stipulated between the
lessor and the lessee.1578

The sublessee is subsidiarily liable to the lessor for any rent due
from the lessee. However, the sublessee shall not be responsible
beyond the amount of rent due from him, in accordance with the
terms of the sublease, at the time of the extra-judicial demand by the
lessor.

Payments of rent in advance by the sublessee shall be deemed

not to have been made, so far as the lessor's claim is concerned,
unless said payments were effected in virtue of the custom of the
place.1579

1574
See Art. 1646
1575
Art. 1648
1576
Art. 1649
1577
Art. 1650
1578
Art. 1651
1579
Art. 1652

397
 The lessor is obliged:

(1) To deliver the thing which is the object of the contract in such a
condition as to render it fit for the use intended;

(2) To make on the same during the lease all the necessary repairs in
order to keep it suitable for the use to which it has been devoted,
unless there is a stipulation to the contrary;

(3) To maintain the lessee in the peaceful and adequate enjoyment of

the lease for the entire duration of the contract.1580

If the thing leased is totally destroyed by a fortuitous event, the

lease is extinguished. If the destruction is partial, the lessee may
choose between a proportional reduction of the rent and a rescission
of the lease.1581

The lessor of a business or industrial establishment may

continue engaging in the same business or industry to which the
lessee devotes the thing leased, unless there is a stipulation to the
contrary.1582

The lessee is obliged:

(1) To pay the price of the lease according to the terms stipulated;

(2) To use the thing leased as a diligent father of a family, devoting it

to the use stipulated; and in the absence of stipulation, to that which
may be inferred from the nature of the thing leased, according to the
custom of the place;

(3) To pay expenses for the deed of lease.1583

The lessee may suspend the payment of the rent in case the
lessor fails to make the necessary repairs or to maintain the lessee in
peaceful and adequate enjoyment of the property leased.1584

1580
Art. 1654
1581
Art. 1655
1582
Art. 1656
1583
Art. 1657
1584
Art. 1658

398
 If the lessor or the lessee should not comply with the obligations
set forth in articles 1654 and 1657,1585 the aggrieved party may ask for
the rescission of the contract and indemnification for damages, or
only the latter, allowing the contract to remain in force.1586

If a dwelling place or any other building intended for human

habitation is in such a condition that its use brings imminent and
serious danger to life or health, the lessee may terminate the lease at
once by notifying the lessor, even if at the time the contract was
perfected the former knew of the dangerous condition or waived the
right to rescind the lease on account of this condition.1587

If during the lease it should become necessary to make some

urgent repairs upon the thing leased, which cannot be deferred until
the termination of the lease, the lessee is obliged to tolerate the work,
although it may be very annoying to him, and although during the
same, he may be deprived of a part of the premises.

If the repairs last more than forty days the rent shall be reduced
in proportion to the time - including the first forty days - and the part
of the property of which the lessee has been deprived.

When the work is of such a nature that the portion which the
lessee and his family need for their dwelling becomes uninhabitable,
he may rescind the contract if the main purpose of the lease is to
provide a dwelling place for the lessee.1588

The lessee is obliged to bring to the knowledge of the

proprietor, within the shortest possible time, every usurpation or
untoward act which any third person may have committed or may be
openly preparing to carry out upon the thing leased.

He is also obliged to advise the owner, with the same urgency, of

the need of all repairs included in No. 2 of article 1654.1589

In both cases the lessee shall be liable for the damages which,
through his negligence, may be suffered by the proprietor.

1585
supra
1586
Art. 1659
1587
Art. 1660
1588
Art. 1662
1589
supra

399
 If the lessor fails to make urgent repairs, the lessee, in order to
avoid an imminent danger, may order the repairs at the lessor's
cost.1590

The lessee shall return the thing leased, upon the termination of
the lease, as he received it, save what has been lost or impaired by
the lapse of time, or by ordinary wear and tear, or from an inevitable
cause.1591

In the absence of a statement concerning the condition of the

thing at the time the lease was constituted, the law presumes that the
lessee received it in good condition, unless there is proof to the
contrary.1592

The lessee is responsible for the deterioration or loss of the

thing leased, unless he proves that it took place without his fault. This
burden of proof on the lessee does not apply when the destruction is
due to earthquake, flood, storm or other natural calamity.1593

The lessee is liable for any deterioration caused by members of

his household and by guests and visitors.1594

The bailor shall refund the extraordinary expenses during the

contract for the preservation of the thing loaned, provided the bailee
brings the same to the knowledge of the bailor before incurring them,
except when they are so urgent that the reply to the notification
cannot be awaited without danger.

If the extraordinary expenses arise on the occasion of the actual

use of the thing by the bailee, even though he acted without fault,
they shall be borne equally by both the bailor and the bailee, unless
there is a stipulation to the contrary.1595

V. Special rules for lease of rural/urban lands

The lessee shall have no right to a reduction of the rent on

account of the sterility of the land leased, or by reason of the loss of
fruits due to ordinary fortuitous events; but he shall have such right in
case of the loss of more than one-half of the fruits through
1590
Art. 1663
1591
Art. 1665
1592
Art. 1666
1593
Art. 1667
1594
Art. 1668
1595
Art. 1949

400
extraordinary and unforeseen fortuitous events, save always when
there is a specific stipulation to the contrary.

Extraordinary fortuitous events are understood to be: fire, war,

pestilence, unusual flood, locusts, earthquake, or others which are
uncommon, and which the contracting parties could not have
reasonably foreseen.1596

Neither does the lessee have any right to a reduction of the rent
if the fruits are lost after they have been separated from their stalk,
root or trunk.1597

The lease of a piece of rural land, when its duration has not
been fixed, is understood to have been for all the time necessary for
the gathering of the fruits which the whole estate leased may yield in
one year, or which it may yield once, although two or more years have
to elapse for the purpose.1598

The outgoing lessee shall allow the incoming lessee or the lessor
the use of the premises and other means necessary for the
preparatory labor for the following year; and, reciprocally, the
incoming lessee or the lessor is under obligation to permit the
outgoing lessee to do whatever may be necessary for the gathering or
harvesting and utilization of the fruits, all in accordance with the
custom of the place.1599

Land tenancy on shares shall be governed by special laws, the

stipulations of the parties, the provisions on partnership and by the
customs of the place.1600

The tenant on shares cannot be ejected except in cases specified

by law.1601

VI. Household service

Household service shall always be reasonably compensated. Any

stipulation that household service is without compensation shall be
void. Such compensation shall be in addition to the house helper's
lodging, food, and medical attendance.1602

1596
Art. 1680
1597
Art. 1681
1598
Art. 1682
1599
Art. 1683
1600
Art. 1684
1601
Art. 1685
1602
Art. 1689

401
 The head of the family shall furnish, free of charge, to the house
helper, suitable and sanitary quarters as well as adequate food and
medical attendance.1603

If the house helper is under the age of eighteen years, the head
of the family shall give an opportunity to the house helper for at least
elementary education. The cost of such education shall be a part of
the house helper's compensation, unless there is a stipulation to the
contrary.1604

No contract for household service shall last for more than two
years. However, such contract may be renewed from year to year. 1605

The house helper's clothes shall be subject to stipulation.

However, any contract for household service shall be void if thereby
the house helper cannot afford to acquire suitable clothing.1606

The head of the family shall treat the house helper in a just and
humane manner. In no case shall physical violence be used upon the
house helper.1607

House helpers shall not be required to work more than ten

hours a day. Every house helper shall be allowed four days' vacation
each month, with pay.1608

In case of death of the house helper, the head of the family shall
bear the funeral expenses if the house helper has no relatives in the
place where the head of the family lives, with sufficient means
therefor.1609

If the period for household service is fixed neither the head of

the family nor the house helper may terminate the contract before the
expiration of the term, except for a just cause. If the house helper is
unjustly dismissed, he shall be paid the compensation already earned
plus that for fifteen days by way of indemnity. If the house helper
leaves without justifiable reason, he shall forfeit any salary due him
and unpaid, for not exceeding fifteen days.1610

1603
Art. 1690
1604
Art. 1691
1605
Art. 1692
1606
Art. 1693
1607
Art. 1694
1608
Art. 1695
1609
Art. 1696
1610
Art. 1697

402
 If the duration of the household service is not determined either
by stipulation or by the nature of the service, the head of the family or
the house helper may give notice to put an end to the service relation,
according to the following rules:

(1) If the compensation is paid by the day, notice may be given on any
day that the service shall end at the close of the following day;

(2) If the compensation is paid by the week, notice may be given, at

the latest on the first business day of the week, that the service shall
be terminated at the end of the seventh day from the beginning of the
week;

(3) If the compensation is paid by the month, notice may be given, at

the latest, on the fifth day of the month, that the service shall cease at
the end of the month.1611

Upon the extinguishment of the service relation, the house

helper may demand from the head of the family a written statement
on the nature and duration of the service and the efficiency and
conduct of the house helper.1612

VII. Contract of labor

A. Obligation in case of death/injury of laborers

Owners of enterprises and other employers are obliged to pay

compensation for the death of or injuries to their laborers, workmen,
mechanics or other employees, even though the event may have been
purely accidental or entirely due to a fortuitous cause, if the death or
personal injury arose out of and in the course of the employment. The
employer is also liable for compensation if the employee contracts any
illness or disease caused by such employment or as the result of the
nature of the employment. If the mishap was due to the employee's
own notorious negligence, or voluntary act, or drunkenness, the
employer shall not be liable for compensation. When the employee's
lack of due care contributed to his death or injury, the compensation
shall be equitably reduced. 1613

If the death or injury is due to the negligence of a fellow worker,

the latter and the employer shall be solidarily liable for compensation.
If a fellow worker's intentional or malicious act is the only cause of
the death or injury, the employer shall not be answerable, unless it
1611
Art. 1698
1612
Art. 1699
1613
Art. 1711

403
should be shown that the latter did not exercise due diligence in the
selection or supervision of the plaintiff's fellow worker.1614

VIII. Contract for piece of work

By the contract for a piece of work the contractor binds himself

to execute a piece of work for the employer, in consideration of a
certain price or compensation. The contractor may either employ only
his labor or skill, or also furnish the material.1615

If the contractor agrees to produce the work from material

furnished by him, he shall deliver the thing produced to the employer
and transfer dominion over the thing. This contract shall be governed
by the following articles as well as by the pertinent provisions on
warranty of title and against hidden defects and the payment of price
in a contract of sale.1616

The contract shall execute the work in such a manner that it has
the qualities agreed upon and has no defects which destroy or lessen
its value or fitness for its ordinary or stipulated use. Should the work
be not of such quality, the employer may require that the contractor
remove the defect or execute another work. If the contract fails or
refuses to comply with this obligation, the employer may have the
defect removed or another work executed, at the contractor's cost.1617

An agreement waiving or limiting the contractor's liability for

any defect in the work is void if the contractor acted fraudulently.1618

If the contractor bound himself to furnish the material, he shall

suffer the loss if the work should be destroyed before its delivery, save
when there has been delay in receiving it.1619

The contractor who has undertaken to put only his work or skill,
cannot claim any compensation if the work should be destroyed
before its delivery, unless there has been delay in receiving it, or if the
destruction was caused by the poor quality of the material, provided
this fact was communicated in due time to the owner. If the material is
lost through a fortuitous event, the contract is extinguished.1620

1614
Article 1712
1615
Art. 1713
1616
Art. 1714
1617
Art. 1715
1618
Art. 1716
1619
Art. 1717
1620
Art. 1718

404
 Acceptance of the work by the employer relieves the contractor
of liability for any defect in the work, unless:

(1) The defect is hidden and the employer is not, by his special
knowledge, expected to recognize the same; or

(2) The employer expressly reserves his rights against the contractor
by reason of the defect.1621

The price or compensation shall be paid at the time and place of

delivery of the work, unless there is a stipulation to the contrary. If the
work is to be delivered partially, the price or compensation for each
part having been fixed, the sum shall be paid at the time and place of
delivery, in the absence if stipulation.1622

If, in the execution of the work, an act of the employer is

required, and he incurs in delay or fails to perform the act, the
contractor is entitled to a reasonable compensation.

The amount of the compensation is computed, on the one hand,

by the duration of the delay and the amount of the compensation
stipulated, and on the other hand, by what the contractor has saved in
expenses by reason of the delay or is able to earn by a different
employment of his time and industry.1623

If the work cannot be completed on account of a defect in the

material furnished by the employer, or because of orders from the
employer, without any fault on the part of the contractor, the latter
has a right to an equitable part of the compensation proportionally to
the work done, and reimbursement for proper expenses made.1624

The engineer or architect who drew up the plans and

specifications for a building is liable for damages if within fifteen
years from the completion of the structure, the same should collapse
by reason of a defect in those plans and specifications, or due to the
defects in the ground. The contractor is likewise responsible for the
damages if the edifice falls, within the same period, on account of
defects in the construction or the use of materials of inferior quality
furnished by him, or due to any violation of the terms of the contract.
If the engineer or architect supervises the construction, he shall be
solidarily liable with the contractor.1625
1621
Art. 1719
1622
Art. 1720
1623
Art. 1721
1624
Art. 1722
1625
Art. 1723

405
 Acceptance of the building, after completion, does not imply
waiver of any of the cause of action by reason of any defect mentioned
in the preceding paragraph.

The action must be brought within ten years following the

collapse of the building.

The contractor who undertakes to build a structure or any other

work for a stipulated price, in conformity with plans and specifications
agreed upon with the land-owner, can neither withdraw from the
contract nor demand an increase in the price on account of the higher
cost of labor or materials, save when there has been a change in the
plans and specifications, provided:

(1) Such change has been authorized by the proprietor in writing; and

(2) The additional price to be paid to the contractor has been

determined in writing by both parties.1626

The owner may withdraw at will from the construction of the

work, although it may have been commenced, indemnifying the
contractor for all the latter's expenses, work, and the usefulness
which the owner may obtain therefrom, and damages.1627

When a piece of work has been entrusted to a person by reason

of his personal qualifications, the contract is rescinded upon his
death.

In this case the proprietor shall pay the heirs of the contractor
in proportion to the price agreed upon, the value of the part of the
work done, and of the materials prepared, provided the latter yield
him some benefit.

The same rule shall apply if the contractor cannot finish the
work due to circumstances beyond his control.1628

The contractor is responsible for the work done by persons

employed by him.1629

1626
Art. 1724
1627
Art. 1725
1628
Art. 1726
1629
Art. 1727

406
 The contractor is liable for all the claims of laborers and others
employed by him, and of third persons for death or physical injuries
during the construction.1630

Those who put their labor upon or furnish materials for a piece
of work undertaken by the contractor have an action against the
owner up to the amount owing from the latter to the contractor at the
time the claim is made. However, the following shall not prejudice the
laborers, employees and furnishers of materials:

(1) Payments made by the owner to the contractor before they are
due;

(2) Renunciation by the contractor of any amount due him from the
owner.

This article is subject to the provisions of special laws.1631

If it is agreed that the work shall be accomplished to the

satisfaction of the proprietor, it is understood that in case of
disagreement the question shall be subject to expert judgment.

If the work is subject to the approval of a third person, his

decision shall be final, except in case of fraud or manifest error. 1632

He who has executed work upon a movable has a right to retain

it by way of pledge until he is paid.1633

LAND TITLES AND DEEDS

I. Torrens System

A. Concept

A system for registration of land under which, upon the

landowners application, the court may, after appropriate proceedings,
direct the issuance of a certificate of title.

The Torrens system does not create or vest title. It only confirms
and records title already existing and vested. It does not protect a
usurper from the true owner. It cannot be a shield for the commission

1630
Art. 1728
1631
Art. 1729
1632
Art. 1730
1633
Art. 1731

407
of fraud. It does not permit one to enrich himself at the expense of
another1634

Background

In order to establish a system of registration by which title

recorded became absolute, indefeasible and imprescriptible, Act No.
496, otherwise known as the Land Registration Act, was passed and
took effect on February 1, 1903. Rights acquired under this system
are guaranteed by the government which provides an assurance fund
to answer for damages to be suffered by persons thru the operation of
this system.

This method is also known as the Torrens system of land

registration.1635 There are two (2) laws ancillary to Act No. 496. These
are the Cadastral Law of February 11, 1913 1636 and the Public Land
Law of December 1, 1936 1637 which have been subsequently amended
by later legislations.

Presidential Decree No. 1529 was issued to cope with the

growing need of updating the Land Registration Act, to codify the
various other laws relative to registration of real property and real
rights, and to further strengthen the Torrens system. Land
Registration Act No. 496 of February 1, 1903 has not been repealed or
abrogated but rather, all laws, decrees, orders, rules and regulations
or parts thereof, in conflict with any provisions of this decree are
hereby repealed or modified accordingly.1638
B. Certificate of Title

This is the true copy of the decree of registration or the

transcription thereof and like the decree shall also be signed by LRA
Administrator1639

It takes effect upon the date of entry thereof, and the land
covered thereby becomes registered land on that date.

II. Regalian Doctrine

A. Concept

1634
Angeles vs. Samia, 66 Phil. 444 (1938)
1635
Act 496 has been amended by P.D. 1529 which was enacted on June 11, 1978
1636
Act 2259
1637
Com. Act No. 141
1638
Sec. 20, P.D. No. 1529
1639
Sec. 39, ibid

408
 All lands of the public domain, waters, minerals, coal, petroleum
and other mineral oils, all forces of potential energy, fisheries, forests,
or timber, wildlife, flora and fauna, and natural resources belong to
the state. With the exception of agricultural lands, all other natural
resources shall not be alienated.1640

B. Effects

Under the Regalian doctrine, all lands of the public domain

belong to the State, which is the source of any asserted right to
ownership of land. All lands not otherwise appearing to be clearly
within private ownership are presumed to belong to the State.1641

C. Concept of native title, time immemorial possession

Native Title - refers to pre-conquest rights to lands and domains

which, as far back as memory reaches, have been held under a claim
of private ownership by ICCs/IPs, have never been public lands and
are thus indisputably presumed to have been held that way since
before the Spanish Conquest.1642

III. Citizenship Requirement

A. Individuals and corporations

Alienable lands of the public domain:

Only Filipino citizens may acquire not more than 12 hectares by

purchase, homestead or grant, or lease not more than 500 hectares.

Private corporations may lease not more than 1,000 hectares for
25 years renewable for another 25 years;

IV. Original Registration1643

1640
Sec. 2, Art. XII, 1987 Constitution
1641
Spouses Reyes et at. v. CA, 295 SCRA 296, September 10, 1998; Cacho v. CA, 269 SCRA 159, March
3,1997
1642
See R.A. 8371
1643
Takes place when the title to land is made of public record for the first time in the name of its lawful
owner. Under the Torrens system, it refers to the registration procedure from the filing of the application to
the issuance of the original certificate of title in pursuance of the decree of registration.
Kinds of Original Registration
1. Voluntary by filing with the proper court
a) Under P.D. No. 1529 (Property Registration Decree)
b) Under Sec. 48 of CA No. 141, Public Land Act
2. Involuntary cadastral proceedings
Compulsory registration initiated by the government, to adjudicate ownership of land

409
 A. Who may apply

1. Under PD 1529

a. Those who, by themselves or through their predecessors-in-

interest, have been in open, continuous, exclusive and notorious
possession and occupation of alienable and disposable lands of the
public domain under a bona fide claim of ownership since June 12,
1945, or earlier;

b. Those who have acquired ownership of private lands by

prescription under the provisions of existing laws;

c. Those who have acquired ownership of private lands or

abandoned river beds by right of accession or accretion; and

d. Those who have acquired ownership of land in any other

manner provided for by law.

Where the land is owned in common, all the co-owners shall file
the application jointly.

Where the land has been sold under pacto de retro, the vendor
a retro may file an application for the original registration of the land,
provided, however, that should the period for redemption expire
during the pendency of the registration proceedings and ownership
to the property consolidated in the vendee a retro, the latter shall be
substituted for the applicant and may continue the proceedings.

A trustee on behalf of the principal may apply for original

registration of any land held in trust by him, unless prohibited by the
instrument creating the trust.1644
2. Under CA 141

Involuntary on the part of the claimants but they are compelled to substantiate their claim or interest
through an answer
1644
Sec. 14
All these persons must be natural-born Filipino Citizens. However, by way of exception, juridical
persons may apply for registration of leased agricultural and disposable lands not exceeding 1,000 hectares
in area for a period of 25 years and renewable for not more than 25 years. (Sec. 3, Chapter XII, 1987
Constitution)
Notwithstanding the prohibition in the 1973 and 1987 Constitutions against private corporations
holding lands of the public domain except by lease, still a private corporation may institute confirmation
proceedings under Section 48(b) of Public Land Act if, at the time of institution of the registration
proceedings, the land was already private land. (Dir. of Lands vs. IAC and ACME Plywood, 146 SCRA
509)

410
 (a) Those who prior to the transfer of sovereignty from Spain to
the prior United States have applied for the purchase, composition or
other form of grant of lands of the public domain under the laws and
royal decrees then in force and have instituted and prosecuted the
proceedings in connection therewith, but have with or without default
upon their part, or for any other cause, not received title therefor, if
such applicants or grantees and their heirs have occupied and
cultivated said lands continuously since the filing of their applications.

(b) Those who by themselves or through their predecessors in

interest have been in open, continuous, exclusive, and notorious
possession and occupation of agricultural lands of the public domain,
under a bona fide claim of acquisition or ownership, for at least thirty
years immediately preceding the filing of the application for
confirmation of title except when prevented by war or force majeure.
These shall be conclusively presumed to have performed all the
conditions essential to a Government grant and shall be entitled to a
certificate of title under the provisions of this chapter.

(c) Members of the national cultural minorities who by themselves or

through their predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of lands of the
public domain suitable to agriculture, whether disposable or not,
under a bona fide claim of ownership for at least 30 years shall be
entitled to the rights granted in sub-section (b) hereof.

3. Under RA 8371

Individual and indigenous corporate claimants of ancestral lands

which are not within ancestral domains, may have their claims
officially established by filing applications for the identification and
delineation of their claims with the Ancestral Domains Office. An
individual or recognized head of a family or clan may file such
application in his behalf or in behalf of his family or clan,
respectively.1645

B. Registration process and requirements

Registration process

1. Survey of the land by the Bureau of Lands or a duly licensed

private surveyor;1646
1645
Sec. 53 (b)
1646
Must be drawn in a tracing cloth plan
Approved ONLY by the Director of Land Management (authority of LRA to approve such plan was
withdrawn by P.D. 239 dated July 9, 1983)

411
2. Filing of Application for Registration by the applicant;1647
3. Setting of date for initial hearing by the court;

4. Transmittal of Application and date of initial hearing together with

all documents or other evidences attached thereto by the Clerk of
Court to the Land Registration Authority;

5. Publication of Notice of Filing of Application and date and place of

hearing once in the Official Gazette and once in a newspaper of
general circulation in the Philippines;1648

6. Service of Notice upon contiguous owners, occupants and those

known to have interest in the property by the sheriff;

7. Filing of Answer or Opposition to Application by any person

whether named in the notice or not;

8. Hearing of the case by the court;1649

9. Promulgation of judgment by the court;

10. Issuance of decree or order by the court declaring the decision

final and instructing the Land Registration Authority to issue a
Decree of Confirmation and Registration;1650

11. Entry of Decree in the Land Registration Authority;1651

12. Sending of copy of Decree to the corresponding Register of Deeds;

and

13. Transcription of Decree in the registration book and issuance of

Owners Duplicate Original Certificate of Title of the applicant by
the Register of Deeds upon payment of the prescribed fees.

1647
Always at the RTC of the province, city or municipality where property is situated.
1648
it is at this point that the court acquires jurisdiction over the subject matter
this is done by the Administrator who acts as the clerk of court
1649
Republication or amendment of technical description of land is necessary when there is substantial
increase of the area of the land. If increase is merely minimal, no republication is needed. (Benin vs.
Tuason, 57 SCRA 531)
1650
it is not the court BUT the LRA which issues the decree of confirmation and registration
1 year after issuance of decree, it becomes incontrovertible and amendments of the same will not be
allowed except merely in case of clerical errors.
Decree of registration may be reviewed on the ground of fraud and must be filed within 1 year from
entry of the decree.
1651
This serves as the reckoning date to determine the 1-year period from which one can impugn the
validity of the registration.

412
 Requisites of an Application for Original Registration:

1) The application must be in writing, signed and sworn to by the

applicant or by someone duly authorized in his behalf; and if there is
more than one applicant, the application shall be signed and sworn to
by and in behalf of each. The full name, citizenship, status, residence
and post office address of the applicant must be stated therein.

2) The application must contain the description of the land; the

number of parcels and location threof; the nature of title thereto;
encumbrances, if any; occupants thereon; names and addresses of
adjoining owners, if known; assessed value of the property, and the
length of possession.

3) The application must be accompanied with a tracing cloth plan

approved by the Bureau of Lands together with two (2) blue print
copies of the same; three (3) copies of the technical description; three
(3) copies of the surveyors certificate; the certificate of the last
assessment of the property in quadruplicate or, if none, the affidavit of
its market value; and all muniments of title in the possession of
applicant or applicants.

C. Remedies

1. New Trial1652
2. Relief from Judgment1653
3. Appeal1654
4. Petition for Review1655
1652
Sec.1, Rule 37,Rules of Court
Grounds:
a. fraud, accident, mistake or excusable negligence which ordinary prudence could not have
guarded against
b. newly discovered evidence
c. award of excessive damages, or insufficiency of the evidence to justify the decision
1653
Nature: subsidiary remedy, i.e. may be availed only when the judgment has become final and a new trial
is not available
Grounds: when a judgment is entered against a party through fraud, accident, mistake, or excusable
negligence, such party may file a petition in the court that rendered such judgment praying that the said
judgment be set aside.
1654
Under P.D. 1529, judgments and orders in land registration cases are appealable to the Court of Appeals
or to the Supreme Court in the same manner as ordinary actions
Must be filed within 15 days from receipt of the judgment or final order appealed from.
1655
of a Decree
Any person may file a petition for review to set aside the decree of registration on the ground that he
was deprived of their opportunity to be heard in the original registration case not later than one (1) year
after the entry of the decree.
It is a petition for review of judgment when it is filed after rendition of the decision but before the
entry of the decree of registration. And it is a petition for review of the decree when it is filed within the

413
5. Action for Reconveyance1656
6. Recovery of Damages

D. Cadastral registration1657

A proceeding in rem, initiated by the filing of a petition for

registration by the government, not by the persons claiming
ownership of the land subject thereof, and the latter are, on the pain
of losing their claim thereto, in effect compelled to go to court to
make known their claim or interest therein, and to substantiate such
claim or interest

V. Subsequent Registration1658

A. Voluntary dealings.1659

one year period after such entry.

1656
An action seeking to transfer or reconvey the land from the registered owner to the rightful owner
May be filed even after the lapse of one year from entry of the decree of registration as long as the property
has not been transferred or conveyed to an innocent purchaser for value.
An action for reconveyance does not aim or purport to reopen the registration proceedings and set aside
the decree of registration but only to show that the person who secured the registration of the questioned
property is not the real owner thereof. The action, while respecting the decree as incontrovertible, seeks to
transfer or reconvey the land from the registered owner to the rightful owner. (Esconde vs Borlongay, 152
SCRA 603)
1657
Here, the government does not seek the registration of land in its name. The objective of the proceeding
is the adjudication of title to the lands or lots involved in said proceeding.
1658
Takes place when any deed affecting the land is made of public record after the date of its original
registration.; where incidental matters after original registration may be brought before the land registration
court by way of motion or petition filed by the registered owner or a party in interest.
1659
In voluntary sale of land, the registration of the instrument is the operative act that transmits or transfers
title.
Where there is nothing on the certificate of title to indicate any cloud or vice in the ownership of the
property, or any encumbrance thereon, the purchaser is not required to explore further than what the
Torrens title upon its face indicates in quest for any hidden defect or inchoate right that may subsequently
defeat his right thereto. (Fule vs. Legare. GR No. 17951)
The exception to the above rule is embodied in the case of Dela Merced vs. GSIS (365 SCRA 1) where
the court ruled that when the purchaser or mortgagee is a financing institution, the general rule that a
purchaser or mortgagee of the land is not required to look further than what appears on the face of the title
does not apply.
Well settled is the rule that all persons dealing with property covered by Torrens certificate of title are
not required to go beyond what appears on the face of the title. When there is nothing on the COT
indicating any cloud or vice in the ownership of the property, or any encumbrance thereon, the purchaser is
not required to explore further than what the Torrens Title upon its face indicates in quest for any hidden
defect or inchoate right that may subsequently defeat his right thereto. [Centeno vs CA, 139 SCRA 545,
555 (1985)]
Exceptions for applicability:
1) purchaser in bad faith [Egao vs. CA, 174 SCRA 484, 492 (1989)];
2) sufficiently strong indications to impel closer inquiry into the location, boundaries and condition of the
lot. (Francisco vs. CA 153 SCRA 330, 336, 337);

414
 Refer to deeds, instruments or documents which are results of
the free and voluntary acts of the parties thereto

B. Involuntary dealings1660

Refer to such writ order or process issued by a court of record

affecting registered land which by law should be registered to be
effective, and also to such instruments which are not the willful acts
of the registered owner and which may have been executed even
without his knowledge or against his consent.

VI. Non-Registrable Properties

The following lands are not registrable by any private person in

his name:

1. Those devoted to public land use such as public roads, plazas,

canals, streets, rivers, banks and shores;
2. Those devoted to public service such as towns, walls and
fortresses;
3. Public forests;
4. Mineral lands; and
5. Those reserved by the government for public or quasi-public
purposes.

3) where a person buys land not from the registered owner but from one whose right to the land has been
merely annotated on the COT. (Quiniano vs. CA 39 SCRA 221);
4) purchaser of land the certificate of title contains a notice of lis pendens;
5) purchaser with full knowledge of flaws and defects in the title.(Bernales vs. IAC 166 SCRA 519, 524;
Lu vs. Manipon, 381 SCRA 788)
1660
Involuntary dealings affecting registered land which must be registered:
a. attachments
b. sale on execution or for taxes or for any assessment
c. adverse claim
d. notice of lis pendens
Claim or interest is adverse when:
a. claimants right or interest in registered land is adverse to the registered owner;
b. such right arose subsequent to date of original registration;
c. no other provision is made in the Decree for the registration of such right or claim
(Sec. 70, 1st par., P.D. 1529)
An adverse claim is a notice to third persons that someone is claiming an interest on the property or has
a better right than the registered owner thereof, and that any transaction regarding the disputed land is
subject to the outcome of the dispute (Sajonas vs CA, [GR No. 102377, July 5, 1996)
Notice of lis pendens is intended to constructively advise, or warn all people who deal with the property
that they so deal with it at their own risk, and whatever rights they may acquire in the property in any
voluntary transaction are subject to the results of the action, and may well be inferior and subordinate to
those which may be finally determined and laid down therein. (Heirs of Maria Marasigan vs IAC. 152
SCRA 253).

415
 The Constitution provides that all natural resources, except
agricultural, commercial and industrial, residential and resettlement
lands are inalienable.1661 Public forests are non-alienable public lands.
Possession of public forests on the part of the claimant, however long,
cannot convert the same into private property1662

VII. Dealings with Unregistered Lands1663

The system of registration under the Spanish Mortgage Law is

hereby discontinued and all lands recorded under said system which
are not yet covered by Torrens title shall be considered as
unregistered lands.

Hereafter, all instruments affecting lands originally registered

under the Spanish Mortgage Law may be recorded under Section 113
of this Decree, until the land shall have been brought under the
operation of the Torrens system.

The books of registration for unregistered lands provided under

Section 194 of the Revised Administrative Code, as amended by Act
No. 3344, shall continue to remain in force; provided, that all
instruments dealing with unregistered lands shall henceforth be
registered under Section 113 of this Decree.1664

No deed, conveyance, mortgage, lease, or other voluntary

instrument affecting land not registered under the Torrens system
shall be valid, except as between the parties thereto, unless such
instrument shall have been recorded in the manner herein prescribed
in the office of the Register of Deeds for the province or city where
the land lies.

(a) The Register of Deeds for each province or city shall keep a
Primary Entry Book and a Registration Book. The Primary Entry Book
shall contain, among other particulars, the entry number, the names
of the parties, the nature of the document, the date, hour and minute
it was presented and received. The recording of the deed and other
instruments relating to unregistered lands shall be effected by any of
annotation on the space provided therefor in the Registration Book,
after the same shall have been entered in the Primary Entry Book.

(b) If, on the face of the instrument, it appears that it is sufficient in

law, the Register of Deeds shall forthwith record the instrument in the
1661
Art. XIV, Sec. 8, New Constitution
1662
Vano vs. Government of P.I., 41 Phil. 161 (1920)
1663
Sec. 3, P.D. 1529; also Sec. 113
1664
Section 3, P.D. 1529

416
manner provided herein. In case the Register of Deeds refuses its
administration to record, said official shall advise the party in interest
in writing of the ground or grounds for his refusal, and the latter may
appeal the matter to the Commissioner of Land Registration in
accordance with the provisions of Section 117 of this Decree. It shall
be understood that any recording made under this section shall be
without prejudice to a third party with a better right.

(c) After recording on the Record Book, the Register of Deeds shall
endorse among other things, upon the original of the recorded
instruments, the file number and the date as well as the hour and
minute when the document was received for recording as shown in
the Primary Entry Book, returning to the registrant or person in
interest the duplicate of the instrument, with appropriate annotation,
certifying that he has recorded the instrument after reserving one
copy thereof to be furnished the provincial or city assessor as
required by existing law.

(d) Tax sale, attachment and levy, notice of lis pendens, adverse claim
and other instruments in the nature of involuntary dealings with
respect to unregistered lands, if made in the form sufficient in law,
shall likewise be admissible to record under this section.

(e) For the services to be rendered by the Register of Deeds under

this section, he shall collect the same amount of fees prescribed for
similar services for the registration of deeds or instruments
concerning registered lands.1665

TORTS AND DAMAGES

BOOK I TORTS1666

I. Principles

A. Abuse of Right

Every person must, in the exercise of his rights and in the

performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith. 1667
1665
Sec. 113, Ibid
1666
An unlawful violation of private right, not created by contract, and which gives rise to an action for
damages.
It is an act or omission producing an injury to another, without any previous existing lawful relation of
which the said act or omission may be said to be a natural outgrowth or incident.
1667
Art. 19
Contains a mere declaration of principles. The declaration is implemented by Art. 20 (Globe Mackay
vs. CA)

417
 Elements:

1. There is a legal right or duty

2. Which is exercised in bad faith;
3. For the sole intent of prejudicing or injuring another.

B. Unjust Enrichment1668

Every person who through an act of performance by another, or

any other means, acquires or comes into possession of something at
the expense of the latter without just or legal ground, shall return the
same to him.1669

If something is received when there is no right to demand it,

and it was unduly delivered through mistake, the obligation to return
it arises.1670

Certain lawful, voluntary and unilateral acts give rise to the

juridical relation of quasi-contract to the end that no one shall be
unjustly enriched or benefited at the expense of another.1671

C. Liability without Fault

Even when an act or event causing damage to another's

property was not due to the fault or negligence of the defendant, the
latter shall be liable for indemnity if through the act or event he was
benefited.1672

D. Acts Contrary to Law.

Sets certain standards which must be observed not only in the exercised of ones rights but also in the
performance of ones duties. These standards are:
1. To act with justice
2. To give everyone his due; and
3. Observe honesty and good faith
There is no hard and fast rule to determine whether or not the principle may be invoked.
1668
Elements of Unjust Enrichment:
1. There must be enrichment on the part of the defendant.
2. There is a concomitant injury to the plaintiff.
3. There is no just cause or legal ground for the enrichment
1669
Art. 22
1670
Art. 2154
1671
Art. 2142
1672
Art.23

418
 Every person who, contrary to law, wilfully or negligently causes
damage to another, shall indemnify the latter for the same.1673

E. Acts Contrary to Morals

Any person who wilfully causes loss or injury to another in

manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damage.1674

II. Classification of Torts

A. According to manner of commission:

Intentional Torts - Include conduct where the actor desires to

cause the consequences of his act or believes that the consequences
are substantially certain to result from it.1675

Negligent Torts - involve voluntary acts or omissions which

result in injury to others without intending to cause the same or
because the actor fails to exercise due care in performing such acts or
omissions.

Strict Liability when the person is made liable independent of

fault or negligence upon submission of proof of certain facts specified
by law.1676

B. According to scope: general or specific

III. The Tortfeasor

A. The Direct Tortfeasor

1673
Art. 20
Even if the particular provision of law does not expressly provide for indemnification in case of
violation, so long as there is a violation of law and damage resulting therefrom, there is liability for
damages under this article.
1674
Art. 21
There is an act which may be legal but whch may be contrary to morals, good customs, public order or
public policy (Albeson vs. CA)
1675
They are found in Chapter 2 of the Preliminary Title of the NCC entitled Human Relations. Although
this chapter covers negligent acts, the torts mentioned herein are mostly intentional in nature or torts
involving malice or bad faith.
1676
Strict liability tort can be committed even if reasonable care was exercised and regardless of the state of
mind of the actor at that time.

419
 1. Natural Persons

Refer to human beings.

2. Juridical Persons

(i) The State and its political subdivisions;

(ii) Other corporations, institutions and entities for public

interest or purpose, created by law; their personality begins as soon
as they have been constituted according to law;

(iii) Corporations, partnerships and associations for private

interest or purpose to which the law grants a juridical personality,
separate and distinct from that of each shareholder, partner or
member.1677

Juridical persons may acquire and possess property of all kinds,

as well as incur obligations and bring civil or criminal actions, in
conformity with the laws and regulations of their organization.1678

B. Persons Made Responsible for Others

1. In General

a. Quasi-delicts under Article 2180, how

interpreted

The obligation imposed by article 2176 is demandable not only

for one's own acts or omissions, but also for those of persons for
whom one is responsible.

The father and, in case of his death or incapacity, the mother,

are responsible for the damages caused by the minor children who
live in their company.1679

Guardians are liable for damages caused by the minors or

incapacitated persons who are under their authority and live in their

1677
Art. 44
1678
Art. 46
1679
This has already been modified by Art. 221 of the Family Code to the extent that the alternative
qualification of the liability of the father and the mother has been removed.
Art. 221. Parents and other persons exercising parental authority shall be civilly liable for the injuries
and damages caused by the acts or omissions of their unemancipated children living in their company and
under their parental authority subject to the appropriate defenses provided by law.

420
company.

The owners and managers of an establishment or enterprise are

likewise responsible for damages caused by their employees in the
service of the branches in which the latter are employed or on the
occasion of their functions.

Employers shall be liable for the damages caused by their

employees and household helpers acting within the scope of their
assigned tasks, even though the former are not engaged in any
business or industry.1680

The State is responsible in like manner when it acts through a

special agent; but not when the damage has been caused by the
official to whom the task done properly pertains, in which case what is
provided in article 2176 shall be applicable.1681

Lastly, teachers or heads of establishments of arts and trades

shall be liable for damages caused by their pupils and students or
apprentices, so long as they remain in their custody.

The responsibility treated of in this article shall cease when the

persons herein mentioned prove that they observed all the diligence
of a good father of a family to prevent damage.1682
Family Code
1680
Liability of the employer can be established by proving the existence of an employer- he injury while
performing
1681
Public officers who are guilty of tortuous conduct are personally liable for their actions.
1682
Statutory basis:
if student is minor Art. 219, FC
if student is no longer a minor Art. 2180, Civil Code
Applies also to teachers of academic institutions.
Liability attaches to the teacher-in-charge.
The school itself is now solidarily liable with the teacher-in-charge.
The liability extends to acts committed even outside the school so long as it is an official activity of the
school.
Whenever the school or teacher is being made liable, the parents and those exercising substitute
parental authority are not free from liability because Art. 219 of the Family Code expressly provides that
they are subsidiarily liable.
Art. 2180 makes teachers and heads liable for acts of students and apprentices whether the latter are
minors or not.
General rule: The teacher-in-charge is liable for the acts of his students. The school and administrators
are not liable.
Exception: It is only the head of the school, not the teacher who is held liable where the injury is caused
in a school of arts and trade.
The liability of the teacher subsists whether the school is academic or non- academic.
Liability is imposed only if the pupil is already in the custody of the teacher or head. The student is in
the custody of the school authorities as longs as he is under the control and influence of the school and
within its premises whether the semester had not yet begun or has already ended.
The victim of negligence is likewise required to exercise due care in avoiding injury to himself.

421
 The school, its administrators and teachers, or the individual,
entity or institution engaged in child are shall have special parental
authority and responsibility over the minor child while under their
supervision, instruction or custody.

Authority and responsibility shall apply to all authorized

activities whether inside or outside the premises of the school, entity
or institution.1683

Those given the authority and responsibility under the

preceding Article shall be principally and solidarily liable for damages
caused by the acts or omissions of the unemancipated minor. The
parents, judicial guardians or the persons exercising substitute
parental authority over said minor shall be subsidiarily liable.

The respective liabilities of those referred to in the preceding

paragraph shall not apply if it is proved that they exercised the proper
diligence required under the particular circumstances.

All other cases not covered by this and the preceding articles
shall be governed by the provisions of the Civil Code on quasi-
delicts.1684

(1)Elements; definition

Quasi-delict

Whoever by act or omission causes damage to another, there

being fault or negligence is obliged to pay for the damage done.1685

1683
Art. 218
1684
Art. 219
1685
Article 2176
Difference between Articles 218 & 2180
Art 218
School, admin, teachers engaged in child care are made expressly liable
School, admin, teachers is solidary and parents are made subsidiary liable
Students involved must be minor
Art 2180
Teachers, head of establishment in Arts and trades are made expressly liable
No such express solidary nor subsidiary liability is stated
Students involved not necessarily minor

422
 Elements:

(a) fault or negligence of the defendant, or some other person

for whose acts he must respond;
(b) damages suffered by the plaintiff; and
(c) the connection of cause and effect between the fault or
negligence of the defendant and the damages incurred by the
plaintiff.1686

(2)Distinguished from culpa

contractual and culpa criminal

Culpa criminal:

1. Crimes affected the public interest.

2. Penal law punishes/ corrects the criminal act.
3. Only acts covered by Penal Law are punished 1687
4. Guilt proven beyond reasonable doubt.
5. Reservation to file separate civil action. No reservation, civil action
is impliedly instituted in the criminal action.
6. Employers liability is subsidiary

Culpa Aquiliana:

1. Only private concern.

2. Repairs the damage by indemnification.
3. Covers all acts that are faulty or negligent.
4. Preponderance of evidence.
5. No reservation its independent from crime.
6. Employers liability is solidary1688

Culpa Contractual

(i) Pre-existing obligation between the parties

(ii) Fault or negligence is incidental to the performance of the
obligation
(iii) Defense of having exercised diligence of a good father of a family
is not available, just like in criminal action. Applied doctrine of
Respondent Superior, or Master and Servant Rule

Culpa Contractual Culpa Aquiliana

1686
Philippine Bank of Commerce v. CA, 336 Phil. 667, 675 (1997)
1687
Barredo vs Garcia, 73 Phil 607; J. Bocobo, 1940
1688
Fabre Jr. vs CA, 259 SCRA 426

423
The foundation of It is a separate
the liability of the source of obligation
defendant independent of
contract
is the contract
In breach of contract In quasi-delict the
committed through presumptive
the negligence of responsibility for the
employee, the negligence of his
employer cannot servants can be
Culpa Aquiliana Crime
erase his primary and rebutted by proof of
Only involves private Affect the public
direct liability by the exercise of due
concern interest
invoking exercise of care in their selection
diligence of a good and supervision. The Civil Code by The Revised Penal
father of a family in means of indem- Code punishes or
the selection and nification merely corrects criminal act
supervision of the repairs the damage
employee. Includes all acts in Punished only if there
which any kind of is a penal law clearly
fault or negligence covering them
intervenes
Liability of the
employer of the
Liability is direct and actor-employee is
primary in quasi- subsidiary in crimes
delict

b. Indirect liability for intentional acts

A person who himself is not guilty of negligence is made liable

for conduct of another.1689

c. Presumption of negligence on persons

indirectly responsible

In motor vehicle mishap , the owner is solidarily liable with his

driver, if the former, who was in the vehicle, could have by the use of
due diligence, prevented the misfortune. It is disputably presumed
that a driver was negligent, if he had been found guilty of reckless
driving or violating traffic regulations at least twice within the next
preceding two months.

If the owner was not in the motor vehicle, the provisions of

Article 2180 are applicable.1690

1689
Vicarious liability
1690
Art. 2184

424
 Unless there is proof to the contrary, it is presumed that a
person driving a motor vehicle has been negligent if at the time of the
mishap, he was violating any traffic regulation.1691

There is prima facie presumption of negligence on the part of

the defendant if the death or injury results from his possession of
dangerous weapons or substances, such as firearms and poison,
except when the possession or use thereof is indispensable in his
occupation or business.1692

In case of death of or injuries to passengers, common carriers

are presumed to have been at fault or to have acted negligently,
unless they prove that they observed extraordinary diligence as
prescribed in 1733 and 1755.1693

The proprietor of a building or structure is responsible for the

damages resulting from its total or partial collapse, if it should be due
to the lack of necessary repairs.1694

The head of a family that lives in a building or a part thereof, is

responsible for damages caused by things thrown or falling from the
same.1695

The engineer or architect who drew up the plans and

specifications for a building is liable for damages if within fifteen
years from the completion of the structure, the same should collapse
by reason of a defect in those plans and specifications, or due to
the defects in the ground. The contractor is likewise responsible for
the damages if the edifice falls, within the same period, on account of
defects in the construction or the use of materials of inferior quality
furnished by him, or due to any violation of the terms of the contract.
If the engineer or architect supervises the construction, he shall be
solidarily liable with the contractor.

Acceptance of the building, after completion, does not imply

waiver of any of the causes of action by reason of any defect
mentioned in the preceding paragraph.

The action must be brought within ten years following the

collapse of the building.1696
1691
Art. 2185
1692
Art. 2188
1693
Art. 1756; see reference for Arts. 1733 & 1755
1694
Art. 2190
1695
Art. 2193
1696
Art. 1723

425
 d. Nature of liability; joint or solidary?

The responsibility of two or more persons who are liable for

quasi-delict is solidary.1697

2. In Particular1698

a. Parents1699

For damage caused by:

a) minor children
b) living in their company1700

b. Guardian

For damage caused by

a. minors or incapacitated persons
b. under their authority
1697
Art. 2194
1698
Art. 2180
1699
Father and Mother shall jointly exercise parental authority over common children. In case of
disagreement, father's decision shall prevail (Art. 211)
Persons liable for the act of minors other
than parents.
a. Those exercising substitute parental authority
b. Surviving grandparents
c. Oldest sibling, over 21 years old unless unfit
or unqualified
d. Childs actual custodian, over 21 years old
unless unfit or disqualified
1700
The basis of liability for the acts or omissions of their minor children is the parental authority that they
exercise over them, except for children 18 to 21.
The same foreseability test of negligence should apply to parents when they are sought to be held liable
under Art. 2180, NCC
The liability is not limited to parents, the same is also imposed on those exercising substitute and special
parental authority, i.e., guardian.
The liability is present only both under Art 2180 of the NCC and Art 221 of the Family Code if the child
is living in his parents company.
Parental authority is not the sole basis of liability. A teacher in charge is still liable for the acts of their
students even if the minor student reaches the age of majority.
The parents or guardians can still be held liable even if the minor is already emancipated provided that
he is below 21 years of age.
Parents and other persons exercising parental authority can escape liability by proving that they observed
all the diligence of a good father of a family to prevent damages. (Art. 2180)
The burden of proof rests on the parents and persons exercising parental authority.

426
 c. living in their company

c. Owners and Managers of

Establishments and Enterprises

For damage caused by:

a) their employees
b) in the service of the branches in which they are employed, or
c) on the occasion of their functions

d. Employers1701

For damages caused by:

a) employees and household helpers

b) acting within the scope of their assigned tasks
c) even if the employer is not engaged in any business or
industry1702

(1) Meaning of employers

Includes any person acting in the interest of an employer,

directly or indirectly, but shall not include or any labor organization
(otherwise , than when acting as an employer) or any one acting in the
capacity of officer or agent of such labor organization.

(2) Requisites

(a) Employee chosen by

employer or through another

Employees are bound to exercise due care in the performance

of their functions for the employers; absence such due care, the
employee may be held liable.

(b) Services rendered in

accordance with orders

1701
Defenses available to employers:
a. exercise of due diligence ins election and
supervision of employees
b. act/omission was made outside working hours and in violation of company's rules and regulations
1702
unlike in RPC subsidiary liability of employer attaches in case of insolvency of employer for as long
as the employer is engaged in business/industry

427
 which employer has
authority to give

Person for whom the services are to be performed controls not

just the result but also the means and manner to achieve such end or
result.

(c) Illicit act of employee was

on the occasion or by reason
of the functions entrusted to
him

The vicarious liability of the employer attaches only when the

tortious conduct of the employee relates to, or is in the course of his
employment

(d) Presumption of
negligence

Presumption of negligence of the employer is only juris

tantum and not juris et de jure.

For the presumption of negligence to operate, the negligence

of the employee must first be established

(3) Employer need not be engaged

in business or industry

As long as their employees and household helpers acted within

the scope of their assigned task

(4) Defense of diligence in

selection and supervision

It is a defense that the employer exercised proper diligence in

the selection and supervision of negligent employee

(5) Nature of employers liability

The employer's liability is direct and primary.

e. State

For damage caused by:

428
 a) a special agent1703
b) not when the damage has been caused by the official to whom
the task done properly pertains1704

Public officers who are guilty of tortuous conduct are personally

liable for their actions.

f. Teachers and heads of establishments

of arts and trades

For damage caused by:

a) pupils and students or apprentices

b) in their custody

C. Joint Tortfeasors

The responsibility of two or more persons who are liable for

quasi-delict is solidary.1705

IV. Act of Omission and Its Modalities

A. Concept of Act

It is an act or omission producing an injury to another, without

any previous existing lawful relation of which the said act or omission
may be said to be a natural outgrowth or incident. 1706

1703
Two Kinds:
1. Public officials with a particular assigned tasks but is specially commissioned to do such task foreign to
his usual assigned governmental function.
2. Private person not a public official, commissioned to perform non-governmental function. A
government commissioning a special person for a special task is acting thru a special agent within the
meaning of Art. 2180.
1704
in which case Art. 2176 is applicable
1705
Art. 2194
All the persons who command, instigate, promote, encourage, advice, countenance, cooperate in, aid, or
abet the commission of a tort, or who approve of it after it is done, if done for their benefit; they are each
liable as a principal, to the same extent and in the same manner as if they have performed the wrongful act
themselves.
1706
An unborn child is NOT entitled to damages. But the bereaved parents may be entitled to damages, on
damages inflicted directly upon them. (Geluz vs. CA, 2 SCRA 802)
Defendants in tort cases can either be natural or artificial being. Corporations are civilly liable in the
same manner as natural persons.
Any person who has been injured by reason of a tortious conduct can sue the tortfeasor.
The primary purpose of a tort action is to provide compensation to a person who was injured by the
tortious conduct of the defendant.
Preventive remedy is available in some cases.

429
V. Proximate Cause

A. Concept

1. Definition

That cause which in natural and continuous sequence, unbroken

by any efficient intervening cause, produces the injury, without which
the result would not have occurred.1707

2. Test1708

a. Cause-in-fact Test

It is necessary that there be proof that defendant's conduct is

a factor in causing plaintiff's damage.

b. Policy Test

In determining the proximate cause of the injury, it is first

necessary to determine if the defendants negligence was the cause-
in-fact of the damage to the plaintiff.1709

If the defendants negligence was not the cause-in-fact, the

inquiry stops.

If it is, the inquiry shifts to the question of limit of the

defendants liability.1710

3. Distinguished from Immediate Cause

An immediate cause is the last event in a chain of events though

not necessarily the proximate cause of what follows.
1707
Primary cause remains the proximate cause even if there is an intervening cause which merely
cooperated with the primary cause and which did not break the chain of causation.
1708
Tests applied in the Philippines:
New Civil Code has a chapter on Damages which specifies the kind of damage for which the defendant
may be held liable and the extent of damage to be awarded to the plaintiff.
Cause-in-fact Tests:
1. But-for test
2. Substantial Factor test
3. NESS test
Policy test: The directness approach is being applied in this jurisdiction.
The definition of proximate cause which includes the element of foresight is not consistent with the
express provision of the Article 2202 of the New Civil Code; a person may be held liable whether the
damage to the plaintiff may be unforeseen.
1709
Cause-in-fact test
1710
Policy Test

430
 4. Distinguished from Intervening Cause

An intervening cause is one which comes into active operation

in producing the result after the actors negligent act or omission has
occurred.

The defendant ordinarily will not be relieved of liability by an

intervening cause which could reasonably have been foreseen, nor by
one which is a normal incident of the risk created.

One which destroys the causal connection between the

negligent act and the injury and thereby negatives liability.1711

5. Distinguished from Remote and Concurrent

Remote Cause

That cause which some independent force merely took

advantage of to accomplish something not the natural effect thereof.

Concurrent Causes

The actor is liable even if the active and substantially

simultaneous operation of the effects of a third persons innocent,
tortious or criminal act is also a substantial factor in bringing about
the harm so long as the actors negligent conduct actively and
continuously operate to bring about harm to another.1712

Where several causes producing the injury are concurrent and

each is an efficient cause without which the injury would not have
happened, the injury may be attributed to all or any of the causes and
recovery may be had against any or all of the responsible persons.

B. Cause in Fact

1. But For

The defendants conduct is the cause-in-fact if damage would

not have resulted had there been no negligence on the part of the
defendant. Conversely, defendants negligent conduct is not the cause
1711
Example: The medical findings, show that the infection of the wound by tetanus was an efficient
intervening cause later or between the time Javier was wounded to the time of his death. (People vs. Rellin
77 Phil 1038)
1712
Africa vs. Caltex

431
in fact of the plaintiffs damage if the accident could not have been
avoided in the absence thereof.

2. Substantial Factor Test

The conduct is the cause-in-fact of the damage if it was a

substantial factor in producing the injuries.

In order to be a substantial factor in producing the harm, the

causes set in motion by the defendant must continue until the moment
of the damage or at least down the setting in motion of the final active
injurious force which immediately produced or preceded the
damage.1713

3. Concurrent Causes

The actor is liable even if the active and substantially

simultaneous operation of the effects of a third persons innocent,
tortious or criminal act is also a substantial factor in bringing about
the harm so long as the actors negligent conduct actively and
continuously operate to bring about harm to another.1714
Where several causes producing the injury are concurrent and
each is an efficient cause without which the injury would not have
happened, the injury may be attributed to all or any of the causes and
recovery may be had against any or all of the responsible persons.

Where the concurrent or successive negligent acts or omissions

of two or more persons, although acting independently, are in
combination the direct and proximate cause of a single injury to a
third person, and it is impossible to determine what proportion each
contributed to the injury, either of them is responsible for the whole
injury, even though his act alone might not have caused the entire
injury; they become joint tort-feasors and are solidarily liable for the
resulting damage under Article 2194 of the Civil Code.

C. Legal Cause

1. Natural and Probable Consequences1715

Involves 2 things:1716

1713
If the defendants conduct was already determined to be the cause in fact of the plaintiffs damage under
the but for test, it is necessarily the cause in fact of the damage under the substantial factor test.
1714
Africa vs. Caltex
1715
Art. 2202, see Reference
1716
Reyes & Puno

432
 1. Causality
damage would not have resulted without the fault or
negligence of the defendant

2. Adequacy
the fault of the defendant would normally result in the
damage suffered by the obligee

2. Foreseeability

Involves the question of probability, that is, the existence of

some real likelihood of some damage and the likelihood is of such
appreciable weight reasonably to induce, action to avoid it.

Even if a particular injury was not foreseeable, the risk is still

foreseeable if possibility of injury is foreseeable.

D. Efficient Intervening Cause1717

One which destroys the causal connection between the

negligent act and the injury and thereby negatives liability.

There is no efficient intervening cause if the force created by

the negligent act or omission have either:

1. Remained active itself, or

2. Created another force which remained active until it
directly caused the result, or
3. Created a new active risk of being acted upon by the
active force that caused the result.1718
.
1717
A cause is not an intervening cause if it was already in operation at the time the negligent act is
committed.
Foreseeable intervening causes cannot be considered sufficient intervening causes.
The intervention of unforeseen and unexpected cause is not sufficient to relieve the wrongdoer from
consequences of negligence if such negligence directly and proximately cooperates with the independent
cause in the resulting injury.
1718
Example: The medical findings, show that the infection of the wound by tetanus was an efficient
intervening cause later or between the time Javier was wounded to the time of his death (People vs. Rellin
77 Phil 1038)

433
 E. Cause vs. Condition

It is no longer practicable to distinguish between cause and

condition.

The defendant may be liable even if only created conditions, if

the conditions resulted in harm to either person or property.1719

F. Last Clear Chance

Doctrine of Last Clear Chance or Discovered Peril1720

The negligence of the plaintiff does not preclude a recovery for

the negligence of the defendant where it appears that the defendant,
by exercising reasonable care and prudence, might have avoided
injurious consequences to the plaintiff notwithstanding the plaintiffs
negligence.

VI. Legal Injury

A. Concept

The violation or invasion of a legal right.1721

1719
Examples of Dangerous Conditions:
1. Those that are inherently dangerous
2. Those where a person places a thing which is not dangerous in itself in a dangerous position.
3. Those involving products and other things which are dangerous because they are defective.
1720
Elements:
a. plaintiff was in a position of danger by his own negligence
b. defendant knew of such position of the plaintiff
c. defendant had the least clear chance to avoid the accident by exercise of ordinary care but failed to
exercise such last clear chance and
d. accident occurred as proximate cause of such failure
Who may invoke: plaintiff
Inapplicable to:
1. joint tortfeasors
2. defendants concurrently negligent
as against 3rd persons
Cases when the doctrine was held inapplicable (PICCA)
1. If the plaintiff was not negligent.
2. The party charged is required to act instantaneously, and if the injury cannot be avoided by the
application of all the means at hand after the peril is or should have been discovered.
3. If defendants negligence is a concurrent cause and which was still in operation up to the time the injury
was inflicted.
4. Where the plaintiff, a passenger, filed an action against a carrier based on contract.
5. If the actor, though negligent, was not aware of the danger or risk brought about by the prior fraud or
negligent act.
1721
Blacks Law Dictionary

434
 An act causing damage, which act must be not only hurtful, but
wrongful. There must be damnum et injuria.

B. Elements of Right

1. a legal wrong inflicted by the defendant, and

2. damage resulting to the plaintiff therefrom

C. Violation of Right or Legal Injury

The loss, hurt or harm which results from the injury.

D. Classes of Injury

1. Injury to persons
2. Injury to property
3. Injury to relations

VII. Intentional Torts

A. General

1. Concept

Include conduct where the actor desires to cause the

consequences of his act or believes that the consequences are
substantially certain to result from it.

They are found in Chapter 2 of the Preliminary Title of the NCC

entitled Human Relations. Although this chapter covers negligent
acts, the torts mentioned herein are mostly intentional in nature or
torts involving malice or bad faith.

2. Classes1722

a. Interference with persons and

property

(1) Physical harms

a. Battery
b. Assault

(2) Non-physical harms

1722
Not so sure with this one

435
 a. conversion,
b. defamation,
c. false imprisonment,
d. fraud,
e. malicious prosecution,
f. invasion of privacy,
g. trespass, and
h. intentional infliction of emotional distress.

b. Interference with relations

The gist of the tort is an interference with one spouses mental

attitude toward the other and the conjugal kindness of marital
relations resulting in some actual conduct which materially affects it.

It extends to all cases of wrongful interference in the family

affairs of others whereby one spouse is induced to leave the other
spouse or conduct himself or herself that the comfort of married life is
destroyed.

If the interference is by the parents of the spouse, malice must

be proven.

B. Interference with rights to persons and property

1. Intentional Physical Harms

a. General

(1) Concept

It is an intentional infliction of a harmful or offensive bodily

contact which offends a reasonable persons sense of dignity or places
him in apprehension of immediate bodily harm or offensive act.

(2) Kinds

a. Physical Injuries like battery and assault

b. False imprisonment
c. Intentional mental stress

b. Violation of persons security, physical

injuries1723
1723
Art. 33, see Reference
Physical injuries which resulted because of negligence or imprudence is not included in this article;
they are already covered by Article 2176.

436
 (1) Battery1724

An intentional infliction of a harmful or offensive bodily contact;

bodily contact is offensive if it offends a reasonable persons sense of
dignity.

(2) Assault1725

Intentional conduct by one person directed at another which places

the latter in apprehension of immediate bodily harm or offensive act.

c. False Imprisonment1726

It is a restraint of a person in a bounded area without

justification or consent. It is unlawful obstruction or deprivation of
freedom from restraint of movement. 1727

d. Trespass to Land

(1) Concept

It involves the wrongful interference with one's possessory

rights in real property.

(2) Elements

1. intrude without authorization and without privilege under law

2. cause something to enter another's land.

e. Interference with Personal Property

1) Trespass to Chattels

The creditor possesses to himself the mortgaged property with

violence and against the will of the debtor.

2) Conversion

1724
Physical Injury
1725
Grave Threat
Includes bodily injuries causing death.
1726
Illegal detention
1727
It applies to private as well as governmental detention.

437
 An intentional exercise of dominion and control over a chattel
which so seriously interferes with the right of another to control it
that the actor may justly be required to pay the other the full value of
the chattel.1728

2. Intentional Non-Physical Harms

a. General

(1) Concept
(2) Kinds

b. Violation of Personal Dignity

Types:

1. Violation of the right of privacy

2. Interference with Family and other relations
3. Intriguing to Cause Alienation
4. Vexation and Humiliation1729

c. Infliction of emotional distress

An intentional conduct of defendant that results in extreme

emotional distress of plaintiff.1730

d. Violation of Privacy

(1) Appropriation

The unwarranted publication of a persons name or the

unauthorized use of his photograph or likeness for commercial
purposes is an invasion of privacy.

1728
Elements:
i. the plaintiff has clear legal ownership or right to possession of the property at the time of
the conversion;
ii. the defendant's conversion by a wrongful act or disposition of plaintiff's property rights;
iii. there are damages resulting from the conversion
1729
Sexual Harassment falls under this category.
1730
Elements:
1. Defendant acted intentionally or recklessly; and
2. Defendants conduct was extreme and outrageous; and
3. Defendants act is the cause of the distress; and
4. Plaintiff suffers severe emotional distress as a result of defendants conduct

438
 With respect to celebrities, however, the right of publicity is
often treated as a separate right that overlaps but is distinct from the
right of privacy. They treat their names and likeness as property and
they want to control and profit therefrom.

(2) Intrusion

It is not limited to cases where the defendant physically

trespassed into anothers property. It includes cases when the
defendant invades ones privacy by looking from outside.1731

GENERAL RULE:

There is no invasion of right to privacy when a journalist records

photographs or writes about something that occurs in public places.

EXCEPTION:

When the acts of the journalist should be to such extent that it

constitutes harassment or overzealous shadowing.

The freedom of the press has never been construed to accord

newsmen immunity from tort or crimes committed during the course
of the newsgathering.

There is no intrusion when an employer investigates an employee or

when the school investigates its student.

(3) Public disclosure of private

facts1732

Requisites:

1. Publicity is given to any private or purely personal

information about a person;

1731
Example: peeping-tom
1732
Public figure - A person, who by his accomplishments, fame or mode of living or by adopting a
profession or calling which gives the public a legitimate interest in his doings, his affairs and his character.
Public figures, most especially those holding responsible positions in government enjoy a more limited
right to privacy compared to ordinary individuals.
The interest sought to be protected is the right to be free from unwarranted publicity, from the wrongful
publicizing of the private affairs and activities of an individual which are outside the realm of legitimate
public concern.
The publication of facts derived from the records of official proceedings which are not otherwise declared
by law as confidential, cannot be considered a tortious conduct.

439
 2. Without the latters consent; and
3. Regardless of whether or not such publicity constitutes a
criminal offense, like libel or defamation, the circumstance
that the publication was made with intent of gain or for
commercial and business purposes invariably serves to
aggravate the violation of the right.

(4) False light in the public eye

The interest to be protected in this tort is the interest of the

individual in not being made to appear before the public in an
objectionable false light or false position.1733

Tort of Putting Defamation

Another in False
Light
1. As to gravamen of claim
The gravamen of The gravamen of
claim is not the claim is the reputa-
reputational harm tional harm
but rather the
embarrassment of a
person being made
into some-thing he is
not
2. As to publication
The statement should Publication is
be actually made in satisfied if a letter is
public sent to a third person
3. As to the defamatory character of the
statements
Defendant may still What is published
be held liable even if lowers the esteem in
the statements tells which the plaintiff is
something good held
about the plaintiff

e. Disturbance of Peace of Mind

Every person shall respect the dignity, personality, privacy

and peace of mind of his neighbors and other persons. The following
and similar acts, though they may not constitute a criminal offense,
shall produce a cause of action for damages, prevention and other
relief:

1733
Example: Defendant was held liable for damages when he published an unauthorized biography of a
famous baseball player exaggerating his feats on the baseball field, portraying him as a war hero. (Spahn
vs. Messner)
If the publicity given to the plaintiff is defamatory, hence an action for libel is also warranted; the action
for invasion of privacy will afford an alternative remedy.
May be committed by the media by distorting a news report.

440
(1) Prying into the privacy of another's residence;
(2) Meddling with or disturbing the private life or
family relations of another;
(3) Intriguing to cause another to be alienated from his friends;
(4) Vexing or humiliating another on account of his religious
beliefs, lowly station in life, place of birth, physical defect, or other
personal condition.1734

f. Malicious Prosecution

An action for damages brought by one against another whom a

criminal prosecution, civil suit, or other legal proceeding has been
instituted maliciously and without probable cause, after the
termination of such prosecution, suit or proceeding in favor of the
defendant therein.

The gist of the action is putting legal process in force regularly,

for mere purpose of vexation or injury.1735

g. Defamation1736
1734
Art. 26
1735
Drilon vs. CA (1997)
Elements:
1. The fact of the prosecution and the further fact that the defendant was himself the prosecutor; and that
the action was finally terminated with an acquittal;
2. That in bringing the action, the prosecutor acted without probable cause;
3. The prosecutor was actuated or impelled by legal malice.
Malice is the inexcusable intent to injure, oppress, vex, annoy or humiliate.
1736
Requisites for one to be liable for defamatory imputations:
a. It must be defamatory
b. It must be malicious
c. It must be given publicity
d. The victim must be identifiable
Test in determining the defamatory character of the imputation:
A charge is sufficient if the words are calculated to induce the hearers to suppose and understand that the
person/s against whom they were uttered were guilty of a certain offense, or are sufficient to impeach their
honesty, virtue, or reputation, or to hold the person/s up to public ridicule.
Dissemination to a number of persons is not required, communication to a single individual is sufficient
publication.
General rule: Every defamatory imputation is presumed to be malicious, even if it be true, if no good
intention or justifiable motive for making it is shown.
Exceptions:
1. A private communication made by any person to another in the performance of any legal, moral or
social duty; and
2. A fair and true report, made in good faith, without any comments or remarks, of any judicial,
legislative or other official proceedings which are not of confidential nature, or of any statement,
report, or speech delivered in said proceedings or of any other act performed by public officers in
the exercise of their functions.
It is not sufficient that the offended party recognized himself as the person attacked or defamed, it
must be shown that at least a third person could identify him as the object of the libelous publication.
In order to escape liability, the defendant may claim that the statements made are privileged.

441
 An invasion of the interest in reputation and good name, by
communication to others which tends to diminish the esteem in which
the plaintiff is held, or to excite adverse feelings or opinion against
him.1737

(1) Defenses

(a) Absence of elements

Absence of malice1738 signifies good faith on the part of the

defendant; good faith may even be based on mistake of law.

(b) Privilege

Two kinds:

1. Absolutely privilege Those which are not actionable even

if the author acted in bad faith.
2. Qualifiedly privilege not actionable unless found to have
been made without good intention or justifiable motive.

h. Fraud or Misrepresentation1739

Elements of deceit:

1.The defendant must have made false representation to the plaintiff

2. The representation must be one of fact
3. The defendant must know that the representation is false or be
reckless about whether it is false.
4. The defendant must have acted on the false representation
5. The defendant must have intended that the false representation
should be acted on
6. The plaintiff must have suffered damage as a result of acting on the
false representation

Half-truths are likewise included; it is actionable if the

withholding of that which is not stated makes that which is stated
absolutely false.

1737
Includes the crime of libel and slander.
RPC considers the statement defamatory if it is an imputation of circumstance tending to cause the
dishonor, discredit or contempt of natural or juridical person or to blacken the memory of one who is dead.
1738
Presence of probable cause signifies absence of malice.
1739
formerly deceit

442
 Misrepresentation upon a mere matter of opinion is not an
actionable deceit.

i. Seduction

Seduction, by itself, is an act contrary to morals, good

customs and public policy.

The defendant is liable if he employed deceit, enticement,

superior power or abuse of confidence in successfully having sexual
intercourse with another even if he satisfied his lust without
promising to marry the offended party.

It may not even matter that the plaintiff and the defendant
are of the same gender.

j. Unjust Dismissal

The right of the employer to dismiss an employee should not be

confused with the manner in which the right is exercised and the
effects flowing therefrom;

If the dismissal was done anti-socially and oppressively, the

employer should be deemed to have violated Article 1701 of the Civil
Code1740 and Article 211741 NCC.

An employer may be held liable for damages if the manner of

dismissing is contrary to morals good customs and public policy.1742

C. Interference with relations

1. General

a. Concept
b. Kinds

2. Family Relations

a. Alienation of affection

1740
which prohibits acts of oppression by either capital or labor against the other
1741
supra
1742
Example: False imputation of misdeed to justify dismissal or any similar manner of dismissal which is
done abusively.

443
 Consists of depriving one spouse of the affection, society,
companionship and comfort of the other

The gist is an interference with one spouses mental attitude

toward the other and the conjugal kindness of marital relations
resulting in some actual conduct which materially affects it.

b. Loss of consortium

The loss of conjugal fellowship and the impairment or

destruction of sexual life.

c. Criminal conversation (Adultery)

Adultery is committed by the married woman who lies with a

man not her husband, and by him who lies with her knowing that she
is married, although the marriage be afterwards declared void.

3. Social Relations

a. Meddling with or disturbing family

relations

Meddling with or disturbing the private life or family relations

of another" and "similar acts", "though they may not constitute a
criminal offense, shall produce a cause of action for damages,
prevention and other relief.1743

b. Intriguing to cause another to be

alienated from his friends1744

4. Economic Relations

a. Interference with contractual

relations

The existence of a contract is necessary and the breach must

occur because of the alleged act of interference; No action can be
maintained if the contract is void.1745

1743
See Art. 26
1744
ibid
1745
Malice is not essential.
Rule under Article 2201 and 2202 Civil Code

444
 b. Unfair competition

Unfair Competition in agricultural, commercial, or industrial

enterprises, or in labor, through the use of force, intimidation , deceit,
machination or any unjust or oppressive or highhanded method shall
give rise to a right of action by a person who thereby suffers
damage.1746

5. Political Relations

a. Violation of right to suffrage1747

b. Violation of other political rights

Any public officer 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;
(9) The right to be secure in one's person, house, papers, and
effects against unreasonable searches and seizures;
(10) The liberty of abode and of changing the same;
(11) The privacy of communication and correspondence;

1) If in bad faith: defendant is liable for all natural and probable consequences of his act or omission,
whether the same is foreseen or unforeseen.
2) If in good faith: defendant is liable only for consequences that can be foreseen
1746
Article 27
For a defendant to be liable, the plaintiff must show that the formers conduct was purely malicious and
served no legitimate purpose, or that any trade or competitive motive was absent.
Cases included:
a. passing off and disparagement of products
b. interference
c. misappropriation
d. monopolies and predatory pricing
1747
see b.

445
 (12) The right to become a member of associations or societies
for purposes not contrary to law;
(13) The right to take part in a peaceable assembly to petition
the Government for redress of grievances;
(14) The right to be free from involuntary servitude in any form;
(15) The right of the accused against excessive bail;
(16) The right of the accused to be heard by himself and
counsel, to be informed of the nature and cause of the
accusation against him, to have a speedy and public trial, to
meet the witnesses face to face, and to have compulsory process
to secure the attendance of witness in his behalf;
(17) Freedom from being compelled to be a witness against
one's self, or from being forced to confess guilt, or from being
induced by a promise of immunity or reward to make such
confession, except when the person confessing becomes a State
witness;
(18) Freedom from excessive fines, or cruel and unusual
punishment, unless the same is imposed or inflicted in
accordance with a statute which has not been judicially declared
unconstitutional; and
(19) Freedom of access to the courts.

In any of the cases referred to in this article, whether or not the

defendant's act or omission constitutes a criminal offense, the
aggrieved party has a right to commence an entirely separate and
distinct civil action for damages, and for other relief. Such civil action
shall proceed independently of any criminal prosecution (if the latter
be instituted), and may be proved by a preponderance of evidence.

The indemnity shall include moral damages. Exemplary

damages may also be adjudicated.

The responsibility herein set forth is not demandable from a

judge unless his act or omission constitutes a violation of the Penal
Code or other penal statute

6. Defenses

a. Absence of element

Defendant may not avail of any of the defenses if there is an

absence of element.

b. Privilege

1. Consent

446
 Plaintiff gives permission, express or implied, that what would
otherwise be tortious is instead privileged.

2. Self-defense and defense of

others

Reasonable force can be used where one reasonably believes

that such force is necessary to
protect oneself or a third party from immediate harm1748.

3. Necessity

Allows the defendant to interfere with the property interests of

an innocent party in order to avoid a greater injury.

4. Defense of property

An individual is privileged to use reasonable force to prevent a

tort against her real or personal property.
5. Authority of Law

Police, military, prison officials , regulatory inspectors, mental

health workers, etc. engaging in conduct that otherwise would be
tortuous.

c. Prescription

The following actions must be instituted within four years:

(1) Upon an injury to the rights of the plaintiff;

(2) Upon a quasi-delict;

However, when the action arises from or out of any act, activity,
or conduct of any public officer involving the exercise of powers or
authority arising from Martial Law including the arrest, detention
and/or trial of the plaintiff, the same must be brought within one (1)
year.1749

1748
threatened battery
1749
Art. 1146 (As amended by PD No. 1755, Dec. 24, 1980)
The four-year prescriptive period is reckoned from the date when the tortious act was committed.
But, according to the DISCOVERY RULE: if the injury is discovered after the four-year period, the
reckoning point
is the date of discovery and not the date of commission of the act

447
 d. Waiver

A waiver, to be valid and effective, must in the first place be

couched in clear and unequivocal terms which leave no doubt as to
the intention of a person to give up a right or benefit which legally
pertains to him. A waiver may not casually be attributed to a person
when the terms thereof do not explicitly and clearly evidence an
intent to abandon a right vested in such person.

For a waiver to be valid and effective, it must not be contrary to

law, morals, public policy or good customs.
believe this purported waiver is offensive to public policy because it
dilutes the degree of care required of common
carriers
e. Force majeure

GENERAL RULE:

It is a complete defense and a person is not liable if the cause of

the damage is a fortuitous event.

EXCEPTION:

It is merely a partial defense and the courts may mitigate the

damages if the loss would have resulted in any event.1750

Requisites of a fortuitous event, as a defense, are:

1. The event must be unforeseen , or if foreseen, inevitable ;

2. There must be no concurrent negligence on the part of the
offended party.

VIII. Negligence

A. Concept

Involve voluntary acts or omissions which result in injury to

others without intending to cause the same or because the actor fails
to exercise due care in performing such acts or omissions.

1750
Art. 2215(4)
No person shall be responsible for those events which cannot be foreseen, or which through foreseen
were inevitable.
Exception: assumption of risk

448
 The omission to do something which a reasonable man, guided
by those considerations which ordinarily regulate the conduct of
human affairs, would do, or the doing of something which a prudent
and reasonable man would not do.1751

B. Good Father of a Family or Reasonably Prudent Man

The only standard of conduct used in the Philippines1752

A reasonable man is deemed to have knowledge of the facts that

a man should be expected to know based on ordinary human
experience.

C. Standard of Care

1. NCC, Art. 1173

The fault or negligence of the obligor consists in the omission of

that diligence which is required by the nature of the obligation and
corresponds with the circumstances of the persons, of the time and of
the place. When negligence shows bad faith, the provisions of articles
1171 and 2201, paragraph 2, shall apply.

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.

2. Emergency Rule1753

One who suddenly finds himself in a place of danger, and is

required to act without time to consider the best means that may be
1751
Philippine Bank of Commerce v. CA, 336 Phil. 667, 676 (1997)
1752
Art. 1173
1753
Applicable only to situations that are sudden and unexpected such as to deprive actor of all opportunity
for deliberation
But action must still be judged by the standard of the ordinary prudent man
Absence of foreseeability
An individual will nevertheless be subject to liability if the emergency was brought about by his own
negligence (Valenzuela v. CA, 253 SCRA 303)

449
adopted to avoid the impending danger, is not guilty of negligence, if
he fails to adopt what subsequently and upon reflection may appear to
have been a better method, unless the emergency in which he finds
himself is brought about by his own negligence.

D. Unreasonable risk of Harm

The risk is unreasonable...if the risk is of such magnitude as to

outweigh what the law regards as the utility of the act...

E. Evidence

The quantum of proof required is preponderance of evidence.1754

F. Presumption of Negligence

1. Legal Provisions

In motor vehicle mishaps, the owner is presumed negligent if he

was in the vehicle and he could have used due diligence to prevent
the misfortune.

It is disputably presumed that a driver was negligent if he had

been found guilty of reckless driving or violating traffic regulations at
least twice for the next preceding two months.1755

The driver of a motor vehicle is presumed negligent if at the

time of the mishap, he was violating any traffic regulation.1756

Prima facie presumption of negligence of the defendant arises if

death or injury results from his possession of dangerous weapons or
substance except when such possession or use is indispensable to his
occupation or business.1757

Presumption of negligence of the common carrier arises in case

of loss, destruction or deterioration of the goods, or in case of death
or injury of passengers except upon proof of exercise of extraordinary
diligence.

1754
Rule 133 Revised Rules of Court
Exceptions:
When the rules or the law provides for cases when negligence is presumed.
A. Presumptions of Negligence
B. Res Ipsa Loquitur
1755
Art. 2184
1756
Art. 2185
1757
Art. 2188

450
 2. Res ipsa loquitur1758

The thing or transaction speaks for itself.

It is a rule of evidence peculiar to the law of negligence which

recognizes that prima facie negligence may be established in the
absence of direct proof, and furnishes a substitute for specific proof of
negligence.

G. Defenses

1. Complete

a. Absence of element

(1) Due diligence

Diligence required by law/contract/depends on circumstances of

persons, places, things

(2) Acts of public officers

In the lawful exercise of their functions

b. Accident or fortuitous event

It is a complete defense and a person is not liable if the cause of

the damage is a fortuitous event.

It is merely a partial defense and the courts may mitigate the

damages if the loss would have resulted in any event1759

c. Damnum absque injuria1760

1758
Requisites:
1. The accident was of a kind which ordinarily does not occur in the absence of someones negligence;
2. The instrumentality which caused the injury was under the exclusive control and management of the
person charged with negligence; and
3. The injury suffered must not have been due to any voluntary action or contribution on the part of the
person injured; absence of explanation by the defendant.
The doctrine is not applicable if there is direct proof of absence or presence of negligence. (S.D.
Martinez, et al vs. William Van Buskirk)
1759
Art. 2215(4)
A person may still be liable for a fortuitous event if such person made an assumption of risk
1760
Literal translation: Damage without injury
Consequences must be borne by the injured alone

451
 A principle that involves damage without injury, therefore no
liability is incurred; there is no legal injury.

d. Authority of law

By specific provision of law.

e. Assumption of risk1761

Volenti non fit injuria:

One is not legally injured if he has consented to the act

complained of or was willing that it should occur.

There is assumption of risk if the plaintiff in advance has

expressly waived his right to recover damages for the negligent act of
the defendant.1762

f. Last clear chance1763

g. Prescription

The following actions must be brought within ten years from the
time the right of action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;
(3) Upon a judgment1764

The following actions must be instituted within four years:

(1) Upon an injury to the rights of the plaintiff;

(2) Upon a quasi-delict;

However, when the action arises from or out of any act, activity,
or conduct of any public officer involving the exercise of powers or
1761
Doctrine of Assumption of Risk
Intentional exposure to a known danger.
One who voluntarily assumed the risk of an injury from a known danger cannot recover in an action for
negligence or an injury is incurred.
Plaintiffs acceptance of risk (by law/contract/nature of obligation) has erased defendants duty so that
his negligence is not a legal wrong.
Applies to all known danger.
1762
A person cannot contract away his right to recover damages resulting from negligence; the same is
contrary to public policy (Pleasantville Dev't Corp vs CA ,253 SCRA 10)
1763
supra
1764
Art. 1144

452
authority arising from Martial Law including the arrest, detention
and/or trial of the plaintiff, the same must be brought within one (1)
year.1765

The time for prescription for all kinds of actions, when there is
no special provision which ordains otherwise, shall be counted from
the day they may be brought.1766

h. Waiver

A person cannot contract away his right to recover damages

resulting from negligence. Such waiver is contrary to public policy
and cannot be allowed. However, the waiver contemplated by this
prohibition is the waiver of the right to recover before the negligent
act was committed.

If waiver was made after the cause of action accrued, the waiver
is valid and may be construed as a condonation of the obligation.

i. Double recovery

Responsibility for fault or negligence under the preceding

article is 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.1767

IX. Special Liability in Particular Activities

A. General

1. Concept.

B. Products Liability1768

1. Manufacturers or Processors

a. Elements

1765
Art. 1146
1766
Art. 1150
1767
Art. 2177
1768
law which governs the liability of manufacturers and sellers for damages resulting from defective
products
Based on fraud, warranty, negligence or strict liability

453
 Defects resulting from design, manufacture, construction,
assembly and erection, formulas and handling and making up,
presentation or packing of their products, as well as for the
insufficient or inadequate information on the use and hazards thereof

Requisites:

The plaintiff should allege and prove that:

1) The product was defective;
2) The product was manufactured by the defendant;
3) The defective product was the cause of his injury.

b. Consumer Act1769

Any Filipino or foreign manufacturer, producer, and any

importer, shall be liable for redress, independently of fault, for
damages caused to consumers by defects resulting from design,
manufacture, construction, assembly and erection, formulas and
handling and making up, presentation or packing of their products, as
well as for the insufficient or inadequate information on the use and
hazards thereof.

A product is defective when it does not offer the safety rightfully

expected of it, taking relevant circumstances into consideration,
including but not limited to:

a) presentation of product;
b) use and hazards reasonably expected of it;
c) the time it was put into circulation.

A product is not considered defective because another better

quality product has been placed in the market.

The manufacturer, builder, producer or importer shall not be

held liable when it evidences:
a) that it did not place the product on the market;
b) that although it did place the product on the market such product
has no defect;
c) that the consumer or a third party is solely at fault.1770

The tradesman/seller is likewise liable, pursuant to the

preceding article when;

1769
RA 7394
1770
Art. 97

454
a) it is not possible to identify the manufacturer, builder, producer or
importer.
b) the product is supplied, without clear identification of the
manufacturer, producer, builder or importer;
c) he does not adequately preserve perishable goods. The party
making payment to the damaged party may exercise the right to
recover a part of the whole of the payment made against the other
responsible parties, in accordance with their part or responsibility in
the cause of the damage effected.1771

The service supplier is liable for redress, independently of fault,

for damages caused to consumers by defects relating to the rendering
of the services, as well as for insufficient or inadequate information on
the fruition and hazards thereof.

The service is defective when it does not provide the safety the
consumer may rightfully expect of it, taking the relevant
circumstances into consideration, including but not limited to:

a) the manner in which it is provided;

b) the result of hazards which may reasonably be expected of it;
c) the time when it was provided.

A service is not considered defective because of the use or

introduction of new techniques.

The supplier of the services shall not be held liable when it is

proven:

a) that there is no defect in the service rendered;

b) that the consumer or third party is solely at fault.1772

The suppliers of durable or nondurable consumer products are

jointly liable for imperfections in quality that render the products unfit
or inadequate for consumption for which they are designed or
decrease their value, and for those resulting from inconsistency with
the information provided on the container, packaging, labels or
publicity messages/advertisement, with due regard to the variations
resulting from their nature, the consumer being able to demand
replacement to the imperfect parts.

If the imperfection is not corrected within thirty (30) days, the

consumer may alternatively demand at his option:

1771
Art. 98
1772
Art. 99

455
a) the replacement of the product by another of the same kind, in a
perfect state of use;
b) the immediate reimbursement of the amount paid, with monetary
updating, without prejudice to any losses and damages;
c) a proportionate price reduction.

The parties may agree to reduce or increase the term specified

in the immediately preceding paragraph; but such shall not be less
than seven (7) nor more than one hundred and eighty (180) days.

The consumer may make immediate use of the alternatives

under the second paragraph of this Article when by virtue of the
extent of the imperfection, the replacement of the imperfect parts
may jeopardize the product quality or characteristics, thus decreasing
its value.

If the consumer opts for the alternative under sub-paragraph (a)

of the second paragraph of this Article, and replacement of the
product is not possible, it may be replaced by another of a different
kind, mark or model: Provided, That any difference in price may result
thereof shall be supplemented or reimbursed by the party which
caused the damage, without prejudice to the provisions of the second,
third and fourth paragraphs of this Article.1773

Suppliers are jointly liable for imperfections in the quantity of

the product when, in due regard for variations inherent thereto, their
net content is less than that indicated on the container, packaging,
labeling or advertisement, the consumer having powers to demand,
alternatively, at his own option:

a) the proportionate price

b) the supplementing of weight or measure differential;
c) the replacement of the product by another of the same kind, mark
or model, without said imperfections;
d) the immediate reimbursement of the amount paid, with monetary
updating without prejudice to losses and damages if any.

The provisions of the fifth paragraph of Article 99 shall apply to

this Article.
The immediate supplier shall be liable if the instrument used for
weighing or measuring is not gauged in accordance with official
standards.1774

1773
Art. 100
1774
Art. 101

456
 The service supplier is liable for any quality imperfections that
render the services improper for consumption or decrease their value,
and for those resulting from inconsistency with the information
contained in the offer or advertisement, the consumer being entitled
to demand alternatively at his option:

a) the performance of the services, without any additional cost and

when applicable;
b) the immediate reimbursement of the amount paid, with monetary
updating without prejudice to losses and damages, if any;
c) a proportionate price reduction.

Reperformance of services may be entrusted to duly qualified

third parties, at the supplier's risk and cost.

Improper services are those which prove to be inadequate for

purposes reasonably expected of them and those that fail to meet the
provisions of this Act regulating service rendering.1775

When services are provided for the repair of any product, the
supplier shall be considered implicitly bound to use adequate, new,
original replacement parts, or those that maintain the manufacturer's
technical specifications unless, otherwise authorized, as regards to
the latter by the consumer.1776

The supplier's ignorance of the quality imperfections due to

inadequacy of the products and services does not exempt him from
any liability.1777

The legal guarantee of product or service adequacy does not

require an express instrument or contractual exoneration of the
supplier being forbidden.1778

The stipulation in a contract of a clause preventing, exonerating

or reducing the obligation to indemnify for damages effected, as
provided for in this and in the preceding Articles, is hereby
prohibited, if there is more than one person responsible for the cause
of the damage, they shall be jointly liable for the redress established
in the pertinent provisions of this Act. However, if the damage is
caused by a component or part incorporated in the product or service,

1775
Art. 102
1776
Art. 103
1777
Art. 104
1778
Art. 105

457
its manufacturer, builder or importer and the person who
incorporated the component or part are jointly liable.1779

Any person who shall violate any provision of this Chapter or its
implementing rules and regulations with respect to any consumer
product which is not food, cosmetic, or hazardous substance shall
upon conviction, be subject to a fine of not less than Five thousand
pesos (P5,000.00) and by imprisonment of not more than one (1) year
or both upon the discretion of the court.

In case of juridical persons, the penalty shall be imposed upon

its president, manager or head. If the offender is an alien, he shall,
after payment of fine and service of sentence, be deported without
further deportation proceedings.1780

C. Nuisance1781

Every successive owner or possessor of property who fails or

refuses to abate a nuisance in that property started by a former owner
or possessor is liable therefor in the same manner as the one who
created it.1782

The abatement of a nuisance does not preclude the right of any

person injured to recover damages for its past existence.1783

Lapse of time cannot legalize any nuisance, whether public or

private.1784

The remedies against a public nuisance are:

(1) A prosecution under the Penal Code or any local ordinance: or

(2) A civil action; or
(3) Abatement, without judicial proceedings.1785

The district health officer shall take care that one or all of the
remedies against a public nuisance are availed of. 1786

1779
Art. 106
1780
Art. 107
1781
For definition, see Art. 694, supra
1782
Art. 696
1783
Art. 697
1784
Art. 698
1785
Art. 699
1786
Art. 700

458
 If a civil action is brought by reason of the maintenance of a
public nuisance, such action shall be commenced by the city or
municipal mayor.1787

The district health officer shall determine whether or not

abatement, without judicial proceedings, is the best remedy against a
public nuisance.1788

A private person may file an action on account of a public

nuisance, if it is specially injurious to himself. 1789

Any private person may abate a public nuisance which is

specially injurious to him by removing, or if necessary, by destroying
the thing which constitutes the same, without committing a breach of
the peace, or doing unnecessary injury. But it is necessary:

(1) That demand be first made upon the owner or possessor of the
property to abate the nuisance;
(2) That such demand has been rejected;

(3) That the abatement be approved by the district health officer and
executed with the assistance of the local police; and

(4) That the value of the destruction does not exceed three thousand
pesos.1790

The remedies against a private nuisance are:

(1) A civil action; or

(2) Abatement, without judicial proceedings.1791

Any person injured by a private nuisance may abate it by

removing, or if necessary, by destroying the thing which constitutes
the nuisance, without committing a breach of the peace or doing
unnecessary injury. However, it is indispensable that the procedure for
extrajudicial abatement of a public nuisance by a private person be
followed.1792

A private person or a public official extrajudicially abating a

nuisance shall be liable for damages:
1787
Art. 701
1788
Art. 702
1789
Art. 703
1790
Art. 704
1791
Art. 705
1792
Art. 706

459
(1) If he causes unnecessary injury; or
(2) If an alleged nuisance is later declared by the courts to be not a
real nuisance.1793

1. Nuisance Per Se and Nuisance Per

Accidence

Per se nuisance at all times and under all circumstances

regardless of location and surrounding.

Per accidens nuisance by reason of circumstances, location, or

surroundings.

2. Public Nuisance and Private Nuisance

Public affects the community or a considerable number of persons.

Private affects only a person or a small number of persons.

3. Attractive Nuisance

Doctrine of Attractive Nuisance:

One who maintains on his premises dangerous instrumentalities

or appliances of a character likely to attract children in play and who
fails to exercise ordinary care to prevent children from playing
therewith or resorting thereto is liable to a child of tender years who
is injured thereby, even if the child is technically a trespasser in the
premises.

D. Violation of Constitutional Rights1794

1. Violation of Civil Liberties

Every person shall respect the dignity, personality, privacy and

peace of mind of his neighbors and other persons. The following and
similar acts, though they may not constitute a criminal offense, shall
produce a cause of action for damages, prevention and other relief:

(1) Prying into the privacy of another's residence;

(2) Meddling with or disturbing the private life or family relations of
another;
(3) Intriguing to cause another to be alienated from his friends;
1793
Art. 707
1794
It is not necessary that the defendant should have acted with malice/bad faith to be liable.

460
(4) Vexing or humiliating another on account of his religious beliefs,
lowly station in life, place of birth, physical defect, or other personal
condition.1795

E. Violation of Rights Committed by Public Officers

Any public officer 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;
(9) The right to be secure in one's person, house, papers, and effects
against unreasonable searches and seizures;
(10) The liberty of abode and of changing the same;
(11) The privacy of communication and correspondence;
(12) The right to become a member of associations or societies for
purposes not contrary to law;
(13) The right to take part in a peaceable assembly to petition the
Government for redress of grievances;
(14) The right to be a free from involuntary servitude in any form;
(15) The right of the accused against excessive bail;
(16) The right of the accused to be heard by himself and counsel, to
be informed of the nature and cause of the accusation against him, to
have a speedy and public trial, to meet the witnesses face to face, and
to have compulsory process to secure the attendance of witness in his
behalf;
(17) Freedom from being compelled to be a witness against one's self,
or from being forced to confess guilt, or from being induced by a
promise of immunity or reward to make such confession, except when
the person confessing becomes a State witness;
(18) Freedom from excessive fines, or cruel and unusual punishment,
unless the same is imposed or inflicted in accordance with a statute
which has not been judicially declared unconstitutional; and
(19) Freedom of access to the courts.
1795
Art. 26

461
 In any of the cases referred to in this article, whether or not the
defendant's act or omission constitutes a criminal offense, the
aggrieved party has a right to commence an entirely separate and
distinct civil action for damages, and for other relief. Such civil action
shall proceed independently of any criminal prosecution (if the latter
be instituted), and may be proved by a preponderance of evidence.

The indemnity shall include moral damages. Exemplary

damages may also be adjudicated.

The responsibility herein set forth is not demandable from a

judge unless his act or omission constitutes a violation of the Penal
Code or other penal statute.1796

F. Provinces, Cities and Municipalities

Provinces, cities and municipalities shall be liable for damages

for the death of, or injuries suffered by any person by reason of the
defective condition of roads, streets, bridges, public buildings and
other public works under their control and supervision. 1797

G. Owner of Motor Vehicle

In motor vehicle mishap, the owner is solidarily liable with his

driver, if the former, who was in the vehicle, could have by the use of
due diligence, prevented the misfortune. It is disputably presumed
that a driver was negligent, if he had been found guilty of reckless
driving or violating traffic regulations at least twice within the next
preceding two months.

If the owner was not in the motor vehicle, the provisions of

Article 2180 are applicable.1798

H. Proprietor of Building or Structure or Thing

The proprietor of a building or structure is responsible for the

damages resulting from its total or partial collapse, if it should be due
to the lack of necessary repairs.1799
1796
Art. 32
1797
Art. 2189
1798
Art. 2184
1799
Art. 2190
Third persons who suffered damages may proceed only against the engineer or architect or contractor if
the damage referred to in Articles 2190 and 2191should be a result of any defect in construction.
Nevertheless, actions for damages can still be maintained under Article 2176 for damages resulting
from proprietors failure to exercise due care in the maintenance of his building and that he used his

462
 Proprietors shall also be responsible for damages caused:

(1) By the explosion of machinery which has not been taken

cared of with due diligence, and the inflammation of explosive
substances which have not been kept in a safe and adequate place;

(2) By excessive smoke, which may be harmful to persons or

property;

(3) By the falling of trees situated at or near highways or lanes,

if not caused by force majeure;

(4) By emanations from tubes, canals, sewers or deposits of

infectious matter, constructed without precautions suitable to the
place.1800

If damages referred to in Articles 2190 and 2191 1801 should be

the result of any defect in the construction mentioned in Article
1723,1802 the third person suffering damages may proceed only
against the engineer or architect or contractor in accordance with
said article, within the period therein fixed.1803

I. Head of Family

The head of a family that lives in a building or a part thereof, is

responsible for damages caused by things thrown or falling from the
same.1804

X. Strict Liability1805

A. Animals

1. Possessor and User of an Animal

property in such a way that he injured the property of another.

1800
Art. 2191
1801
supra
1802
See Reference
1803
Art. 2192
1804
Art. 2193
1805
When the person is made liable independent of fault or negligence upon submission of proof of certain
facts specified by law.
Strict liability tort can be committed even if reasonable care was exercised and regardless of the state of
mind of the actor at that time.

463
 GENERAL RULE: The possessor of an animal or whoever may
make use of the same is responsible for the damages which it may
cause although it may escape or be lost.

EXCEPTION: When the damage was caused by force majeure or

by the person who suffered the damage.1806

B. Nuisance

1. Classes<Per se or per accidents; Public or

Private1807

2. Easement Against Nuisance

Every building or piece of land is subject to the easement

which prohibits the proprietor or possessor from committing
nuisance through noise, jarring, offensive odor, smoke, heat, dust,
water, glare and other causes.1808

Subject to zoning, health, police and other laws and

regulations, factories and shops may be maintained provided the
least possible annoyance is caused to the neighborhood.1809

C. Products Liability

1. Consumer Act1810

Any Filipino or foreign manufacturer, producer and importer,

independently of fault shall be liable for redress for damages caused
to consumers by defects resulting from:

a. design;
b. manufacture;
c. construction;
d. assembly and erection;
e. formulas and handling and making up; or

1806
Art. 2183
1807
See C. Nuisance, supra
1808
Art. 682
1809
Art. 683
1810
See B. Products Liability, supra

464
 f. presentation or packing of their products as well as for the
insufficient or inadequate information on the use and hazards
thereof.

BOOK II DAMAGES1811

I. General Considerations

A. Classification

1. NCC

Damages may be:

(1) Actual or compensatory;

(2) Moral;
(3) Nominal;
(4) Temperate or moderate;
(5) Liquidated; or
(6) Exemplary or corrective.1812

2. According to purpose

Damages may be recovered:

(1) For loss or impairment of earning capacity in cases of temporary

or permanent personal injury;

(2) For injury to the plaintiff's business standing or commercial

credit.1813

Willful injury to property may be a legal ground for awarding

moral damages if the court should find that, under the circumstances,
such damages are justly due. The same rule applies to breaches of
contract where the defendant acted fraudulently or in bad faith.1814

Nominal damages are adjudicated in order that a right of the

plaintiff, which has been violated or invaded by the defendant, may be

1811
General Principles of Damages:
1. The amount should be fair and just and commensurate to the damage.
2. Damage and the amount must be proven by competent evidence. Competent means that it
is admissible.
3. Only proximate damages, not remote or speculative, can be recovered.
1812
Art. 2197
1813
Art. 2205
1814
Art. 2220

465
vindicated or recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him.1815

Temperate or moderate damages, which are more than nominal

but less than compensatory damages, may be recovered when the
court finds that some pecuniary loss has been suffered but its amount
cannot, from the nature of the case, be provided with certainty.1816

Liquidated damages are those agreed upon by the parties to a

contract, to be paid in case of breach thereof.1817

Exemplary or corrective damages are imposed, by way of

example or correction for the public good, in addition to the moral,
temperate, liquidated or compensatory damages.1818

3. According to manner of determination

No proof of pecuniary loss is necessary in order that moral,

nominal, temperate, liquidated or exemplary damages, may be
adjudicated. The assessment of such damages, except liquidated ones,
is left to the discretion of the court, according to the circumstances of
each case.1819

4. Special and ordinary

Special damages - are those which arise directly but not

necessarily or by implication of law, from the act or default
complained of. These are super added to ordinary damages,
arising from an act injurious in itself, as when some particular
loss arises from the uttering of slanderous words, actionable in
themselves, or such as arise from an act indifferent and not
actionable in itself, but injurious only in its consequences as
when the words become actionable only by reason of special
damages insuing.1820

Ordinary damages are those which necessarily and by

implication of law result from the act or default complained of.

1815
Art. 2221
1816
Art. 2224
1817
Art. 2226
1818
Art. 2229
1819
Art. 2216
1820
Bouviers Dictionary, p. 750

466
II. Actual and Compensatory Damages

A. Concept

Comprehends not only the value of the loss suffered but also
that of the profits which the obligee failed to obtain.1821

B. Requisites

1. Alleged and proved with certainty

Actual or compensatory damages cannot be presumed but must

be duly proved.1822

Actual damages must be proved and a court cannot rely on

speculation, conjecture or guesswork as to the fact and amount of
damages, but must depend on actual proof that damages had been
suffered and on evidence of the actual amount.1823

2. Not speculative

Remote and speculative damages are not recoverable.

C. Component Elements

1. Value of loss; unrealized profit

Loss of earning capacity:

Variables considered are:

1. life expectancy
2. net income/earnings

Loss of profits

May be determined by considering the average profit for the

preceding years multiplied by the number of years during which the
business was affected by the wrongful act or breach.

1821
Art. 2200
1822
Malonzo vs. Galang, 109 Phil. 16
1823
Rangas vs. Raya, 22 SCRA 839

467
 2. Attorneys fees and expenses of litigation

They are actual damages. It is due to the plaintiff and not to the
counsel.

Plaintiff must allege the basis of his claim for attorneys fees in
the complaint; the basis should be one of the 11 cases specified in
Article 2208 of the Civil Code.

3. Interest

Award of interest in the concept of actual and compensatory

damages actual damages.

The rate of interest, as well as the accrual thereof is imposed as

follows:

1. When the obligation is breached and it consist of payment of

sum of money, i.e., a loan or forbearance of money:

a. The interest due should be that which may have been

stipulated in writing; furthermore, the interest due shall
itself earn legal interest from the time it is judicially
demanded.
b. In the absence of stipulation, the rate of interest shall be
12% per annum to be computed from default, i.e., from
judicial or extra-judicial demand under and subject to the
provisions of Article 1169 of the Civil Code.

2. When the obligation, not constituting a loan or forbearance or

money, is breached:

An interest on the amount of damages to be awarded may be

imposed at the discretion of the court at the rate of 6% per annum.

No interest shall be adjudged on unliquidated claims or damages,

except when or until demand can be established with reasonable
certainty.

Where the demand is established with reasonable certainty, the

interest shall begin to run from the time the claim is made judicially
or extrajudicially.

3. When the judgment of the court awarding the sum of money

becomes final and executory, the rate of legal interest shall be 12%
per annum from such finality until its satisfaction.

468
 D. Extent or scope of actual damages

1. In contracts and quasi-contracts

In contracts and quasi-contracts, the damages for which the

obligor who acted in good faith is liable shall be those that are the
natural and probable consequences of the breach of the obligation,
and which the parties have foreseen or could have reasonably
foreseen at the time the obligation was constituted.

In case of fraud, bad faith, malice or wanton attitude, the

obligor shall be responsible for all
damages which may be reasonably attributed to the non-performance
of the obligation.1824

2. In crimes and quasi-delicts

The defendant shall be liable for all damages which are the
natural and probable consequences of the act and omission
complained of. It is not necessary that such damages have been
foreseen or could have reasonably foreseen by the defendant.1825

The amount should be that which would put plaintiff in the same
position as he would have been if he had not sustained the wrong for
which he is now getting his compensation or reparation.

To recover damages, the amount of loss must not only be

capable of proof but must actually be proven.

Uncertainty as to the precise amount is not necessarily fatal.

III. Moral Damages

A. Concept

Moral damages include physical suffering, mental anguish,

fright, serious anxiety, besmirched reputation, wounded feelings,
moral shock, social humiliation, and similar injury. Though incapable
of pecuniary computation, moral damages may be recovered if they

1824
Art. 2201
In construing and applying this Article, the provisions of Article 2200 must be considered and taken into
account.
1825
Article 2202

469
are the proximate result of the defendant's wrongful act for
omission.1826

In the adjudication of moral damages, the sentimental value of

property, real or personal, may be considered.1827

B. When recoverable

Moral damages may be recovered in the following and

analogous cases:

(1) A criminal offense resulting in physical injuries;

(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in article 309;
(10) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32,
34, and 35.

The parents of the female seduced, abducted, raped, or abused,

referred to in No. 3 of this article, may also recover moral damages.

The spouse, descendants, ascendants, and brothers and sisters

may bring the action mentioned in No. 9 of this article, in the order
named.1828

Willful injury to property may be a legal ground for awarding

moral damages if the court should find that, under the circumstances,
such damages are justly due. The same rule applies to breaches of
contract where the defendant acted fraudulently or in bad faith.1829

1. In seduction, abduction, rape and other

lascivious acts

Victim and parents are included.

1826
Art. 2217
1827
Art. 2218
1828
Art. 2219
1829
Art. 2220

470
 2. In acts referred to in Arts. 21, 26, 27, 28,
29, 32, 34 & 35, NCC1830

3. In cases of malicious prosecution1831

IV. Nominal Damages

A. Concept

Small sums fixed by the court without regard to the extent of the
harm done to the injured party.

Law presumes damage although actual or compensatory

damages are not proven.

They are damages in name only and are allowed simply in

recognition of a technical injury based on a violation of a legal right.

Nominal damages cannot co-exist with actual or compensatory

damages.

B. When awarded

Nominal damages are adjudicated in order that a right of the

plaintiff, which has been violated or invaded by the defendant, may be
vindicated or recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him.1832

V. Temperate or Moderate Damages

A. Concept

These are damages, which are more than nominal but less than
compensatory, and may be recovered when the court finds that some
pecuniary loss has been suffered but its amount cannot be proved
with certainty.1833

1830

1831
supra
1832
Art. 2221
1833
Article 2224 Civil Code

471
 In cases where the resulting injury might be continuing and
possible future complications directly arising from the injury, while
certain to occur are difficult to predict, temperate damages can and
should be awarded on top of actual or compensatory damages; in such
cases there is no incompatibility between actual and temperate
damages.

VI. Liquidated Damages

A. Concept

Liquidated damages are those agreed upon by the parties to a

contract, to be paid in case of breach thereof.1834

B. Rules governing in case of breach of contract

Interest may, in the discretion of the court, be allowed upon

damages awarded for breach of contract.1835

VII. Exemplary or Corrective Damages

A. Concept

Exemplary or corrective damages are imposed, by way of

example or correction for the public good, in addition to the moral,
temperate, liquidated or compensatory damages.1836

B. When recovered

1. In criminal offenses; NCC

In criminal offenses, exemplary damages as a part of the civil

liability may be imposed when the crime was committed with one or
more aggravating circumstances. Such damages are separate and
distinct from fines and shall be paid to the offended party.1837

2. In quasi-delicts1838

1834
Art. 2226
1835
Art. 2210
1836
Art. 2229
1837
Art. 2230
1838
Art. 2231

472
 In quasi-delicts, exemplary damages may be granted if the
defendant acted with gross negligence.

3. In contracts and quasi-contracts; NCC Art.

2232

In contracts and quasi-contracts, the court may award

exemplary damages if the defendant acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner.

C. Requisites

Exemplary damages cannot be recovered as a matter of right;

the court will decide whether or not they should be adjudicated.1839

While the amount of the exemplary damages need not be

proved, the plaintiff must show that he is entitled to moral, temperate
or compensatory damages before the court may consider the question
of whether or not exemplary damages should be awarded. In case
liquidated damages have been agreed upon, although no proof of loss
is necessary in order that such liquidated damages may be recovered,
nevertheless, before the court may consider the question of granting
exemplary in addition to the liquidated damages, the plaintiff must
show that he would be entitled to moral, temperate or compensatory
damages were it not for the stipulation for liquidated damages.1840

VIII. Damages in Case of Death

A. In crimes and quasi-delicts causing death

1. In death caused by breach of conduct by a

common crime

The amount of damages for death caused by a crime or quasi-

delict shall be at least three thousand pesos, 1841 even though there
may have been mitigating circumstances.

In addition:
(1) The defendant shall be liable for the loss of the earning capacity of
the deceased, and the indemnity shall be paid to the heirs of the
latter; such indemnity shall in every case be assessed and awarded by
the court, unless the deceased on account of permanent physical

1839
Art. 2233
1840
Art. 2234
1841
As of 2008, it is P75,000(People vs. Robert Brodett y Pajaro, Ja. 18, 2008)

473
disability not caused by the defendant, had no earning capacity at the
time of his death;
(2) If the deceased was obliged to give support according to the
provisions of article 291, the recipient who is not an heir called to the
decedent's inheritance by the law of testate or intestate succession,
may demand support from the person causing the death, for a period
not exceeding five years, the exact duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate descendants and
ascendants of the deceased may demand moral damages for mental
anguish by reason of the death of the deceased.1842

IX. Graduation of Damages

A. Duty of Injured Party

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.1843

B. Rules

1. In crimes

In crimes, the damages to be adjudicated may be respectively

increased or lessened according to the aggravating or mitigating
circumstances.1844

2. In quasi-delict

In quasi-delicts, the contributory negligence of the plaintiff shall

reduce the damages that he may recover.1845

1842
Art. 2206
Damages recoverable in case of death:
1. Medical & Hospital Bills
2. Damages for death
a. Minimum amount: P50,000
b. Loss of earning capacity unless deceased had permanent physical disability not caused by defendant
so that deceased had no earning capacity at time of death
c. Support, if deceased was obliged to give support (for period not more than 5 years)
d. Moral damages
1843
Art. 2203
1844
Art. 2204
1845
Art. 2214

474
 3. In contracts, quasi-contracts and quasi-
delicts;

In contracts, quasi-contracts, and quasi-delicts, the court may

equitably mitigate the damages under circumstances other than the
case referred to in the preceding article, as in the following instances:

(1) That the plaintiff himself has contravened the terms of the
contract;
(2) That the plaintiff has derived some benefit as a result of the
contract;
(3) In cases where exemplary damages are to be awarded, that the
defendant acted upon the advice of counsel;
(4) That the loss would have resulted in any event;
(5) That since the filing of the action, the defendant has done his best
to lessen the plaintiff's loss or injury.1846

4. Liquidated damages

Liquidated damages, whether intended as an indemnity or a

penalty, shall be equitably reduced if they are iniquitous or
unconscionable.1847

5. Compromise

The courts may mitigate the damages to be paid by the losing

party who has shown a sincere desire for a compromise.1848

X. Miscellaneous Rules

A. Damages that cannot co-exists

1. Nominal with other damages

The adjudication of nominal damages shall preclude further

contest upon the right involved and all accessory questions, as

1846
Art. 2215
1847
Art. 2227
1848
Art. 2031

475
between the parties to the suit, or their respective heirs and
assigns.1849

2. Actual and Liquidated

Liquidated damages are those agreed upon by the parties to a

contract, to be paid in case of breach thereof.1850

B. Damages that must co-exist

1. Exemplary with moral, temperate,

liquidated or compensatory

C. Damages that must stand alone

1. Nominal Damages1851

REFERENCE

Civil Code

1849
Art. 2223
1850
Art. 2226
1851
See X. A. 1, supra

476
Article 21. Any person who wilfully causes loss or injury to another in
manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damage.

Article 26. Every person shall respect the dignity, personality, privacy and
peace of mind of his neighbors and other persons. The following and similar
acts, though they may not constitute a criminal offense, shall produce a
cause of action for damages, prevention and other relief:

(1) Prying into the privacy of another's residence;

(2) Meddling with or disturbing the private life or family relations of

another;

(3) Intriguing to cause another to be alienated from his friends;

(4) Vexing or humiliating another on account of his religious beliefs, lowly

station in life, place of birth, physical defect, or other personal condition.

Article 27. Any person suffering material or moral loss because a public
servant or employee refuses or neglects, without just cause, to perform his
official duty may file an action for damages and other relief against the
latter, without prejudice to any disciplinary administrative action that may
be taken.

Article 28. Unfair competition in agricultural, commercial or industrial

enterprises or in labor through the use of force, intimidation, deceit,
machination or any other unjust, oppressive or highhanded method shall
give rise to a right of action by the person who thereby suffers damage.

Article 29. When the accused in a criminal prosecution is acquitted on the

ground that his guilt has not been proved beyond reasonable doubt, a civil
action for damages for the same act or omission may be instituted. Such
action requires only a preponderance of evidence. Upon motion of the
defendant, the court may require the plaintiff to file a bond to answer for
damages in case the complaint should be found to be malicious.

If in a criminal case the judgment of acquittal is based upon reasonable

doubt, the court shall so declare. In the absence of any declaration to that
effect, it may be inferred from the text of the decision whether or not the
acquittal is due to that ground.

Article 32. Any public officer 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:

477
(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;

(9) The right to be secure in one's person, house, papers, and effects against
unreasonable searches and seizures;

(10) The liberty of abode and of changing the same;

(11) The privacy of communication and correspondence;

(12) The right to become a member of associations or societies for purposes

not contrary to law;

(13) The right to take part in a peaceable assembly to petition the

Government for redress of grievances;

(14) The right to be a free from involuntary servitude in any form;

(15) The right of the accused against excessive bail;

(16) The right of the accused to be heard by himself and counsel, to be

informed of the nature and cause of the accusation against him, to have a
speedy and public trial, to meet the witnesses face to face, and to have
compulsory process to secure the attendance of witness in his behalf;

(17) Freedom from being compelled to be a witness against one's self, or

from being forced to confess guilt, or from being induced by a promise of
immunity or reward to make such confession, except when the person
confessing becomes a State witness;

(18) Freedom from excessive fines, or cruel and unusual punishment, unless
the same is imposed or inflicted in accordance with a statute which has not
been judicially declared unconstitutional; and

(19) Freedom of access to the courts.

478
In any of the cases referred to in this article, whether or not the defendant's
act or omission constitutes a criminal offense, the aggrieved party has a
right to commence an entirely separate and distinct civil action for damages,
and for other relief. Such civil action shall proceed independently of any
criminal prosecution (if the latter be instituted), and may be proved by a
preponderance of evidence.

The indemnity shall include moral damages. Exemplary damages may also
be adjudicated.

The responsibility herein set forth is not demandable from a judge unless his
act or omission constitutes a violation of the Penal Code or other penal
statute.

Article 33. In cases of defamation, fraud, and physical injuries a civil action
for damages, entirely separate and distinct from the criminal action, may be
brought by the injured party. Such civil action shall proceed independently
of the criminal prosecution, and shall require only a preponderance of
evidence.

Article 34. When a member of a city or municipal police force refuses or fails
to render aid or protection to any person in case of danger to life or
property, such peace officer shall be primarily liable for damages, and the
city or municipality shall be subsidiarily responsible therefor. The civil action
herein recognized shall be independent of any criminal proceedings, and a
preponderance of evidence shall suffice to support such action.

Article 35. When a person, claiming to be injured by a criminal offense,

charges another with the same, for which no independent civil action is
granted in this Code or any special law, but the justice of the peace finds no
reasonable grounds to believe that a crime has been committed, or the
prosecuting attorney refuses or fails to institute criminal proceedings, the
complaint may bring a civil action for damages against the alleged offender.
Such civil action may be supported by a preponderance of evidence. Upon
the defendant's motion, the court may require the plaintiff to file a bond to
indemnify the defendant in case the complaint should be found to be
malicious.

If during the pendency of the civil action, an information should be

presented by the prosecuting attorney, the civil action shall be suspended
until the termination of the criminal proceedings.

Article 294. The claim for support, when proper and two or more persons
are obliged to give it, shall be made in the following order:

(1) From the spouse;

479
(2) From the descendants of the nearest degree;

(3) From the ascendants, also of the nearest degree;

(4) From the brothers and sisters.

Among descendants and ascendants the order in which they are called to the
intestate succession of the person who has a right to claim support shall be
observed

Art. 391. The following shall be presumed dead for all purposes, including
the division of the estate among the heirs:

(1) A person on board a vessel lost during a sea voyage, or an aeroplane

which is missing, who has not been heard of for four years since the loss of
the vessel or aeroplane;

(2) A person in the armed forces who has taken part in war, and has been
missing for four years;

(3) A person who has been in danger of death under other circumstances
and his existence has not been known for four years.

Article 443. He who receives the fruits has the obligation to pay the
expenses made by a third person in their production, gathering, and
preservation

Article 537. Acts merely tolerated, and those executed clandestinely and
without the knowledge of the possessor of a thing, or by violence, do not
affect possession

Article 546. Necessary expenses shall be refunded to every possessor; but

only the possessor in good faith may retain the thing until he has been
reimbursed therefor.

Useful expenses shall be refunded only to the possessor in good faith

with the same right of retention, the person who has defeated him in the
possession having the option of refunding the amount of the expenses or of
paying the increase in value which the thing may have acquired by reason
thereof

Article 559. The possession of movable property acquired in good faith is

equivalent to a title. Nevertheless, one who has lost any movable or has
been unlawfully deprived thereof, may recover it from the person in
possession of the same.

If the possessor of a movable lost or which the owner has been unlawfully
deprived, has acquired it in good faith at a public sale, the owner cannot
obtain its return without reimbursing the price paid therefor.

480
Article 649. The owner, or any person who by virtue of a real right may
cultivate or use any immovable, which is surrounded by other immovables
pertaining to other persons and without adequate outlet to a public highway,
is entitled to demand a right of way through the neighboring estates, after
payment of the proper indemnity.

Should this easement be established in such a manner that its use may be
continuous for all the needs of the dominant estate, establishing a
permanent passage, the indemnity shall consist of the value of the land
occupied and the amount of the damage caused to the servient estate.

In case the right of way is limited to the necessary passage for the
cultivation of the estate surrounded by others and for the gathering of its
crops through the servient estate without a permanent way, the indemnity
shall consist in the payment of the damage caused by such encumbrance.

This easement is not compulsory if the isolation of the immovable is due to

the proprietor's own acts.

Article 670. No windows, apertures, balconies, or other similar projections

which afford a direct view upon or towards an adjoining land or tenement
can be made, without leaving a distance of two meters between the wall in
which they are made and such contiguous property.

Neither can side or oblique views upon or towards such conterminous

property be had, unless there be a distance of sixty centimeters.

The nonobservance of these distances does not give rise to prescription

Art. 688. Every owner of a tenement or piece of land may establish thereon
the easements which he may deem suitable, and in the manner and form
which he may deem best, provided he does not contravene the laws, public
policy or public order.

Article 750. The donation may comprehend all the present property of the
donor, or part thereof, provided he reserves, in full ownership or in usufruct,
sufficient means for the support of himself, and of all relatives who, at the
time of the acceptance of the donation, are by law entitled to be supported
by the donor. Without such reservation, the donation shall be reduced in
petition of any person affected

Article 760. Every donation inter vivos, made by a person having no children
or descendants, legitimate or legitimated by subsequent marriage, or
illegitimate, may be revoked or reduced as provided in the next article, by
the happening of any of these events:

(1) If the donor, after the donation, should have legitimate or legitimated or
illegitimate children, even though they be posthumous;

481
(2) If the child of the donor, whom the latter believed to be dead when he
made the donation, should turn out to be living;

(3) If the donor subsequently adopt a minor child.

Article 911. After the legitime has been determined in accordance with the
three preceding articles, the reduction shall be made as follows:

(1) Donations shall be respected as long as the legitime can be covered,

reducing or annulling, if necessary, the devises or legacies made in the will;

(2) The reduction of the devises or legacies shall be pro rata, without any
distinction whatever.

If the testator has directed that a certain devise or legacy be paid in

preference to others, it shall not suffer any reduction until the latter have
been applied in full to the payment of the legitime.

(3) If the devise or legacy consists of a usufruct or life annuity, whose value
may be considered greater than that of the disposable portion, the
compulsory heirs may choose between complying with the testamentary
provision and delivering to the devisee or legatee the part of the inheritance
of which the testator could freely dispose. (820a)

Article 912. If the devise subject to reduction should consist of real property,
which cannot be conveniently divided, it shall go to the devisee if the
reduction does not absorb one-half of its value; and in a contrary case, to the
compulsory heirs; but the former and the latter shall reimburse each other
in cash for what respectively belongs to them.

The devisee who is entitled to a legitime may retain the entire property,
provided its value does not exceed that of the disposable portion and of the
share pertaining to him as legitime.

Article 919. The following shall be sufficient causes for the disinheritance of
children and descendants, legitimate as well as illegitimate:

(1) When a child or descendant has been found guilty of an attempt against
the life of the testator, his or her spouse, descendants, or ascendants;

482
(2) When a child or descendant has accused the testator of a crime for which
the law prescribes imprisonment for six years or more, if the accusation has
been found groundless;

(3) When a child or descendant has been convicted of adultery or

concubinage with the spouse of the testator;

(4) When a child or descendant by fraud, violence, intimidation, or undue

influence causes the testator to make a will or to change one already made;

(5) A refusal without justifiable cause to support the parent or ascendant

who disinherits such child or descendant;

(6) Maltreatment of the testator by word or deed, by the child or

descendant;

(7) When a child or descendant leads a dishonorable or disgraceful life;

(8) Conviction of a crime which carries with it the penalty of civil

interdiction.

Article 1132. The ownership of movables prescribes through uninterrupted

possession for four years in good faith.

The ownership of personal property also prescribes through uninterrupted

possession for eight years, without need of any other condition.

With regard to the right of the owner to recover personal property lost or of
which he has been illegally deprived, as well as with respect to movables
acquired in a public sale, fair, or market, or from a merchant's store the
provisions of articles 559 and 1505 of this Code shall be observed. (1955a)

Article 1133. Movables possessed through a crime can never be acquired

through prescription by the offender.

Article 1140. Actions to recover movables shall prescribe eight years from
the time the possession thereof is lost, unless the possessor has acquired the
ownership by prescription for a less period, according to articles 1132, and
without prejudice to the provisions of articles 559, 1505, and 1133. (1962a)

Article 1141. Real actions over immovables prescribe after thirty years.

This provision is without prejudice to what is established for the acquisition

of ownership and other real rights by prescription. (1963)

Article 1142. A mortgage action prescribes after ten years

Article 1144. The following actions must be brought within ten years from
the time the right of action accrues:

483
(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment. (n)

Article 1145. The following actions must be commenced within six years:

(1) Upon an oral contract;

(2) Upon a quasi-contract. (n)

Article 1146. The following actions must be instituted within four years:

(1) Upon an injury to the rights of the plaintiff;

(2) Upon a quasi-delict;

However, when the action arises from or out of any act, activity, or conduct
of any public officer involving the exercise of powers or authority arising
from Martial Law including the arrest, detention and/or trial of the plaintiff,
the same must be brought within one (1) year. (As amended by PD No. 1755,
Dec. 24, 1980.)

Article 1147. The following actions must be filed within one year:

(1) For forcible entry and detainer;

(2) For defamation.

Article 1170. Those who in the performance of their obligations are guilty of
fraud, negligence, or delay, and those who in any manner contravene the
tenor thereof, are liable for damages

Article 1233. A debt shall not be understood to have been paid unless the
thing or service in which the obligation consists has been completely
delivered or rendered, as the case may be. (1

Article 1248. Unless there is an express stipulation to that effect, the

creditor cannot be compelled partially to receive the prestations in which
the obligation consists. Neither may the debtor be required to make partial
payments.

However, when the debt is in part liquidated and in part unliquidated, the
creditor may demand and the debtor may effect the payment of the former
without waiting for the liquidation of the latter.

Article 1385. Rescission creates the obligation to return the things which
were the object of the contract, together with their fruits, and the price with
its interest; consequently, it can be carried out only when he who demands
rescission can return whatever he may be obliged to restore.

484
Neither shall rescission take place when the things which are the object of
the contract are legally in the possession of third persons who did not act in
bad faith.

In this case, indemnity for damages may be demanded from the person
causing the loss.

Article 1388. Whoever acquires in bad faith the things alienated in fraud of
creditors, shall indemnify the latter for damages suffered by them on
account of the alienation, whenever, due to any cause, it should be
impossible for him to return them.

Article 1505. Subject to the provisions of this Title, where goods are sold by
a person who is not the owner thereof, and who does not sell them under
authority or with the consent of the owner, the buyer acquires no better title
to the goods than the seller had, unless the owner of the goods is by his
conduct precluded from denying the seller's authority to sell.

Nothing in this Title, however, shall affect:

(1) The provisions of any factors' act, recording laws, or any other provision
of law enabling the apparent owner of goods to dispose of them as if he were
the true owner thereof;

(2) The validity of any contract of sale under statutory power of sale or
under the order of a court of competent jurisdiction;

(3) Purchases made in a merchant's store, or in fairs, or markets, in

accordance with the Code of Commerce and special laws

Art. 1584. Where goods are delivered to the buyer, which he has not
previously examined, he is not deemed to have accepted them unless and
until he has had a reasonable opportunity of examining them for the purpose
of ascertaining whether they are in conformity with the contract if there is
no stipulation to the contrary.

Unless otherwise agreed, when the seller tenders delivery of goods to the
buyer, he is bound, on request, to afford the buyer a reasonable opportunity
of examining the goods for the purpose of ascertaining whether they are in
conformity with the contract.

Where goods are delivered to a carrier by the seller, in accordance with an

order from or agreement with the buyer, upon the terms that the goods shall
not be delivered by the carrier to the buyer until he has paid the price,
whether such terms are indicated by marking the goods with the words
"collect on delivery," or otherwise, the buyer is not entitled to examine the
goods before the payment of the price, in the absence of agreement or usage
of trade permitting such examination.

Article 1608. The vendor may bring his action against every possessor
whose right is derived from the vendee, even if in the second contract no
mention should have been made of the right to repurchase, without

485
prejudice to the provisions of the Mortgage Law and the Land Registration
Law with respect to third persons

Article 1652. The sublessee is subsidiarily liable to the lessor for any rent
due from the lessee. However, the sublessee shall not be responsible beyond
the amount of rent due from him, in accordance with the terms of the
sublease, at the time of the extra-judicial demand by the lessor.

Payments of rent in advance by the sublessee shall be deemed not to have

been made, so far as the lessor's claim is concerned, unless said payments
were effected in virtue of the custom of the place.

Article 1723. The engineer or architect who drew up the plans and
specifications for a building is liable for damages if within fifteen years from
the completion of the structure, the same should collapse by reason of a
defect in those plans and specifications, or due to the defects in the ground.
The contractor is likewise responsible for the damages if the edifice falls,
within the same period, on account of defects in the construction or the use
of materials of inferior quality furnished by him, or due to any violation of
the terms of the contract. If the engineer or architect supervises the
construction, he shall be solidarily liable with the contractor.

Acceptance of the building, after completion, does not imply waiver of any of
the cause of action by reason of any defect mentioned in the preceding
paragraph.

The action must be brought within ten years following the collapse of the
building

Article 1729. Those who put their labor upon or furnish materials for a piece
of work undertaken by the contractor have an action against the owner up to
the amount owing from the latter to the contractor at the time the claim is
made. However, the following shall not prejudice the laborers, employees
and furnishers of materials:

(1) Payments made by the owner to the contractor before they are due;

(2) Renunciation by the contractor of any amount due him from the owner.

This article is subject to the provisions of special laws

Article 1731. He who has executed work upon a movable has a right to
retain it by way of pledge until he is paid.

Article 1892. The agent may appoint a substitute if the principal has not
prohibited him from doing so; but he shall be responsible for the acts of the
substitute:

(1) When he was not given the power to appoint one;

(2) When he was given such power, but without designating the person, and
the person appointed was notoriously incompetent or insolvent.

486
All acts of the substitute appointed against the prohibition of the principal
shall be void. (1721)

Article 1893. In the cases mentioned in Nos. 1 and 2 of the preceding article,
the principal may furthermore bring an action against the substitute with
respect to the obligations which the latter has contracted under the
substitution.

Article 1994. The depositary may retain the thing in pledge until the full
payment of what may be due him by reason of the deposit

Art. 2202. In crimes and quasi-delicts, the defendant shall be liable for all
damages which are the natural and probable consequences of the act or
omission complained of. It is not necessary that such damages have been
foreseen or could have reasonably been foreseen by the defendant.

Family Code

Chapter 2. Marriages Exempted from License Requirement

Art. 27. In case either or both of the contracting parties are at the point of
death, the marriage may be solemnized without necessity of a marriage
license and shall remain valid even if the ailing party subsequently survives.

Art. 28. If the residence of either party is so located that there is no means
of transportation to enable such party to appear personally before the local
civil registrar, the marriage may be solemnized without necessity of a
marriage license.

Art. 29. In the cases provided for in the two preceding articles, the
solemnizing officer shall state in an affidavit executed before the local civil
registrar or any other person legally authorized to administer oaths that the
marriage was performed in articulo mortis or that the residence of either
party, specifying the barrio or barangay, is so located that there is no means
of transportation to enable such party to appear personally before the local
civil registrar and that the officer took the necessary steps to ascertain the
ages and relationship of the contracting parties and the absence of legal
impediment to the marriage.

Art. 30. The original of the affidavit required in the last preceding article,
together with the legible copy of the marriage contract, shall be sent by the
person solemnizing the marriage to the local civil registrar of the
municipality where it was performed within the period of thirty days after
the performance of the marriage.

Art. 31. A marriage in articulo mortis between passengers or crew members

may also be solemnized by a ship captain or by an airplane pilot not only
while the ship is at sea or the plane is in flight, but also during stopovers at
ports of call.

487
Art. 32. A military commander of a unit, who is a commissioned officer, shall
likewise have authority to solemnize marriages in articulo mortis between
persons within the zone of military operation, whether members of the
armed forces or civilians.

Art. 33. Marriages among Muslims or among members of the ethnic cultural
communities may be performed validly without the necessity of marriage
license, provided they are solemnized in accordance with their customs,
rites or practices.

Art. 34. No license shall be necessary for the marriage of a man and a
woman who have lived together as husband and wife for at least five years
and without any legal impediment to marry each other. The contracting
parties shall state the foregoing facts in an affidavit before any person
authorized by law to administer oaths. The solemnizing officer shall also
state under oath that he ascertained the qualifications of the contracting
parties are found no legal impediment to the marriage. (76a)

------------------------------

Art. 51. In said partition, the value of the presumptive legitimes of all
common children, computed as of the date of the final judgment of the trial
court, shall be delivered in cash, property or sound securities, unless the
parties, by mutual agreement judicially approved, had already provided for
such matters.

The children or their guardian or the trustee of their property may ask for
the enforcement of the judgment.

The delivery of the presumptive legitimes herein prescribed shall in no way

prejudice the ultimate successional rights of the children accruing upon the
death of either of both of the parents; but the value of the properties already
received under the decree of annulment or absolute nullity shall be
considered as advances on their legitime.

Art. 77. The marriage settlements and any modification thereof shall be in
writing, signed by the parties and executed before the celebration of the
marriage. They shall not prejudice third persons unless they are registered
in the local civil registry where the marriage contract is recorded as well as
in the proper registries of properties.

Art. 102. Upon dissolution of the absolute community regime, the following
procedure shall apply:

488
 (1) An inventory shall be prepared, listing separately all the properties
of the absolute community and the exclusive properties of each
spouse.

(2) The debts and obligations of the absolute community shall be paid
out of its assets. In case of insufficiency of said assets, the spouses
shall be solidarily liable for the unpaid balance with their separate
properties in accordance with the provisions of the second paragraph
of Article 94.

(3) Whatever remains of the exclusive properties of the spouses shall

thereafter be delivered to each of them.

(4) The net remainder of the properties of the absolute community

shall constitute its net assets, which shall be divided equally between
husband and wife, unless a different proportion or division was agreed
upon in the marriage settlements, or unless there has been a
voluntary waiver of such share provided in this Code. For purpose of
computing the net profits subject to forfeiture in accordance with
Articles 43, No. (2) and 63, No. (2), the said profits shall be the
increase in value between the market value of the community
property at the time of the celebration of the marriage and the market
value at the time of its dissolution.

(5) The presumptive legitimes of the common children shall be

delivered upon partition, in accordance with Article 51.

(6) Unless otherwise agreed upon by the parties, in the partition of

the properties, the conjugal dwelling and the lot on which it is
situated shall be 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 decided otherwise. In case there in no such majority, the court
shall decide, taking into consideration the best interests of said
children.

+Art. 128. If a spouse without just cause abandons the other or fails to
comply with his or her obligation to the family, the aggrieved spouse may
petition the court for receivership, for judicial separation of property, or for
authority to be the sole administrator of the conjugal partnership property,
subject to such precautionary conditions as the court may impose.

The obligations to the family mentioned in the preceding paragraph refer to

marital, parental or property relations.

A spouse is deemed to have abandoned the other when he or she has left the
conjugal dwelling without intention of returning. The spouse who has left
the conjugal dwelling for a period of three months or has failed within the
same period to give any information as to his or her whereabouts shall be

489
prima facie presumed to have no intention of returning to the conjugal
dwelling

Art. 129. Upon the dissolution of the conjugal partnership regime, the
following procedure shall apply:

(1) An inventory shall be prepared, listing separately all the properties

of the conjugal partnership and the exclusive properties of each
spouse.

(2) Amounts advanced by the conjugal partnership in payment of

personal debts and obligations of either spouse shall be credited to
the conjugal partnership as an asset thereof.

(3) Each spouse shall be reimbursed for the use of his or her exclusive
funds in the acquisition of property or for the value of his or her
exclusive property, the ownership of which has been vested by law in
the conjugal partnership.

(4) The debts and obligations of the conjugal partnership shall be paid
out of the conjugal assets. In case of insufficiency of said assets, the
spouses shall be solidarily liable for the unpaid balance with their
separate properties, in accordance with the provisions of paragraph
(2) of Article 121.

(5) Whatever remains of the exclusive properties of the spouses shall

thereafter be delivered to each of them.

(6) Unless the owner had been indemnified from whatever source, the
loss or deterioration of movables used for the benefit of the family,
belonging to either spouse, even due to fortuitous event, shall be paid
to said spouse from the conjugal funds, if any.

(7) The net remainder of the conjugal partnership properties shall

constitute the profits, which shall be divided equally between husband
and wife, unless a different proportion or division was agreed upon in
the marriage settlements or unless there has been a voluntary waiver
or forfeiture of such share as provided in this Code.

(8) The presumptive legitimes of the common children shall be

delivered upon the partition in accordance with Article 51.

(9) In the partition of the properties, the conjugal dwelling and the lot
on which it is situated shall, unless otherwise agreed upon by the
parties, be 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
decided otherwise. In case there is no such majority, the court shall
decide, taking into consideration the best interests of said children.

490
Art. 134. In the absence of an express declaration in the marriage
settlements, the separation of property between spouses during the
marriage shall not take place except by judicial order. Such judicial
separation of property may either be voluntary or for sufficient cause.

+Art. 135. Any of the following shall be considered sufficient cause for
judicial separation of property:

(1) That the spouse of the petitioner has been sentenced to a penalty
which carries with it civil interdiction;

(2) That the spouse of the petitioner has been judicially declared an
absentee;

(3) That loss of parental authority of the spouse of petitioner has been
decreed by the court;

(4) That the spouse of the petitioner has abandoned the latter or failed
to comply with his or her obligations to the family as provided for in
Article 101;

(5) That the spouse granted the power of administration in the

marriage settlements has abused that power; and

(6) That at the time of the petition, the spouses have been separated
in fact for at least one year and reconciliation is highly improbable.

In the cases provided for in Numbers (1), (2) and (3), the presentation
of the final judgment against the guilty or absent spouse shall be
enough basis for the grant of the decree of judicial separation of
property. (191a)

+Art. 136. The spouses may jointly file a verified petition with the court for
the voluntary dissolution of the absolute community or the conjugal
partnership of gains, and for the separation of their common properties.

All creditors of the absolute community or of the conjugal partnership of

gains, as well as the personal creditors of the spouse, shall be listed in the
petition and notified of the filing thereof. The court shall take measures to
protect the creditors and other persons with pecuniary interest.

Art. 137. Once the separation of property has been decreed, the absolute
community or the conjugal partnership of gains shall be liquidated in
conformity with this Code.

During the pendency of the proceedings for separation of property, the

absolute community or the conjugal partnership shall pay for the support of
the spouses and their children. (192a)

491
Art. 138. After dissolution of the absolute community or of the conjugal
partnership, the provisions on complete separation of property shall apply.

Art. 155. The family home shall be exempt from execution, forced sale or
attachment except:
(1) For nonpayment of taxes;
(2) For debts incurred prior to the constitution of the family home;
(3) For debts secured by mortgages on the premises before or after such
constitution; and
(4) For debts due to laborers, mechanics, architects, builders, materialmen
and others who have rendered service or furnished material for the
construction of the building.

Art. 205. The right to receive support under this Title as well as any money
or property obtained as such support shall not be levied upon on attachment
or execution

Article 213. Separation of property may refer to present or future property

or both. It may be total or partial. In the latter case, the property not agreed
upon as separate shall pertain to the conjugal partnership of gains.

Rules of Court

RULE 39

Section 13. Property exempt from execution. Except as otherwise

expressly provided by law, the following property, and no other, shall be
exempt from execution:
(a) The judgment obligor's family home as provided by law, or the homestead
in which he resides, and land necessarily used in connection therewith;
(b) Ordinary tools and implements personally used by him in his trade,
employment, or livelihood;
(c) Three horses, or three cows, or three carabaos, or other beasts of
burden, such as the judgment obligor may select necessarily used by him in
his ordinary occupation;
(d) His necessary clothing and articles for ordinary personal use, excluding
jewelry;
(e) Household furniture and utensils necessary for housekeeping, and used
for that purpose by the judgment obligor and his family, such as the
judgment obligor may select, of a value not exceeding one hundred thousand
pesos;
(f) Provisions for individual or family use sufficient for four months;
(g) The professional libraries and equipment of judges, lawyers, physicians,
pharmacists, dentists, engineers, surveyors, clergymen, teachers, and other
professionals, not exceeding three hundred thousand pesos in value;

492
(h) One fishing boat and accessories not exceeding the total value of one
hundred thousand pesos owned by a fisherman and by the lawful use of
which he earns his livelihood;
(i) So much of the salaries, wages, or earnings of the judgment obligor for
his personal services within the four months preceding the levy as are
necessary for the support of his family;
(j) Lettered gravestones;
(k) Monies, benefits, privileges, or annuities accruing or in any manner
growing out of any life insurance;
(l) The right to receive legal support, or money or property obtained as such
support, or any pension or gratuity from the Government;
(m) Properties specially exempted by law.
But no article or species of property mentioned in this section shall be
exempt from execution issued upon a judgment recovered for its price or
upon a judgment of foreclosure of a mortgage thereon.

RULE 108

CANCELLATION OR CORRECTION OF ENTRIES IN THE CIVIL

REGISTRY

Sec. 1. Who may file petition. - Any person interested in any act,
event, order or decree concerning the civil status of persons which has been
recorded in the civil register, may file a verified petition for the cancellation
or correction of any entry relating thereto, with the Court of First Instance
of the province where the corresponding civil registry is located.

Sec. 2. Entries subject to cancellation or correction. - Upon good and

valid grounds, the following entries in the civil register may be cancelled or
corrected: (a) births; (b) marriages; (c) deaths; (d) legal separations; (e)
judgments of annulments of marriage; (f) judgments declaring marriages
void from the beginning; (g) legitimations; (h) adoptions; (i)
acknowledgments of natural children; (j) naturalization (k) election, loss or
recovery of citizenship (l) civil interdiction; (m) judicial determination of
filiation; (n) voluntary emancipation of a minor; and (o) changes of name.

Sec. 3. Parties. - When cancellation or correction of an entry in the

civil register is sought, the civil registrar and all persons who have or claim
any interest which would be affected thereby shall be made parties to the
proceeding.chanrobles virtua law library

Sec. 4. Notice and publication. - Upon the filing of the petition, the
court shall, by an order, fix the time and place for the hearing of the same,
and cause reasonable notice thereof to be given to the persons named in the
petition. The court shall also cause the order to be published once a week
for three (3) consecutive weeks in a newspaper of general circulation in the
province.

493
 Sec. 5. Opposition. - The civil registrar and any person having or
claiming any interest under the entry whose cancellation or correction is
sought may, within fifteen (15) days from notice of the petition, or from the
last date of publication of such notice, file his opposition thereto.

Sec. 6. Expediting proceedings. - The court in which the proceeding is

brought may make orders expediting the proceedings, and may also grant
preliminary injunction for the preservation of the rights of the parties
pending such proceedings.

Sec. 7. Order. - After hearing, the court may either dismiss the
petition or issue an order granting the cancellation or correction prayed for.
In either case, a certified copy of the judgment shall be served upon the civil
registrar concerned who shall annotate the same in his record.

REPUBLIC ACT NO. 9048

[March 22, 2001]

Section 1. Authority to Correct Clerical or Typographical Error and

Change of First Name or Nickname.

No entry in a civil register shall be changed or corrected without a

judicial order; except for clerical or typographical errors and change
of first name or nickname which can be corrected or changed by
concerned city or municipal civil registrar or consul general in
accordance with the provisions of this Act and its implementing rules
and regulations.

Sec. 2. Definitions of Terms. As used in this Act, the following terms

shall mean:

(1) "City or municipal civil registrar" refers to the head of the

local civil registry office of the city or municipality, as the case
may be, who is appointed as such by the city or municipal mayor
in accordance with the provisions of existing laws.

(2) "Petitioner" refers to a natural person filing the petition and

who has direct and personal interest in the correction of a
clerical or typographical error in an entry or change of first
name or nickname in the civil register.

(3) "Clerical or typographical error" refers to a mistake

committed in the performance of clerical work in writing,

494
 copying, transcribing or typing an entry in the civil register that
is harmless and innocuous, such as misspelled name or
misspelled place of birth or the like, which is visible to the eyes
or obvious to the understanding, and can be corrected or
changed only by reference to other existing record or records:
Provided, however, That no correction must involve the change
of nationality, age, status or sex of the petitioner.

(4) "Civil register" refers to the various registry books and

related certificates and documents kept in the archives of the
local civil registry offices, Philippine Consulates and of the
Office of the Civil Register General.

(5) "Civil registrar general" refers to the administrator of the

National Statistics Office which is the agency mandated to carry
out and administer the provision of laws on civil registration.

(6) "First name" refers to a name or nickname given to a person

which may consist of one or more names in addition to the
middle and last names.

Sec. 3. Who may File the Petition and Where. Any person having
direct and personal interest in the correction of a clerical or
typographical error in an entry and/or change of first name or
nickname in the civil register may file, in person, a verified petition
with the local civil registry office of the city or municipality where the
record being sought to be corrected or changed is kept.

In case the petitioner has already migrated to another place in the

country and it would not be practical for such party, in terms of
transportation expenses, time and effort to appear in person before
the local civil registrar keeping the documents to be corrected or
changed, the petition may be filed, in person, with the local civil
registrar of the place where the interested party is presently residing
or domiciled. The two (2) local civil registrars concerned will then
communicate to facilitate the processing of the petition.

Citizens of the Philippines who are presently residing or domiciled in

foreign countries may file their petition, in person, with the nearest
Philippine Consulates.

The petitions filed with the city or municipal civil registrar or the
consul general shall be processed in accordance with this Act and its
implementing rules and regulations.

495
All petitions for the correction of clerical or typographical errors
and/or change of first names or nicknames may be availed of only
once.

Sec. 4. Grounds for Change of First Name or Nickname. The

petition for change of first name or nickname may be allowed in any of
the following cases:

(1) The petitioner finds the first name or nickname to be

ridiculous, tainted with dishonor or extremely difficult to write
or pronounce;

(2) The new first name or nickname has been habitually and
continuously used by the petitioner and he has been publicly
known by the first name or nickname in the community; or

(3) The change will avoid confusion.

Sec. 5. Form and Contents of the Petition. The petition shall be in

the form of an affidavit, subscribed and sworn to before any person
authorized by law to administer oaths. The affidavit shall set forth
facts necessary to establish the merits of the petition and shall show
affirmatively that the petitioner is competent to testify to the matters
stated. The petitioner shall state the particular erroneous entry or
entries which are sought to be corrected and/or the change sought to
be made.

The petition shall be supported with the following documents:

(1) A certified true machine copy of the certificate or of the page

or of the registry book containing the entry or entries sought to
be corrected or changed;

(2) At least two (2) public or private documents showing the

correct entry or entries upon which the correction or change
shall be based; and

(3) other documents which the petitioner or the city or

municipal civil registrar, or the consul general may consider
relevant and necessary for the approval of the petition.

In case of change of first name or nickname, the petition shall likewise

be supported with the documents mentioned in the immediately
preceding paragraph. In addition, the petition shall be published at
least once a week for two (2) consecutive weeks in a newspaper of
general circulation. Furthermore, the petitioner shall submit a

496
certification from the appropriate law enforcement agencies that he
has no pending case or no criminal record.

The petition and its supporting papers shall be filed in three (3) copies
to be distributed as follows: first copy to the concerned city or
municipal civil registrar, or the consul general; second copy to the
Office of the Civil Registrar General; and the third copy to the
petitioner.

Sec. 6. Duties of the City of Municipal Civil Registrar or the Consul

General. The city or municipal civil registrar or the consul general
to whom the petition is presented shall examine the petition and its
supporting documents. He shall post the petition in a conspicuous
place provided for the purpose for ten (10) consecutive days after he
finds the petition and its supporting documents sufficient in form and
substance.

The city or municipal civil registrar or the consul general shall act on
the petition and shall render a decision not later than five (5) working
days after the completion of the posting and/or publication
requirement. He shall transmit a copy of his decision together with
the records of the proceedings to the Office of the Civil Registrar
General within five (5) working days from the date of the decision.

Sec. 7. Duties and Powers of the Civil Registrar General. The civil
registrar general shall, within ten (10) working days from receipt of
the decision granting a petition, exercise the power to impugn such
decision by way of an objection based on the following grounds:

(1) The error is not clerical or typographical;

(2) The correction of an entry or entries in the civil register is

substantial or controversial as it effects the civil status of a
person; or

(3) The basis used in changing the first name or nickname of a

person does not fall under Section 4.

The civil registrar general shall immediately notify the city or

municipal civil registrar or the consul general of the action taken on
the decision. Upon receipt of the notice thereof, the city or municipal
civil registrar or the consul general shall notify the petitioner of such
action.

The petitioner may seek reconsideration with the civil registrar

general or file the appropriate petition with the proper court.

497
If the civil registrar general fails to exercise his power to impugn the
decision of the city or municipal registrar or of the consul general
within the period prescribed herein, such decision shall become final
and executory.

Where the petition is denied by the city or municipal civil registrar or

the consul general, the petitioner may either appeal the decision to
the civil registrar general or file the appropriate petition with the
proper court.

Sec. 8. Payment of Fees. The city or municipal civil registrar or the

consul general shall be authorized to collect reasonable fees as a
condition for accepting the petition. An indigent petitioner shall be
exempt from the payment of the said fee.

Sec. 9. Penalty Clause. A person who violates any of the provisions

of this Act shall, upon conviction, be penalized by imprisonment of not
less than six (6) years but not more than twelve (12) years, or a fine of
not less than Ten thousand pesos (P10,000.00) but not more than One
hundred thousand pesos (P100,000.00), or both, at the discretion of
the court.

In addition, if the offender is a government official or employee, he

shall suffer the penalties provided under civil service laws, rules and
regulations.

-------------------------------------------------------------

Public Land Act

Section 118. Conveyance and encumbrance made by persons belonging to

the so-called "non-Christian tribes," when proper, shall not be valid unless
duly approved by the Director of the Bureau of non-Christian tribes.

SYLLABUS
I. Effect and Application of Laws New Civil Code

A. When law takes effect, NCC Art. 2

B. Ignorance of the Law, NCC Art. 3

498
 C. Retroactivity of Laws, NCC Art. 4
D. Mandatory or Prohibitory Laws, NCC Art. 5
E. Waiver of Rights, NCC Art. 6
F. Repeal of Laws, NCC Art. 7
G. Judicial Decisions, NCC Art. 8
H. Duty to Render Judgment, NCC Art. 9
I. Presumption and Applicability of Custom, NCC Arts 10-12
J. Legal Periods, NCC Art. 13
K. Applicability of Penal Laws, NCC Art. 14
L. Conflict of Laws, NCC Arts. 15-18, relative to Divorce, Art. 26
(2)

II. Human Relations New Civil Code

A. NCC Art. 19-22, relative to breach of promise to marry

B. Independent Civil Actions EXCLUDE: to be covered by
Remedial Law
C. Prejudicial Questions EXCLUDE: to be covered by
Remedial Law

PERSONS

I. Persons and Personality New Civil Code

A. Capacity to Act

1. Civil Personality, NCC Art. 37

2. Restrictions on Capacity to Act, NCC 38-39
3. Birth, NCC 40-41
4. Death, NCC 42-43
a. Compare Art. 43 with Rule 131, Sec. 3 (jj)
presumption of Survivorship
EXCLUDE: NCC 44-47

B. Domicile and residence of person, NCC 50-51

II. Marriage Family Code (Aug. 3, 1988)

EXCLUDE: Muslim Code, (PD 1083)

A. Requisites

1. Nature of Marriage, Art. 1

2. Kinds of Requisites, Arts. 2-3
3. Effect of absence of requisites, Art. 4
4. Essential Art. 5
a. Age, Art. 5
5. Ceremony, Art. 6
6. Formal Arts. 7, 31, 32
7. Solemnizing authority, Art. 7-8, 10

499
 a. Exceptions Art. 35 (2)
8. License Required Arts 3 (2), 9, 11, 20, 26
a. Foreign National Art. 21
b. Exceptions Arts. 27, 31-32, 34
9. Marriage Certificate, Art. 22

EXCLUDE: Duties of a Civil Registrar, Arts. 12-19, 23-25

B. Effect of Marriage celebrated abroad and foreign divorce,

Art. 26
C. Void and Voidable marriages

1. Void Marriage Arts. 5, 35, 36-8, 52-3

a. Absence of Requisites, Art. 35
b. Psychological incapacity, Art. 36
c. Incestous marriages, Arts. 37-38
2. Prescription, Art. 39
3. Subsequent marriage, Arts. 40-44
4. Annullable marriage, Arts. 14, 45-46
5. Voidable marriages, Art. 45-47
6. Presence of prosecutor, Art. 48
7. Pendency of action, Art. 49
8. Effects of nullity, Arts. 50-54

EXCLUDE: SC Rules on Procedure (Nullity and Provisional Orders),

R.A. 6955, An Act to Declare Unlawful the Practice of Matching
Filipino Women for Marriage to Foreign Nationals, RA 9208, Anti-
Trafficking in Persons Act

III. Legal Separation

A. Grounds, Art. 55, Republic Act. 9262, Anti-Violence Against

Women and Children
B. Defenses, Arts. 56-57
C. Cooling-off Period, Art. 58
D. Reconciliation efforts, Art. 59
E. Confession of Judgment, Art. 60
F. Effects of Filing Petition, Art. 61
G. Effects of pendency, Art. 62
H. Effects of legal separation, Arts. 63-64
I. Reconciliation, Arts. 65-67

EXCLUDE: SC Rules on legal separation

IV. Rights and Obligations Between Husband and Wife

A. Essential Obligations, Art. 68

B. Family domicile, Art. 69
C. Support, Art. 70
D. Management of household, Art. 71

500
 E. Effect of neglect of duty, Art. 72
F. Exercise of profession, Art. 73

EXCLUDE: R.A. 7192, An Act Promoting the Integration of Womens

as Full and Equal Partners of Men in Development and Nation
Building, RA 8187, An Act Granting Paternity Leave, RA 9710, Magna
Carta for Women

V. Property Relations of the Spouses

A. Marriage Settlements, Arts. 76-81

B. Donations by Reason of Marriage, Arts. 82-83, 86, 43(3), 50
C. Void donations by the spouses, Art. 87
D. Absolute Community of property
1. General Provisions, Arts. 75-85, 88-90
2. What constitutes Community Property, Arts. 91-93
3. Charges Upon and Obligations of the Community
Property, Arts. 94-95
4. Ownership, Administration, Enjoyment and Disposition
of the Community Property, Arts. 96-98
5. Dissolution of Community Regime, Arts. 99-101
6. Liquidation of the Absolute Community Assets and
Liabilities, Arts. 102-104
E. Conjugal Partnership of Gains
1. General Provision, Arts. 105-108
2. Exclusive Property of Each Spouse, Arts. 109-115
3. Conjugal Partnership Property, Arts. 116-120
4. Charges upon and obligations of the CPG, Arts. 121-
123
5. Administration of the CPG, Arts. 124-125
6. Dissolution of CPG Regime, Arts. 126-128
7. Liquidation of the Conjugal Partnership Assets and
Liabilities, Arts. 129-133
F. Separation of Property of the Spouses and Administration of
Common Property by One Spouse During the Marriage, Arts.
134-142
G. Regime of Separation of Property, Arts. 143-146
H. Property Regime of Unions Without Marriage, Arts. 147-148

VI. The Family

A. The Family as an Institution, Arts. 149-151

B. The Family Home, Arts. 152-165

EXCLUDE: Arts. 157, 161 and 162

VII. Paternity and Filiation

A. Legitimate Children, Arts. 163-171

B. Proof of Filiation, Arts. 172-174

501
 C. Illegitimate Children, Art. 175 and Art. 176 as amended by
RA 9255
D. Legitimated Children, Arts. 177-182

EXCLUDE: SC Rule on DNA Evidence

VIII. Adoption

EXCLUDE: Family Code, Arts. 183-188, 191-193

A. RA 8552 Domestic Adoption Law

1. Who can adopt

2. Who can be adopted
3. Rights of an adopted child include FC, Arts. 189 and
190 on successional rights
4. Rescission of adoption

EXCLUDE: AM No. 02-6-02-S.C. (Aug. 22, 2002), RA 9523 requiring

certification of the department of DSWD to declare a "child legally
available for adoption"

B. RA 8043, The Law on Inter- Country Adoption

1. Who can Adopt

2. Who can be adopted

IX. Support

A. What it Compromises, Art. 194

B. Who are Obliged, Arts. 195-197, 199-200, 206-208
C. Support during marriage litigation, Art. 198
D. Amount, Arts. 201-202
E. When Demandable, Art. 203
F. Options, Art. 204
G. Attachment, Art. 205

X. Parental Authority

A. General Provisions, Arts. 209-215

B. Substitute and Special Parental Authority, Arts. 216-219
C. Effect of Parental Authority upon the Persons of the Children,
Arts. 220-224

EXCLUDE: Rule on Guardianship of Minors, Rule on Custody of

Minors, RA 8972 Solo Parents Act, RA 8980 Policy for Childhood
Care

D. Effects of Parental Authority upon the Property of the

Children, Arts. 225-227

502
EXCLUDE: RA 9231 Child Labor Law (to be covered by Labor Law)
E. Suspension or Termination of Parental Authority, Arts. 228-
233 RA 7610 Child Abuse Law

XI. Emancipation Arts. 234 and 236, as amended by RA 6809

XII. Summary Judicial Proceedings in the Family Law

XIII. Final Provisions Retroactive effect, Art. 256

EXCLUDE: Arts. 254-255, 257

XIV. Funeral, NCC Arts. 305-301

EXCLUDE: Care and Education of Children, Arts. 356-363

XV. Use of surnames Arts. 364-369, 369-380 (other articles repealed
by Family Code)

XVI. Absence NCC Art. 43; Art. 41 Family Code

A. Provisional measures in Case of Absence, Arts. 381-383

B. Declaration of Absence, Arts. 384-389
C. Administration of the Property of the Absentee, arts. 387-389
D. Presumption of Death, Arts. 390-392

EXCLUDE: Arts. 393-396, contingent assets

XVII. Civil Registrar

A. Arts. 407-413
B. RA 9048-clerical errors
C. Rule 108, Rules of Court

EXCLUDE: Act. No. 375, IRR of RA 9048

PROPERTY

I. Characteristics
II. Classification Arts. 415-418

A. Hidden Treasure Arts. 438-9

B. Right of Accession Art. 440

1. Fruits Arts. 441-4

2. With respect to Immovable Property
a. Builder, planter, sower on land of another in
concept of owner
(1) Builder, planter, sower in good faith
Arts. 448-456
(2) Builder, planter, sower in bad faith
Arts. 449-450

503
 b. Usufructuary, Art. 579
3. Lands adjoining river banks
a. Alluvion Art. 457
b. Change of course of river Arts. 461-246, see
Water Code PD 1067
c. Avulsion- Arts. 459-463
4. Islands Arts. 464-465
C. By Object
1. Real or immovable
2. Personal or Movable
D. By Owner
1. Of public dominion
2. Of private ownership
a. Patrimonial property distinction between
private property of individual persons, and of State
entities
E. By Nature
1. Consumable/non-consumable vs. Fungible/non-fungible

III. Ownership

A. Right in general
1. Bundle of rights
a. Jus utendi, fruendi, abutendi, vindicandi,
disponendi (possidendi)
(1) Actions to recover ownership and
possession of real property
(a) Distinctions between
accionreivindicatoria,
accionpubliciana, accioninterdictal
(b) Distinction between forcible entry
and unlawful detainer
(2) Actions for recovery of possession of
moveable property
(3) Requisites for recovery of property
proof of right; identity; reliance on strength
of own evidence not weakness of
defendants claim
2. Distinction between real and personal rights

B. Modes of acquiring ownership

1. original, derivative

C. Limitations

1. General limitations taxation, eminent domain, police

power
2. Specific Limitations imposed by law, sic uteretuo,
nuisance, stat of necessity, easements voluntarily

504
 imposed by owner: servitudes, mortgages imposed by
contract

IV. Accession

A. Right to hidden treasure

B. General Rules:

1. Forimmovables:

a. Accession discreta(natural and industrial civil

fruits) and continua (over immovables:
artificial/industrial and natural)
b. Accession industrial (building, avulsion, rivers,
islands)
c. Accession natural (accretion, avulsion, rivers,
islands)

2. For movables:

a. Accession continua (conjuction, adjunction,

commixtion/ confusion, specification)
b. Rules for determining the principal and
accessory

V. Quieting of title to/interest in and removal/prevention of

cloud over title to/interest in real property

A. Requirement
B. Distinction between quieting title and removing/preventing a
cloud
C. Prescription/non-prescription of action

VI. Co-ownership

A. Characteristics of co-ownership

1. In general
2. Special rules:

a. Concept of condominium
(1) Condominium corporation
(2) Interest in real property
(3) Concept of common areas, amendment
(4) Documents to consider (master deed,
declaration of restrictions, articles and by-
laws of the condominium corporation or the
association where applicable
b. Rights and obligations of condominium owner

505
 (1) Contributions/Dues
(2) PD 957 and RA 6552
c. Grounds for partition of common areas, or
dissolution of the condominium

B. Source of co-ownership
C. Rights of co-owners
1. Distinction between right to property owned in
common and full ownership over his/her ideal share
2. Right to oppose acts of alteration
3. Right to partition
4. Right to contributions for expenses (necessary
expenses, taxes)
5. Waiver
6. Right to redemption of co-owners share
D. Termination/extinguishment
1. Effect of partition
2. Rights against individual co-owners in case of partition
3. Partition in case co-owners cannot agree

VII. Possession

A. Characteristics
B. Acquisition of Possession Art. 531
C. Effects of Possession
1. Possessor in Good Faith Arts. 544, 526-527
a. Right to pending fruits Art. 545
b. Right to be reimbursed
(1) Necessary and useful expenses Arts.
546-547
(2) Expenses for pure luxury Art. 548
2. Possessor in Bad Faith Arts. 449, 549, 552
D. Loss or Unlawful Deprivation of a Movable Arts. 559, 1505
(3)
1. Period to Recover Arts. 1140, 1134, 1132, 1133
2. Finder of Lost Movable Arts. 719-720
3. Distinguished from voidable title Art. 1506
E. In concept of owner, holder, in ones own name, in name of
another
F. Rights of the possessor
G. Loss/termination
VIII. Usufruct

A. Characteristics
B. Classification
C. Rights and obligations of usufructuary
D. Rights of the owner
E. Extinction/termination

IX. Easements Arts. 613, 615-616

506
 A. Characteristics
B. Classification
1. Legal easements
a. Right of way
2. Voluntary easements Art. 688
a. Effect of Zoning ordinance
C. Modes of Acquiring Easements
1. Compulsory easements Arts. 620-624
2. Easement of light and view Arts. 669-673

X. Nuisance Art. 694

XI. Action to Quiet Title Arts. 476-480

XII. Modes of Acquiring Ownership Art. 712

A. Occupation Art. 713

B. Donation

1. Definition Arts. 725-6, 746

2. Characteristics
a. Extent to which donor may donate property
b. Reservations and reversions
3. Kinds
a. Donation Inter Vivos Art. 729
b. Donation By Reason of Marriage Family Code
Arts. 82-83, 86
c. Donation Mortis Causa Art. 728
d. Onerous Donation Art. 733
e. Simple, modal, conditional
4. Formalities required
a. How made and accepted
b. Perfection
c. Differences between formalities for donation of
real, personal properties
(1) Movables Art. 748
(2) Immovables Art. 749
5. Qualifications of donor, donee
6. Effects of donation/limitations
a. In general
b. Double donations
c. Excessive/inofficious
d. Scope of amount Arts. 750-752
e. In fraud of creditors Art. 759
7. Void Donations Arts. 739-740, 1027
8. Revocation or reduction
a. Grounds for revocation, grounds for reduction
b. How done
c. Effects

507
 d. Prescription
e. Innofficious Donations Arts. 760-761, 771-775
f. Ingratitude Arts. 765, 769

EXCLUDE: Intellectual Creations to be covered by Mercantile Law

PRESCRIPTION

I. Definition Art. 1106

A. Acquisitive Art. 1117

1. Characteristics
2. Ordinary
a. Good Faith Art. 1127
b. Just title Arts. 1129-1130
3. Extraordinary Arts. 1137, 1132 second par.
4. Requisites Arts. 1118-1125
5. Period Arts. 1132, 1134, 1138
6. What cannot be required by acquisitive prescription
B. Extinctive
1. Characteristics
2. Requisites
3. Periods

II. No Prescription Applicable

A. By Offender Art. 1133

B. Registered Lands PD 1529
C. Art. 1143, NCC
1. Action legal to demand a right of way Art. 649
2. To abate a nuisance
D. Action to quiet title if plaintiff in possession
E. Void contracts Art. 1410
F. Action to demand partition Art. 494
1. Distinguished from laches
G. Property of public dominion

III. Prescription or Limitation of Actions

A. To recover movables Art. 1140

B. To recover immovables Art. 1141
C. Other actions Arts. 1142-1149

IV. Interruption Art. 1155

V. Nuisance
A. Definition
B. Classification
C. Remedies

508
 OBLIGATIONS

I. Definition
II. Elements of an Obligation
III. Different Kinds of Prestations
IV. Classification of Obligations
V. Sources of Obligations Arts. 1156-7
A. A single act or omission can give rise to different causes of
action
B. Natural Obligations
C. Extra-contractual Obligations
VI. Nature and Effect of obligations
A. Obligation to give
1. A determinate or specific thing
2. An indeterminate or generic thing
B. Obligation to do or not to do
C. Breaches of obligations
1. Complete failure to perform
2. Default, delay or mora no default unless creditors
makes a demand; Exceptions (Art. 1169)
a. Mora solvendi
b. Mora accipiendi
c. Compesatiomorae
3. Fraud in the performance of obligation
a. Waiver of future fraud is void (Art. 1171)
4. Negligence (culpa) in the performance of obligation
a. Diligence normally required is ordinary
diligence or diligence of a good father of a family;
exceptions common carriers requiring
extraordinary diligence (Arts. 1998-2002)
5. Contravention of the tenor of obligation
6. Legal excuse for breach of obligation fortuitous
event; requisites
D. Remedies available to creditor in cases of breach
1. Specific Performance
a. Substituted performance by a third person on
obligation to deliver generic thing and in
obligation to do, unless a purely personal act
2. Rescission (resolution in reciprocal obligations)
3. Damages, in any event
4. Subsidiary remedies of creditors (Art. 1177)
a. Accionsubrogatoria
b. Accionpauliana
c. Acciondirecta(Arts. 1652, 1608, 1729, 1893)

VII. Kinds of civil obligations

A. Pure Arts. 1179-1180
B. Conditional Art. 1181
1. Suspensive condition
2. Resolutory condition

509
 3. Potestative casual or mixed
a. Obligations subject to potestativesuspensive
conditions are void (Art. 1182)
4. Effect of the happening of suspensive condition (Art.
1187); resolutory condition no retroactivity
5. Effect of loss of specific thing or deterioration or
improvement of specific thing before suspensive
condition (Art. 1189); if this occurs in resolutory
condition in obligation to do or not to do (1190, par. 3)
C. Obligation with a period or a term Art. 1193
1. Suspensive period; effect suspensive period is for the
benefit of both debtor and of creditor, unless given in
favor of one of them; if given to debtor alone, debtor
losses benefit of period in any of the five cases in Art.
1198 obligation retroact to the day of its constitution
2. Resolutory period
3. Definite or indefinite period
a. Instances when courts may fix the period (Art.
1197)
b. Creditor must ask court to set the period, before
he can demand payment
D. Alternative or Facultative Art. 1199
1. Difference between alternative and facultative
obligations
2. Effect of loss of specific things or impossibility of
performance of alternative, through fault of
debtor/creditor or through fortuitous events

VIII. Joint and Solidary obligation

A. Joint (divisible) obligation
1. Concurrence of two or more creditors and or two or
more debtors
a. Joint obligation is presumed, unless otherwise
indicated by the law or nature of obligation (Art.
1207)
b. Obligation presumed to be divided into as many
equal shares as there are creditors or debtors
c. Each credit is distinct from one another,
therefore a joint debtor cannot be required to pay
for the share of another with debtor, although he
may pay if he wants to (Art. 1209)
d. Insolvency of a joint debtor, others not liable for
his share (Art. 1209)
B. Joint Indivisible Obligation
1. Obligation cannot be performed in parts but debtors
are bound jointly
2. In case of failure of one joint debtor to perform his
part (share), there is default but only debtor guilty shall
be liable for damages
C. Solidary obligation

510
 1. Anyone of the solidary creditors may collect or demand
payment of whole obligation; there is mutual agency
among solidary debtors (Arts. 1214, 1215)
2. Any of the solidary debtor may be required to pay the
whole obligation; there is mutual guaranty among
solidary debtors (Arts. 1216, 1217, 1222)
3. Each one of solidary creditors may do whatever maybe
useful to the others, but not anything prejudicial to them
(Art. 1212); however, any novation, compensation,
confusion or remission of debt executed by any solidary
creditor shall extinguish the obligation without prejudice
to his liability for the shares of the other solidary
creditors
D. Divisible and Indivisible Art. 1225
E. Obligations with a Penal Clause Arts. 1226, 1228-1230

IX. Extinguishment of Obligations

A. Payment Arts. 1236-1238

1. Dation in payment Art. 1245
2. Form of payment Art. 1249
3. Extraordinary inflation or deflation Art. 1250
4. Application of payment Art. 1252-1254
5. Tender of Payment and Consignation Arts. 1256-1261
B. Loss of Determinate Thing Due or Impossibility or difficulty
of performance Arts. 1262, 1266-1267
C. Condonation or Remission of Debt Art. 1270
1. Express Formality of Donation art. 1270
2. Implied Arts. 1271, 1272, 1274
D. Confusion Arts. 1275, 1272
E. Compensation
1. Kinds Arts. 1278, 1279
a. Legal compensation Arts. 1286-1290
b. Agreement Art. 1282
c. Voluntary Art. 1282
d. Judicial Art. 1283
e. Facultative
2. Obligations not compensable Art. 1287-1288
F. Novation Arts. 1291-1304

CONTRACTS
I. Essential Requisites Art. 1261

II. Kinds of Contracts

A. Consensual
B. Real
C. Formal or Solemn
1. Donations Arts. 748-749
2. Partnership where real property contributed Arts.
1771, 1773

511
 3. Antichresis Art. 2134
4. Agency to sell real property or an interest therein Art. 1874
5. Stipulation to charge interest Art. 1956
6. Stipulation limiting common carriers duty of extraordinary
diligence to ordinary diligence Art. 1744
7. Chattel mortgage
8. Sale of large cattle

III. Formality Arts. 1356, 1357, 1358

IV. Defective Contracts

A. Rescissible Contracts Art. 1381
1. Difference with Rescission (resolution) under Art. 1191
B. Voidable Contracts Arts. 1328-1344, 1390-1402
C. Unenforceable Contracts Arts. 1403-1407, 1317
D. Void Contracts Arts. 1409, 1346
1. Pactumcommissorium- Arts. 2088, 2130, 1390
2. Pactum de non alienando Art. 2130
3. Pactumleonina Art. 1799
V. Effect of Contracts Art. 1311

SALES

I. Introduction

A. Definition of Sales Arts. 1458, 1470

B. Essential Requisites of a Contract of Sale Art. 1505
C. Stages of Contract of Sale
D. Obligations Created Art. 1165
E. Characteristics of a Contract of Sale
F. Sale is Title and Not Mode
G. Sale Distinguished From Other Contracts
H. Contract of Sale/Contract to Sell

II. Parties to a Contract of Sale

A. Capacity of parties Arts. 1489-1492

B. Absolute incapacity Arts. 1327, 1397, 1399
C. Relative incapacity: Married Persons
D. Special disqualifications Arts. 1491-1492

III. Subject Matter

A. Requisites of a valid subject matter Arts. 1459-1465

B. Particular kinds

IV. Obligations of the Seller to Transfer Ownership

A. Sale by a person not the owner at time of delivery Arts.

1462, 1505, 1459

512
 1. Exceptions
B. Sale by a person having a voidable title Arts. 1506, 559
V. Price

A. Meaning of price Arts. 1469-1474

B. Requisites for a valid price
C. How price is determined
D. Inadequacy of price Arts. 1355, 1470
E. When no price agreed Art. 1474
F. Manner of payment must be agreed upon
G. Earnest money vs. option money art. 1482

VI. Formation of Contract of Sale

A. Preparatory Art. 1479

1. Offer Art. 1475
2. Option Contract Arts. 1479, 1324
3. Right of First Refusal
4. Mutual Promise to Buy and Sell Art. 1479
B. Perfection Arts. 1475, 1319, 1325, 1326
C. Formalities of the Contract Art. 1403 (d) (e)

VII. Transfer of Ownership

A. Manner of Transfer Arts. 1477, 1496-1501

B. When delivery does not transfer title
C. Kinds of delivery
D. Double Sales Art. 1544
E. Property Registration Decree
1. Requisites for registration of deed of sale in good faith
2. Accompanied by vendors duplicate certificate of title,
payment of capital gains tax, and documentary tax
registration fees

VIII. Risk of Loss

A. General rule Arts. 1263, 1189

B. When loss occurred before perfection
C. When loss occurred at time of perfection Arts. 1493 and
1494
D. When loss occurred after perfection but before delivery
E. When ownership is transferred Art. 1504

IX. Documents of Title

A. Definition Art. 1636

B. Purpose of documents of title
C. Negotiable documents of title
D. Non-negotiable documents of title
E. Warranties of seller of documents of title Art. 1516

513
 F. Rules on levy/garnishment of goods Arts. 1514, 1519, 1520

X. Remedies of an Unpaid Seller

A. Definition of unpaid seller Art. 1525

B. Remedies of unpaid seller

XI. Performance of Contract

A. Delivery of thing sold

1. Sale of Movables Arts. 1522, 1537, 1480
2. Sale of Immovables Arts. 1539, 1543
3. Inspections and Acceptance
B. Payment of price

XII. Warranties

A. Express warranties
B. Implied warranties Art. 1547
C. Effects of warranties
D. Effects of waivers
E. Buyers options in case of breach of warranty Art. 1599

XIII. Breach of Contract

A. Remedies of the Seller Arts. 1636, 1594

1. Sale of Movables
B. Recto Law: Sale of Movables on Installment Arts. 1484-
1486
1. Sale of Immovables
a. PD 957, sec. 23, 24
b. Maceda Law: Sale of Immovables on Installment
C. Remedies of the Buyer
1. Sale of Movable
2. Sale of Immovables

XIV. Extinguishment of the Sale

A. Causes Arts. 1600, 1231

B. Conventional redemption Art. 1601
C. Equitable mortgage Arts. 1602-1604
D. Distinguish from option to buy Art. 1602
E. Period of redemption Art. 1606
F. Exercise of the right to redeem Art. 1616
G. Legal redemption Art. 1619
H. Age redemption Art. 1619

XV. The Law on Sale of Subdivision and Condominium (PD 957)

XVI. The Condominium Act (RA 4726)

514
EXCLUDE: Electronic Commerce Act, Public Land Law, Retail Trade
and Liberalization Act, Bulk Sales Law

SUCCESSION

I. General Provisions (Arts. 774-780)

A. Definition/What is transmitted Arts. 774, 776, 781
B. Succession occurs at the moment of death Art. 777
C. Kinds of Successors Heirs, Devisees, Legatees Art. 782

II. Testamentary Succession

A. Wills
1. In General
a. Definition and characteristics - (Arts. 783-787)
(1) Personal Act; Non-delegability of will-
making Arts. 784-785, 787; exception
786
(2) Rules of Construction and
Interpretation/Law Governing Formal
Validity Art. 788-795
2. Testamentary Capacity and Intent (Arts. 796-803)
a. Age Requirement Art. 797
b. Soundness of Mind; Presumptions Arts. 798-
801
3. Form
a. Formal Validity Rules - Arts. 17, 815-817, 819
(1) See Law Governing Substantive Validity
Arts. 15, 16, 1039
b. Common requirements Art. 804
(1) In Writing
(2) Language/Dialect Requirement
c. Notarial Wills
(1) Arts. 805-806
(2) Special rules for handicapped testators
Arts. 807-808
(3) Substantial Compliance Art. 809
(4) Requisites Arts. 820-824
d. Holographic Wills
(1) Requirements Arts. 810-814
(2) Witnesses Required for Probate Art.
811 Alterations, Requirements Art. 814
e. Joint Wills Arts. 818-819
4. Codicils, Definition and Formal Requirements Arts.
825-826
5. Incorporate by Reference
6. Revocation (Arts. 828-834); kinds (Art. 830)
7. Allowance and Disallowance of Wills (Arts. 838-839)
a. Probate Requirement Art. 838
(1) Issues to be Resolved in Probate
Proceedings Art. 839

515
 (a) Exceptions when practical
considerations demand the intrinsic
validity of the will be resolved
(2) Effect of Final Decree of Probate, Res
Judicata on Formal Validity
b. Grounds for Denying Probate Art. 839
B. Institution of Heirs (Arts. 840-856)
1. Preterition Definition, Requisites and Effects (Art.
854)
2. Concept Art. 854
3. Compulsory Heirs in the Direct Line
4. Preterition vs. Disposition less than Legitime/Donation
Inter Vivos Arts. 855, 906-918
5. Effects of Preterition, devisees only entitled to
completion of legitime
C. Substitution of Heirs (Arts. 857-870)
1. Definition Art. 857
2. Kinds Arts. 858-860
3. Simple Substitution Art. 859
4. Fideicommissary Substitution Arts. 863-866, 869
D. Conditional Testamentary Dispositions and Testamentary
Dispositions with a Term Arts. 871-885
E. Legitime (Arts. 886-914)
1. Definition Art. 886
2. Compulsory Heirs and Various Combinations Arts.
887-903
3. ReservaTroncal Art. 891
4. Disinheritance
a. Disinheritance for cause Art. 919
(1) Reconciliation Art. 922
(2) Rights of descendants of person
disinherited Art. 923
b. Disinheritance without cause - Art. 918
5. Legacies and Devisees Arts. 924-959

III. Legal or Intestate Succession Arts. 960-1014

A. General Provisions Arts. 960-969
1. Relationship Arts. 963-969
2. Right of Representation Arts. 970-977
B. Order of Intestate Succession Arts. 978-1014, 992

IV. Provisions Common to Testate and Intestate Succession

Arts. 1015-1105
A. Right of Accretion Arts. 1015-1023
1. Definition and Requisites Arts. 1015-1016
B. Capacity to Succeed by Will or Intestacy (Arts. 1024-1040)
1. Persons Incapable of Succeeding Arts. 1027, 739,
1032
2. Unworthiness vs. Disinheritance

516
 C. Acceptance and Repudiation of the Inheritance Arts. 1041-
1057
D. Collation Arts. 908-910, 1061-1062
E. Partition and Distribution of Estate Arts. 1078-1105
1. Partition Arts. 1079, 1080
2. Partition inter vivos
3. Effects of Partition Arts. 1091, 1097, 1100, 1104-
1105

EXCLUDE: Executors and Administrators (Arts. 1058-1060) to be

covered by Remedial Law

PARTNERSHIP

I. Contract of partnership
A. Definition
B. Elements
C. Rules to determine existence
D. How partnership is formed
E. Partnership term
F. Universal vs. Particular; General vs. Limited
G. Partnership by estoppel
H. Partnership v. Joint Venture
I. Professional partnership
J. Management Arts. 1800-1803
II. Rights and obligations of partnership
III. Rights and obligations of partners among themselves
IV. Obligations of partnership/partners to third persons
V. Dissolution Art. 1830
VI. Limited partnership
A. Definition
B. How limited partnership is formed/amended
C. Rights and obligations of a limited partner
EXCLUDE: Questions requiring application of SEC opinions or
regulations

AGENCY

I. Definition of agency
II. Powers Art. 1877-8
A. To bind principal Arts. 1897-1902
B. Exception Art. 1883
III. Express vs. Implied Agency
IV. Agency by estoppel
V. General vs. Special Agency
VI. Agency couched in general terms
VII. Agency requiring special power of attorney
VIII. Agency by operation of law
IX. Rights and Obligations of Principal
X. Irrevocable agency Arts. 1927-1930

517
XI. Modes of extinguishment

COMPROMISE
I. Definition Art. 2028
II. Void Compromise Art. 2035
III. Effect Arts. 2037, 2041

CREDIT TRANSACTIONS

I. Loan
A. Commodatum vs. Mutuum
B. Obligations of Bailor and Bailee
C. Interest and the suspension of Usury Law
II. Deposit
A. Voluntary deposit
B. Necessary deposit
C. Judicial deposit
III. Guaranty and Suretyship
A. Nature and extent of guaranty
B. Effects of guaranty
C. Extinguishment of guaranty
D. Legal and judicial bonds
IV. Pledge
A. Definition
B. Kinds
C. Essential requirements
D. Obligation of pledge
E. Rights of pledgor
F. Perfection Arts. 2093, 2096
G. Foreclosure Arts. 2112, 2115
H. Pledge by Operation of Law Art. 2121-2122
I. Distinguished from Chattel Mortgage Arts. 2140, 1484
V. Real Mortgage
A. Definition and characteristics
B. Essential requisites
C. Foreclosure
VI. Antichresis
A. Definition and characteristics
B. Obligations of antichretic creditor
VII. Chattel Mortgage
A. Definition and characteristics
B. Registration
VIII. Quasi-Contracts
A. NegotiorumGestio
B. SolutioIndebiti
IX. Concurrence and Preference of Credits
A. Meaning of concurrence and preference
B. Preferred Credits on Specific Movables
C. Exempt Property
D. Classification of credits

518
 E. Order of preference of credits
X. Insolvency Law
A. Definition of insolvency
B. Suspension of payments
C. Voluntary insolvency
D. Involuntary insolvency
EXCLUDE: Warehouse Receipts Law, Usury Law

LEASE
I. Lease of things
II. Lease of work or services
III. Lease of rural and urban lands
A. Qualified persons
B. Registration
C. Prohibitions
IV. Rights and obligations of lessor and lessee
V. Special rules for lease of rural/urban lands
VI. Household service
VII. Contract of labor
A. Obligation in case of death/injury of laborers
VIII. Contract for piece of work

LAND TITLES AND DEEDS

I. Torrens System
A. Concept and background
B. Certificate of Title
II. Regalian Doctrine
A. Concept
B. Effects
C. Concept of native title, time immemorial possession
III. Citizenship Requirement
A. Individuals and corporations
IV. Original Registration
A. Who may apply
1. Under PD 1529
2. Under CA 141
3. Under RA 8371
B. Registration process and requirements
C. Remedies
D. Cadastral registration
V. Subsequent Registration
A. Voluntary dealings
B. Involuntary dealings
VI. Non-Registrable Properties
VII. Dealings with Unregistered Lands
EXCLUDE: History of land laws, Remedies sufficiently covered under
Remedial Law, Registration of judgments, Orders and Partitions,

519
Assurance Fund, Registration of Patents, Administrative structure of
the Register of Deeds, Consultas1avvphi1

TORTS AND DAMAGES

BOOK I TORTS
I. Principles
A. Abuse of Right; Elements
B. Unjust Enrichment
C. Liability without Fault
D. Acts Contrary to Law
E. Acts Contrary to Morals
II. Classification of Torts
A. According to manner of commission: intentional,
negligent and strict liability
B. According to scope: general or specific
III. The Tortfeasor
A. The Direct Tortfeasor
1. Natural Persons
2. Juridical Persons
B. Persons Made Responsible for Others
1. In General
a. Quasi-delicts under Article 2180, how
interpreted Family Code, Arts. 218-219,
221
(1) Elements; definition
(2) Distinguished from culpa
contractual and culpa criminal
b. Indirect liability for intentional acts
c. Presumption of negligence on persons
indirectly responsible
d. Nature of liability; joint or solidary?
2. In Particular
a. Parents
b. Guardian
c. Owners and Managers of Establishments
and Enterprises
d. Employers
(1) Meaning of employers
(2) Requisites
(a) Employee chosen by
employer or through another
(b) Services rendered in
accordance with orders which
employer has authority to give
(c) Illicit act of employee was
on the occasion or by reason of
the functions entrusted to him

520
 (d) Presumption of negligence
(3) Employer need not be engaged in
business or industry
(4) Defense of diligence in selection
and supervision
(5) Nature of employers liability
e. State
f. Teachers and heads of establishments of
arts and trades
C. Joint Tortfeasors (Art. 2194, Civil Code)
IV. Act of Omission and Its Modalities
A. Concept of Act
V. Proximate Cause
A. Concept
1. Definition
2. Test
3. Distinguished from Immediate Cause
4. Distinguished from Intervening Cause
5. Distinguished from Remote and Concurrent
B. Cause in Fact
1. But For
2. Substantial Factor Test
3. Concurrent Causes
C. Legal Cause
1. Natural and Probable Consequences
2. Foreseeability
D. Efficient Intervening Cause
E. Cause vs. Condition
F. Last Clear Chance
VI. Legal Injury
A. Concept
B. Elements of Right
C. Violation of Right or Legal Injury
D. Classes of Injury
1. Injury to persons
2. Injury to property
3. Injury to relations
VII. Intentional Torts
A. General
1. Concept
2. Classes
a. Interference with persons and property
(1) Physical harms
(2) Non-physical harms
b. Interference with relations
B. Interference with rights to persons and property
1. Intentional Physical Harms
a. General
(1) Concept
(2) Kinds

521
 b. Violation of persons security, physical
injuries Art. 33, Civil Code
(1) Battery (Physical Injury)
(2) Assault (Grave Threat)
c. False Imprisonment (Illegal detention)
d. Trespass to Land
(1) Concept
(2) Elements
e. Interference with Personal Property
1) Trespass to Chattels
2) Conversion
2. Intentional Non-Physical Harms
a. General
(1) Concept
(2) Kinds
b. Violation of Personal Dignity
c. Infliction of emotional distress
d. Violation of Privacy
(1) Appropriation
(2) Intrusion
(3) Public disclosure of private facts
(4) False light in the public eye
e. Disturbance of Peace of Mind
f. Malicious Prosecution
g. Defamation
(1) Defenses
(a) Absence of elements
(b) Privilege
h. Fraud or Misrepresentation (formerly
deceit)
i. Seduction
j. Unjust Dismissal
C. Interference with relations
1. General
a. Concept
b. Kinds
2. Family Relations
a. Alienation of affection
b. Loss of consortium
c. Criminal conversation (Adultery)
3. Social Relations
a. Meddling with or disturbing family
relations
b. Intriguing to cause another to be
alienated from his friends
4. Economic Relations
a. Interference with contractual relations
b. Unfair competition
5. Political Relations

522
 a. Violation of right to suffrage (NCC, Art.
32)
b. Violation of other political rights (freedom
of speech, press, assembly and petition, etc.)
6. Defenses
a. Absence of element
b. Privilege
1. Consent
2. Self-defense and defense of others
3. Necessity NCC Art. 429
4. Defense of property
5. Authority of Law
c. Prescription
d. Waiver
e. Force majeure
VIII. Negligence
A. Concept
B. Good Father of a Family or Reasonably Prudent Man
C. Standard of Care
1. NCC, Art. 1173
2. Emergency Rule
D. Unreasonable risk of Harm
E. Evidence
F. Presumption of Negligence
1. Legal Provisions
2. Res ipsa loquitur
G. Defenses
1. Complete
a. Absence of element
(1) Due diligence
(2) Acts of public officers
b. Accident or fortuitous event
c. Damnumabsqueinjuria
d. Authority of law
e. Assumption of risk
f. Last clear chance
g. Prescription NCC, Art. 1144, 1146, and
1150
h. Waiver
i. Double recovery NCC Art. 2177
IX. Special Liability in Particular Activities
A. General
1. Concept
B. Products Liability
1. Manufacturers or Processors
a. Elements
b. Consumer Act RA 7394, secs. 92-107,
(Ch. 1)
C. Nuisance NCC Arts. 694-707
1. Nuisance Per Se and Nuisance Per Accidence

523
 2. Public Nuisance and Private Nuisance
3. Attractive Nuisance
D. Violation of Constitutional Rights
1. Violation of Civil Liberties
E. Violation of Rights Committed by Public Officers
F. Provinces, Cities and Municipalities
G. Owner of Motor Vehicle
H. Proprietor of Building or Structure or Thing
I. Head of Family
X. Strict Liability
A. Animals
1. Possessor and User of an Animal
B. Nuisance (supra)
1. Classes<Per se or per accidents; Public or
Private
2. Easement Against Nuisance
C. Products Liability (supra)
1. Consumer Act

BOOK II DAMAGES
I. General Considerations
A. Classification
1. NCC Art. 2197
2. According to purpose
3. According to manner of determination
4. Special and ordinary
II. Actual and Compensatory Damages
A. Concept
B. Requisites
1. Alleged and proved with certainty
2. Not speculative
C. Component Elements
1. Value of loss; unrealized profit
2. Attorneys fees and expenses of litigation
3. Interest
D. Extent or scope of actual damages
1. In contracts and quasi-contracts
2. In crimes and quasi-delicts
III. Moral Damages
A. Concept (Arts. 2217-2218)
B. When recoverable (Arts. 2219-2220)
1. In seduction, abduction, rape and other
lascivious acts
2. In acts referred to in Arts. 21, 26, 27, 28, 29, 32,
34 & 35, NCC
3. In cases of malicious prosecution
IV. Nominal Damages
A. Concept
B. When awarded
V. Temperate or Moderate Damages

524
 A. Concept
VI. Liquidated Damages
A. Concept; NCC Art. 2226
B. Rules governing in case of breach of contract
VII. Exemplary or Corrective Damages
A. Concept; NCC Art. 2229
B. When recovered
1. In criminal offenses; NCC Art. 2230
2. In quasi-delicts; NCC Art. 2231
3. In contracts and quasi-contracts; NCC Art. 2232
C. Requisites
1. Arts. 2233, 2234
VIII. Damages in Case of Death
A. In crimes and quasi-delicts causing death
1. In death caused by breach of conduct by a
common crime
IX. Graduation of Damages
A. Duty of Injured Party
1. Art. 2203
B. Rules
1. In crimes
2. In quasi-delict; NCC Art. 2214
3. In contracts, quasi-contracts and quasi-delicts;
NCC Art. 2215
4. Liquidated damages; NCC Art. 2227
5. Compromise
X. Miscellaneous Rules1avvphi1
A. Damages that cannot co-exists
1. Nominal with other damages, Art. 2223
2. Actual and Liquidated Art. 2226
B. Damages that must co-exist
1. Exemplary with moral, temperate, liquidated or
compensatory
C. Damages that must stand alone
1. Nominal Damages, Art. 2223
EXCLUDE: Distinction between tort and quasi-delict

525