Nature of Contracts; Obligatoriness (1991)

Obligation and Contracts QUESTION:

BAR QUESTIONS AND Roland, a basketball star, was under contract for one year
ANSWERS to play-for-play exclusively for Lady Love, Inc. However,
even before the basketball season could open, he was
offered a more attractive pay plus fringes benefits by Sweet
Taste, Inc. Roland accepted the offer and transferred to
Sweet Taste. Lady Love sues Roland and Sweet Taste for
1991 Bar Questions breach of contract. Defendants claim that the restriction to
play for Lady Love alone is void, hence, unenforceable, as
OBLIGATIONS it constitutes an undue interference with the right of
Period; Suspensive Period (1991) Roland to enter into contracts and the impairment of his
Question: freedom to play and enjoy basketball.
Can Roland be bound by the contract he entered into with
In a deed of sale of a realty, it was stipulated that the buyer Lady Love or can he disregard the same? Is he liable at all?
would construct a commercial building on the lot while How about Sweet Taste? Is it liable to Lady Love?
the seller would construct a private passageway bordering
the lot. The building was eventually finished but the seller SUGGESTED ANSWER: Roland is bound by the contract
failed to complete the passageway as some of the he entered into with Lady Love and he cannot disregard
squatters, who were already known to be there at the time the same, under the principles of obligatoriness of
they entered into the contract, refused to vacate the contracts. Obligations arising from contracts have the force
premises. In fact, prior to its execution, the seller filed of law between the parties.
ejectment cases against the squatters. The buyer now sues
the seller for specific performance with damages. The SUGGESTED ANSWER: Yes, Roland is liable under the
defense is that the obligation to construct the passageway contract as far as Lady Love is concerned. He is liable for
should be with a period which, incidentally, had not been damages under Article 1170 of the Civil Code since he
fixed by them, hence, the need for fixing a judicial period. contravened the tenor of his obligation. Not being a
Will the action for specific performance of the buyer contracting party, Sweet Taste is not bound by the contract
against the seller prosper? but it can be held liable under Art. 1314. The basis of its
liability is not prescribed by contract but is founded on
SUGGESTED ANSWER: quasi-delict, assuming that Sweet Taste knew of the
No. the action for specific performance filed by the buyer contract. Article 1314 of the Civil Code provides that any
is premature under Art. 1197 of the Civil Code. If a period third person who induces another to violate his contract
has not been fixed although contemplated by the parties, shall be liable for damages to the other contracting party.
the parties themselves should fix that period, failing in Art. 1314. Any third person who induces another to violate
which, the Court maybe asked to fix it taking into his contract shall be liable for damages to the other
consideration the probable contemplation of the parties. contracting party.
Before the period is fixed, an action for specific
performance is premature. ALTERNATIVE ANSWER: It is assumed that Lady Love
Art. 1197. If the obligation does not fix a period, but from knew of the contract. Neither Roland nor Sweet Taste
its nature and the circumstances it can be inferred that a would be liable, because the restriction in the contract is
period was intended, the courts may fix the duration violative of Article 1306 as being contrary to law morals,
thereof. good customs, public order or public policy.
The courts shall also fix the duration of the period when it Art. 1306. The contracting parties may establish such
depends upon the will of the debtor. stipulations, clauses, terms and conditions as they may
In every case, the courts shall determine such period as deem convenient, provided they are not contrary to law,
may under the circumstances have been probably morals, good customs, public order, or public policy.
contemplated by the parties. Once fixed by the courts, the Art. 1412. If the act in which the unlawful or forbidden
period cannot be changed by them. cause consists does not constitute a criminal offense, the
following rules shall be observed:
ALTERNATIVE ANSWER: It has been held in Borromeo vs.
CA (47 SCRA 69), that the Supreme Court allowed the (1) When the fault is on the part of both contracting
simultaneous filing of action to fix the probable parties, neither may recover what he has given by virtue
contemplated period of the parties where none is fixed in of the contract, or demand the performance of the other's
the agreement if this would avoid multiplicity of suits. In undertaking;
addition, technicalities must be subordinated to substantial
justice. (2) When only one of the contracting parties is at fault, he
cannot recover what he has given by reason of the
ALTERNATIVE ANSWER: The action for specific contract, or ask for the fulfillment of what has been
performance will not prosper. The filing of the ejectment promised him. The other, who is not at fault, may demand
suit by the seller was precisely in compliance with his the return of what he has given without any obligation to
obligations and should not, therefore, be faulted if no comply his promise. (1306)
decision has yet been reached by the Court on the matter.

CONTRACTS
 1993 Bar Question
QUESTION NO. 1 - EXTINGUISHMENT; NOVATION
In 1971, Able Construction, Inc. entered into a contract
with Tropical Home Developers, Inc. whereby the former In 1978, Bobby borrowed P1,000,000.00 from Chito
would build for the latter the houses within its subdivision. payable in two years. The loan, which was evidenced by a
The cost of each house, labor and materials included, was promissory note, was secured by a mortgage on real
P100,000.00. Four hundred units were to be constructed property. No action was filed by Chito to collect the loan
within five years. In 1973, Able found that it could no or to foreclose the mortgage on real property. But in 1991,
longer continue with the job due to the increase in the Bobby, without receiving any amount from Chito,
price of oil and its derivatives and the concomitant executed another promissory note which was worded
worldwide spiraling of prices of all commodities, including exactly as the 1978 promissory note, except for the date
basic raw materials required for the construction of the thereof, which was the date of its execution.
houses. The cost of development had risen to
unanticipated levels and to such a degree that the 1. Can Chito demand payment on the 1991 promissory
conditions and factors which formed the original basis of note in 1994?
the contract had been totally changed. Able brought suit
against Tropical Homes praying that the Court relieve it of 2. Can Chito foreclose the real estate mortgage if Bobby
its obligation. Is Able Construction entitled to the relief fails to make good his obligation under the 1991
sought? promissory note?

SUGGESTED ANSWER: SUGGESTED ANSWER:

Yes, the Able Construction. Inc. is entitled to the relief
sought under Article 1267, Civil Code. The law provides: 1. Yes, Chito can demand payment on the 1991 promissory
"When the service has become so difficult as to be note in 1994. Although the 1978 promissory note for
manifestly beyond the contemplation of the parties, the P1,000,000.00 payable for two years later or in 1980
obligor may also be released therefrom, in whole or in became a natural obligation after the lapse of 10 years,
part." such natural obligation can be a valid consideration of a
novated promissory note dated in 1991 and payable 2
years later, or in 1993. All the elements of an implied real
1994 Civil Law Bar Exam novation stated under Article 1292 of the New Civil Code
are present, to wit:
QUESTION NO. 1 - EXTINGUISHMENT; LOSS OF THE a) a prevous valid obligation;
THING DUE b) a new valid obligation;
c) capacity of the parties;
Dino sued Ben for damages because the later had failed to d) animus novandi or intention to novate;
deliver antique Mercedes Benz car Dino had purchased e) the previous and new obligation should be
from Ben, which was--by agreement--due for delivery on incompatible with each other on all material
December 31, 1993, Ben, in his answer to Dino’s points;
complaint, said Dino’s claim has no basis for the suit,
because as the car was being driven to be delivered to Dino The previous and new promissory notes cannot stand
on January 1, 1994, a reckless truck driver had rammed together, hence, the period of prescription of 10 years has
into the Mercedes Benz. The trial cort dismissed Dino’s not yet lapsed.
complaint, saying Ben’s obligation had indeed, been
extinguised by force majeure. Is the trial court correct? 2. No. The mortgage being an accessory contract
prescribed with the loan. The novation of the loan,
SUGGESTED ANSWER: however, did not expressly include the mortgage, hence,
: the mortgage is extinguished under Article 1296 of the
No, the trial court erred in its decision to dismiss Dino’s New Civil Code. The contract has been extinguished by
complaint. the novation or extinction of the principal obligation
insofar as third parties are concerned.
Article 1262 of the New Civil Code states that, “An
obligation which consists in the delivery of a determinate 1995 Bar Question
thing shall be extinguished if it should be lost or destroyed
without fault of the debtor, and before he has incurred in EXTINGUISHMENTS: PAYMENT
delay.” In 1983 PHILCREDIT extended loans to Rivett-
Strom Machineries, Inc. (RIVETTT-STROM), consisting of
In the given case, the debtor was in delay when the car US$10 Million for the cost of machineries imported and
was destroyed on January 1, 1994 since it was due for directly paid by PHILCREDIT, and 5 Million in cash
delivery on December 31, 1993. Since there was a delay in payable in installments over a period of ten (10) years on
the delivery of the car Dino purchased, loss of the thing the basis of the value thereof computed at the rate of
due by fortuitous events or force majeure cannot be used exchange of the U.S. dollar vis-à-vis the Philippine peso at
by Ben as a valid defense. Extinguishment of liability for the time of payment. RIVETT-STROM made payments on
fortuitous event requires that there was no delay incurred both loans which if based on the rate of exchange in 1983
by the debtor. would have fully settled the loans.
 PHILCREDIT contends that the payments on both SSC refused to accept the money and demanded that
loans should be based on the rate of exchange existing at Salvador execute a deed of absolute sale of the property
the time of payment, which rate of exchange has been in its favor, at which time it will pay the balance of the
consistently increasing, and for which reason there would price. Incidentally, the value of the land had doubled by
still be a considerable balance on each loan. Is the that time. Salvador consigned the P 100,000.00 in court,
contention of PHILCREDIT correct? Discuss fully. and filed an action for rescission of the deed of conditional
sale, plus damages. Will the action prosper? Explain.
Suggested Answer: Suggested Answer:
No, the action will not prosper. The action for
The contention of the PHILCREDIT is correct. It rescission may be brought only by the aggrieved party to
has to be paid in Philippine currency computed on the the contract. Since it was Salvador who failed to comply
basis of exchange rate at the time of payment. According with his conditional obligation, he is not the aggrieved
to Article 1249, paragraph 1 of the Civil Code of the party who may file the action for rescission but the Star
Philippines: Semiconductor Company. The company, however, is not
“The payment of debts in money shall be opting to rescind the contract but has chosen to waive
made in the currency stipulated, and if it is not Salvador's compliance with the condition which it can do
possible to deliver such currency, then in the under Art. 1545, NCC.
currency to which is legal tender in the ALTERNATIVE ANSWER:
Philippines.” The action for rescission will not prosper. The
Since the currency stipulated by the parties at the buyer has not committed any breach, let alone a
time of payment is Philippine peso (computed at the rate substantial or serious one, to warrant the
exchange of the U.S Dollar), the loan made by the rescission/resolution sought by the vendor. On the
PHILCREDIT must be paid on the agreed currency which is contrary, it is the vendor who appears to have failed to
Philippine Peso. comply with the condition imposed by the contract the
fulfillment of which would have rendered the obligation
to pay the balance of the purchase price demandable.
1996 Bar Questions Further, far from being unable to comply with what is
incumbent upon it, ie., pay the balance of the price the
Nature of Contracts; Relativity of Contracts buyer has offered to pay it even without the vendor
Baldomero leased his house with a telephone to having complied with the suspensive condition attached
Jose. The lease contract provided that Jose shall pay for all to the payment of the price, thus waiving such condition
electricity, water and telephone services in the leased as well as the 60-day term in its favor The stipulation that
premises during the period of the lease. Six months later. the P100,000.00 down payment shall be returned by the
Jose surreptitiously vacated the premises. He left behind vendor to the vendee if the squatters are not removed
unpaid telephone bills for overseas telephone calls within six months, is also a covenant for the benefit of
amounting to over P20,000.00. Baldomero refused to pay the vendee, which the latter has validly waived by
the said bills on the ground that Jose had already implication when it offered to pay the balance of the
substituted him as the customer of the telephone company. purchase price upon the execution of a deed of absolute
The latter maintained that Baldomero remained as his sale by the vendor. (Art. 1545, NCC)
customer as far as their service contract was concerned,
notwithstanding the lease contract between Baldomero
and Jose. Who is correct, Baldomero or the telephone 1997 Bar Question
company? Explain.
Suggested Answer:
The telephone company is correct because as far CONDITIONAL OBLIGATIONS; PROMISE
as it is concerned, the only person it contracted with was In two separate documents signed by him, Juan
Baldomero. The telephone company has no contract with Valentino "obligated" himself each to Maria and to Perla,
Jose. Baldomero cannot substitute Jose in his stead without thus - 'To Maria, my true love, I obligate myself to give
the consent of the telephone company (Art. 1293, NCC). you my one and only horse when I feel like It." - and -'To
Baldomero is, therefore, liable under the contract. Perla, my true sweetheart, I obligate myself to pay you the
Rescission of Contracts; Proper Party P500.00 I owe you when I feel like it." Months passed but
In December 1985, Salvador and the Star Juan never bothered to make good his promises. Maria
Semiconductor Company (SSC) executed a Deed of and Perla came to consult you on whether or not they
Conditional Sale wherein the former agreed to sell his could recover on the basis of the foregoing settings. What
2,000 square meter lot in Cainta, Rizal, to the latter for would your legal advice be?
the price of P1,000,000.00, payable P100,000.00 down,
and the balance 60 days after the squatters in the property Suggested Answer: I would advise Maria not to bother
have been removed. If the squatters are not removed running after Juan for the latter to make good his promise.
within six months, the P100,000.00 down payment shall This is because a promise is not an actionable wrong that
be returned by the vendor to the vendee, Salvador filed allows a party to recover especially when she has not
ejectment suits against the squatters, but in spite of the suffered damages resulting from such promise. A promise
decisions in his favor, the squatters still would not leave. does not create an obligation on the part of Juan because
In August, 1986, Salvador offered to return the it is not something which arises from a contract, law, quasi-
P100,000.00 down payment to the vendee, on the ground contracts or quasidelicts (Art, 1157)]. Under Art. 1182,
that he is unable to remove the squatters on the property. Juan's promise to Maria is void because a conditional
obligation depends upon the sole will of the obligor.
As regards Perla, the document is an express 2. Jojo can be compelled by Joey to contribute P50,000.
acknowledgment of a debt, and the promise to pay what Art. 1217, par. 3, Civil Code provides, "When one of the
he owes her when he feels like it is equivalent to a promise solidary debtors cannot, because of his insolvency,
to pay when his means permits him to do so, and is reimburse his share to the debtor paying the obligation,
deemed to be one with an indefinite period under Art. such share shall be borne by all his co-debtors, in
1180. Hence the amount is recoverable after Perla asks the proportion to the debt of each."
court to set the period as provided by Art. 1197, par. 2. Since the Insolvent debtor's share which Joey paid was
P100,000, and there are only two remaining debtors -
1998 Civil Law Bar Questions (ObliCon Analysis) namely Joey and Jojo - these two shall share equally the
burden of reimbursement. Jojo may thus be compelled by
(a) Define alternative and facultative obligations. Joey to contribute P50,000.00.
(b) Define joint and solidary obligations. (1988 Bar
Question)
1. Define compensation as a mode of extinguishing an
SUGGESTED ANSWERS: obligation, and distinguish it from payment. [2%]
(a) Alternative obligations refer to those juridical relations 2. X, who has a savings deposit with Y Bank in the sum of
which comprehend several objects or prestations which are P1,000,000.00 incurs a loan obligation with the said Bank
due, but the payment or performance of one of them in the sum of P800,000.00 which has become due. When
would be sufficient. On the other hand, facultative X tries to withdraw his deposit. Y Bank allows only
obligations refer to those juridical relations where only one P200,000.00 to be withdrawn, less service charges,
object or prestation has been agreed upon by the parties claiming that compensation has extinguished its obligation
to the obligation, but the obligor may deliver or render under the savings account to the concurrent amount of X’s
another in substitution. debt. X contends that compensation is improper when one
of the debts, as here, arises from a contract of deposit.
(b) When there is a concurrence of two or more creditors Assuming that the promissory note signed by X to evidence
or of two or more debtors in one and the same Obligation, the loan does not provide for compensation between said
such obligation may be either joint (obligacion loan and his savings deposit, who is correct? [3%] (1998
mancomunada) or solidary (obligacion solidaria). A joint Bar Question)
obligation may be defined as an obligation where there is
a concurrence of several creditors or several debtors, or of SUGGESTED ANSWERS:
several creditors and debtors by virtue which each of the 1. Compensation is a mode of extinguishing to the
creditors has a right to demand, while each of debtors is concurrent amount, the obligations of those persons who
bound to render compliance with his proportionate part in their own right are reciprocally debtors and creditors of
of the prestation which constitutes the object of the each other (Tolentino, 1991 ed., p. 365, citing 2 Castan
obligation. In other words, each of the creditors is entitled 560 and Francia vs. LAC, 162 SCRA 753). It involves the
to demand the payment of only a proportionate part of simultaneous balancing of two obligations in order to
the credit, while each of the debtors is liable for the extinguish them to the extent in which the amount of one
payment of only a proportionate part of the debt. A is covered by that of the other. (De Leon, 1992 ed., p. 221,
solidary obligation, on the other hand, may be defined as citing 6 Manresa 401).
an obligation where there is a concurrence of several
creditors, or several debtors, or of several creditors and Payment means not only delivery of money but also
debtors, by virtue which each of the creditors has a right performance of an obligation (Article 1232, Civil Code). In
to demand, while each of the debtors is bound to render payment, capacity to dispose of the thing paid and
entire compliance with the prestation which constitutes the capacity to receive payment are required for debtor and
object of the obligation. In other words, each of the creditor, respectively: in compensation, such capacity is
creditors is entitled to demand the payment of the entire not necessary, because the compensation operates bylaw
credit, while each of the debtors is liable for the payment and not by the act of the parties. In payment, the
of the entire debt. (See Art. 1207, CC; 3 Castan, 7th Ed., performance must be complete; while in compensation
pp. 65-66.) there may be partial extinguishment of an obligation
(Tolentino, supra)
2. Y bank is correct. Art. 1287, Civil Code, does not apply.
III. Joey, Jovy and Jojo are solidary debtors under a loan All the requisites of Art. 1279, Civil Code are present. In
obligation of P300.000.00 which has fallen due. The the case of Gullas vs. PNB (62 Phil. 519), the Supreme
creditor has, however, condoned Jojo’s entire share in the Court held: “The Civil Code contains provisions regarding
debt. Since Jovy has become insolvent, the creditor makes compensation (set off) and deposit. These portions of
a demand on Joey to pay the debt. Philippine law provide that compensation shall take place
when two persons are reciprocally creditor and debtor of
1. How much, if any, may Joey be compelled to pay? [2%] each other. In this connection, it has been held that the
2. To what extent, if at all, can Jojo be compelled by Joey relation existing between a depositor and a bank is that of
to contribute to such payment? (3%) (1998 Bar Question) creditor and debtor, x xx As a general rule, a bank has a
right of set off of the deposits in its hands for the payment
SUGGESTED ANSWER: of any indebtedness to it on the part of a depositor."
1. Joey can be compelled to pay only the remaining Hence, compensation took place between the mutual
balance of P200.000, in view of the remission of Jojo's obligations of X and Y bank.
share by the creditor. (Art. 1219, Civil Code)
IV. Distinguish consensual from real contracts and name at what they have received. The fruits here may e natural,
least four (4) kinds of real contracts under the present law. industrial or civil fruits.
(3%) (1998 Bar Question)
2000 BAR QUESTIONS
SUGGESTED ANSWER:
Consensual contracts are those which are perfected by
mere consent (Art. 1315, Civil Code). Real contracts are CONDITIONAL OBLIGATIONS
those which are perfected by the delivery of the object of Pedro promised to give his grandson a car if the latter will
the obligation. (Art. 1316, Civil Code) pass the bar examinations. When his grandson passed the
Examples of real contracts are deposit, pledge, said examinations, Pedro refused to give the car on the
commodatum and simple loan (mutuum). ground that the condition was a purely potestative one. Is
he correct or not?
Suggested Answer:
1999 BAR QUESTIONS No, he is not correct. First of all, the condition is not purely
potestative, because it does not depend on the sole will of
In 1997, Manuel bound himself to sell Eva a house and lot one of the parties. Secondly, even if it were, it would be
which is being rented by another person, if Eva passes the valid because it depends on the sole will of the creditor
1998 bar examinations. Luckily for Eva, she passed said (the done) and not of the debtor (the donor).
examinations. LOSS OF THE THING DUE; FORCE MAJEURE
(a) Suppose Manuel had sold the same house Kristina brought her diamond ring to a jewelry shop for
and lot to another before Eva passed the cleaning. The jewelry shop undertook to return the ring by
1998 bar examinations, is such sale valid? February 1, 1999. When the said date arrived, the jewelry
Why? shop informed Kristina that the job was not yet finished.
They asked her to retur five days later. On February 6,
1999, Kristina went to the shop to claim the ring, but she
was informed that the same was stolen by a thief who
Suggested Answer: Yes, the sale is valid, according to entered the shop the night before. Kristina filed an action
Article 1181 “ In conditional obligations the acquisition of for damages against the jewelry shop which put up the
rights, as well as the extinguishment of those already defense of force majeure. Will the action prosper or not?
acquired, shall depend upon the happening of the event
which constitutes the condition.” The obligation of
Manuel to sell the house and lot to Eva is under a
suspensive condition which means that she can only Suggested Answer:
acquire a right over the house and lot if she will pass the The action will prosper. Since the defendant was already
bar exams. During the pendency of this susensive condition in default not having delivered the ring when delivery was
Eva do not have any right but only a mere hope or demanded by plaintiff at due date, the defendant is liable
expectancy of acquiring a right. for the loss of the thing and even when the loss was due
to force majeure.
Therefore, the sale to the third person is valid but subjected
to a resolutory condition because the house and lot is the
object of the obligation of Manuel to Eva which means 2001 BAR QUESTION
that it can be repurchased. The right of the third person
then is not absolute because it may be lost if Eva will EXTINGUISHMENT; EXTRAORDINARY INFLATION OR
exercise her right to purchase the house and lot. DEFLATION
On July 1, 1998, Brian leased an office space in a
building for a period of five years at a rental rate of
(b) Assuming that it is Eva who is entitled to buy said P1,000.00 a month. The contract of lease contained the
house and lot, is she entitled to rentals collected proviso that "in case of inflation or devaluation of the
by Manuel before she passed the 1998 bar Philippine peso, the monthly rental will automatically be
examinations? Why? increased or decreased depending on the devaluation or
inflation of the peso to the dollar." Starting March 1, 2001,
Suggested Answer: No, Eva is not entitled to the rentals the lessor increased the rental to P2,000 a month, on the
collected by Manuel before she passed the bar exams ground of inflation proven by the fact that the exchange
because according to Article 1187 “ When the obligation rate of the Philippine peso to the dollar had increased from
imposes reciprocal prestations upon the parties, the fruits P25.00=$1.00 to P50.00=$1.00. Brian refused to pay the
and interest during the pendency of the condition shall be increased rate and an action for unlawful detainer was filed
deemed to have been mutually compensated.” against him. Will the action prosper? Why? (5%)

Manuel and Eva have reciprocal obligations, when Eva SUGGESTED ANSWER:
passed the bar exams Manuel should sell to her the house The fourth student is correct. His liability is only joint,
and lot and Eva should pay him. In reciprocal obligation, hence, pro rata. There is solidary liability only when the
there is no retroactivity because the fruits and interests obligation expressly so states or when the law or nature of
received during the pendency of the condition are deemed the obligation requires solidarity (Art. 1207, CC). The
to have been mutually compensated. The reason for the contract of lease in the problem does not, in any way,
non-retroactive effect is for the convenience of the parties, stipulate solidarity.
so that they do not have to render mutual accounting of
LIABILITY; LEASE; JOINT LIABILITY prosper? Could Mrs. ZY file in turn a suit against PX to
Four foreign medical students rented the recover the P100,000 that her husband lost? Reason. (5%)
apartment of Thelma for a period of one year. After one SUGGESTED ANSWER:
semester, three of them returned to their home country A. 1) The suit by PX to collect the balance of what he won
and the fourth transferred to a boarding house. Thelma from ZY will not prosper. Under Article 2014 of the Civil
discovered that they left unpaid telephone bills in the total Code, no action can be maintained by the winner for the
amount of P80,000.00. The lease contract provided that collection of what he has won in a game of chance.
the lessees shall pay for the telephone services in the leased Although poker may depend in part on ability, it is
premises. Thelma demanded that the fourth student pay fundamentally a game of chance.
the entire amount of the unpaid telephone bills, but the 2) If the money paid by ZY to PX was conjugal or
latter is willing to pay only one fourth of it. Who is correct? community property, the wife of ZY could sue to recover
Why? (5%) it because Article 117(7) of the Family Code provides that
SUGGESTED ANSWER: losses in gambling or betting are borne exclusively by the
The unlawful detainer action will not prosper. loser-spouse. Hence, conjugal or community funds may
Extraordinary inflation or deflation is defined as the sharp not be used to pay for such losses. If the money were
decrease in the purchasing power of the peso. It does not exclusive Article 2016 of the Civil Code if she and the
necessarily refer to the exchange rate of the peso to the family needed the money for support.
dollar. Whether or not there exists an extraordinary ALTERNATIVE ANSWER (2):
inflation or deflation is for the courts to decide. There A. (2). Mrs. ZY cannot file a suit to recover what her
being no showing that the purchasing power of the peso husband lost. Art 2014 of the Civil Code provides that any
had been reduced tremendously, there could be no loser in a game of chance may recover his loss from the
inflation that would justify the increase in the amount of winner, with legal interest from the time he paid the
rental to be paid. Hence, Brian could refuse to pay the amount lost. This means that only he can file the suit. Mrs.
increased rate. ZY cannot recover as a spouse who has interest in the
absolute community property or conjugal partnership of
ALTERNATIVE ANSWER: gains, because under Art. 117(7} of the Family Code, losses
The action will not prosper. The existence of inflation or are borne exclusively by the loser-spouse. Therefore, these
deflation requires an official declaration by the Bangko cannot be charged against absolute community property
Sentral ng Pilipinas. or conjugal partnership of gains. This being so, Mrs. ZY has
no interest in law to prosecute and recover as she has no
ALTERNATIVE ANSWER: legal standing in court to do so.
The unlawful detainer action will prosper. It is a given fact Extinguishment; Cause of Action (2004)
in the problem, that there was inflation, which caused the TX filed a suit for ejectment against BD for non-payment
exchange rate to double. Since the contract itself authorizes of condominium rentals amounting to P150,000. During
the increase in rental in the event of an inflation or the pendency of the case, BD offered and TX accepted the
devaluation of the Philippine peso, the doubling of the full amount due as rentals from BD, who then filed a
monthly rent is reasonable and is therefore a valid act motion to dismiss the ejectment suit on the ground that
under the very terms of the contract. Brian's refusal to pay the action is already extinguished. Is BD’s contention
is thus a ground for ejectment. correct? Why or why not? Reason. (5%)
SUGGESTED ANSWER:
2004 Bar Questions BD's contention is not correct. TX can still maintain the
suit for ejectment. The acceptance by the lessor of the
payment by the lessee of the rentals in arrears even
Inexistent Contracts vs. Annullable Contracts (2004) during the pendency of the ejectment case does not
Distinguish briefly but clearly between Inexistent contracts constitute a waiver or abandonment of the ejectment
and annullable contracts. case. (Spouses Clutario v. CA, 216 SCRA 341 [1992]).
SUGGESTED ANSWER:
INEXISTENT CONTRACTS are considered as not having
been entered into and, therefore, void ab initio. They do
not create any obligation and cannot be ratified or 2005 Bar Exam Civil Law
validated, as there is no agreement to ratify or validate. Contracts
On the other hand, ANNULLABLE or VOIDABLE
CONTRACTS are valid until invalidated by the court but 1. Marvin offered to construct the house of Carlos
may be ratified. In inexistent contracts, one or more for a very reasonable price of 900,000.00, giving
requisites of a valid contract are absent. In annullable the latter 10 days within which to accept or reject
contracts, all the elements of a contract are present except the offer. On the fifth day, before Carlos could
that the consent of one of the contracting parties was make up his mind, Marvin withdrew his offer.
vitiated or one of them has no capacity to give consent.
Aleatory Contracts; Gambling (2004) a. What is the effect of the withdrawal of
A. Mr. ZY lost P100, 000 in a card game called Russian Marvin’s offer?
poker, but he had no more cash to pay in full the winner b. Will your answer be the same if Carlos paid
at the time the session ended. He promised to pay PX, the Marvin P10, 000.00 as consideration for that
winner, two weeks thereafter. But he failed to do so option? Explain.
despite the lapse of two months, so PX filed in court a suit c. Supposing that Carlos accepted the offer
to collect the amount of P50,000 that he won but before Marvin could communicate his
remained unpaid. Will the collection suit against ZY
 withdrawal thereof? Discuss the legal third party at the expense of Marvin.
consequences. Provided in Art. 1167 of NCC;

Answers: Art. 1167. If a person obliged to do something

a. In the withdrawal of Marvin’s offer there is fails to do it, the same shall be executed at his
absence of concurrence of the offer and cost.
acceptance, the offer was not accepted and This same rule shall be observed if he does it
there is no consent from Carlos. Carlos is in contravention of the tenor of the
unable to accept the offer on the given obligation. Furthermore, it may be decreed
period, hence there is no perfected contract that what has been poorly done be undone.
between the two parties. Consent is an
essential requisites in a contract, as stated in
Art. 1318 of NCC; 2008 Bar Questions
Art. 1318. There is no contract unless the
following requisites concur:
1. Consent of the contracting parties; Obligations and Contracts Question
2. Object certain which is the subject  AB Corp. entered into a contract with XY Corp.
matter of the contract; Under the terms of the contract, AB Corp. agreed
3. Cause of the obligation which is to complete the construction of the research and
established. laboratory facilities in 18 months. XY Corp. paid
As for the damages, Marvin will not be liable for 50% of the total contract price, the balance to be
damages for withdrawing the offer before the paid upon completion of the work. AB Corp. later
lapse of the period granted. In case at bar, there experienced work slippage because AB Corp.'s
was no consideration given by Carlos thus there is employees claimed that they are not being paid
no perfected contract of option for lack of cause on time; hence, the work slowdown. As of the
of obligation. 17th month, work was only 45% completed. AB
Corp. asked for extension of time, claiming that its
b. No. My answer will not be the same if Carlos labor problems is a case of fortuitous event, but
paid P10, 000.00 as consideration for that this was denied by XY Corp. When it became
option, this will indicate that an option certain that the construction could not be finished
contract is perfected. Under Art. 1324 of on time, XY Corp. sent written notice cancelling
NCC; the contract, and requiring AB Corp. to
immediately vacate the premises.
Art. 1324. When the offerer has allowed the  Can the labor unrest be considered a
offeree a certain period to accept, the offer fortuitous event?
may be withdrawn at any time before ANSWER:
acceptance by communicating such No. The labor unrest cannot be considered as
withdrawal, except when the option is a fortuitous event.
founded upon a consideration, as something Art. 1174 of the Civil Code defines what a
paid or promised. fortuitous event is. A fortuitous event is an event
which could not be foreseen or though foreseen
In case Marvin decided to withdraw the offer were inevitable. There are two classifications of
before the expiration of the period, he is liable fortuitous event: Fortuitous event proper (Act of
for damages because he breached the option God) and Force majeure (Fuerza mayor). An Act
contract. of God is an event absolutely independent of
human intervention while fuerza mayor is an
c. Supposed that Carlos accepted the offer event arising from legitimate and illegitimate acts
before the withdrawal, a contract is perfected. of persons other than the obligor.
Essential elements are fulfilled which is the Applying in the facts, it is clear that the labor
consent, object and the cause of the unrest was caused by the AB Corp.’s failure to pay
obligation. Under Art. 1315 of NCC, it is the employees on time. The labor unrest is
provided; dependent on the will of the obligor which is the
AB Corporation could have just paid the
Art. 1315. Contracts are perfected by mere employees on time to prevent the labor unrest. It
consent, and from that moment the parties is neither an Act of God nor a Force majeure.
are bound not only to the fulfillment of what  Can XY Corp. unilaterally and
has been expressly stipulated but also to all immediately cancel the contract?
the consequence which, according to their No. XY Corp cannot unilaterally and
nature, maybe in keeping with good faith, immediately cancel the contract.
usage and law. The obligation included in the contract that
they entered into is a reciprocal obligation. A
In case if Marvin refused to construct the reciprocal obligation is an obligation created and
house, he will be held liable for the damages established at the same time, out of the same cause
that may arise from the refusal. The and which results in a mutual relationship of
construction of the house can be done by a creditor and debtor between the parties.
 Under Art. 1191 of the Civil Code, In 2016 Bar Question
reciprocal obligations, there is an implied power
to rescind obligations. The injured part may either -IX-
choose between the fulfillment and the rescission Butch got a loan from Hagibis Corporation (Hagibis) but
of the obligation, with payment for damages in he defaulted in the payment. A case for collection of a sum
either case. He may also seek rescission, even after of money was filed against him. As a defense, Butch claims
he has chosen fulfillment, if the latter should that there was already an arrangement with Hagibis on the
become impossible. payment of the loan. To implement the same, Butch
From the facts given, because AB Corp. failed already surrendered five (5) service utility vehicles (SUVs)
to comply with what is encumbent upon him, XY to the company for it to sell and the proceeds to be
Corp. can choose either fulfillment of the credited to the loan as payment. Was the obligation of
construction of research and laboratory facilities Butch extinguished by reason of dacion en pago upon the
with payment for damages or rescission of surrender of the SUVs? Decide and explain.
obligation with payment for damages. Suggested Answer:
 Must AB Corp. return the 50% down In this case, it is provided that Butch, the debtor,
payment? defaulted in the payment of his loan from Hagibis
No. AB Corp. need not to return the 50% Corporation. And when the latter demanded for its
down payment. payment, he claims that by delivering things, which in this
There is already 45% work done so if ever XY case, are the five SUVs, his money obligation (which is
Corp. would demand the return of the 50% paying the loan) is extinguished.
down payment, XY Corp. would be unjustly So, identifying the issue raised by Butch is whether
enriching itself at the expense of AB Corp. or not his obligation is extinguished by reason of dacion
en pago upon surrender of the five SUVs.
2009 Bar Question Above all, let us answer what is dacion en pago
and how is it satisfied?
QUESTION: Sarah had a deposit in a savings account with Dacion en pago is a special mode of payment
Filipino Universal Bank in the amount of five million pesos wherein the debtor offers another thing to the creditor
(P5,000,000.00). To buy a new car, she obtained a loan who accepts it as equivalent of payment of an outstanding
from the same bank in the amount of P1,200,000.00, obligation. Article 1245 of the Civil Code provides that it
payable in twelve monthly installments. Sarah issued in is satisfied when a property is alienated to the creditor in
favor of the bank post-dated checks, each in the amount satisfaction of the debt in money, and shall be governed
of P100,000.00, to cover the twelve monthly installment by the law on sales.
payments. On the third, fourth and fifth months, the So we can now establish that dacion en pago is a
corresponding checks bounced. contract of sale that extinguishes a money obligation to the
extent of the value of the thing delivered, as agreed upon
The bank then declared the whole obligation due, and by the parties. It is as if the creditor is really buying the
proceeded to deduct the amount of one million pesos thing or property of the debtor, the payment for which is
(P1,000,000.00) from Sarah’s deposit after notice to her to be charged against the debtors obligation. In any case,
that this is a form of compensation allowed by law. Is the since dacion en pago is a contract, the 3 essential elements
bank correct? Explain. must be present. The COC (consent, object certain and
cause or consideration).
SUGGESTED ANSWER: No, the bank is not correct. While Applying In the given case, Butch surrendered 5
the Bank is correct about the applicability of SUVs to Hagibis Corporation. However, there was no
compensation, it was not correct as to the amount showing that Hagibis accepted it as equivalent of payment
compensated.A bank deposit is a contract of loan,where of Butch’s outstanding obligation. Being as such, the
the depositor is the creditor and the bank the debtor. Since obligation of Butch was not extinguished by reason of
Sarah is also the debtor of the bank with respect to the dacion en pago.
loan, both are mutually principal debtors and creditors of Further, the contract of sale between Butch and
each other. Both obligation are due, demandable and Hagibis was not perfected because there is no meeting of
liquidated but only up to the extent of P300,000.00 the minds between them upon the thing which is the
(covering the unpaid third,fourth and fifth monthly subject of the contract and upon the price. There was no
installments).The entire one million was not yet due common consent among Butch and Hagibis thereby not
because the loan has no acceleration clause in case of extinguishing the obligation of Butch.
default. And since there is no retention or controversy
commenced by third person and communicated in due
time to the debtor, then all the requisites of legal
compensation are present but only up to the amount of
P300,000.00. The bank,therefore, may deduct
P300,000.00 from
Sarah’s bank deposit by way of compensation.
-X- instituting as their common heirs to divide their combined
Jerico, the project owner, entered into a Construction estate in equal shares, the five siblingsand of Alden the
Contract with Ivan for the latter to construct his house. seven siblings of Stela. Alden passed away in 2013 and a
Jojo executed a Surety undertaking to guarantee the year later, Stela also died. The siblings of Alden who were
performance of the work by Ivan. Jerico and Ivan later all citizens of the US instituted probate proceedings in a
entered into a Memorandum of Agreement (MOA) US court impleading the siblings of Stela who were all in
revising the work schedule of Ivan and the subcontractors. the Philippines.
The MOA stated that all the stipulations of the original a) Was the joint will executed by Alden and
contract not in conflict with said agreement shall remain Stela who were both former Filipinos valid? Explain
valid and legally effective. Jojo filed a suit to declare him with legal basis. (3%)
relieved of his undertaking as a result of the MOA because
of the change in the work schedule. Jerico claims there is b) Can the joint will produce legal effect in
no novation of the Construction Contract. Decide the case the Philippines with respect to the
and explain. propertiesand of Alden Stela found
Suggested Answer: here? If so, how? (3%)
In this case, a Construction Contract between
Jerico and Ivan were entered then a third person named c) Is the situation presented in Item I an
Jojo executed a Surety to guarantee the performance of example of depe9age? (2%)
work. Later on, a memorandum of agreement revised only
the work schedule of Ivan and thereby stating that all SUGGESTED ANSWER:
stipulations shall remain valid and effective if not in a) Yes, the joint will of Alden and Stela is considered valid.
conflict with the original contract. Due to the MOA, Jojo Being no longer Filipino citizens at the time they executed
wants to declare himself relieved of his undertaking and their joint will, the prohibition under our Civil Code on
claims that there is a novation of the Construction joint wills will no longer apply to Alden and Stela. For as
Contract. long as their will was executed in accordance with the law
So let us identify the issue raised in the given facts of the place where they reside, or the law of the country
of the case. The issue raised by Jojo is whether or not the of which they are citizens or even in accordance with the
suit he filed to relieve him from his undertaking will Civil Code, a will executed by an alien is considered valid
prosper by reason of novation of the Construction in the Philippines. (Article 816)
Contract. b) Yes, the joint will of Alden and Stela can take effect even
To answer that, first, we must identify novation with respect to the properties located in the Philippines
and its requisites. because what governs the distribution of their estate is no
Novation is the substitution or change of an longer Philippine law but their national law at the time of
obligation by another, resulting in its extinguishment or their demise. Hence, the joint will produces legal effect
modification, either by changing its object or principal even with respect to the properties situated in the
conditions, or by substituting another in place of the Philippines.
debtor, or by subrogating a third person in the rights of c) No, because depecage is a process of applying rules of
the creditor. different states on the basis of the precise issue involved.
As one of the modes of extinguishing an It is a conflict of laws where different issues within a case
obligation, novation requires the concurrence of the may be governed by the laws of different states. In the
following: 1) there is a previous valid obligation; 2) the situation in letter (a) no conflict of laws will arise because
parties concerned agree to new contract; 3) the old Alden and Stela are no longer Filipino citizens at the time
contract is extinguished; and 4) there is a valid new of the execution of their joint will and the place of
contract. execution is not the Philippines.
Applying in the case at bar, the agreed obligation
of Ivan is to construct the house. There was no change or II.
substitution of Ivan’s obligation because what was revised Marco and Gina were married in 1989. Ten years
was the work schedule only by virtue of the MOA entered later, or in 1999, Gina left Marco and lived with another
into by Jerico and Ivan. The change of work schedule will man, leaving their two children of school age with Marco.
not affect the duty of Ivan in the construction of the house. When Marco needed money for their children's education
Thereby, no extinguishment of the construction contract he sold a parcel of land registered in his name, without
despite the execution of the MOA. Gina's consent, which he purchased before his marriage. Is
Therefore, the suit filed by Jojo will not prosper the sale by Marco valid, void or voidable? Explain with
because there was no novation in the Construction legal basis. (4%)
contract.
SUGGESTED ANSWER:
2015 CIVIL LAW BAR EXAMINATIONS The sale made by Marco is considered void. The parties
I. were married in 1989 and no mention was made whether
Alden and Stela were both former Filipino they executed a marriage settlement. In the absence of a
citizens. They were married in the Philippines but they marriage settlement, the parties shall be governed by
later migrated to the United States where they were absolute community of property whereby all the
naturalized as American citizens. In their union they were properties owned by the spouses at the time of the
able to accumulate several real properties both in the US celebration of the marriage as well as whatever they may
and in the Philippines. Unfortunately, they were not acquire during the marriage shall form part of the absolute
blessed with children. In the US, they executed a joint will community. In ACP, neither spouse can sell or encumber
property belonging to the ACP without the consent of the
other. Any sale or encumbrance made by one spouse boy. In their 20 years of cohabitation they were able to
without the consent of the other shall be void although it acquire real estate assets registered in their names as co-
is considered as a continuing offer on the part of the owners. Unfortunately, Bert died of cardiac arrest, leaving
consenting spouse upon authority of the court or written no will. Bert was survived by his biological siblings, Joe,
consent of the other spouse. (Article 96 FC) and the boy.

III. a) Can Article 147 on co-ownership apply to Bert and

Julie had a relationship with a married man who had Joe, whereby all properties they acquired will be
legitimate children. A son was born out of that illicit presumed to have been acquired by their joint industry
relationship in 1981. Although the putative father did not and shall be owned by them in equal shares? (2%)
recognize the child in his certificate of birth, he nevertheless
provided the with child all the support he needed and b) What are the successional rights of the boy Bert
spent time regularly with the child and his mother. When Joe and raised as their son? (2%)
the man died in 2000, the child was already 18 years old
so he filed a petition to be recognized as an illegitimate c) If Bert and Joe had decided in the early years of
child of the putative father and sought to be given a share their cohabitation to jointly adopt the boy, would
in his putative father's estate. The legitimate family they have been legally allowed to do so? Explain with
opposed, saying that under the Family Code his action legal basis. (3%)
cannot prosper because he did not bring the action for
recognition during the lifetime of his putative father.
a) If you were the judge in this case, would how you SUGGESTED ANSWER:
rule? (4%)
b) Wishing to keep the peace, the child a) No, Article 147 cannot apply to Bert and Joe because
during the pendency of the case decides to the law only applies to a man and a woman who are
compromise with his putative father's family by capacitated to marry each other who live together as
abandoning his petition in exchange for Yi of what husband and wife without the benefit of marriage or
he would have received as inheritance if he were under a void marriage. In the case of Bert and Joe,
recognized as an illegitimate child. As the judge, they are both men so the law does not apply.
would you approve such a compromise? (2%) b) Neither of the two will inherit from Bert. Joe cannot
SUGGESTED ANSWER: inherit because the law does not recognize the right of
a) If I were the judge, I will not allow the action for a stranger to inherit from the decedent in the absence
recognition filed after the death of the putative father. of a will. Their cohabitation will not vest Joe with the
Under the Family Code, an illegitimate child who has right to inherit from Bert. The child will likewise not
not been recognized by the father in the record of inherit from Bert because of the lack of formal
birth, or in a private handwritten instrument, or in a adoption of the child. A mere ward or “ampon” has
public document and may prove his filiation based on no right to inherit from the adopting parents. (Manuel
open and continuous possession of the status of an v. Ferrer, 247 SCRA 476)
illegitimate child but pursuant to Article 175, he or she c) No, because joint adoption is allowed between
must file the action for recognition during the lifetime husband and wife. Even if Bert and Joe are cohabiting
of the putative father. The provision of Article 285 of with each other, they are not vested with the right to
the Civil Code allowing the child to file the action for jointly adopt under the Family Code or even under
recognition even after the death of the father will not the Domestic Adoption Act. (Section 7, R.A. 8552)
apply because in the case presented, the child was no
longer a minor at the time of death of the putative V.
father. Mrs. L was married to a ship captain who worked for an
international maritime vessel. For her and her family's
b) No, I will not approve the compromise agreement support, she would claim monthly allotments from her
because filiation is a matter to be decided by law. It is husband's company. One day, while en route from Hong
not for the parties to stipulate whether a person is a Kong to Manila, the vessel manned by Captain L
legitimate or illegitimate child of another. (De Jesus v. encountered a severe typhoon at sea. The captain was able
Estate of Dizon 366 SCRA 499) In all cases of to send radio messages of distress to the head office until
illegitimate children, their filiation must be duly all communications were lost. In the weeks that followed,
proved. (Article 887, Civil Code) the search operations yielded debris of the lost ship but the
bodies of the crew and the passengers were not recovered.
ALTERNATIVE ANSWER: Yes, I would approve the The insurance company thereafter paid out the death
compromise because it is no longer considered future benefits to all the heirs of the passengers and crew. Mrs. L
inheritance. What the law prohibits is a compromise with filed a complaint demanding that her monthly allotments
respect to future legitime. In this case, the father is already continue for the next four years until her husband may be
dead so the compromise is considered valid. legally presumed dead because of his absence. If you were
the magistrate would how you rule? (3%)
IV. SUGGESTED ANSWER:
I would rule against Mrs. L. There is no merit in her
Bert and Joe, both male and single, lived together as contention that the monthly allotments to her should
common law spouses and agreed to raise a son of Bert's continue despite the presumptive death of the husband. In
living brother as their child without legally adopting him. case of disappearance where there is danger of death, the
Bert worked while Joe took care of their home and the
person shall be presumed to have died at the beginning of Mr. and Mrs. X migrated to the US with all their children.
the four (4) year period although his succession will be As they had no intention of coming back, they offered
opened only at the end of the four year period. (Article their house and lot for sale to their neighbors, Mr. and
391, Civil Code) Since the husband of Mrs. L is presumed Mrs. A (the buyers) who agreed to buy the property for
to have died at about the time of disappearance, he is no 128 Million. Because Mr. and Mrs. A needed to obtain a
longer entitled to receive his salary from the day the loan from a bank first, and since the sellers were in a hurry
presumption of death arises. to migrate, the latter told the buyers that they could
already occupy the house, renovate it as it was already in
VI. a state of disrepair, and pay only when their loan is
approved and released. While waiting for the loan
Kardo met Glenda as a young lieutenant and after approval, the buyers spent .Pl Million in repairing the
a whirlwind courtship, they were married. In the early part house. A month later, a person carrying an authenticated
of his military career, Kardo was assigned to different special power of attorney from the sellers demanded that
places all over the country but Glenda refused to the buyers either immediately pay for the property in full
accompany him as she preferred to live in her hometown. now or vacate it and pay damages for having made
They did not live together until the 12th year of their improvements on the property without a sale having been
marriage when Kardo had risen up the ranks and was given perfected.
his own command. They moved to living quarters in Fort
Gregorio. One day, while Kardo was away on official a) What are the buyers' options or legal
business, one of his military aides caught Glenda having sex rights with respect to the they expenses incurred in
with the corporal assigned as Kardo's driver. The aide improving the property under circumstances? (3%)
immediately reported the matter to Kardo who rushed
home to confront his wife. Glenda readily admitted the b) Can the buyers be made to immediately
affair and Kardo sentawayher in anger. Kardo would later vacate on the ground that the sale was not
come to know the true extent of Glenda's unfaithfulness perfected? Explain briefly. (3%)
from his aides, his household staff, and former neighbors SUGGESTED ANSWER:
who informed him that Glenda has had intimate relations a) The buyers here may be deemed possessors or builders in
with various men throughout their marriage whenever good faith because they were made to believe that they
Kardo was away on assignment. were allowed to make repairs or renovation by the sellers
Kardo filed a petition for declaration of nullity of themselves. As builders in good faith, they have the right
marriage under Article 36. Based on interviews from to seek reimbursement for the value of the improvements
Kardo, his aide, and the housekeeper, a psychologist in case the owner decides to appropriate them. They
testified that Glenda's habitual infidelity was due to her cannot be asked to remove the improvements because that
affliction with Histrionic Personality Disorder, an illness is not one of the options given by law to the landowner
characterized by excessive emotionalism and in case the builder is in good faith.
uncontrollable attention-seeking behavior rooted in
Glenda's abandonment as a child by her father. Kardo b) No, the buyers cannot be made to vacate on the ground
himself, his aide, and his housekeeper also testified in that the sale was not perfected for the fact of the matter is
court. The RTC granted the petition, relying on the that a contract of sale is consensual and is perfected by
liberality espoused by Te v. Te and Azcueta v. Republic. mere consent. (Article 1315, Civil Code) In this case, there
However, the OSG filed an appeal, arguing that sexual was an agreement to deliver a determinate thing for a price
infidelity was only a ground for legal separation and that certain in money. When the owners made an offer to sell
the RTC failed to abide by the guidelines laid down in the their property to Mr. and Mrs. A and the latter accepted
Molina case. How would you decide the appeal? (5%) the offer, there was already a meeting of the minds
SUGGESTED ANSWER: between the parties resulting in the perfection of the
I will resolve the appeal in favor of the Republic. In the contract of sale.
case of Dedel v. Dedel, (G.R. No. 151867 January 29,
2004) the Supreme Court refused to declare the marriage VIII.
of the parties void on the ground of sexual infidelity of the X, Y, Z are siblings who inherited a IO-storey building
wife Sharon. In case mentioned, the wife committed from their parents. They agreed in writing to maintain it
infidelity with several men up to the extent of siring two as a co-owned property for leasing out and to divide the
illegitimate children with a foreigner. The court, however, net profits among themselves equally for a period of 20
said that it was not shown that the sexual infidelity was a years. On the gth year, X wanted to get out of the co-
product of a disordered personality and that it was rooted ownership so he could get his 1/3 share in the property. Y
in the history of the party alleged to be psychologically and Z refused, saying X is bound by their agreement to
incapacitated. Also, the finding of psychological incapacity keep the co-ownership for 20 years. Are Y and Z correct?
cannot be based on the interviews conducted by the Explain. (3%)
clinical psychologist on the husband or his witnesses and
the person alleged to be psychologically incapacitated SUGGESTED ANSWER:
must be personally examined to arrive at such declaration. Y and Z are partly correct. The law provides that none of
(Marcos v. Marcos, 343 SCRA 755; Agraviador v. the co-owners shall be obliged to remain in the co-
Agraviador, G.R. No. 170729- December 8, 2010) ownership and it is the right of a co-owner to ask for
partition of the co-ownership anytime. One exception to
VII. the rule is if the co-owners agree to keep the thing
undivided which period shall not exceed ten years. In this
case, the agreement to keep the thing undivided shall be No, I do not agree with the contention of X. The law
valid at the most for ten years. (Article 494, Civil Code) provides that except when it is otherwise declared by
stipulation or when the law provides or the nature of the
obligation requires the assumption of risk, no person shall
IX. be liable for those events which could not be foreseen or
Jose, single, donated a house and lot to his only niece, which though foreseen were inevitable. (Article 1174, Civil
Maria, who was of legal age and who accepted the Code) In the case presented, X cannot invoke fortuitous
donation. The donation and Maria's acceptance thereof event as a defense because she had already incurred in
were evidenced by a Deed of Donation. Maria then lived delay at the time of the occurrence of the loss. (Article
in the house and lot donated to her, religiously paying real 1165, Civil Code)
estate taxes thereon. Twelve years later, when Jose had
already passed away, a woman claiming to be an XI.
illegitimate daughter of Jose filed a complaint against Jackie, 16, inherited a townhouse. Because she wanted to
Maria. Claiming rights as an heir, the woman prayed that study in an exclusive school, she sold her townhouse by
Maria be ordered to reconvey the house and lot to Jose's signing a Deed of Sale and turning over possession of the
estate. In her complaint she alleged that the notary public same to the buyer. Whenthatthe buyer discovered she was
who notarized the Deed of Donation had an expired still a minor, she promised to execute another Deed of Sale
notarial commission when the Deed of Donation was when she turns 18. When Jackie turned 25 and was already
executed by Jose. Can Maria be made to reconvey the working, she wanted to annul the sale and return the
property? What can she put up as a defense? (4%) buyer's money to recover her townhouse. Was the sale
SUGGESTED ANSWER: contract void, voidable or valid? Can Jackie still recover
No. Maria cannot be compelled to reconvey the property. the property? Explain. (4%)
The Deed of Donation was void because it was not SUGGESTED ANSWER:
considered a public document. However, a void donation The contract of sale was voidable on the ground that
can trigger acquisitive prescription. (Solis v. CA 176 SCRA Jackie is incapable of giving consent at the time of the
678; Doliendo v. Biarnesa 7 Phil. 232) The void donation execution of the sale. (Article 1390 and Article 1327)
has a quality of titulo colorado enough for acquisitive Jackie can no longer recover the townhouse unit because
prescription especially since 12 years had lapsed from the if a contract is voidable on the ground of minority, the
deed of donation. action to annul it must be filed within four (4) years from
attainment of the age of majority. Since Jackie was already
ALTERNATIVE ANSWER: Yes, Maria can be made to 25 years old, the action has clearly prescribed because she
reconvey the property. The law provides that no person should have filed it before she reached the age of 22.
may give or receive by way of donation more than what (Article 1391, Civil Code)
he may give or receive by will. On the assumption that
the property donated to Maria is the only property of XII.
Jose, the legitime of his illegitimate child would be A. Iya and Betty owed Jun P500,000.00 for
impaired if Maria would be allowed to keep the entire advancing their equity in a corporation they joined as
property. After taking into account the value of the incorporators. Iya and Betty bound themselves solidarily
property, Maria can be made to reconvey the property to liable for the debt. Later, Iya and Jun became sweethearts
the extent necessary to satisfy the legitime of Jose’s so Jun condoned the debt of P500,000.00. May lya
illegitimate daughter provided that the woman claiming to demand from Betty ~250,000.00 as her share in the debt?
be Jose’s child can prove her filiation to the deceased. Explainlegal with basis. (2%)
B. Juancho, Don and Pedro borrowed
Maria can set up the defense that the action has prescribed. ~150,000.00 from their friend Cita to put up an internet
An action for revocation of the donation on the ground cafe orally promising to pay her the full amount after one
that it impaired the legitime of a compulsory heir may only year. Because of their lack of business know-how, their
be filed within ten (10) years from the time the cause of business collapsed. Juancho and Don ended up penniless
action accrues which is at the time of the death of Jose. but Pedro was able to borrow money and put up a
The facts are not clear as to when Jose died but on the restaurant which did well. Can Cita demand that Pedro
assumption that he died ten years prior to the filing of the pay the entire obligation since he, together with the two
action, the same has clearly prescribed. others, promised to pay the amount in full after one year?
Defend your answer. (2%)
X. SUGGESTED ANSWER:
X, a dressmaker, accepted clothing materials from a) No, Iya may not demand the 250,000 from Betty because
Karla to make two dresses for her. dayOn the X was the entire obligation has been condoned by the creditor
supposed to deliver Karla's dresses, X called up Karla to Jun. In a solidary obligation the remission of the whole
say that she had an urgent matter to attend to and will obligation obtained by one of the solidary debtors does
deliver them the next day. That night, however, a robber not entitle him to reimbursement from his co-debtors.
broke into her shop and took everything including Karla's (Article 1220, Civil Code)
two dresses. X claims she is not liable to deliver Karla's b) No, Cita cannot demand that Pedro pay the entire
dresses or to pay for the clothing materials considering she obligation because the obligation in this case is presumed
herself was a victim of the robbery which was a fortuitous to be joint. The concurrence of two or more creditors or
event and over which she had no control. Do you agree? of two or more debtors in one and the same obligation
Why? (3%) does not imply that each one of the former has a right to
SUGGESTED ANSWER: demand, or that each one of the latter is bound to render,
entire compliance with the prestation. (Article 1207) In a
 joint obligation, there is no mutual agency among the joint subject to the defense of due diligence on their part.
debtors such that if one of them is insolvent the others shall (Article 2176; Article 2180)
not be liable for his share. b) Yes, the parents of the boy can enforce the subsidiary
liability of the employer in the criminal case against the
XIII. driver. The conviction of the driver is a condition sine qua
A. X and Y are partners in a shop offering portrait non for the subsidiary liability of the employer to attach.
painting. Y provided the capital and the marketing while Proof must be shown that the driver is insolvent. (Article
X was the portrait artist. They accepted the PS0,000.00 103, Revised Penal Code)
payment of Kyla to do her portrait but X passed away
without being able to do it. Can Kyla demand that Y XV.
deliver the portrait she had paid for because she was
dealing the with business establishment and not with the A. Sara borrowed PS0,000.00 from Julia
artist personally? Why or why not? (3%) and orally promised to pay it within six months. When
B. In this jurisdiction, is a joint venture (i.e., a Sara tried to pay her debt on the gth month, Julia
group of corporations contributing resources for a specific demanded the payment of interest of 12o/o per annum
project and sharing the profits therefrom) considered a because of Sara's delay in payment. Sara paid her debt and
partnership? (3%) the interest claimed by Julia. After rethinking, Sara
demanded back from Julia the amount she had paid as
SUGGESTED ANSWER: interest. Julia claims she has no obligation to return the
a) No Kyla cannot demand that Y deliver the portrait. The interest paid by Sara because it was a natural obligation
death of X has the effect of dissolving the partnership. which Sara voluntarily performed and can no longer
(Article 1830, Civil Code) Also, while the obligation was recover. Do you agree? Explain. (4%)
contracted by the partnership, it was X who was supposed
to create the portrait for Kyla. Since X died before creating B. Distinguish civil and natural obligations.
the portrait, the obligation can no longer be complied (2%)
because of impossibility of performance. (Article 1266) In
obligations to do, the debtor shall be released when the SUGGESTED ANSWER:
prestation becomes legally or physically impossible
without the debtor’s fault. a) No, the case is not one of a natural obligation because
b) Yes, under Philippine law, a joint venture is understood to even if the contract of loan is verbal, the delay of Julia
mean an organization formed for some temporary made her liable for interest upon demand by Sara. This is
purpose and is hardly distinguishable form a partnership not a case of a natural obligation but a civil obligation to
since its elements are similar which are: community of pay interest by way of damages by reason of delay. (Article
interest in business, sharing of profits, and losses, and a 1956; Article 1169; Article 2209 Civil Code)
mutual right of control. (Primelink Properties v. Lazatin b) A civil obligation is based on positive law which gives a
June 27, 2006 citing Blackner v. Mcdermott, 176 F. 2d right of action to compel their performance in case of
498[1949]) breach. A natural obligation is based on equity and natural
law and cannot be enforced by court action but after
XIV. voluntary fulfilment by the obligor, they authorize the
A driver of a bus owned by company Z ran over a boy retention of what may have been delivered or rendered
who died instantly. A criminal case for reckless imprudence by reason thereof. (Article 1423, Civil Code)
resulting in homicide was filed against the driver. He was
convicted and was ordered to pay P2 Million in actual and XVI.
moral damages to the parents of the boy who was an Donna pledged a set of diamond ring and earrings
honor student and had a bright future. Without even to Jane for P200,000.00 She was made to sign an
trying to find out if the driver had assets or means to pay agreement that if she cannot pay her debt within six
the award of damages, the parents of the boy filed a civil months, Jane could immediately appropriate the jewelry
action against the bus company to make it directly liable for herself. After six months, Donna failed to pay. Jane
for the damages. then displayed the earrings and ring set in her jewelry shop
a) Will their action prosper? (4%) located in a mall. A buyer, Juana, bought the jewelry set
b) If the parents of the boy do not wish to for P300,000.00.
file a separate civil action against. the bus company, can a) Was the agreement which Donna signed
they still make the bus company liable if the driver cannot' with Jane valid? Explain with legal basis. (2%)
pay the award for damages? If so, what is the nature of b) Can Donna redeem the jewelry set from
the employer's liability and how may civil damages be Juana by paying the amount she owed Jane to
satisfied? (3%) Juana? Explain with legal basis. (2%)
c) Give an example of a pledge created by
SUGGESTED ANSWER: operation of law. (2%)
a) Yes, the action will prosper. The liability of the employer
in this case may be based on quasi-delict and is included SUGGESTED ANSWER:
within the coverage of independent civil action. It is not a) appropriate the jewelry upon default of Donna is
necessary to enforce the civil liability based on culpa considered pactum commissorium and it is considered void
aquiliana that the driver or employee be proven to be by law. ( Article 2088)
insolvent since the liability of the employer for the quasi- b) No, Donna cannot redeem it from Juana because the
delicts committed by their employees is direct and primary pledge contract is between her and Jane. Juana is not a
party to the pledge contract. (Article 1311, Civil Code)
c) One example of a pledge created by operation of law is purpose of holding these properties in trust for the siblings
the right of the depositary to retain the thing deposited of X. If the transfer was by virtue of a sale, the same is
until the depositor shall have paid him whatever may be void for lack of cause or consideration. Hence, the action
due to the depositary by reason of the deposit. (1994) to declare the sale void is imprescriptible. (Article Heirs
Another is the right of the agent to retain the thing which of Ureta vs. Ureta September 14, 2011- G.R. No. 165748
is the object of the agency until the principal reimburses September 14, 2011
him the expenses incurred in the execution of the agency.
(Article 1914, Civil Code) ALTERNATIVE ANSWER:
No, I do not agree. A trust was created in favor of the
XVII. siblings of X when their father A transferred the titles in his
Z, a gambler, wagered and lost P2 Million in baccarat, a name. The facts are clear that X was to hold these assets
card game. He was pressured into signing a Deed of for his siblings until they reach the age of majority. An
Absolute Sale in favor of the winner covering a parcel ·of action to recover property based on an implied trust
land with improvements worth P20 Million. One month prescribes in ten years from the time the title was issued in
later, the supposed vendee of the property demanded that favor of the trustee. In the case presented, only five years
he and his family vacate the property subject of the deed had lapsed from the issuance of the title hence, the action
of sale. Was the deed of sale valid? What can Z do? (4%) has not yet prescribed.
SUGGESTED ANSWER:
The sale is valid. Being pressured to sign the deed of sale XX.
is not equivalent to vitiation of consent. Z however, can A. Mr. and Mrs. Roman and Mr. and Mrs. Cruz filed
recover his losses from the winner because the law an application for registration of a parcel of land which
provides that no action can be maintained by the winner after due proceedings was granted by the RTC acting
for the collection of what he has won in any game of registration as land court. However, before the decree of
chance. But any loser in a game of chance may recover his registration could be issued, the spouses Roman and the
loss from the winner, with legal interests from the time he spouses Cruz sold the lot to Juan. In the notarized deed of
paid the amount lost. (Article 2014) sale, the sellers expressly undertook to submit the deed of
sale to the land registration court so that the title to the
XVIII. property would be directly issued in Juan's name. Is such a
A lawyer was given an authority by means of a Special stipulation valid? (2%)
Power of Attorney by his client to sell a parcel of land for B. Distinguish a direct attack from a collateral attack
the amount of P3 Million. Since the client owed the lawyer on a title. (2%)
Pl Million in attorney's fees in a prior case he handled, the C. If the title in Item XX.A is issued in the names of
client agreed that if the property is sold, the lawyer was the original sellers, would a motion filed by Juan in the
entitled to get 5% agent's fee plus Pl Million as payment same case to correct or amend the title in order to reflect
for his unpaid attorney's fees. The client, however, his name as owner considered be collateral attack?
subsequently found a buyer of his own who was willing to (2%)
buy the property for a higher amount. Can the client SUGGESTED ANSWER:
unilaterallythe rescind authority he gave in favor of his a) Yes, because when one who is not the owner of the
lawyer? Why or why not? (4%) property sells or alienates it and later the seller or grantor
acquires title, such title passes by operation of law to the
SUGGESTED ANSWER: buyer or grantee. (Article 1434, Civil Code)
No, the agency in the case presented is one which is b) A direct attack on a title is one where the action filed is
coupled with an interest. As a rule, agency is revocable at precisely for the purpose of pointing out the defects in the
will except if it was established for the common benefit of title with a prayer that it be declared void. A collateral
the agent and the principal. In this case, the interest of the attack is one where the action is not instituted for the
lawyer is not merely limited to his commission for the sale purpose of attacking the title but the nullity of the title is
of the property but extends to his right to collect his raised as a defense in a different action.
unpaid professional fees. Hence, it is not revocable at will. c) No, because Juan is not attacking the title but merely
(Article 1927) invoking his right as transferee. Hence, it does not involve
a collateral attack on the title.
XIX.
Mr. A, a businessman, put several real estate properties
under the name of his eldest son X because at that time, X BAR EXAMINATIONS 2013
was the only one of legal age among his four children. He
told his son he was to hold those assets for his siblings until
they become adults themselves. X then got married. After
5 years, Mr. A asked X to transfer the titles over three QUESTION NO. I.
properties to his three siblings, leaving two properties for
himself. To A’s surprise, X said that he can no longer be You are a Family Court judge and before you is a Petition
made to transfer the properties to his siblings because more for the Declaration of Nullity of Marriage (under Article
than 5 years have passed since the titles were registered in 36 of the Family Code) filed by Maria against Neil. Maria
his name. Do you agree? Explain. ( 4%) claims that Neil is psychologically incapacitated to comply
with the essential obligations of marriage because Neil is a
SUGGESTED ANSWER: drunkard, a womanizer, a gambler, and a mama's boy-
No, the transfer of the properties in the name of X was traits that she never knew or saw when Neil was courting
without cause or consideration and it was made for the
her. Although summoned, Neil did not answer Maria's rehabilitation for another 3 months. In his complaint for
petition and never appeared in court. damages, the rider prayed for the award ofP1,000,000
actual damages,P200,000 moral damages, P200,000
To support her petition, Maria presented three witnesses- exemplary damages, P1 00,000 nominal damages and
herself, Dr. Elsie Chan, and Ambrosia. Dr. Chan testified P50,000 attorney's fees.
on the psychological report on Neil that she prepared.
Since Neil never acknowledged n9r responded to her Assuming the police report to be correct and as the lawyer
invitation for interviews, her report is solely based on her for the bicycle rider, what evidence (documentary and
interviews with Maria and the spouses' minor children. Dr. testimonial) and legal arguments will you present in court
Chan concluded that Neil is suffering from Narcissistic to justify the damages that your client claims? (8%)
Personality Disorder, an ailment that she found to be
already present since Neil's early adulthood and one that SUGGESTED ANSWER:
is grave and incurable. Maria testified on the specific
instances when she found Neil drunk, with another As lawyer for the bicycle rider, I will present in addition to
woman, or squandering the family's resources in a casino. the police report, the medical abstract as to the injuries
Ambrosia, the spouses' current household help, sustained by my client as well as copies of receipts of
corroborated Maria's testimony. expenses incurred in connection with the treatment of his
injuries. I will also present the testimony of my client and
On the basis of the evidence presented, will you grant the perhaps a bystander who witnessed the incident as to the
petition? (8%) circumstances surrounding the accident.

As for the legal argument, I will rebut the claim of

SUGGESTED ANSWER: negligence on my client’s part by presenting evidence that
my client has actually crossed the intersection ahead of the
If I were the judge, I will not grant the petition. Although taxicab and it was the taxicab driver who rapidly cut the
psychological incapacity has not been defined by the path of the bicycle which caused the collision. Also, even
Family Code, the Supreme Court in several cases (Republic assuming that there was contributory negligence on the
vs. San Jose - February 28, 2007; Zamora v. CA an Zamora part of my client, I will argue that it will not preclude the
G.R. No. 141917 February 7, 2007; Benjamin Ting v. recovery of damages but may only mitigate the damages
Carmen Ting G.R. No. 166562; March 31, 2009) has ruled to which he is entitled.
that the intendment of the law is to confine psychological
incapacity to the most serious cases of personality disorders
clearly demonstrative of an utter insensitivity or inability QUESTION III.
to give meaning and significance to the marriage. What
the law requires is downright incapacity and not refusal or Sergio is the registered owner of a 500-square meter land.
neglect or difficulty but a failure to perform essential His friend, Marcelo, who has long been interested in the
marital obligations due to causes psychological in nature. property, succeeded in persuading Sergio to sell it to him.
On June 2, 2012, they agreed on the purchase price of
Further, the presentation of expert proof presupposes a P600,000 and that Sergio would give Marcelo up to
thorough and in-depth assessment of the parties by the June30, 2012 within which to raise the amount. Marcelo,
psychologist or expert for a conclusive diagnosis of grave, in a light tone usual between them, said that they should
severe, and incurable presence of psychological incapacity. seal their agreement through a case of Jack Daniels Black
(Paz vs. Paz – February 18, 2010) In this case, the report of and P5,000 "pulutan" money which he immediately
Dr. Chan is solely based on her interviews with Maria and handed to Sergio and which the latter accepted. The
the children. She did not actually hear, see and evaluate friends then sat down and drank the first bottle from the
Neil. Hence, the report cannot constitute a reasonable case of bourbon.
basis to reach a conclusion as to Neil’s psychological
incapacity. On June 15, 2013, Sergio learned of another buyer,
Roberto, who was offering P800,000 in ready cash for the
land. When Roberto confirmed that he could pay in cash
QUESTION II. as soon as Sergio could get the documentation ready,
Sergio decided to withdraw his offer to Marcelo, hoping
A collision occurred at an intersection involving a bicycle to just explain matters to his friend. Marcelo, however,
and a taxicab. Both the bicycle rider (a businessman then objected when the withdrawal was communicated to him,
doing his morning exercise) and the taxi driver claimed taking the position that they have a firm and binding
that the other was at fault. Based on the police report, the agreement that Sergio cannot simply walk away from
bicycle crossed the intersection first but the taxicab, because he has an option to buy that is duly supported by
crossing at a fast clip from the bicycle's left, could not brake a duly accepted valuable consideration.
in time and hit the bicycle's rear wheel, toppling it and
throwing the bicycle rider into the sidewalk 5 meters (A) Does Marcelo have a cause of action against Sergio?
away. (5%)

The bicycle rider suffered a fractured right knee, sustained (B) Can Sergio claim that whatever they might have agreed
when he fell on his right side on the concrete side walk. upon cannot be enforced because any agreement relating
He was hospitalized and was subsequently operated on, to the sale of real property must be supported by evidence
rendering him immobile for 3 weeks and requiring physical
 in writing and they never reduced their agreement to SUGGESTED ANSWER:
writing? (3%)
A) Boboy’s claim that he is a builder in good faith is without
merit. The contract between the parties remains to be a
lease despite the nominal rentals paid by Boboy. As such,
Boboy’s right with regard to the improvements he
SUGGESTED ANSWER: introduced on the property should not be resolved on the
basis of the provisions of the Civil Code on builder in good
A) Yes, Marcelo has a cause of action against Sergio. As a rule, faith under Article 448 but by the provision on lease,
an offer can be withdrawn at any time before acceptance particularly Article 1678. A lessee who makes
by communicating such withdrawal (Art. 1324) except improvements on the property cannot be considered a
when the option is founded upon a consideration as builder in good faith for he knows that he does not own
something paid or promised. In this case, although there the property and his possession is merely temporary.
was no separate consideration for the option, the offer had Boboy may only claim one-half of the value of the
already been accepted and thus, it resulted into a perfected improvements from Anselmo but if the latter refuses to
contract of sale between Marcelo and Sergio. Sale being a reimburse him, Boboy may remove the improvements
consensual contract is perfected by mere consent. even if it may cause damage to the property.

B) No, Sergio cannot claim that the agreement cannot be B) No, Boboy cannot be held liable for damages except if he
enforced because it was not reduced into writing. caused unnecessary impairment to the property leased.
Contracts shall be obligatory, in whatever form they may Since Anselmo refused to appropriate the improvements
have been entered into, provided all the essential requisites and to reimburse Boboy, the latter may exercise his right
for their validity are present. (Art. 1356) In fact when the to remove the improvements provided he shall not cause
law requires a document or other special form, as in the any more impairment to the property leased than is
acts and enumerated by law, the contracting parties may necessary.
compel each other to observe that form, once the contract
has been perfected, and this right may be exercised
simultaneously with the action upon the contract. (Art. QUESTION V.
1357) Even an oral sale of a parcel of land is valid between
the parties (Campillo vs. CA 129 SCRA 513; Zaide v. CA Josefa executed a deed of donation covering a one-hectare
163 SCRA 71) rice land in favor of her daughter, Jennifer. The deed
specifically provides that:

QUESTION IV. "For and in consideration of he love and

service Jennifer has shown and given to
Anselmo is the registered owner of a land and a house that me, I hereby freely, voluntarily and
his friend Boboy occupied for a nominal rental and on the irrevocably donate to her my one-hectare
condition that Boboy would vacate the property on rice land covered by TCT No. 11550,
demand. With Anselmo's knowledge, Boboy introduced located in San Fernando, Pampanga. This
renovations consisting of an additional bedroom, a donation shall take effect upon my
covered veranda, and a concrete block fence, at his own death."
expense.
The deed also contained Jennifer's signed acceptance, and
Subsequently, Anselmo needed the property as his an attached notarized declaration by Josefa and Jennifer
residence and thus asked Boboy to vacate and turn it over that the land will remain in Josefa's possession and cannot
to him. Boboy, despite an extension, failed to vacate the be alienated, encumbered, sold or disposed of while Josefa
property, forcing Anselmo to send him a written demand is still alive.
to vacate.
Advise Jennifer on whether the deed is a donation inter
In his own written reply, Boboy signified that he was ready vivos or mortis causa and explain the reasons supporting
to leave but Anselmo must first reimburse him the value of your advice. (8%)
the improvements he introduced on the property as he is
a builder in good faith. Anselmo refused, insisting that SUGGESTED ANSWER:
Boboy cannot ask for reimbursement as he is a mere lessee.
Boboy responded by removing the improvements and I will advise Jennifer that the deed of donation executed
leaving the building in its original state. in her favor by Josefa is a donation inter vivos. An inter
vivos donation is generally irrevocable once accepted, and
(A) Resolve Boboy's claim that as a builder in good faith, the law requires that if it involves immovable property, it
he should be reimbursed the value of the improvements must be in a public document and there must be a deed of
he introduced. (4%) acceptance which must be in the same deed of donation.
(B) Can Boboy be held liable for damages for removing If the acceptance is in a separate instrument, it has to be
the improvements over Anselmo's objection? (4%) noted in both instruments. (Art. 749) In this case, the deed
of acceptance clearly signifies that it is a donation inter
vivos because a donation mortis causa need not be
accepted by the donee during the lifetime of the donor
 although the donee in the case of mortis causa donation is obligation is not extinguished and remains suspended until
free to accept or repudiate it after the death of the donor. the payment by commercial document is actually realized
(Art. 1249, Civil Code, par. 3). Also, redemption within
Also, the prohibition on alienation during Josefa’s lifetime the period allowed by law is not a matter of intent but a
all the more indicates that the donation is inter vivos question of payment or valid tender of full redemption
because the fact that Josefa reserved the lifetime usufruct price within the said period. Whether the redemption is
of the land shows that her intent is to transfer the being made under Act 3135 or under the General Banking
ownership of the donated property to Jennifer or else Law, the mortgagor or his assignee is required to tender
there would have been no need for her to reserve the payment to make said redemption valid. (Heirs of
lifetime usufruct thereof if it were a donation mortis causa. Quisumbing vs. PNB aand SLDC –G.R. No. 178242
(Gestopa v. CA 342 SCRA 105 citing Reyes vs. Mosqueda, January 20, 2009)
187 SCRA 661, 671 (1990); Concepcion vs. Concepcion, 91
Phil. 823, 827 (1952).)
QUESTION VII.
In 2005, Andres built a residential house on a lot whose
QUESTION VI. only access to the national highway was a pathway
Lito obtained a loan of P1,000,000 from Ferdie, payable crossing Brando's property. Andres and others have been
within one year. To secure payment, Lito executed a using this pathway (pathway A) since 1980.
chattel mortgage on a Toyota Avanza and a real estate In 2006, Brand0 fenced off his property, thereby blocking
mortgage on a 200-square meter piece of property. Andres' access to the national highway. Andres demanded
(A) Would it be legally significant - from the point of view that part of the fence be removed to maintain his old
of validity and enforceability - if the loan and the access route to the highway (pathway A), but Brando
mortgages were in public or private instruments? (6%) refused, claiming that there was another available pathway
(B) Lito's failure to pay led to the extra-judicial foreclosure (pathway B) for ingress and egress to the highway. Andres
of the mortgaged real property. Within a year from countered that pathway B has defects, is circuitous, and is
foreclosure, Lito tendered a manager's check to Ferdie to extremely inconvenient to use.
redeem the property. Ferdie refused to accept payment on To settle their dispute, Andres and Brando hired Damian,
the ground that he wanted payment in cash: the check a geodetic and civil engineer, to survey and examine the
does not qualify as legal tender and does not include the two pathways and the surrounding areas, and to
interest payment. Is Ferdie's refusal justified? (4%) determine the shortest and the least prejudicial way
through the servient estates. After the survey, the engineer
SUGGESTED ANSWER: concluded that pathway B is the longer route and will need
improvements and repairs, but will not significantly affect
A) With respect to the loan, the same is both valid and the use of Brando's property. On the other hand, pathway
enforceable regardless of whether it is in a private or public A that had long been in place, is the shorter route but
document because as a rule, contracts shall be obligatory would significantly affect the use of Brando's property.
in whatever form they may have been entered into In light of the engineer's findings and the circumstances of
provided all the essential requisites for their validity are the case, resolve the parties' right of way dispute. (6%)
present. A loan is a contract which the law does not require
to be in a particular form in order that it may be valid or SUGGESTED ANSWER:
enforceable.
I will rule in favor of Brando. The easement of right of
However, with regard to the chattel mortgage, since the way should be established at a point least prejudicial to the
law (Act 1508) requires an affidavit of good faith stating servient estate where the distance from the dominant
that the chattel mortgage is supposed to stand as security estate to the public highway may be the shortest. (Art.
for the loan, it is submitted that for validity of the chattel 650) If these two conditions do not concur in one estate,
mortgage, it must be in a public document. A real estate the criterion of least prejudice prevails over shortest
mortgage under the provisions of Article 2125 requires that distance. (Anastacia Quimen vs. CA and Yolanda Oliveros
in order that a mortgage may be validly constituted that May 29, 1996) In this case, to establish the easement on
the document in which it appears must be recorded. If it the property of Brando would significantly affect his use of
is not recorded, the mortgage is nevertheless valid and his property whereas while Pathway B may prove to be
binding between the parties. Hence, for validity both the longer route, it will cause least prejudice to Brando.
chattel and real estate mortgages must be in a public Andres’ argument that Pathway B is circuitous and
document. But for purposes of enforceability, it is inconvenient to use should not be given weight because
submitted that the form of the contract whether in a public the true test of the establishment of an easement is
or private document would be immaterial. (Mobil Oil vs. adequacy. Convenience of the dominant estate has never
Diocares 29 SCRA 656). been the gauge for the establishment of the easement.
(Costabella Corporation v. CA 193 SCRA 333; Cristobal vs.
B) Ferdie’s refusal to accept the check on the ground that it Ledesma 291 SCRA 122)
does not qualify as legal tender is correct because a check,
whether a manager's check or ordinary check, is not legal QUESTION VIII.
tender, and an offer of a check in payment of a debt is not Ciriaco Realty Corporation (CRC) sold to the spouses Del
a valid tender of payment and may be refused receipt by a Cruz a500-square meter land (Lot A) in Paranaque. The
the obligee or creditor. (Philippine Airlines vs. CA and land now has a fair market value of Pl,200,000. CRC
Amelia Tan – January 30, 1990) Mere delivery of checks likewise sold to the spouses Rodriguez, a 700-square meter
does not discharge the obligation under a judgment. The
land (Lot B) which is adjacent to Lot A. Lot B has a present and it may be argued that the land itself is not the object
fair market value of P1,500,000. of the litigation, the annulment of marriage if granted, will
The spouses Dela Cruz constructed a house on Lot B, carry with it the liquidation of the absolute community or
relying on there presentation of the CRC sales agent that it conjugal partnership of the spouses as the case may be
is the property they purchased. Only upon the completion (Article 50 in relation to Article 43 of the Family Code).
of their house did the spouses Dela Cruz discover that they Richard purchased the land with his lotto winnings during
had built on Lot B owned by the spouses Rodriguez, not the pendency of the suit for annulment and on the
on Lot A that they purchased. They spent P 1 000,000 for assumption that the parties are governed by the regime of
the house. absolute community or conjugal partnership, winnings
As their lawyer, advise the spouses Dela Cruz on their from gambling or betting will form part thereof. Also,
rights and obligations under the given circumstances, and since the land is part of the absolute community or
the recourses and options open to them to protect their conjugal partnership of the Richard and Rica it may not be
interests. (8%) sold or alienated without the consent of the latter and any
disposition or encumbrance of the property of the
SUGGESTED ANSWER: community or conjugal property without the consent of
the other spouse is void. (Article 96 and Article 124, Family
I will advise Spouses Dela Cruz that they have the right to Code).
retain possession of the premises until Rodriguez exercises
any of the options under Article 448 of the Civil Code.
(Tecnogas Manufacturing vs. CA February 10, 1997) QUESTION X.
Spouses Dela Cruz are builders in good faith because Manuel was born on 12 March 1940 in a 1 000-square
before constructing the house, they exercised due diligence meter property where he grew up helping his father,
by asking the agent of CRC the location of Lot A and they Michael, cultivate the land. Michael has lived on the
relied on the information given by the agent who is property since the land was opened for settlement at
presumed to know the identity of the lot purchased by the about the time of the Commonwealth government in 193
Dela Cruz. (Pleasantville vs. CA 253 SCRA 10) The owner 5, but for some reason never secured any title to the
of the land on which anything has been built in good faith property other than a tax declaration in his name. He has
by another has the right to appropriate as his own the held the property through the years in the concept of an
works, sowing or planting after payment of the indemnity owner and his stay was uncontested by others. He has also
or to oblige the builder to pay the price of the land if its conscientiously and continuously paid the realty taxes on
value is not considerably higher than the building or trees, the land.
or to ask the sower to pay proper rent. I will also advise Michael died in 2000 and Manuel - as Michael’s only son
my clients that Rodriguez may not compel them to remove and heir -now wants to secure and register title to the land
the improvements because it is not one of the options in his own name. He consults you for legal advice as he
granted to the landowner if the builder is in good faith. wants to perfect his title to the land and secure its
registration in his name.
(A) What are the laws that you need to consider in advising
QUESTION IX. Manuel on how he can perfect his title and register the
Rica petitioned for the annulment of her ten-year old land in his name? Explain the relevance of these laws to
marriage to Richard. Richard hired Atty. Cruz to represent your projected course of action. (4%)
him in the proceedings. In payment for Atty. Cruz's (B) What do you have to prove to secure Manuel's
acceptance and legal fees, Richard conveyed to Atty. Cruz objectives and what documentation are necessary? (4%)
a parcel of land in Taguig that he recently purchased with
his lotto winnings. The transfer documents were duly SUGGESTED ANSWER:
signed and Atty. Cruz immediately took possession by
fencing off the property's entire perimeter. A) For purposes of confirmation of imperfect title, I will have
Desperately needing money to pay for his mounting legal to consider the provisions of Commonwealth Act No. 141
fees and his other needs and despite the transfer to Atty. as well as the Property Registration Decree or P.D. 1529 in
Cruz, Richard offered the same parcel of land for sale to giving my advice to Manuel. C.A. No. 141 which amended
the spouses Garcia. After inspection of the land, the the second Public Land Act (Act 2874) provides that there
spouses considered it a good investment and purchased it are two requisites for judicial confirmation of imperfect
from Richard. Immediately after the sale, the spouses title namely:1) open and continuous, exclusive and
Garcia commenced the construction of a three-story notorious possession and occupation of the land by himself
building over the land, but they were prevented from or through his predecessor in interest under bona fide
doing this by Atty. Cruz who claimed he has a better right claim of ownership since June 12, 1945; and 2) the
in light of the prior conveyance in his favor. classification of the land as alienable and disposable land
Is Atty. Cruz's claim correct? (8%) of the public domain. (Secretary of DENR v. Yap -G.R.
NO. 167707, October 8, 2008) The Property Registration
SUGGESTED ANSWER: Decree or P.D. 1529 provides who may file an application
No, Atty. Cruz is not correct. At first glance, it may appear
that Atty. Cruz is the one who has a better right because
he first took possession of the property. However, as a
lawyer of Richard he is prohibited under Article 1491 from
acquiring the property and rights which may the object of
any litigation in which they may take part by virtue of their
profession. While the suit is for annulment of marriage
 for registration of title to the land under Section 141 thereof
which provides that those who by themselves or their Ariz became envious of the success of his wife. He started
predecessors-in-interest have been in open, continuous, to drink alcohol until he became a drunkard. He preferred
exclusive and notorious possession and occupation of to join his "barkadas"; became a wifebeater; would hurt his
alienable and disposable lands for the public domain under children without any reason; and failed to contribute to
a bona fide claim of ownership since June 12, 1945 or the needs of the family. Despite rehabilitation and
earlier. Since Manuel’s father Michael had been in open, consultation with a psychiatrist, his ways did not change.
continuous, exclusive and notorious possession of the land
since 1935, and that the land was declared alienable in the After 19 years of marriage, Paz, a devout Catholic, decided
same year, his possession has ripened into ownership to have their marriage annulled by the church. Through
which entitles him or his successor Manuel to file an the testimony of Paz and a psychiatrist, it was found that
application for judicial confirmation of imperfect title. Ariz was a spoiled brat in his youth and was sometimes
involved in brawls. In his teens, he was once referred to a
B) I have to prove that the land was already declared psychiatrist for t reatment due to his violent tendencies. In
alienable at the time that Manuel or his father Michael due time, the National Appellate Matrimonial Tribunal
took possession of the land and that their possession was (NAMT) annulled the union of Ariz and Paz due to the
open, continuous, exclusive and notorious which started failure of Ariz to perform and fulfill his duties as a husband
prior to or on June 12, 1945 as required by C.A. No. 141. and as a father to their children. The NAMT concluded
To prove the first requisite, the original classification of the that it is for the best interest of Paz, Ariz and their children
land as approved by the DENR Secretary (Republic v. T.A. to have the marriage annulled.
N. Properties 555 SCRA 4777 (2008) or in lieu thereof, a
Certification by the DENR Regional office attesting to the In view of the NAMT decision, Paz decided to file a
alienable and disposable character of the land (Republic v. Petition for Declaration of Nullity of Marriage of their civil
Serrano G.R. No. 183063 – February 24, 2010) must have wedding before the Regional Trial Court (RTC) of Makati
to be submitted. I also have to file together with the City using the NAMT decision and the same evidence
application for registration all original muniments of title adduced in the church annulment proceedings as basis.
or copies thereof and a survey plan of the land approved
by the Bureau of Lands in accordance with Section 17 of If you are the judge, will you grant the petition? Explain.
P.D. 1529.2 Manuel may also submit the tax declarations (5%)
and tax payment receipts which have been ruled to be
good indications of possession in the concept of owner SUGGESTED ANSWER:
(Republic vs. Candy Maker, Inc. G.R. No. 163766, June If I were the judge, I will not grant the petition. While the
22, 2006). decision of the church tribunal annulling the marriage of
the parties may be persuasive, it is not however, binding
2014 BAR EXAMINATIONS upon the civil courts. For psychological incapacity to be a
ground for nullity, it must be shown that it was rooted in
the history of the party alleged to be suffering from it, must
I. be grave and serious, and incurable such that it renders the
person incapacitated to perform the essential marital
Ariz and Paz were officemates at Perlas ng Silangan Bank obligations due to causes psychological in nature. In the
(PSB). They fell in love with each other and had a civil and case presented, it appears that Ariz fulfilled his marital
church wedding. Meanwhile, Paz rapidly climbed the obligations at the beginning and it was only after feeling
corporate ladder of PSB and eventually became its Vice envious about the success of Paz that he started exhibiting
President, while Ariz remained one of its bank supervisors, violent tendencies and refused to comply with marital
although he was short of 12 units to finish his Masters of obligations. Psychological incapacity is not mere refusal
Business Administration (MBA) degree. but outright incapacity to perform marital obligations

1 Section 14. Who may apply. The following persons may file (3) Those who have acquired ownership of private
in the proper Court of First Instance an application for lands or abandoned river beds by right of accession or
registration of title to land, whether personally or through their accretion under the existing laws.
duly authorized representatives:
(4) Those who have acquired ownership of land in any
(1) Those who by themselves or through their other manner provided for by law.
predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and 2 Section 17. What and where to file. The application for land
occupation of alienable and disposable lands of the registration shall be filed with the Court of First Instance of the
public domain under a bona fide claim of ownership province or city where the land is situated. The applicant shall
since June 12, 1945, or earlier. file together with the application all original muniments of titles
or copies thereof and a survey plan of the land approved by
(2) Those who have acquired ownership of private the Bureau of Lands.
lands by prescription under the provision of existing
laws. The clerk of court shall not accept any application unless it is
shown that the applicant has furnished the Director of Lands
with a copy of the application and all annexes.
which does not appear to be present in the case of Ariz. Monica, referred to as Vendee, I hereby sell, transfer, cede,
(Marcos v. Marcos G.R. No. 136490- October 19, 2000) convey, and assign, as by these presents, I do have sold,
transferred, ceded, conveyed and assigned a parcel of land
covered by TCT No. 2468 in favor of the Vendee."
II.
After delivery of the initial payment of P100,000.00,
Crispin died testate and was survived by Alex and Josine, Monica immediately took possession of the property. Five
his children from his first wife; Rene and Ruby, his children (5) months after, Monica failed to pay the remaining
from his second wife; and Allan, Bea, and Cheska, his balance of the purchase price. Nante filed an action for the
children from his third wife. recovery of possession of the property. Nante alleged that
the agreement was one to sell,which was not
One important provision in his will reads as follows: consummated as the full contract price was not paid. Is the
contention of Nante tenable?
"Ang lupa at bahay sa Lungsod ng Maynila ay ililipat at
ilalagay sa pangalan nila Alex at Rene hindi bilang pamana SUGGESTED ANSWER:
ko sa kanila kundi upang pamahalaan at pangalagaan The contention of Nante is not tenable. The deed itself
lamang nila at nang ang sinuman sa aking mga anak, states that for consideration received, he sells, transfers,
sampu ng aking mga apo at kaapuapuhan ko sa habang and conveys the land to Monica and there was delivery of
panahon, ay may tutuluyan kung magnanais na mag-aral the property to the latter. The contract is clearly one of
sa Maynila o sa kalapit na mga lungsod." sale as there was no reservation of ownership on the part
of the seller Nante. The non-payment of the price in a
Is the provision valid? (4%) contract of sale would only entitle the seller to rescind the
contract but it does not thereby prevent the transfer of
SUGGESTED ANSWER: ownership particularly so as in this case, where there was
No, the provision is not valid. At first glance, the provision already delivery to the buyer.
may appear valid as it provides for the transfer of title in
favor of Alex and Rene over the parcel of land. A legacy
or devise is to be construed as a donation effective mortis V.
causa, and it is intended to transfer ownership to the
legatee or devisee. Since the ownership is legally What is the effect of preterition ? (1%)
transferred to the Alex and Rene, they cannot be
prohibited by the testator from alienating or partitioning (A) It annuls the devise and legacy
the same perpetually. The dispositions of the testator
declaring all or part of the estate inalienable for more than (B) It annuls the institution of heir
twenty years are void. (Article 870)
(C) It reduces the devise and legacy

III. (D) It partially annuls the institution of heir

The Roman Catholic Church accepted a donation of a real

property located in Lipa City. A deed of donation was Answer is letter B (preterition annuls the institution of
executed, signed by the donor, Don Mariano, and the heirs)
donee, the Church, as represented by Fr. Damian. Before
the deed could be notarized, Don Mariano died. Is the
donation valid? (4%)
VI.
SUGGESTED ANSWER:
The donation is void. The donation of an immovable Miko and Dinah started to live together as husband and
property must be in a public instrument in order for it to wife without the benefit of marriage in 1984. Ten (10)
be valid. In this case, the donor died even before the years after, they separated. In 1996, they decided to live
notarization of the deed of donation. Hence, it does not together again, and in 1998, they got married.
satisfy the requirement of being in a public instrument for
the donation to be valid. On February 17, 2001, Dinah filed a complaint for
declaration of nullity of her marriage with Miko on the
ground of psychological incapacity under Article 36 of the
Family Code. The court rendered the following decision:

IV. "1. Declaring the marriage null and void;

Nante, a registered owner of a parcel of land in Quezon 2. Dissolving the regime of absolute community of
City, sold the property to Monica under a deed of sale property; and
which reads as follows:
3. Declaring that a decree of absolute nullity of marriage
"That for and in consideration of the sum of P500,000.00, shall only be issued after liquidation, partition and
value to be paid and delivered to me, and receipt of which distribution of the parties’ properties under Article 147 of
shall be acknowledged by me to the full satisfaction of the Family Code."
 its valet parking attendant parked the vehicle in
Dinah filed a motion for partial reconsideration front of a bank near the hotel premises. The court
questioning the portion of the decision on the issuance of ruled that the bank’s parking area became an
a decree of nullity of marriage only after the liquidation, annex of the hotel when the management of the
partition and distribution of properties under Article 147 bank allowed the hotel to park vehicles there on
of the Code. the night in question. The contract of deposit was
perfected when the guest surrendered the keys to
If you are the judge, how will you decide petitioner’s his vehicle to the parking attendant and the hotel
motion for partial reconsideration? Why? (4%) is under obligation of safely keeping and returning
it. Ultimately, Square One Hotel is liable for the
SUGGESTED ANSWER: loss of the vehicle.
I will grant partial reconsideration. If the marriage is
declared void under Article 36, the provisions of the VIII.
Family Code on liquidation, partition, and distribution of
the properties on absolute community or conjugal Tess leased her 1,500 sq. m. lot in Antipolo City to
partnership will not apply but rather Article 147 or Article Ruth for a period of three (3) years, from January
148 depending on the presence or absence of a legal 2010 to February 2013.
impediment between them. In Dino v. Dino, 3 the SC ruled
that Art. 50 of the Family Code and Section 19 of the Rules On March 19, 2011, Tess sent a letter to Ruth, part of
on Declaration of Nullity applies only to marriages which which reads as follows:
are declared void ab initio or annulled by final judgment
under Articles 40 and 45 of the Family. In short, Art. 50 "I am offering you to buy the property you are
of the Family Code does not apply to marriages which are presently leasing at P5,000.00 per sq. m. or for a total
declared void ab initio under Art. 36 of the FC which of P7,500,000.00. You can pay the contract price by
should be declared void without waiting for the installment for two (2) years without interest.
liquidation of the properties of the parties.
I will give you a period of one (1) year from receipt of
this letter to decide whether you will buy the
VII. property."

Due to the continuous heavy rainfall, the major streets in After the expiration of the lease contract, Tess sold the
Manila became flooded. This compelled Cris to check-in at property to her niece for a total consideration of P4
Square One Hotel. As soon as Crisgot off from his Toyota million.
Altis, the Hotel’s parking attendant got the key of his car
and gave him a valet parking customer’s claim stub. The Ruth filed a complaint for the annulment of the sale,
attendant parked his car at the basement of the hotel. Early reconveyance and damages against Tess and her niece.
in the morning, Cris was informed by the hotel manager Ruth alleged that the sale of the leased property
that his car was carnapped. (4%) violated her right to buy under the principle of right
of first refusal.
(A) What contract, if any, was perfected between Cris and
the Hotel when Cris surrendered the key of his car to the Is the allegation of Ruth tenable? (4%)
Hotel’s parking attendant?
SUGGESTED ANSWER:
(B) What is the liability, if any, of the Hotel for the loss of No, the allegation of Ruth is not tenable. The letter
Cris’ car? written by Tess did not grant a right of first refusal to
Ruth. At most, it is to be construed as an option
SUGGESTED ANSWER: contract whereby Ruth was given the right to buy or
not to buy the leased property. An option is itself not
a) The contract between Cris and Square One Hotel a purchase but it merely secures the privilege to buy.
is one of necessary deposit. Deposit of effects However, the option is not valid because it was not
made by travelers or guests in hotels or inns is supported by a cause or consideration distinct from
considered a necessary deposit. 4 This includes not the price of the property. (Article 1479) Also, Ruth
only the personal effects brought inside the hotel does not appear to have exercised her option before
premises but also vehicles or animals and articles the offer was withdrawn by the subsequent sale of the
which have been introduced or placed in the property to the niece of Tess.
annexes of the hotel.

b) In the case of Durban Apartments vs. Pioneer IX.

Insurance,5 the Supreme Court held the hotel
liable for the loss of the vehicle of the guest after

3
Alain Dino vs. Ma. Caridad Dino G.R. No. 178044, January 19, 2011
5
G.R. No. 179419 January 12, 2011
4
Article 1998, Civil Code
Spouses Macario and Bonifacia Dakila entered into a creditor as she had already sold the property to DM
contract to sell with Honorio Cruz over a parcel of Realty, the facts do not state that the realty
industrial land in Valenzuela, Bulacan for a price of corporation was also given notice before filing the case
Three Million Five Hundred Thousand Pesos for consignation.
(P3,500,000.00). The spouses would give a
downpayment of Five Hundred Thousand Pesos
(P500,000.00) upon the signing of the contract, while XI.
the balance would be paid for the next three (3)
consecutive months in the amount of One Million An easement that can be acquired by prescription:
Pesos (P1,000,000.00) per month. The spouses paid (1%)
the first two (2) installments but not the last
installment. After one (1) year, the spouses offered to (A) Right of way
pay the unpaid balance which Honorio refused to
accept. (B) Watering of an animal

The spouses filed a complaint for specific performance (C) Lateral and subjacent support
against Honorio invoking the application of the
Maceda Law. If you are the judge, how will you decide (D) Light and view
the case? (4%)
Correct answer – letter D – only continuous and
SUGGESTED ANSWER: apparent easements may be acquired by prescription
I will rule in favor of Honorio. The invocation of the
Maceda Law is misplaced. The law applies only to sale
or financing of realty on installment payments
including residential units or residential condominium XII.
apartments and does not apply to sales of industrial
units or industrial lands like in the case presented. J.C. Construction (J.C.) bought steel bars from
Another reason why the Maceda law will not apply is Matibay Steel Industries (MSI) which is owned by
that, the sale in the case at bar is not the sale on Buddy Batungbacal. J.C. failed to pay the purchased
installment as contemplated by the law. The sale on materials worth P500,000.00 on due date. J.C.
installment covered by the Maceda Law is one where persuaded its client Amoroso with whom it had
the price is paid or amortized over a certain period in receivables to pay its obligation to MSI. Amoroso
equal installments. The sale to the Spouses Dakila is agreed and paid MSI the amount of P50,000.00. After
not a sale on installment but more of a straight sale two (2) other payments, Amoroso stopped making
where a down payment is to be made and the balance further payments.
to be paid in a relatively short period of three months.
Buddy filed a complaint for collection of the balance
of the obligation and damages against J.C. J.C. denied
X. any liability claiming that its obligation was
extinguished by reason of novation which took place
Dorotea leased portions of her 2,000 sq. m. lot to when MSI accepted partial payments from Amoroso
Monet, Kathy, Celia, and Ruth for five (5) years. Two on its behalf.
(2) years before the expiration of the lease contract,
Dorotea sold the property to PM Realty and Was the obligation of J.C. Construction to MSI
Development Corporation. The following month, extinguished by novation? Why? (4%)
Dorotea and PM Realty stopped accepting rental
payments from all the lessees because they wanted to SUGEGSTED ANSWER:
terminate the lease contracts. No, the obligation of JC was not extinguished by
novation. Novation may either be objective or subjective.
Due to the refusal of Dorotea to accept rental Subjective novation takes place by the substitution of
payments, the lessees , Ruth, et al., filed a complaint debtor or subrogation of a third person to the rights of the
for consignation of the rentals before the Regional creditor. Novation by substituting a new debtor may take
Trial Court (RTC) of Manila without notifying place even without the knowledge or against the will of
Dorotea. the original debtor but not without the consent of the
creditor. Moreover, novation must be expressed and it
Is the consignation valid? (4%) cannot be implied and there must be an agreement that
the old obligation is extinguished. In the case of JC, it does
SUGGESTED ANSWER: not appear that MSI had agreed to release JC from the
No, the consignation is not valid. For consignation of obligation. Hence, the obligation of JC was not
the thing or sum due to be proper, there must be prior extinguished.
notice to the creditor that the debtor is going to
consign the payment in court. This notice is intended
to give the creditor the opportunity to accept payment XIII.
and thus avoid liability for costs in case it is found that
the act of consignation was properly made. Even on Esteban and Martha had four (4) children: Rolando,
the assumption that Dorotea was no longer the Jun, Mark, and Hector. Rolando had a daughter,
 Edith, while Mark had a son, Philip. After the death of Mr. Bong owns several properties in Pasig City. He decided
Esteban and Martha, their three (3) parcels of land to build a condominium named Flores de Manila in one of
were adjudicated to Jun. After the death of Jun, the his lots. To fund the project, he obtained a loan from the
properties passed to his surviving spouse Anita, and National Bank (NB) secured by a real estate mortgage over
son Cesar. When Anita died, her share went to her son the adjoining property which he also owned.
Cesar. Ten (10) years after, Cesar died intestate During construction, he built three (3) pumps on the
without any issue. Peachy, Anita’s sister, adjudicated mortgaged property to supply water to the condominium.
to herself the properties as the only surviving heir of After one (1) year, the project was completed and the
Anita and Cesar. Edith and Philip would like to recover condominium was turned over to the buyers. However,
the properties claiming that they should have been Mr. Bong failed to pay his loan obligation to NB. Thus, NB
reserved by Peachy in their behalf and must now foreclosed the mortgaged property where the pumps were
revert back to them. installed. During the sale on public auction of the
mortgaged property, Mr. Simon won in the bidding. When
Is the contention of Edith and Philip valid? (4%) Mr. Simon attempted to take possession of the property,
the condominium owners, who in the meantime
SUGGESTED ANSWER: constituted themselves into Flores de Manila Inc. (FMI),
No, the contention is not valid. The property adjudicated claimed that they have earlier filed a case for the declaration
to Jun from the estate of his parents which he in turn left of the existence of an easement before the Regional Trial
to Anita and Cesar is not subject to reservation in favor of Court (RTC) of Pasig City and prayed that the easement be
Edith and Philip. In Mendoza et. al. vs.Policarpio, et. al. 6 annotated in the title of the property foreclosed by NB. FMI
the court ruled that lineal character of the reservable further claimed that when Mr. Bong installed the pumps in
property is reckoned from the ascendant from whom the his adjoining property, a voluntary easement was
propositus received the property by gratuitous title. The constituted in favor of FMI.
ownership should be reckoned only from Jun, as he is the Will the action prosper? (4%)
ascendant from where the first transmission occurred or
from whom Cesar inherited the properties. Moreover, SUGGESTED ANSWER:
Article 891 provides that the person obliged to reserve the No, the action will not prosper. The essence of a mortgage
property should be an ascendant. Peachy is not Cesar’s is that it immediately subjects the property upon which it is
ascendant but a mere collateral relative. On the imposed, and whoever the possessor may be, to the
assumption that the property is reservable, Edith and Philip fulfillment of the obligation for whose security it was
being first cousins of Cesar who is the propositus are constituted.7 There was no voluntary easement in this case
disqualified to be reservatarios as they are not third degree because at the time the water pumps were constructed, the
relatives of Cesar. subject lot where the water pumps were constructed and
the condominium belong to the same person. No one can
have an easement over his own property. (Bogo- Medellin
XIV. vs. CA G.R. 124699, July 31, 2003.) Even of the assumption
that an easement was created in favor of FMI that alone
A pedestrian, who was four (4) months pregnant, was hit will not defeat the right of the mortgagee to enforce the
by a bus driver while crossing the street. Although the security if the debtor defaults.
pedestrian survived, the fetus inside her womb was aborted.
Can the pedestrian recover damages on account of the
death of the fetus? (1%) XVI.
(A) Yes, because of Article 2206 of the Civil Code
which allows the surviving heirs to demand damages A congregation for religious women, by way of
for mental anguish by reason of the death of the commodatum, is using the real property owned and
deceased. registered in the name of Spouses Manuel as a retreat house.
(B) Yes, for as long as the pedestrian can prove that Maria, a helper of the congregation discovered a chest in
she was not at fault and the bus driver was the one the backyard. When she opened the chest, it contained
negligent. several pieces of jewelry and money. (4%)
(C) No, because a fetus is not a natural person. (A) Can the chest containing the pieces of jewelry and
(D) No, if the fetus did not comply with the money be considered as hidden treasure?
requirements under Article 41 of the Civil Code. (B) Who has the right to claim ownership of it?

Correct Answer is letter D – Article 41 of the Civil Code SUGGESTED ANSWER:

requires that to be considered a person, a fetus with an
intrauterine life of less than seven months must survive for a) No, for property to be considered hidden treasure
the full twenty-four hours from complete separation from it must consist of money, jewelry or other precious
the mother’s womb. objects, the lawful ownership of which does not
appear. In the case at bar, the chest was just lay in
the backyard and the real property where it was
XV. found belongs to the Spouses Manuel. They are

6 7
Article 2126
G.R. NO. 176422 -March 20, 2013
 thus presumed the owner of the chest where the thereto. (Article 536) The act of Francisco is an abuse of
jewelry was found. rights because even if he has the right to recover possession
of his property, he must act with justice and give the lessees
b) Since it does not come within the purview of their day in court and observe honesty and good faith.
hidden treasure, the spouses Manuel have the right
to claim ownership over the chest as well as its
contents. XIX.
Who enjoys the Right of Retention? (1%)
(A) Depositary until full payment of what may be
XVII. due him in deposit.
(B) Lessee if he advances the expenses for the
On March 30, 2000, Mariano died intestate and was repair of the leased premises.
survived by his wife, Leonora, and children, Danilo and (C) Bailee if bailor owes him something.
Carlito. One of the properties he left was a piece of land in (D) Builder in bad faith for the recovery of
Alabang where he built his residential house. necessary and useful expenses.
After his burial, Leonora and Mariano’s children
extrajudicially settled his estate. Thereafter, Leonora and Correct answer is letter A – depositary (Article 1994)
Danilo advised Carlito of their intention to partition the
property. Carlito opposed invoking Article 159 of the
Family Code. Carlito alleged that since his minor child Lucas XX.
still resides in the premises, the family home continues until Mabuhay Elementary School organized a field trip for its
that minor beneficiary becomes of age. Grade VI students in Fort Santiago, Manila Zoo, and Star
Is the contention of Carlito tenable? (4%) City. To be able to join, the parents of the students had to
sign a piece of paper that reads as follows:
SUGGESTED ANSWER: "I allow my child (name of student), Grade – Section, to
No, the contention of Carlito is not tenable. In the case of join the school’s field trip on February 14, 2014.
Patricio v. Dario,8 with similar facts to the case at bar, the I will not file any claim against the school, administrator
court ruled that to qualify as beneficiary of the family home or teacher in case something happens to my child during
the person must be among those mentioned in Article 154, the trip."
he/she must be actually living in the family home and must Joey, a 7-year-old student of Mabuhay Elementary School
be dependent for legal support upon the head of the family. was bitten by a snake while the group was touring Manila
While Lucas, the son of Carlito satisfies the first and second Zoo. The parents of Joey sued the school for damages. The
requisites, he cannot however, directly claim legal support school, as a defense, presented the waiver signed by Joey’s
from his grandmother, Leonora because the person parents.
primarily obliged to give support to Lucas is his father, Was there a valid waiver of right to sue the school? Why?
Carlito. Thus, partition may be successfully claimed by (4%)
Leonora and Danilo. SUGGESTED ANSWER:
No, there was no valid waiver of the right to sue the school.
A waiver to be valid must have three requisites 1) existence
XVIII. of the right; 2) legal capacity of the person waiving the right
and 3) the waiver must not be contrary to law, morals,
Spouses Magtanggol managed and operated a gasoline good customs, public order or public policy or prejudicial
station on a 1,000 sq.m. lot which they leased from to a third person with a right recognized by law. In the case
Francisco Bigla-awa. The contract was for a period of three presented, the waiver may be considered contrary to public
(3) years. When the contract expired, Francisco asked the policy as it exonerates the school from liability for future
spouses to peacefully vacate the premises. The spouses negligence. The waiver in effect allows the school to not
ignored the demand and continued with the operation of exercise even ordinary diligence.
the gasoline station.
One month after, Francisco, with the aid of a group of
armed men, caused the closure of the gasoline station by XXI.
constructing fences around it. A delayed accession is: (1%)
Was the act of Francisco and his men lawful? Why? (4%) (A) formation of an island
(B) avulsion
SUGGESTED ANSWER: (C) alluvium
No, the act was not lawful. Even if the lessee’s right to (D) change in the course of the riverbed
occupy the premises has expired, the lessor cannot Correct answer is letter B (Article 459 Civil Code)
physically oust the lessee from the leased premises if the
latter refuses to vacate. The lessor must go through the
proper channels by filing an appropriate case for unlawful XXII.
detainer or recovery of possession. Every possessor has a On March 27, 1980, Cornelio filed an application for land
right to be respected in his possession (Article 539) and in registration involving a parcel of agricultural land that he
no case my possession be acquired through force or had bought from Isaac identified as Lot No. 2716 with an
intimidation as long as there is a possessor who objects area of one (1) hectare. During the trial, Cornelio claimed

8
G.R. No. 170829 November 20, 2006
that he and his predecessors-in-interest had been in open, Registry of Quezon City where his marriage contract with
continuous, uninterrupted, public and adverse possession Annie was registered. He asked the Civil Register to
and occupation of the land for more than thirty (30) years. annotate the decree of divorce on his marriage contract
He likewise introduced in evidence a certification dated with Annie. However, he was advised by the National
February 12, 1981 citing a presidential declaration to the Statistics Office (NSO) to file a petition for judicial
effect that on June 14, 1980, agricultural lands of the public recognition of the decree of divorce in the Philippines.
domain, including the subject matter of the application, Is it necessary for Ted to file a petition for judicial
were declared alienable and disposable agricultural land. recognition of the decree of divorce he obtained in Canada
(4%) before he can contract a second marriage in the
(A) If you are the judge, will you grant the Philippines? (4%)
application for land registration of Cornelio? SUGGESTED ANSWER:
(B) Can Cornelio acquire said agricultural land Yes, a divorce decree even if validly obtained abroad
through acquisitive prescription, whether ordinary cannot have effect in the Philippines unless it is judicially
or extraordinary? recognized through an appropriate petition filed before
SUGGESTED ANSWER: Philippine courts. In Corpuz v. Sto. Tomas,9 the SC ruled
that the foreigner must file a petition under Rule 108 and
a) No, I will not grant the application. To be entitled prove therein the fact of divorce by presenting an official
to registration of the parcel of land, the applicant copy attested by the officer having custody of the original.
must show that the land being applied for is He must also prove that the court which issued the divorce
alienable land. At the time of the filing of the has jurisdiction to issue it and the law of the foreign country
application, the land has not yet been declared on divorce.
alienable by the state. (Republic v. CA, G.R. No.
144057, January 17, 2005)
XXV.
b) Cornelio can acquire the land by acquisitive
prescription only after it was declared part of Mario executed his last will and testament where he
alienable land by the state by possession for the acknowledges the child being conceived by his live-in
required number of years for ordinary prescription, partner Josie as his own child; and that his house and lot in
ten years possession in good faith with just title or Baguio City be given to his unborn conceived child. Are the
extraordinary prescription by possession for thirty acknowledgment and the donation mortis causa valid?
years without need of any other condition. (Article Why? (4%)
1134, Civil Code)
SUGGESTED ANSWER:
Yes, the acknowledgment is considered valid because a will
XXIII. (although not required to be filed by the notary public) may
After undergoing sex reassignment in a foreign country, still constitute a document which contains an admission of
Jose, who is now using the name of "Josie," married his illegitimate filiation. Article 834 also provides that the
partner Ador. Is the marriage valid? (1%) recognition of an illegitimate child does not lose its legal
(A) Yes, the marriage is valid for as long as it is effect even though the will wherein it was made should be
valid in the place where it is celebrated following revoked. This provision by itself warrants a conclusion that
Article 17 of the Civil Code. a will may be considered as proof of filiation. The donation
(B) Yes, the marriage is valid if all the essential and mortis causa may be considered valid because although
formal elements of marriage under the Family unborn, a fetus has a presumptive personality for all
Code are present. purposes favorable to it provided it be born under the
(C) No, the marriage is not valid because one conditions specified in Article 41.
essential element of marriage is absent.
(D) No, the marriage is not valid but is voidable
because "Josie" concealed her real identity.
Correct answer is letter C – not valid for lack of one
essential requirement (Silverio v. Republic G.R. No.
174689, October 22, 2007) XXVI.
Isaac leased the apartment of Dorotea for two (2) years.
Six (6) months after, Isaac subleased a portion of the
XXIV. apartment due to financial difficulty. Is the sublease
Ted, married to Annie, went to Canada to work. Five (5) contract valid? (1%)
years later, Ted became a naturalized Canadian citizen. He (A) Yes, it is valid for as long as all the elements of
returned to the Philippines to convince Annie to settle in a valid sublease contract are present.
Canada. Unfortunately, Ted discovered that Annie and his (B) Yes, it is valid if there is no express prohibition
friend Louie were having an affair. Deeply hurt, Ted for subleasing in the lease contract.
returned to Canada and filed a petition for divorce which (C) No, it is void if there is no written consent on
was granted. In December 2013, Ted decided to marry his the part of the lessor.
childhood friend Corazon in the Philippines. In (D) No, it is void because of breach of the lease
preparation for the wedding, Ted went to the Local Civil contract.

9
Gerbert Corpuz vs. Daisylyn Sto. Tomas G.R. No. 186571; August 11,
2010
 Timothy executed a Memorandum of Agreement (MOA)
Correct answer is letter B – Article 1650 with Kristopher setting up a business venture covering
three (3) fastfood stores known as "Hungry Toppings" that
will be established at Mall Uno, Mall Dos, and Mall Tres.
XXVII. The pertinent provisions of the MOA provides:
Fe, Esperanza, and Caridad inherited from their parents a 1. Timothy shall be considered a partner with
500 sq. m. lot which they leased to Maria for three (3) thirty percent (30%) share in all of the stores to
years. One year after, Fe, claiming to have the authority be set up by Kristopher;
to represent her siblings Esperanza and Caridad, offered to 2. The proceeds of the business, after deducting
sell the leased property to Maria which the latter accepted. expenses, shall be used to pay the principal
The sale was not reduced into writing, but Maria started amount of P500,000.00 and the interest therein
to make partial payments to Fe, which the latter received which is to be computed based on the bank rate,
and acknowledged. After giving the full payment, Maria representing the bank loan secured by Timothy;
demanded for the execution of a deed of absolute sale 3. The net profits, if any, after deducting the
which Esperanza and Caridad refused to do. Worst, Maria expenses and payments of the principal and
learned that the siblings sold the same property to Manuel. interest shall be divided as follows: seventy
This compelled Maria to file a complaint for the annulment percent (70%) for Kristopher and thirty percent
of the sale with specific performance and damages. (30%) for Timothy;
If you are the judge, how will you decide the case? (4%) 4. Kristopher shall have a free hand in running the
SUGGESTED ANSWER: business without any interference from Timothy,
I will dismiss the case for annulment of the sale and specific his agents, representatives, or assigns , and should
performance filed by Maria with respect to the shares such interference happen, Kristopher has the right
pertaining to Esperanza and Caridad. Since the object of to buy back the share of Timothy less the amounts
the sale is a co-owned property, a co-owner may sell his already paid on the principal and to dissolve the
undivided share or interest in the property owned in MOA; and
common but the sale will be subject to the result of the 5. Kristopher shall submit his monthly sales report
partition among the co-owners. In a co-ownership there is in connection with the business to Timothy.
no mutual agency except as provided under Article 487. What is the contractual relationship between Timothy and
Thus, Fe cannot sell the shares of Esperanza and Caridad Kristopher? (4%)
without a special power of attorney from them and the sale
with respect to the shares of the latter without their written SUGGESTED ANSWER:
authority is void under Article 1874. Hence, the sale of the The contractual relationship between Timothy and
property to Manuel is not valid with respect to the shares Kristopher is a contract of partnership as defined under
of Esperanza and Caridad. Maria can only assail the portion Article 1767 of the Civil Code, since they have bound
pertaining to Fe as the same has been validly sold to her by themselves to contribute money, property or industry to a
Fe. common fund, with the intention of dividing the profits of
the partnership between them. With a seed money of
P500, 000.00 obtained by Timothy through a bank loan,
XXVIII. they agreed to divide the profits, 70% for Kristopher and
30% for Timothy.
Spouses Esteban and Maria decided to raise their two (2)
nieces, Faith and Hope, both minors, as their own children However, to be more specific, theirs is a limited
after the parents of the minors died in a vehicular accident. partnership as defined under Article 1843 of the Civil Code
Ten (10) years after, Esteban died. Maria later on married because Timothy does not take part in the control of the
her boss Daniel, a British national who had been living in business pursuant to Article 1848, Civil Code. Nevertheless,
the Philippines for two (2) years. Timothy is entitled to monthly sales reports in connection
With the permission of Daniel, Maria filed a petition for with the business, a right enshrined in Article 1851 of the
the adoption of Faith and Hope. She did not include Civil Code.
Daniel as her co-petitioner because for Maria, it was her
former husband Esteban who raised the kids.
If you are the judge, how will you resolve the petition? XXX.
(4%)
SUGGESTED ANSWER: Joe Miguel, a well-known treasure hunter in Mindanao,
I will dismiss the petition for adoption. The rule is that the executed a Special Power of Attorney (SPA) appointing his
husband and wife must jointly adopt and there are only nephew, John Paul, as his attorney-infact. John Paul was
three recognized exceptions to joint adoption by the given the power to deal with treasure-hunting activities on
husband and wife: 1) if one spouse seeks to adopt the Joe Miguel’s land and to file charges against those who
legitimate child of the other; 2) if one spouse seeks to adopt may enter it without the latter’s authority. Joe Miguel
his or her own illegitimate child; 3) if the spouses are legally agreed to give John Paul forty percent (40%) of the
separated. The case of Maria and Daniel does not appear treasure that may be found on the land.
to fall under any of the recognized exceptions, accordingly Thereafter, John Paul filed a case for damages and
the petition filed by the wife alone should be dismissed. injunction against Lilo for illegally entering Joe Miguel’s
land. Subsequently, he hired the legal services of Atty.
Audrey agreeing to give the latter thirty percent (30%) of
XXIX Joe Miguel’s share in whatever treasure that may be found
in the land.
Dissatified however with the strategies implemented by
John Paul, Joe Miguel unilaterally revoked the SPA
granted to John Paul.
Is the revocation proper? (4%)

SUGGESTED ANSWER:
No, the revocation was not proper. As a rule, a contract
of agency may be revoked by the principal at will. 10
However, an agency ceases to be revocable at will if it is
coupled with an interest or if it is a means of fulfilling an
obligation already contracted. (Article 1922). In the case at
bar, the agency may be deemed an agency coupled with
an interest not only because of the fact that John Paul
expects to receive 40% of whatever treasure may be found
but also because he also contracted the services of a lawyer
pursuant to his mandate under the contract of agency and
he therefore stands to be liable to the lawyer whose
services he has contracted. (Sevilla v. Tourist World
Service, G.R. No. L-41182-3 April 16, 1988)

10
Article 1920