Civil Law Notes - JJP

I.
PRELIMINARY TITLE
A. Effect and application of laws
When the Laws Become Effective

General Rule: Fifteen (15) days after completion of publication in Official Gazette or a newspaper of general
circulation. (Art. 2)
Exception: The law can provide for its own date of effectivity and manner of publication. An immediate
effectivity clause does not preclude the requirement of publication.
Mandatory Publication
Publication is mandatory and must be in full (otherwise, it is not deemed published at all) since its purpose
is to inform the public of its contents.
Compliance with the Law

Ignorance of the law excuses no one from compliance therewith (Ignorantia legis non excusat). (Art. 3)
Note: Applies only to mandatory and prohibitory laws (Consunji v. CA, G.R. 137873, 2001).
General Rule: Laws are not retroactive. (Art. 4)

Exceptions: (PIERCER)
1. Penal laws when favorable to the accused who is not a habitual delinquent or recidivist
2. Interpretative statutes
3. When the law itself Expressly provides
Exceptions to the exception (prospective):

1. Ex post facto law
2. When retroactivity impairs the obligations of contracts
3. Bills of Attainder
4. Remedial statutes
5. Curative statutes
6. Emergency laws
7. Laws creating new substantive Rights
MANDATORY OR PROHIBITORY LAWS

General Rule: Acts executed against the provisions of mandatory or prohibitory laws shall be void. (Art.
5)
Exception: If the law expressly provides for the validity of acts committed in violation of a mandatory or
prohibitory provision of a statute.
WAIVER OF RIGHTS
General Rule: Rights may be waived. (Art. 6)
Requisites of a valid waiver: (Herrera v. Borromeo)

1. Existence of a right
2. Knowledge of the existence of such right
3. An intention to relinquish the right
Exceptions: When waiver is

i. Contrary to law, public order, public policy, morals, good customs (e.g. waiver of future inheritance,
political rights, future support)
ii. Prejudicial to a third person with a right recognized by law.
Repeal of Laws (Art. 7)

1. Express repeal - repeal of the repealing law will not revive the old law (unless expressly provided).
2. Implied repeal - the provisions of the subsequent law are incompatible with those of the previous law.
CIVIL LAW | PEÑALOSA

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Requisites:
1. Both laws cover the same subject matter.
2. The latter law is repugnant to the earlier law.
B. Human Relations
Principle of Abuse of Rights (Art. 19)

One’s right is exercised for the purpose of prejudicing or injuring another.
Requisites/Elements:
1. There is a legal right or duty
2. Which is exercised in bad faith
3. For the sole intent of prejudicing or injuring another. (Sps. Andrada v. Pilhino Sales Corporation, G.R.
No. 156448, 2011)
Standards to Observe in the Exercise of One’s Rights or Performance of Duty:

1. Act with justice
2. Give everyone his due
3. Observe honesty and good faith.
Acts Contrary to Law (Art. 20)

Every person who, contrary to law, willfully or negligently causes damage to another, shall indemnify the
latter for the same.
Acts Contra Bonos Mores (Art. 21)

When persons willfully cause loss or injury to another.
Elements:
1. There is an act which is legal.
2. But contrary to morals, good customs, public order, or public policy.
3. Done with intent to injure.
Note:
• Similarities: In Arts. 19-21, at the core is bad faith or malice and the aggrieved party must be indemnified.
• Differences: Under Arts. 19 & 21, the act must be done intentionally. Art. 20, however, does not distinguish
(the act may be done either willfully or negligently, as long as the act is be contrary to law).
Actions for Breach of Promise to Marry

General Rule: Breach of promise to marry is not actionable.
Exception: When one party has already made real efforts to prepare and spend for the wedding. Such act
is unjustifiably contrary to good customs for which the defendant must be held answerable for damages in
accordance with Art. 21 of the NCC. (Wassmer v. Velez, G.R. No. L-20089, 1964)
Unjust Enrichment / Accion in rem verso (Art. 22)

Action for recovery of what has been paid without just cause
Conditions for Unjust Enrichment to Arise

First, a person must have been benefited without a real or valid basis or justification. Second, the benefit
was derived at another person’s expense or damage (Art. 22 and Loria v. Muñoz, G.R. 187240, 2014).
Requisites (EWLN)
1. Defendant had been Enriched.
2. Plaintiff suffered a Loss.
3. Unjust enrichment of defendant is Without just or legal ground.
4. Plaintiff has No other action based on contract, quasi-contract, crime, or quasidelict.

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Note: Mistake is an essential element in solutio indebiti but not in accion in rem verso. Duty to Indemnify
One for Damage to Property When defendant was benefitted even if not due to fault or negligence. (Art. 23)
Duty of Courts to Protect a Party in a Contract

When such party is at a disadvantage on account of his: (MIgIMenTO)
(a) Moral dependence
(b) Ignorance
(c) Indigence
(d) Mental weakness
(e) Tender age
(f) Other handicap (Art. 24)
Thoughtless Extravagance (Art. 25)

May be stopped by order of courts if the following requisites are present:
1. During an acute public want or emergency; and
2. Person seeking to stop it is the government or a private charitable institution.
Rights to Personal Dignity and Privacy (Art. 26)

Every person shall respect the dignity, personality, privacy and peace of mind of others.
The following acts produce a cause of action for damages, prevention and other relief: (PMIV)
i. Prying into the privacy of another’s residence
Note: It includes "any act of intrusion into, peeping or peering inquisitively into the residence of
another without the consent of the latter." It may extend to places where he has the right to exclude
the public or deny them access. It covers places, locations, or even situations which an individual
considers as private such as a business office located within his residence. (Spouses Hing v.
Choachuy, Sr., G.R. No. 179736, 2013).
ii. Meddling with or disturbing the private life or family relations of another
iii. Intriguing to cause another to be alienated from friends
iv. Vexing or humiliating another on account of his religious beliefs, lowly station in life, place of birth,
physical defect, or other personal condition
Relief Against Public Officials (Art. 26)

When one suffers material or moral loss because a public officer fails without cause to perform his duty, the
officer is not protected by his office and is personally liable.
Unfair Competition through Unjust, Oppressive, or Highhanded Methods (Art. 28)

Article 28 does not prohibit competition with regard to enterprises. What it seeks to be prevented is not
competition per se but the use of unjust, oppressive or highhanded methods which may deprive others of a
fair chance to engage in business or earn a living (Willaware Products Corp. v. Jesichris Manufacturing
Corp., G.R. No. 195549, 2014).
APPLICABILITY OF PENAL LAWS
Territoriality Rule (Art. 14)

General Rule: Penal laws and laws of public security and safety shall be obligatory upon all who live or
sojourn in the Philippine territory.
Exceptions:
i. Treaty stipulations
ii. Principles of Public International Law
iii. Laws of Preferential Application
Example: Foreign Ambassadors, ministers
Note: Consuls do not enjoy the privilege of immunity
Governing Laws (Arts. 14-17)

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LAW MATTERS / PERSONS BOUND GOVERNING
PRINCIPLE/DOCTRINE
Penal Laws All those who live or sojourn in Principle of Territoriality: Law of the
Philippine territory place where crime was committed
Exception:
1. Article 2 of the Revised Penal Code
Principle of Generality: Law applies to

everyone in the territory
Exception:
1. Treaty stipulations which exempt some
persons within the jurisdiction of
Philippine Courts
2. Heads of State and Ambassadors
Status Laws Citizens of the Philippines, including Principle of Nationality:
(relating to family those living abroad National law of the person
rights and duties,
status, legal
capacity)
Property Laws Real and personal property Lex situs or Lex rei sitae: Law of the
place where property is situated
Exception:
For testate or intestate succession, the
national law of the person whose
succession is under consideration. As to
the:
a. Order of succession
b. Amount of successional rights
c. Intrinsic validity of the testamentary
provisions.
Note: The enumeration is governed by the

national law of the decedent, regardless of
place of death.
Laws on Forms Forms and solemnities of contracts, Lex loci celebrationis: Law of the
and Solemnities wills, public instruments country in which they are executed
Exception: If executed before Philippine

diplomatic or consular officials abroad,
Philippine laws shall govern.
II. PERSONS AND FAMILY RELATIONS
A. Persons
1. Civil personality
KINDS OF PERSONS
Natural Persons
When Personality Begins (Art. 40-43)
General Rule: Determined by birth; extinguished by death but commences from conception (PD 603
amending Art. 40)
Exception: The conceived child shall be considered born for all purposes favorable to it (provisional
personality), provided it be born later under the following conditions:

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• If it had an intra-uterine life of 7 months or more, it is alive at the time it is completely delivered
from the mother’s womb.
• If it had an intra-uterine life of less than 7 months, only if it lives for at least 24 hours after its
complete delivery from maternal womb.
Rules on Survivorship (Art. 43)

The Civil Code is used in determining survivorship where there is absence of proof as to who died ahead of
the other
• Doubt as to order of death between two or more persons called to succeed each other—No
presumption: whoever alleges the death of one prior to the other shall prove the same.
• In the absence of proof, it is presumed that they died at the same time and there shall be no
transmission of rights from one to the other. This rule applies only to cases involving succession
between two persons.
Juridical Persons
Civil Personality (Art. 44-47)
The State and its political subdivisions Other corporations, institutions, and entities for public interest or
purpose created by law Corporations, partnerships, and associations for private interest or purpose.
Laws Governing Juridical Persons (Art. 45):

a. The State, its political subdivisions, and corporations, institutions, and entities for public interest or
purpose: governed by the laws creating or recognizing them.
b. Private corporations: governed by the Revised Corp. Code (R.A. 11232)
c. Partnerships and associations: governed by the provisions of the New Civil Code on partnerships,
except those registered with the SEC which should be governed like corporations
Extinguishment
By termination of existence either through law, dissolution or expiration of corporate life.
Rights of a Juridical Person (Art. 46)

a. Acquire and possess property of all kinds
b. Incur obligations
c. Bring civil or criminal actions
CAPACITY TO ACT
Juridical Capacity v. Capacity to Act (Art. 37)
Juridical Capacity Capacity to Act
Fitness to be the subject of legal relations Power to do acts with legal effect
Passive Active
Inherent Not inherent; attained or conferred
Lost only through death Lost through death and other causes
Can exist without capacity to act Cannot exist without juridical capacity
Cannot be limited or restricted Can be restricted, modified, or limited
Restrictions on Capacity to Act (MInD-ICIP)

a. Minority
b. Insanity
c. State of being Deaf-mute
d. Imbecility
e. Civil Interdiction
f. Prodigality - state of squandering money or property with a morbid desire to prejudice the heirs of a
person (Martinez v. Martinez, G.R. No. 445, 1902)
NOTE: But these do not exempt the incapacitated person from certain obligations.
Circumstances that Modify or Limit Capacity to Act (FAT-DA-PAPIII)

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a. Family relations
b. Alienage
c. Trusteeship
d. State of being Deaf-mute
e. Age
f. Penalty
g. Absence
h. Prodigality
i. Insanity
j. Insolvency
k. Imbecility (Art. 39)
DOMICILE AND RESIDENCE OF PERSONS
Place of Domicile (Art. 50-51)

• For natural persons, it is the place of habitual residence
• For juridical persons
o General rule: In accordance with the law creating or recognizing them, or any other provision
o Exception: If the law is silent, the residence shall be understood to be the place where their legal
representation is established or where they exercise their principal functions
NOTE: A person may have as many residences as he wants, but he can only have one domicile. Under the
Family Code, the husband and wife shall fix the family domicile. In case of disagreement, the Court shall
decide (Art. 69)
A minor follows the domicile of his parents

• Domicile of origin can only be lost when a change of domicile occurs
• If the child is illegitimate, the domicile of the mother is followed
Requirements for the Acquisition of New Domicile

1. Bodily presence in new locality;
2. Intention to remain therein (animus manendi); and
3. Intention to abandon the old domicile (animus non revertendi)
Kinds of Domicile
a. Domicile of Origin: received by a person at birth
b. Domicile of choice: the place freely chosen by a person sui juris
2. Use of surnames
PERSON SURNAME OF:
Legitimate and legitimated Principally, the father
children (Art. 364) He/she has the option to choose the surname of the mother
Natural child acknowledged (Alfon v. Republic)
by both parents (Art. 366 par.
1)
Children conceived before the
decree annulling avoidable
marriage (Art. 369)
Adopted child (Art. 365) Adopter
Natural child acknowledged Recognizing parent
by one of the parents (Art. 366
(par. 2)
Natural child by legal fiction Father
(Art. 367)
Illegitimate children (Art. Mother. It is mandatory that the mother of an illegitimate child
368) signs the birth certificate in all cases, irrespective of whether the

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father recognizes the child as his or not. If mother did not sign,
the local civil registrar had no authority to register the subject
birth certificate. (Tinitigan v. Tinitigan, G.R. No. 222095, 2017)
Married woman (Art. 370) Three options:
1. Maiden first name and surname and add husband’s name (ie.
Juana Reyes-Dela Cruz)
2. Maiden first name and husband’s name (ie. Juana Dela Cruz)
3. Husband’s full name, but prefixing a word indicating that she’s
the wife, such as “Mrs.” (i.e., Mrs. Juan Dela Cruz)
4. Retain maiden name (Memorandum Circular No. 2016-07)
In case of annulment of If wife is the guilty party: Resume her maiden name and surname
marriage (Art. 371)
If wife is the innocent party: May resume her maiden name and
surname and may choose to continue employing her former
husband’s surname unless the court decrees otherwise or she or
the former husband marries another person.
In case of legal separation Wife shall continue using her name and surname employed before
(Art. 372) the legal separation
Widow (Art. 373) Same options as that given to a married woman
Identity of names and surnames

The younger person is obliged to use additional name or surname as will avoid confusion. (Art. 374)
Between ascendants and descendants (Art. 375):

• “Junior” can be used only by a son
• Grandsons and other direct male descendants shall either:
o Add a middle name or the mother’s surname; or
o Add the Roman numerals II, III, and so on.
General Rule: Change of name or surname can only be done with judicial authority (RA 9048 as amended
by RA 10172)
Except: Clerical or typographical errors and change of first name or nickname.
Grounds for change of first name or nickname:

a. The petitioner finds the first name or nickname to be ridiculous, tainted with dishonor or extremely
difficult to write or pronounce;
b. The new first name or nickname has been habitually and continuously used by the petitioner and he has
been publicly known by that by that first name or nickname in the community; or
c. The change will avoid confusion (Sec. 3 of RA 9048 as amended by RA 10172)
The following have been held to constitute proper and reasonable causes or compelling reasons or change
of surname: (1) a ridiculous name, a name tainted with dishonor, or a name extremely difficult to write or
pronounce; (2) a change of civil status; and (3) a need to avoid confusion (Republic v. Tañada, G.R. No. L-
31563, 1971), and (4) a sincere desire to adopt a Filipino name to erase signs of a former alien nationality
which unduly hamper social and business life (Uy v. Republic, G.R. No. L-22040, 1965)
Usurpation of name or surname

Gives a rights of action to the person whose surname is used (Art. 378)
May be the subject of an action for damages and other relief (Art. 377)
3. Entries in the Civil Registry and Clerical Error Law (R.A. No. 9048, as amended)
What shall be recorded in the civil register

Acts, events, and judicial decrees concerning civil status (Art. 407)

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This includes:
a. Births;
b. Marriages;
c. Deaths;
d. Legal separations;
e. Annulment of marriages;
f. Judgments declaring marriages void ab initio;
g. Legitimations;
h. Adoptions;
i. Acknowledgments of natural children;
j. Naturalization;
k. Loss or recover of citizenship;
l. Civil interdiction;
m. Judicial determination of filiation;
n. Voluntary emancipation of a minor; and
o. Change of name
In case of judicial orders mentioned above, the clerk of court which issued the decree has the duty to
ascertain whether such order has been registered. If it has not been done, the clerk shall send a copy of said
decree to the civil registry of the city or municipality where the court is functioning (Art. 409).
The books making up the civil register and all documents relating thereto shall be considered public
documents and shall be prima facie evidence of the facts therein.
The civil registrar shall be civilly responsible to any person suffering damage thereby, for unauthorized
alteration in the civil register
• Except if he proves that he has taken reasonable precaution to prevent such alteration (Art. 411).
General rule: An entry in a civil register shall be changed or corrected only with a judicial order.
Exception: for clerical or typographical errors or change in the name or nickname of a person (Sec. 3, RA
9048)
Other matters pertaining to the registration of civil status

• Governed by special laws (Art. 413)
• Example:
o The Civil Registry Law or Act. No. 3753 provides for the registration of documents evidencing the
acquisition or termination of a particular civil status such as legitimation, adoption, change of
name, marriage, termination of such marriage and others.
Case: Republic v. Gallo, G.R. No. 207074, 2018

The current governing law on changes of first name, defines a clerical or typographical error as a recorded
mistake, "which is visible to the eyes or obvious to the understanding.” To correct simply means "to make
or set right; to remove the faults or error from." To change means "to replace something with something
else of the same kind or with something that serves as a substitute. The applicable law for the current
petition is R.A. No. 9048 (as R.A. 10172 was not yet enacted when petition was filed) which removed the
correction of clerical or typographical errors from the scope of Rule 108. It also dispensed with the need for
judicial proceedings in case of any clerical or typographical mistakes in the civil register, or changes of first
name or nickname. However, the petition to correct X's biological sex was rightfully filed under Rule 108
as this was a substantial change excluded in the definition of clerical or typographical errors in R.A. No.
9048. It was only when R.A. No. 10172 was enacted on August 15, 2012 that errors in entries as to biological
sex may be administratively corrected, provided that they involve a typographical or clerical error. However,
this is not true for all cases as corrections in entries of biological sex may still be considered a substantive
matter.
The following changes were correctly considered merely clerical or typographical errors:
a. Change of name from “Michael Gallo” to “Michelle Soriano Gallo”
b. Inclusion of middle name of both parents

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c. Inclusion of parent’s marriage details
4. Absence
a. Civil Code provisions
A judge may appoint a representative when:

1. A person disappears from his or her domicile;
2. His or her whereabouts are unknown; and
3. There is no agent to administer his or her property or the power conferred to the agent by the absentee
has expired (Art. 381)
Who may file:

a. Interested party;
b. Relative; or
c. Friend (Art. 381)
Scope of authority of representative: All that may be necessary (Art. 381)
The order of the judge shall:

a. Take the necessary measures to safeguard the rights and interests of the absentee; and
b. Specify the powers, obligations and remuneration of his representative
c. Regulated, according to the circumstances, by the rules on guardianship (Art. 382)
Rules on choosing a representative:

a. The present spouse shall be preferred
b. If no spouse or in case they are legally separated, any competent person may be appointed (Art. 383)
DECLARATION OF ABSENCE
A judicial declaration of absence is necessary to protect the rights, interests, and benefits of interested
persons such as the spouse, as well as for the protection of the absentee.
When may an absence be declared:

• Two years without any news about the absentee or since the receipt of the last news;
• Five years in case the absentee has left a person in charge of the administration of his property (Art. 384)
Who may ask for the declaration of absence:

1. The spouse present;
2. The heirs instituted in a will, who may present an authentic copy of the same;
3. The relatives who may succeed by the law of intestacy;
4. Those who may have over the property of the absentee some right subordinated to the condition of his
death (Art. 385)
When shall the judicial declaration take effect:

 6 months after its publication in a newspaper of general circulation (Art. 386).
 However, the absence of the absentee shall be counted from the date on which the last news of the
absentee was received (Jones v. Hortiguela, G.R. No. 43701, 1937).
ADMINISTRATION OF THE PROPERTY OF THE ABSENTEE

Rules on appointing an administrator (Art. 387):
a. The present spouse shall be preferred
b. The wife, in case appointed as administratrix of the husband’s property, cannot alienate or encumber
said property or that of the conjugal partnership
Except: When there is judicial authority (Art. 388)
NOTE: This also applies in case the husband is appointed as administrator
c. If no spouse or in case they are legally separated, any competent person may be appointed

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The administration shall cease in any of the following cases:
a. When the absentee appears personally or by means of agent;
b. When the death of the absentee is proved and his testate or intestate heirs appear
c. When a third person appears, showing by a proper document that he has acquired the absentee’s property
by purchase or other title (Art. 389)
b. Presumptive death of absent spouse under the Family Code
A person shall be presumed dead:

• For all purposes: When he or she has been absent for seven years, it being unknown whether or not he or
she still lives
• For purposes of succession: When he or she has been absent for ten years
o Except, in case he disappeared after the age of seventy-five years, five years shall be sufficient
(Art. 390).
• For purposes of remarriage: When the spouse has been absent for four consecutive years (Art. 41).
NOTE: Except for purposes of remarriage under Article 41, there is no need for filing a case for presumptive
death.
Other instances when a person is presumed dead for all purposes:

a. A person on board a vessel lost during a sea voyage, or an airplane which is missing, who has not been
heard for four years since the loss of the vessel or airplane;
b. A person in the armed forces who has taken part in war, and has been missing for four years;
c. A person who has been in danger of death under other circumstances and his existence has not been
known for four years. (Art. 391)
Effect of reappearance or subsequent proof of existence:

The absentee shall recover:
a. His or her property in the condition in which it may be found
b. The price of any property that may have been alienated or property acquired therewith; However, he or
she cannot claim the fruits and rents from such property. (Art. 392)
B. Marriage
Definition of Marriage (Art. 1)

1. Special contract;
2. Permanent union;
3. Between a man and a woman;
4. Entered into in accordance with law; and
5. For the establishment of conjugal and family life
1. Requisites of marriage
Essential Requisites of Marriage: (LC) (Art. 3)

1. Legal capacity of contracting parties;
a. Must be between a male and female
b. Must be at least 18 years old
c. Absence of any Impediment (Art 37 & 38)
2. Consent freely given, in the presence of the solemnizing officer
Formal Requisites of Marriage: (ALC) (Art. 4)

1. Authority of solemnizing officer;
2. Valid marriage License (except in cases where a marriage license is not required); and
a. Valid only for 120 days from issue in any part of the Philippines

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3. Marriage Ceremony where the contracting parties appear before the solemnizing officer, with their
personal declaration that they take each other as husband and wife in the presence of not less than two
witnesses of legal age
Effects of the Absence of Requisites for Marriage

General Rule: Absence of any of the essential or formal requisites – void ab initio
Exceptions:
a. If solemnized by an unauthorized person, the marriage will still be valid if either or both contracting
parties believed in good faith that the solemnizing officer had legal authority (Art. 35[2])
b. In instances where marriage license need not be procured:
1. Marriage in articulo mortis (one or both of the parties at the point of death) (Art. 27)
2. If the residence of either party is so remote there is no means of transportation to enable such
party to appear personally before the civil registrar (Art. 28)
3. Marriage solemnized outside the Philippines where no marriage license is required by the
country where it was solemnized (Art. 26)
4. Marriage among Muslims or among members of ethnic cultural communities in accordance with
their customs (Art. 33)
5. Marriage between persons who have lived together as husband and wife for at least five years and
without any legal impediment to marry each other during the 5-year period of cohabitation (Art.
34)
Procedural Requirements in Case of Cohabitation for Five Years:

a. The parties must execute an affidavit stating that they have lived together for at least 5 years and are
without legal impediment to marry each other; and
b. The solemnizing officer must execute a sworn statement that he had ascertained the qualifications of the
parties and that he had found no legal impediment to their marriage
NOTE:
 Absence of any of these procedural requirements do not make the marriage void. What is
indispensable is the 5-year cohabitation as husband and wife.
 The 5-year period should be a period of cohabitation characterized by exclusivity – meaning no
third party was involved at any time – that is, unbroken. (Niñal v. Bayadog, G.R. No. 133778, 2000)
 The absence of the legal impediment must be throughout the 5-year period. (Office of the
Administrator v. Necessario, A.M. No. MTJ-07-1691, 2013)
Effect of Defects in the Requisites for Marriage (Art. 4)

• Defect in any of the essential requisites – voidable
• Irregularity in any of the formal requisites – does not affect the validity of the marriage by will make the
party responsible civilly, criminally, or administratively liable.
2. Exemption from license requirement

In instances where marriage license need not be procured:
1. Marriage in articulo mortis (one or both of the parties at the point of death) (Art. 27)
2. If the residence of either party is so remote there is no means of transportation to enable such party to
appear personally before the civil registrar (Art. 28)
3. Marriage solemnized outside the Philippines where no marriage license is required by the country where
it was solemnized (Art. 26)
4. Marriage among Muslims or among members of ethnic cultural communities in accordance with their
customs (Art. 33)
5. Marriage between persons who have lived together as husband and wife for at least five years and without
any legal impediment to marry each other during the 5-year period of cohabitation (Art. 34)
Authorized Solemnizing Officers: (JPCCCM) (Art. 7)

a. Incumbent member of the Judiciary (judge – within the court’s jurisdiction; Justices – within
Philippine territory)

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b. Any Priest, rabbi, imam or the minister of any church or religious sect-
1. Registered with the civil registrar general;
2. Within limits of the written authority of the church or sect; and
3. At least one of the contracting parties belongs to the church or religious sect.
c. Ship Captain or airplane chief-
1. At least one of the parties is in articulo mortis;
2. Between passengers or crew members; and
3. While the ship is at sea or the plane is in flight and also during stopover at ports of call
d. Military Commander-
1. Of a unit to which a chaplain is assigned;
2. Chaplain is absent at the time of marriage;
3. During military operations;
4. Must be one in articulo mortis; and
5. Between persons within the zone of military operations or whether members of the armed forces
or civilians
e. Consul-general, consul, or vice-consul- Between Filipino citizens abroad
f. Mayor- effective January 1, 1992 (LGC);
Venues for Marriage (Art. 8) (Directory)

General Rule: Must be solemnized publicly, and not elsewhere, in the:
a. Chambers of the judge or in open court
b. Church, chapel, or office of consul-general, consul, or vice-consul
Exceptions:
(a) Marriage at the point of death (in articulo mortis)
(b) Marriage in remote places
(c) Marriage at a house or place designated by the parties in a sworn statement upon their written request
to the solemnizing officer
Other Requirements (Art. 14-15)

Either or both parties Requires
18 years old and above but below 21  Parental consent
 Marriage counseling
21 years old and above but below 25  Parental advice
 Marriage counseling
Effects of Lack of Parental Consent, Parental Advice, or Marriage Counselling If Required

GROUND EFFECTS
Lack of parental consent Marriage is voidable
Lack of parental advice or failure to attach No effect on validity of marriage. However, this will
certificate of marriage counseling suspend the issuance of the marriage license for 3
months from the completion of publication of the
application. (Art. 16)
If they get married during the 3-month period with

a license, the marriage shall be valid but civil and
criminal liability may attach. (Art. 16)
If they get married during the 3-month period

without a license, the marriage shall be void for
lack of a formal requirement.
No marriage license will be issued in the absence of

Certificate of Compliance issued by the Family
Planning Office. (R.A. 10354, Sec. 15)

12
Marriage Certificate
While a marriage certificate is considered the primary evidence of a marital union, it is not regarded as the
sole and exclusive evidence of marriage. The fact of marriage may be proven by relevant evidence other than
the marriage certificate. Hence, even a person’s birth certificate may be recognized as competent evidence
of the marriage between his parents. (Anonuevo v. Int. Estate of Jalandoni, G.R. No. 178221, 2010)
3. Marriages solemnized abroad and foreign divorce
General Rule: Marriages solemnized outside the Philippines in accordance with the laws of the foreign
country shall be valid here (lex loci celebrationis)
Basis: Principle of Comity

• However, if solemnized inside the Philippine Consulate abroad, Philippine laws must be observed.
Exceptions to Lex Loci Celebrationis:

a. Where either or both parties are below 18 years old
b. Bigamous or polygamous marriage (except Art. 41 on presumptive death of spouse)
c. Mistake in identity
d. Marriage void under Art. 53 – contracted following the annulment or declaration of nullity of a previous
marriage but before recording of partition
e. Psychological incapacity
f. Incestuous marriage
g. Marriage void for reasons of public policy
Thus, what is dispensed with are merely the authority of the solemnizing officer and the marriage license
requirements.
Is the “marriage ceremony” requirement dispensed with, thus allowing common-law

marriage? – NO, Art. 26 of the Family Code uses the word “solemnized”. However, if solemnized abroad,
the ceremony prescribed in the place of celebration shall apply.
Is the same-sex marriage of Filipinos abroad valid?

NO, Article 15 of the Civil Code provides that laws relating to family rights and duties, or to status, condition
and legal capacity of persons are binding upon citizens of the Philippines, even though living abroad. In the
Philippines, a person has legal capacity to marry only a person of the opposite sex. Hence, public policy
mandates that only a man and woman can marry each other.
To establish a valid marriage, it is necessary to prove:

1. The foreign law as a question of fact; and
2. The celebration of marriage pursuant thereto by convincing evidence (Ching Huat v. Co Heong)
NOTE: If such law of the other state is not pleaded nor proved and for purposes of determining the validity
of a marriage in the said state, the laws of such state, in the absence of proof to the contrary, will be
presumed by the Court to be the same as the laws of its own state (Doctrine of Processual
presumption)
FOREIGN DIVORCE
Requisites for a Filipino Spouse to Gain Capacity to Remarry under Philippine Law After
Divorce with Foreigner-spouse (Art. 26, par. 2)
1. A valid marriage that had been celebrated between a Filipino citizen and a foreigner; and
2. A valid divorce subsequently obtained abroad by the alien spouse capacitating him or her to remarry
The letter of the law does not demand that the alien spouse should be the one who initiated the proceeding
wherein the divorce decree was granted. It does not distinguish whether the Filipino spouse is the petitioner
or the respondent in the foreign divorce proceeding (Republic v. Manalo, G.R. No. 221029, 2018).

13
Note:
 Article 26 should be interpreted to mean that it is irrelevant for courts to determine if it is the
foreign spouse that procures the divorce abroad. Once a divorce decree is issued, the divorce
becomes "validly obtained" and capacitates the foreign spouse to marry. The same status should be
given to the Filipino spouse. The national law of Japan does not prohibit the Filipino spouse from
initiating or participating in the divorce proceedings. It would be inherently unjust for a Filipino
woman to be prohibited by her own national laws from something that a foreign law may allow
(Racho v. Seiichi Tanaka, G.R. No. 199515, June 25, 2018)
 The determinative point when the foreigner who procured the divorce should be a foreigner at the
time of the divorce, and not at the time of the marriage ceremony.
How to prove foreign divorce:

1. Present the divorce decree, proven as a public or official record of a foreign country by either:
a. An official publication; or
b. A copy thereof attested by the officer having legal custody of the document
2. If the record is not kept in the Philippines, such copy must be:
a. Accompanied by a certificate issued by the proper or consular officer in the Philippine foreign
service stationed in the foreign country in which the record is kept; and
b. Authenticated by the seal of his office
3. Prove the conformity of the decree to the foreign law (Garcia v. Recio, 2001)
Note: Settled is the rule that in actions involving the recognition of a foreign divorce judgment, it is
indispensable that the petitioner proves not only the foreign divorce judgment granting the divorce, but
also the alien spouse’s national law. The English translation submitted was published by Eibun-Horei-Sha,
Inc., a private company in Japan engaged in publishing English translation of Japanese laws, which came
to be known as the EHS Law Bulletin Series. However, these translations are "not advertised as a source of
official translations of Japanese laws;" rather, it is in the KANPŌ or the Official Gazette where all official
laws and regulations are published, albeit in Japanese. Accordingly, the English translation submitted by
Mrs. X is not an official publication exempted from the requirement of authentication. Neither can the
English translation be considered as a learned treatise. (Arreza v. Toyo, G.R. No. 213198, July 1, 2019)
4. Void and voidable marriages
Marriages Void from the Beginning (Void Ab Initio):

A. Void under Article 35:
a. Contracted by any party below 18 years old;
b. Solemnized by an unauthorized solemnizing officer
• Exception: If either or both parties believed in good faith that the officer had authority
c. Solemnized without a valid marriage license
• Exception: When license not required
d. Bigamous or polygamous marriages
• Exception: Art. 41 – Marriage contracted by a person whose spouse has been absent for 4
years (ordinary absence) or 2 years (extraordinary absence), where such person has a well-
founded belief that his/her absent spouse is already dead, and had obtained a declaration
of presumptive death, and at the time of marriage ceremony is in good faith together with
the subsequent spouse
e. Those contracted through mistake of one contracting party as to the identity of the other; and
f. Those subsequent marriages that are void under Article 53.
B. Psychological Incapacity (Art. 36)
C. Incestuous Marriage (Art. 37)
D. By Reasons of Public Policy (Art. 38)
Good faith marriage (Art. 35[2])

Good faith means an honest and reasonable belief that the marriage was valid at its inception, and that no
legal impediment exists to impair its validity (52 Am. Jur. 2d 96)

14
Valid Bigamous Marriages
General Rule: Marriage contracted by any person during the subsistence of a previous marriage is void
(Art. 35)
Exception: If subsequent marriage was contracted with a valid declaration of presumptive death.
Essential Requisites for the Declaration of Presumptive Death under Art. 41 (MR-BF)
1. That the absent spouse has been Missing for 4 consecutive years, or 2 consecutive years if the
disappearance occurred where there is danger of death under the circumstances laid down in Art. 391 of
the Civil Code;
2. That the present spouse wishes to Remarry;
3. That the present spouse has a well-founded Belief that the absentee is dead; and
4. That the present spouse Files a summary proceeding for the declaration of presumptive death of the
absentee [Republic vs Sareñogon, 2016 (citing Republic v. Cantor, 2013)]
The well-founded belief in the absentee’s death requires the present spouse to prove that his/her belief
was the result of diligent and reasonable efforts to locate the absent spouse and that based on these efforts
and inquiries, he/she believes that under the circumstances, the absent spouse is already dead. Mere claim
of diligent search is insufficient without corroborative evidence such as testimonies of the persons from
whom she inquired (Republic v. Villanueva, G.R. No. 210929, 2015).
NOTES:
• In this case, the subsequent marriage is valid but it shall be automatically terminated by the recording of
the affidavit of reappearance of the absent spouse. (Art. 42)
• Without filing of the affidavit of reappearance, there will exist two valid marriages (valid bigamous
marriage).
• If both spouses of the subsequent marriage acted in bad faith, such marriage is void ab initio. (Art. 44)
Effect of Reappearance
 The subsequent bigamous marriage under Art. 41 remains valid despite reappearance of the
absentee spouse, unless the reappearance made in a sworn statement is recorded in the civil registry
in the place where the parties to the subsequent marriage resides. In such case, the subsequent
marriage is automatically terminated.
 However, if there was a previous judgment annulling or declaring the first marriage a nullity, the
subsequent bigamous marriage remains valid.
 Nullity of judgment of presumptive death is the proper remedy and not an affidavit of reappearance
when the person declared presumptively dead has never been absent. In this case, the husband was
able to secure a declaration of presumptive death by alleging fraudulent facts. (Santos v. Santos,
G.R. No. 187061, 2014)
 Summary proceedings under the Family Code are final and executory pursuant to Article 247.
Hence, a summary proceeding for the declaration of presumptive death of an absent spouse under
Article 41 of the Family Code is non-appealable. (Republic v. Tango, G.R. No. 161062, 2009)
However, a petition for certiorari under Rule 65 is still available (Republic v. Sarenogon, Jr., 2016).
Effects of Termination of Subsequent Marriage: (LDBD-RI) (Art. 43)

a. Children of the subsequent marriage conceived prior to its termination shall be considered Legitimate,
unless the marriage is void ab initio due to bad faith of both spouses of the subsequent marriage, in which
case the children shall be deemed illegitimate.
b. The absolute community or conjugal partnership shall be Dissolved and liquidated
c. If either spouse acted in Bad faith, his/her share in the net profits shall be forfeited:
a. In favor of the common children
b. If none, in favor of the children of the guilty spouse by previous marriage
c. In default of children, in favor of the innocent spouse.
d. Donations by reason of the marriage remain valid except if the donee contracted the marriage in bad faith
e. The innocent spouse may Revoke the designation of the spouse in bad faith as the beneficiary in any
insurance policy, even if designation is stipulated as irrevocable

15
f. The spouse who contracted the subsequent marriage in bad faith shall be disqualified to Inherit from the
innocent spouse by testate or intestate succession
NOTE: The above effects apply to voidable bigamous marriages.

• Except for the first enumerated item (re: legitimate children), the above effects also apply to marriages
which are annulled or declared void ab initio under Art. 40.
Mistake in Identity (Art. 35[5])

The contemplated mistake refers to the actual physical identity of the other party, and not merely mistake
in the name, character, age, or other attributes of the person.
Subsequent Marriage Void under Art. 53

A person whose marriage has been annulled or declared null and void may remarry as long as, after the
marriage is annulled/nullified, he does the following:
1. Partition and distribution of the properties of the spouses;
2. Distribution of the presumptive legitimes of the children; and
3. Recording of the judgement of annulment or absolute nullity (Art. 40), the partition and distribution,
and the delivery of the presumptive legitimes in the appropriate civil registry and registries of the property.
Failure to comply with these requisites will make the subsequent marriage void ab initio. Furthermore,
failure to record in the proper registries will mean that such will not affect third persons (Art. 52-53).
Liquidation, partition, and distribution of presumptive legitimes apply only to marriages declared void
under Art. 40 and 45. (Diño v. Diño, G.R. No. 178044, 2011)
a. Annulment under Article 36 (as recently articulated in Tan-Andal v. Andal, G.R. No.
196359, May 11, 2021; Totality of Evidence Rule)
Psychological Incapacity (Art. 36)

Marriage where any of the parties, at the time of the celebration of the marriage, was psychologically
incapacitated to comply with the essential marital obligation, even if incapacity becomes manifest only after
solemnization.
Psychological Incapacity must be judged on a case-to-case basis. It should refer to no less than a mental
(not physical) incapacity. It must be characterized by: (JIG)
1. Juridical antecedence
2. Incurability
3. Gravity (Carating-Siaynco v. Siaynco, G.R. No. 158896, 2004)
Mere showing of irreconcilable differences and conflicting personalities do not constitute psychological
incapacity. (Carating-Siaynco v. Siaynco, G.R. No. 158896, 2004)
Mere sexual infidelity or perversion and abandonment do not by themselves constitute psychological
incapacity within the contemplation of the Family Code. (Dedel v. CA, G.R. No. 151867, 2004)
One of the essential marital obligations is "to procreate children based on the universal principle that
procreation of children through sexual cooperation is the basic end of marriage." Constant non-fulfillment
of this obligation will finally destroy the integrity or wholeness of the marriage. The senseless and protracted
refusal of one of the parties to fulfill this marital obligation is equivalent to psychological incapacity. (Chi
Ming Tsoi v. CA, G.R. No. 119190, 1997)
Jurisprudential guidelines: (BRE-IGO-IC)

1. Burden of proof to show the nullity of marriage is upon the plaintiff; clear and convincing evidence
2. The Root cause of the psychological incapacity must be: (CCEE)
a. Medically or Clinically identified;
b. Alleged in the Complaint;
c. Sufficiently proven by Experts

16
d. Clearly Explained in the decision
3. The incapacity must be proven to be Existing at the time of the celebration of the marriage
4. Such incapacity must be shown to be medically or clinically permanent or Incurable
5. Such illness must be Grave enough to bring about the disability of the party to assume the essential
obligations of marriage
6. Essential marital Obligations must be those embraced by Arts. 68-71, as well as Arts. 220, 221, and 225
of the Family Code.
7. Interpretations given by the National Appellate Matrimonial Tribunal of the Catholic Church in the
Philippines, while not controlling or decisive, should be given great respect by our courts
8. The trial court must order the prosecuting attorney or fiscal and the Solicitor General to appear as
Counsel for the State
NOTE: The foregoing guidelines do not require that a physician examine the person to be declared
psychologically incapacitated. What is important is that the totality of evidence can adequately establish the
party’s psychological condition. (Republic v. CA & Molina, G.R. No. 108763, 1997)
“Totality of Evidence” principle means that medical experts’ testimony is not required, if the totality of
all other evidence presented is sufficient to prove psychological incapacity. If not, the testimony of experts
is crucial. (Marcos v. Marcos, G.R. 136490, 2000)
Incestuous Marriage (Art. 37)

Whether the relationship is legitimate or illegitimate:
a. Between ascendants and descendants of any degree
b. Between brothers and sisters, whether full or half blood
Void for Reasons of Public Policy (Art. 38)

(exclusive list)
a. Between collateral blood relatives up to 4th civil degree
• There is no prohibition regarding marriages between collateral blood relatives by half-blood
b. Between step-parents and step-children
c. Between parents-in-law and children-in-law
d. Between adopting parent and adopted child
e. Between surviving spouse of the adopter and the adopted
f. Between surviving spouse of the adopted and the adopter
g. Between adopted and a legitimate child of adopter
h. Between adopted children of same adopter
i. Between parties who, with the intention to marry the other, killed the other person’s spouse or his/her
own spouse
• No prior criminal conviction by the court is required by the law since mere preponderance of
evidence is required to prove the killing.
The following can marry each other:

a. Brother-in-law and sister-in-law
b. Stepbrother and stepsister
c. Guardian and ward
d. Adopted and illegitimate child of the adopter
e. Parties who have been convicted of adultery or concubinage
NOTE: Relationship by affinity between the surviving spouse and the kindred of the deceased spouse
continues even after the death of the deceased spouse, regardless of whether the marriage produced
children or not. (Vda. de Carungcong v. People, G.R. No. 181409, 2010)
Subsequent Marriage Without Judicial Declaration of Nullity of Previous Void Marriage

 For purposes of remarriage, the only acceptable evidence that the previous marriage has been
voided is a final judgment declaring such marriage null and void; if the purpose is NOT TO
REMARRY, other evidence can be presented to prove the nullity of the previous marriage. (Art. 40)

17
 Even if a marriage is void, it must be declared void first by final judgment before the parties to such
void marriage can remarry. The parties cannot decide for themselves the invalidity of their
marriage.
ABSENCE of a formal requisite of solemnization of Marriage –

A judicial declaration of nullity is not needed where the parties merely signed a marriage contract on their
own and NO marriage ceremony was performed by a duly authorized solemnizing officer. Such act alone,
without more, cannot be deemed to constitute an ostensibly valid marriage (Morigo v. People, G.R. No.
145226, 2004).
VOID Marriage under the Civil Code –

If a marriage is void under a ground provided in the Civil Code and a subsequent marriage was contracted
before the effectivity of the FC without having the first marriage declared null and void, the second marriage
is valid. The Civil Code contains no express provision on the necessity of a judicial declaration of nullity of
a marriage considered void under the Civil Code. The requirement of a judicial decree of nullity does not
apply to marriages celebrated before the effectivity of the Family Code, particularly if the children of the
parties were born while the Civil Code was in force. (Castillo v. Castillo, G.R. No. 189607, 2016)
VOIDABLE MARRIAGE
Grounds for Annulment (PUFFIS) (Art. 45)

NOTE: Grounds for annulment must exist at the time of the celebration of the marriage.
a. Lack of Parental consent

b. Either party is of Unsound mind
c. Fraudulent means of obtaining consent of either party
• Circumstances constituting fraud (Art. 46)
i. Non-disclosure of conviction by final judgment of crime involving moral turpitude
ii. Concealment of pregnancy by another man
iii. Concealment of sexually transmissible disease, regardless of nature, existing at the time of
marriage
iv. Concealment of drug addiction, habitual alcoholism, homosexuality and lesbianism
d. Force, intimidation, or undue influence in obtaining the consent of either party
e. Physical Incapability of either party to consummate the marriage with the other, and such incapacity
continues and appears to be incurable
• Doctrine of Triennial Cohabitation: Presumption that the husband is impotent should the
wife still remain a virgin after 3 years of living together with her husband. Burden of proof to prove
non-impotency shifts to the husband.
f. Affliction by either party of Sexually Transmissible Disease found to be serious and which appears
incurable

18
DISTINCTION BETWEEN VOID AND VOIDABLE MARRIAGES
BASIS VOID VOIDABLE
As to nature Inexistent from the time of Valid until annulled
performance
As to Does not prescribe (Art. 39) Prescriptive period depends on the
prescriptibility ground/s invoked.
As to how May be attacked directly or collaterally a. Cannot be attacked collaterally, only
marriage may but for the purpose of remarriage, there directly (i.e. there must be a decree of
be impugned must be a judicial declaration of nullity annulment)
Direct: Only the spouses b. Can no longer be impugned after death

Collateral: Any interested party in any of one of the parties
proceeding where the determination of
the validity of the marriage is necessary
to give rise to or negate certain rights
Venue for Family Court of the province or city where the petitioner or the respondent has been
action residing for at least 6 months prior to the date of filing (if the respondent is a non-
resident: where he may be found in the Philippines) at the election of the petitioner.
(A.M. No. 02-11-10-SC)
As to Cannot be ratified Can be ratified either by free cohabitation
susceptibility or prescription
to ratification
As to effect on No community property, only co- Absolute community exists unless they
property ownership (Art. 147/148) agreed upon another system in their
marriage settlement
As to effect on Children are illegitimate Children are legitimate if conceived
children before decree of annulment
Except those falling under the
following: In case of psychological
incapacity (Art. 36); Children born of
subsequent marriage (Art. 53)
SUMMARY FOR VOIDABLE MARRIAGES

GROUNDS FOR WHO CAN FILE PRESCRIPTIVE RATIFICATION
ANNULMENT (Art. 47) PERIOD (Art. 47) (Art. 45)
(Art. 45)
Lack of parental Underage party (18-21 Within 5 years after Free cohabitation after
consent years old) turning 21 reaching 21
Parent or guardian Before child reaches 21

Insanity of one party Sane spouse who had no Before the death of the Free cohabitation after
knowledge of insanity other party insane spouse regains
sanity
Guardian of insane Any time before the death
spouse of either party
Insane spouse During lucid interval or

after regaining sanity also
before death of other
party
Fraud Injured Party Within 5 years after Free cohabitation with
discovery of fraud full knowledge of facts
constituting the fraud
Vitiated consent Injured Party Within 5 years from time Free cohabitation after
force, intimidations or the cause (force,

19
undue influence intimidation, undue
disappeared or ceased influence) disappeared
or ceased.
Intimidation can be on
the person or the
property of the injured
party and his/her
immediate family
Incapability to Injured Party Within 5 years after the No ratification since
consummate/ STD marriage ceremony defect is permanent, but
right of action may
prescribe
EFFECTS OF VALID BIGAMOUS MARRIAGE, DECLARATION OF NULLITY, AND

ANNULMENT
VALID BIGAMOUS
MARRIAGE (ART. 41) – WITH DECLARATION
BASIS ANNULMENT
DECLARATION OF OF NULLITY
PRESUMPTIVE DEATH)
Status of Children of subsequent marriage Illegitimate except Children conceived
Children conceived before its termination – Art. 36 and Art. 53 or born before
legitimate annulment decree –
legitimate
Property ACP/CPG shall be liquidated. The Same if Art. 40 ACP/CPG shall be
Relations share in the net profits of marriages: ACP/CGG liquidated. The
community property of the spouse otherwise, share in the net
who contracted the marriage in bad Coownership. profits of
faith, shall be forfeited in favor of community
common children or if there are The share of the party property of the
none, children of the guilty spouse in bad faith in the spouse who
by previous marriage or in default coownership shall be contracted the
thereof, the innocent spouse. forfeited in favor of marriage in bad
Donations Shall remain valid except their common faith, shall be
Propter • If donee contracted the marriage in children. forfeited in favor of
Nuptias bad faith, donations propter nuptias common children
made to the donee are revoked by Same. If void under or if there are none,
operation of law. Art. 40. If not, under children of the
40, option belongs to guilty spouse by
• If both spouses acted in bad faith, the donee. (Art. previous marriage
donations propter nuptias made by 86[1]) or in default, the
one in favor of the other are revoked innocent spouse.
by operation of law If marriage is void, no
Insurance If one spouse acted in bad faith, the successional rights Same as Art. 40
innocent spouse may revoke his involved.
designation as beneficiary in the
insurance policy even if such
designation be stipulated as
irrevocable.
Succession If one spouse contracted the
marriage in bad faith, he shall be
disqualified to inherit from the
innocent spouse in both testate and
intestate.

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C. Legal Separation
An action for legal separation involves nothing more than the bed-and-board separation of the spouses. It
is purely personal in nature. [Lapuz Sy v. Eufenio, G.R. No. L-30977 (1972)]
Grounds for Legal Separation: (PRC-FAALBILA) (Art. 55)
a. 1st Ground: Repeated physical violence or grossly abusive conduct directed against the
petitioner, a common child, or a child of the petitioner;
 For the purposes of Art. 55, the term “child” shall include a child by nature or by adoption.
Acts of Violence according to the “Anti-Violence Against Women and Their Children Act of
2004” [R.A. No. 9262] (as grounds for legal separation under Art. 55(1), FC)
1. Causing physical harm to the woman or her child;
2. Threatening to cause the woman or her child physical harm;
3. Attempting to cause the woman or her child physical harm;
4. Placing the woman or her child in fear of imminent physical harm;
5. Attempting to compel or compelling the woman or her child to engage in conduct which the woman or
her child has the right to desist from or desist from conduct which the woman or her child has the right to
engage in, or attempting to restrict or restricting the woman's or her child's freedom of movement or
conduct by force or threat of force, physical or other harm or threat of physical or other harm, or
intimidation directed against the woman or child. This shall include, but not limited to, the following acts
committed with the purpose or effect of controlling or restricting the woman's or her child's movement or
conduct:
a. Threatening to deprive or actually depriving the woman or her child of custody to her/his family;
b. Depriving or threatening to deprive the woman or her children of financial support legally due
her or her family, or deliberately providing the woman's children insufficient financial support;
c. Depriving or threatening to deprive the woman or her child of a legal right;
d. Preventing the woman in engaging in any legitimate profession, occupation, business or activity
or controlling the victim's own money or properties, or solely controlling the conjugal or common
money, or properties;
6. Inflicting or threatening to inflict physical harm on oneself for the purpose of controlling her actions or
decisions;
7. Causing or attempting to cause the woman or her child to engage in any sexual activity which does not
constitute rape, by force or threat of force, physical harm, or through intimidation directed against the
woman or her child or her/his immediate family;
8. Engaging in purposeful, knowing, or reckless conduct, personally or through another, that alarms or
causes substantial emotional or psychological distress to the woman or her child. This shall include, but not
be limited to, the following acts:
i. Stalking or following the woman or her child in public or private places;
ii. Peering in the window or lingering outside the residence of the woman or her child;
iii. Entering or remaining in the dwelling or on the property of the woman or her child against
her/his will;
iv. Destroying the property and personal belongings or inflicting harm to animals or pets of the
woman or her child; and
v. Engaging in any form of harassment or violence.
9. Causing mental or emotional anguish, public ridicule or humiliation to the woman or her child, including,
but not limited to, repeated verbal and emotional abuse, and denial of financial support or custody of minor
children of access to the woman's child/children.
b. 2nd Ground: Physical violence or moral pressure to compel the petitioner to change
religious or political affiliation;
 The law does not require the violence or moral pressure to be repeated. A single act of violence is
sufficient to be a ground since religious and political belief are human rights. [Tolentino]

21
c. 3rd Ground: Attempt of respondent to corrupt or induce the petitioner, a common child,
or a child of the petitioner, to engage in prostitution, or connivance in such corruption or
inducement;
 Only the respondent spouse must be guilty of corrupting or inducing the petitioner, a common child
or a child of the petitioner to engage in prostitution.
d. 4th Ground: Final judgment sentencing the respondent to imprisonment of more than
six years, even if pardoned;
e. 5th Ground: Drug addiction or habitual alcoholism of the respondent
f. 6th Ground: Lesbianism or homosexuality of the respondent;

 To constitute grounds for legal separation, the cause (i.e., drug addiction, habitual alcoholism,
lesbianism or homosexuality) does not have to be existing at the time of the celebration of marriage;
it is enough that it arises during the existence of the marriage. Otherwise, it will be a ground for
annulment under Art. 46(4), FC in relation to Art. 45(3), FC.
g. 7th Ground: Contracting by the respondent of a subsequent bigamous marriage,

whether in the Philippines or abroad;
The elements for bigamy to be prosecuted in the Philippines are:
1. Offender has been legally married
2. The marriage has not been legally dissolved or, in case his or her spouse is absent, the absent
spouse could not yet be presumed dead
3. Offender contracts a subsequent marriage
4. Subsequent marriage has all the essential requisites for validity, except legal capacity. [Capili v.
People, G.R. No. 183805 (2013)]
Note: As a ground for legal separation however, there is no need for a criminal conviction for bigamy.
h. 8th Ground: Sexual infidelity or perversion;

 Adultery is not a continuing crime; it is consummated at every moment of carnal knowledge. Thus,
every sexual act is a ground for legal separation. [People v. Zapata and Bondoc, G.R. No. L-3047
(1951)]
 A civil action for legal separation based on concubinage may proceed ahead of, or simultaneously
with, a criminal action for concubinage; conviction is not a prerequisite [Gandionco v. Penaranda,
G.R. No. 79284 (1987)].
i. 9th Ground: Attempt by the respondent against the life of the petitioner; or
j. 10th Ground: Abandonment of petitioner by respondent without justifiable cause for

more than one year.
 Abandonment is not mere physical estrangement but also financial and moral desertion. There
must be an absolute cessation of marital relations, duties, and rights with the intention of perpetual
separation. [Dela Cruz. v. Dela Cruz, G.R. No. L-19565 (1968)]
 To be a ground for legal separation, abandonment must be without just cause. [Ong Eng Kiam v.
Ong, G.R. No. 153206 (2006)]
Defenses [Art. 56, FC]:
a. Condonation by aggrieved party – after the commission of the offense; may be expressed
or implied.
 Condonation may be given expressly or impliedly. An example of an implied condonation is when
a husband repeatedly has intercourse with the wife despite the wife’s cruelty. “Although he did not
wish it, [he did it] eventually for the sake of peace.” [Willan v. Willan, G.R. No. L-13553 (1960)]

22
b. Consent by aggrieved party to the commission of the offense – before the commission of
the offense; may be express (e.g. written agreement, [Matubis v. Praxedes, G.R. No. L-11766
(1960)] or implied
 A written agreement between the spouses, which provided that they were “free to get any mate and
live with as husband and wife without any interference by any of us, nor either of us can prosecute
the other for adultery or concubinage or any other crime or suit arising from our separation”
amounted to express condonation of and consent to the adulterous acts of wife. [Matubis v.
Praxedes, G.R. No. L-11766 (1960)]
 The non-interference of the husband with regard to the amorous relations between his wife and
Ramos constitutes consent. [People v. Sensano and Ramos, G.R. No. L-37720 (1933)]
c. Connivance between parties in the commission of the offense

 Connivance is present when the husband throws no protection around his wife nor warns her
against intimacy with the driver. A husband who had reliable reports for two months that gave him
reason to suspect that his wife was having an affair with her driver yet did nothing to keep the latter
away is guilty of connivance. [Sargent v. Sargent, 114 A. 428 (1920)]
d. Mutual guilt or recrimination between spouses in the commission of any ground for
legal separation
e. Collusion between parties to obtain decree of legal separation

 Collusion in matrimonial cases is the act of married persons in procuring a divorce by mutual
consent, whether by preconcerted commission by one of a matrimonial offense, or by failure, in
pursuance of agreement, to defend divorce proceedings. [Brown v. Yambao, G.R. No. L-10699
(1957)]
f. Prescription of action for legal separation

Art. 57, FC. An action for legal separation shall be filed within five years from the time of the occurrence
of the cause.
g. Reconciliation of parties during pendency of action [Art. 66(1), FC]

Art. 65, FC. If the spouses should reconcile, a corresponding joint manifestation under oath duly signed
by them shall be filed with the court in the same proceeding for legal separation.
Art. 66. The reconciliation referred to in the preceding Articles shall have the following consequences:
(1) The legal separation proceedings, if still pending, shall thereby be terminated at whatever stage; and
(2) The final decree of legal separation shall be set aside, but the separation of property and any forfeiture
of the share of the guilty spouse already effected shall subsist, unless the spouses agree to revive their
former property regime.
The court’s order containing the foregoing shall be recorded in the proper civil registries.
h. Death of either party during pendency of action

 Death of plaintiff before decree of legal separation abates the action. There is no more need for legal
separation because the marriage is already dissolved by the death of one of the parties. [Lapuz Sy
v. Eufemio, G.R. No. L-30977 (1972)].
Procedure
Who may file the action
A petition for legal separation may be filed only by the husband or the wife. [Sec. 2, A.M. No. 02-11- 11-SC
(Rule on Legal Separation)]
Where to file the action

The petition shall be filed in the Family Court of the province or city where the petitioner or the respondent
has been residing for at least six months prior to the date of filing “or in the case of a non-resident
respondent, where he may be found in the Philippines, at the election of the petitioner.” [Sec. 2, A.M. No.
02-11-11-SC]

23
When to File Action
An action for legal separation shall be filed within five years from the time of the occurrence of the cause.
[Art. 57, FC and A.M. No. 02-11-11-SC]
Cooling-off and Reconciliation Effects

An action for legal separation shall in no case be tried before six months shall have elapsed since the filing
of the petition. [Art. 58, FC]
Actions cannot be tried unless the court has attempted to reconcile the spouses, and determined that
despite such efforts, reconciliation is highly improbable. [Art. 59]
 This is without prejudice to judicial determination of custody of children, alimony, and support
pendente lite.
 Courts can still resolve other issues, pending the waiting period or cooling off period. In resolving
other issues, courts should try not to touch, as much as possible, on the main issue (i.e. adultery if
that is the ground used). However, Court must still receive evidence if just to settle incidental issues
of support and custody. [Araneta v. Concepcion, G.R. No. L-9667 (1956)]
 This provision of the Family Code dictating a mandatory 6-month cooling-off period does not apply
in cases where violence, as used in R.A. No. 9262 (Anti-Violence Against Women and their
Children), is alleged. The case should be heard as soon as possible by the court.
Contents and Form of the Petition [Sec. 2, A.M. No. 02-11-11-SC]

a. Allege the complete facts constituting the cause of action;
b. Names and ages of the common children of the parties, specify the regime governing their property
relations, the properties involved, and creditors, if any;
c. Be verified and accompanied by a certification against forum shopping;
d. Be filed in six copies.
Effects of filing petition

a. The spouses are entitled to live separately, but the marital bond is not severed. [Art. 61 (1), FC]
b. Administration of community or conjugal property – If there is no written agreement between the parties,
the court shall designate one of them or a third person to administer the ACP or CPG. [Art. 61, par. 2, FC]
Note: No motion to dismiss the petition shall be allowed except on the ground of lack of jurisdiction over
the subject matter or over the parties; provided, however, that any other ground that might warrant a
dismissal of the case may be raised as an affirmative defense in an answer. [Sec. 4, A.M. No. 02-11-11-SC]
Effects of pendency
The Court shall provide for: [Art. 62, cf. Art. 49, FC]
a. Support of spouses
b. Custody of children: The court shall give custody of children to one of them, if there is no written
agreement between the spouses.
c. Visitation rights of the other spouse
Effects of decree of legal separation

a. The spouses can live separately [Art. 63, FC] but the marriage bonds are not severed.
b. The ACP or CPG shall be dissolved and liquidated, and the share of the guilty spouse shall be forfeited in
favor of the common children, previous children, or innocent spouse, in that order [Art. 63, FC; cf. Art.
43(2), FC]
c. Custody of the minor children shall be awarded to the innocent spouse [Art. 63, FC; cf. Art 213, FC]
d. Guilty spouse shall be disqualified from inheriting from the innocent spouse by intestate succession. The
provisions in favor of the guilty party in the will of the innocent spouse shall also be revoked by operation
of law. [Art. 63, FC]
e. Donations in favor of the guilty spouse may be revoked [Art. 64, FC] but this action prescribes after 5
years from the decree of legal separation.

24
f. Innocent spouse may also revoke designation of guilty spouse as beneficiary in an Insurance policy, even
if such stipulations are irrevocable. [Art. 64. FC; cf. Sec. 11, P.D. 612]
g. Obligation for mutual support ceases, but the court may order the guilty spouse to support the innocent
spouse. [Art. 198, FC]
h. The wife shall continue to use the surname of the husband even after the decree for legal separation.
[Laperal v. Republic, G.R. No. L-18008 (1992)]
Reconciliation
Art. 65. If the spouses should reconcile, a corresponding joint manifestation under oath duly signed by
them shall be filed with the court in the same proceeding for legal separation.
Effects of Reconciliation:
a. Proceedings for legal separation shall be terminated at whatever stage [Art. 66(1), FC].
b. If there is a final decree of legal separation, it shall be set aside [Art. 66(2), FC].
c. The separation of property and forfeiture of share of guilty spouse shall subsist, unless the spouses agree
to revive their former property regime or to institute another property regime [Art. 66 cf. Art. 67, FC].
d. Joint custody of children is restored.
e. The right to intestate succession by guilty spouse from innocent spouse is restored.
f. The right to testamentary succession depends on the will of the innocent spouse.
Effect of death of one of the parties

The death of either party to a legal separation proceeding, before final decree, abates the action. There is no
more need for legal separation because the marriage is already dissolved by the death of one of the parties.
An action for legal separation is also purely personal between the spouses. [Lapuz Sy v. Eufemio]
Void Marriages, Voidable Marriages and Legal Separation

Void Marriages Voidable Marriages Legal Separation
Grounds 1. Absence of essential or Defect in any of the Grounds not relating to any
formal requisites essential requisites: of the essential or formal
a. One is a minor 1. Lack of parental consent, requisites:
b. No authority to marry 2. Insanity, 1. Repeated physical
c. No valid marriage 3. Fraud, violence
license 4. Force, intimidation, 2. Pressure to compel to
d. Bigamous and undue influence, change religious /political
polygamous marriages 5. Impotence, affiliation
e. Mistake of identity 6. Serious and incurable 3. Corruption/ inducement
f. Void subsequent STD to engage in prostitution
marriages 4. Final judgment with
2. Psychological incapacity sentence of more than 6
3. Incestuous marriages years
4. Marriages against public 5. Drug addiction/ habitual
policy alcoholism
5. Subsequent marriages 6. Homosexuality/
which did not comply with lesbianism
Art.52 7. Bigamous marriage
8. Sexual infidelity or
perversion
9. Attempts against the life
of petitioner
10. Abandonment without
just cause for more than 1
year
Defenses None None 1. Condonation
2. Consent
3. Connivance
4. Collusion

25
5. Recrimination (mutual
guilt)
6. Prescription
Prescription No Prescription 1. Lack of parental consent Within 5 years from the
a. Spouses - 5 years occurrence of the cause
after turning 21
b. Parents - before the
spouses turn 21
2. Insanity
a. Insane spouse -
during lucid intervals
b. Sane spouse/
guardian - lifetime
3. Fraud - 5 years after the
discovery of the fraud
4. Force, intimidation,
undue influence - 5 years
after cessation
5. Impotence/STD - 5 years
from marriage
Who can file According to A.M. No. 02- Only the spouses (cannot Only the spouses (cannot
11-10-SC: survive the death of the survive the death of the
1. Before March 18, 2003 plaintiff) plaintiff)
(petition for nullity or
celebration of marriage) -
any party
2. On and after March 18,
2003 (petition for nullity
or celebration of marriage)
- only the spouses
Effects of In the absence of adequate provisions in a written 1. Live separately
Pendency agreement: 2. Designate either of them
1. Support of spouses or a third person as
2. Support and custody of children administrator of property
3. Visitation rights 3. Support of spouses
4. Support and custody of
children
5. Visitation rights
Effects of 1. Properties [Art. 147 - 1. Properties [Art. 50, 1. Properties [Art.
Decree 148, FC] FC] 63(2), FC]
a. Art. 147 (equal shares) a. ACP/CPG dissolved, a. Dissolution and
governs property relations share forfeited to heirs if Liquidation of ACP/CPG
of void marriages bad faith
b. Art. 148 (in proportion) b. Donations valid, except 2. Support and Custody
governs property relations if bad faith [Art. 213, FC]
of bigamous adulterous c. Insurance may be a. Parental authority to the
relationships revoked if bad faith parent designated by Court
d. No succession for spouse after all relevant
2. Status of Children in bad faith consideration
[Art. 54, FC] b. Tender years
General Rule: Conceived 2. Status of Children presumption for Child
or born before the [Art. 54, FC] under 7 y.o. [Art 213(2),
judgment of absolute a. Conceived or born before FC]
nullity, illegitimate judgment, legitimate.
3. Inheritance,
Donations and

26
Exceptions: Conceived or 3. Continued Use of Designation in
born Surname [Art. 371, CC] Insurance Policies
a. Before the judgment of a. Dependent on her being [Sec. 22, rules on Legal
annulment; the innocent or guilty party Separation]
b. Before the judgment of
absolute nullity under Art. 4. Continued Use of
36 (Psychological Surname [Art. 372, CC]
Incapacity)
c. Of the subsequent
marriage under Art. 53
(Failure to Record the
Decree of Nullity of
Annulment);
d. Prior to the termination
of the subsequent marriage
under Art. 42 (when the
absent spouse files an
affidavit of reappearance)
D. Rights and obligations between husband and wife
These rights and duties are not subject to stipulation between the spouses; and though they may voluntarily
agree to any change in their personal relations, this agreement will be void and have no legal effect.
1. Live Together
The right to live together refers to the right of consortium which is not susceptible of precise or complete
definition but, broadly speaking, companionship, love, affection, comfort, mutual services, sexual
intercourse—all belonging to the marriage state—taken together make up what we refer to as consortium.
Art. 68. The husband and wife are obliged to live together, observe mutual love, respect and fidelity, and
render mutual help and support.
Exception: One spouse living abroad or there are valid and compelling reasons [Art. 69(2), FC] - at the
discretion of the court.
Exception to the Exception: Incompatibility with the solidarity of the family [Art. 69(2), FC].
If the wife abandons the family domicile with justifiable cause (i.e. being forced to perform lewd sexual
acts), the husband’s obligation to support her is not terminated. The law will not permit the husband to
terminate the obligation to support his wife by his own wrongful acts driving the wife to seek protection in
her parents’ home [Goitia v. Campos Rueda, G.R. No. 11263 (1916)].
2. Family Domicile
Art. 69. The husband and wife shall fix the family domicile. In case of disagreement, the court shall decide.
3. Support
The spouses are jointly responsible for the support of the family. The expenses for such support and other
conjugal properties shall be paid:
a. From the conjugal property;
b. If none, income or the fruits of their separate properties;
c. If none, from their separate properties, wherein they shall be liable in proportion to their
properties [Art. 70, FC].
 Support is not just limited to financial support - includes emotional and moral support.
 In case of a de facto separation, if it is proved that the husband and wife were still living together at
the time of his death, it would be safe to presume that she was dependent on the husband for

27
support, unless it is shown that she is capable of providing for herself [SSS v. Aguas, G.R. No.
165546 (2006)].
4. Management of Family Life

Art. 71. The management of the household shall be the right and the duty of both spouses. The expenses
for such management shall be paid in accordance with the provisions of Article 70.
5. Effect of Neglect of Duty

Art. 72. When one of the spouses neglects his or her duties to the conjugal union or commits acts which
tend to bring danger, dishonor or injury to the other or to the family, the aggrieved party may apply to
the court for relief.
Note: Injury contemplated here is physical, moral, emotional or psychological, not financial.
6. Exercise of Profession
Art. 73. Either spouse may exercise any legitimate profession, occupation, business or activity without the
consent of the other.
The other spouse may only object on valid, serious and moral grounds.
In case of disagreement, the Court shall decide whether:

a. The objection is proper, and
b. Benefit has accrued to the family
i. If benefit accrued before the objection: enforce against community property
ii. If benefit accrued after the objection: enforce against separate property of spouse who has not
obtained consent [Art. 73, FC, as amended by RA 10572].
7. Use of Surname
For Married Women

A woman may use [Art. 370, CC]:
1. Her maiden first name and surname and add her husband’s surname; or
2. Her maiden first name and her husband’s surname; or
3. Her husband’s full name, but prefixing a word indicating that she is his wife, such as Mrs.
For Widows
A widow may use the deceased husband’s surname as though he were still living, in accordance with Art.
370 [Art. 373, CC].
In case of Annulment [Art. 371, CC]

1. If the wife is the guilty party, she shall resume her maiden name and surname
2. If the wife is innocent
a. She may resume her maiden name and surname; or
b. She may choose to continue employing her former husband’s surname, unless:
i. The court decrees otherwise; or
ii. She or the former husband is married again to another person.
For Legally Separated Spouses

 The wife shall continue using her name and surname employed before the legal separation [Art.
372, CC].
 In case of absolute divorce, the effect of divorce is more akin to the death of the spouse where the
widow can continue using the surname or be referred as Mrs. of her husband [Tolentino v. CA, G.R.
No. L-41427 (1988)].

28
Note: From the foregoing provisions, it can be gleaned that a woman is not mandated by law to adopt her
husband’s surname after marriage. Art. 370, CC is merely directory, since it provides that a woman may
choose any of the options provided.
E. Property relations between husband and wife
1. General provisions
Art. 74. The property relationship between husband and wife shall be governed in the following order:
(1) By marriage settlements executed before the marriage;
(2) By the provisions of this Code; and
(3) By the local custom.
Requisites for Validity [Art. 75, FC]

1. Future spouses agree upon the regime of absolute community, conjugal partnership of gains, complete
separation of property, or any other regime.
2. In the absence of marriage settlement, or when the regime agreed upon is void, the system of absolute
community property as established in this Code shall govern.
Requirements for marriage settlements and any modification thereof [Art. 77, FC]
1. Must be made in writing
2. Signed by the parties
3. Executed before the marriage celebration
4. If executed by a person below 21 years, valid only when persons required to give consent to the marriage
(father, mother, or guardian, respectively) are made parties to the agreement [Art. 78, FC]
The parties have the freedom to stipulate regarding their property relations in their marriage settlements
in which the lex intentionis of the parties governs the contract. When the couple agrees on a property regime
in their marriage settlement, the provisions of the Code are merely suppletory.
When modifications can be made

For modification to be valid, it must be determined before the celebration of marriage [Art. 76, FC]
For judicial separation of property, the following are sufficient causes:

1. The spouse of the petitioner has been sentenced to a penalty which carries with it civil
interdiction;
2. The spouse of the petitioner has been judicially declared an absentee;
3. Loss of parental authority of the spouse of petitioner has been decreed by the court;
4. The spouse of the petitioner has abandoned or failed to comply with his or her obligations to the
family
5. That the spouse granted the power of administration in the marriage settlements has abused that
power; and
6. That at the time of the petition, the spouses have been separated in fact for at least one year and
reconciliation is highly improbable.
Notes:
 Marriage settlements are considered accessory to the marriage, therefore as per Art. 81, stipulations
in consideration of future marriage and donations will be void if the marriage does not take place.
 Should the surviving spouse contract a subsequent marriage without compliance with the foregoing
requirements, a mandatory regime of complete separation of property shall govern the property
relations of the subsequent marriage [Art. 103(3), FC]
2. Donations by reason of marriage (Donations Propter Nuptias)

Art. 82. Donations by reason of marriage are those which are made before its celebration, in
consideration of the same, and in favor of one or both of the future spouses.

29
Donations propter nuptias are made in consideration of marriage. There can be a valid donation even if the
marriage never took place, but the absence of marriage is a ground for the revocation of the donation. [Solis
v. Barroso, G.R. No. 27939 (1928)]
Donations propter nuptias are without onerous consideration, marriage being merely the occasion or
motive for the donation, not its cause. Being liberalities, they remain subject to reduction for inofficiousness
upon the donor’s death, if they should infringe the legitime of a forced heir. [Mateo v. Lagua, G.R. No. L-
26270 (1969)]
Requisites of donation propter nuptias

1. Made before the celebration of marriage
2. Made in consideration of marriage
3. Made in favor of one or both of the future spouses
4. In a public document and not merely privately stipulated [Solis v. Barroso, supra]
Who may donate

1. Spouses to each other
2. Parents of one or both spouses
3. Third persons to either or both spouses
Donations excluded are:

1. Ordinary wedding gifts given after the celebration of marriage
2. Donations in favor of future spouses made before marriage but not in consideration thereof
3. Donations made in favor of persons other than the spouses even if founded on the intended marriage
Distinguished from Ordinary Donations

Donations propter nuptias Ordinary Donations
Does not require express acceptance Express acceptance required
May include future property (subject to formalities Cannot include future property
of wills)
If present property is donated and property regime No limit to donation of present property provided
is not absolute community, limited to 1/5 [Art. 84, legitimes are not impaired
FC]
Grounds for revocation found in Art. 86, FC Grounds for revocation found in donation laws CC
provisions
Donations of property subject to encumbrances

a. Are considered valid.
b. In case of foreclosure:
i. If property value < obligation, donee shall not be liable for the deficiency
ii. If property value > obligation, donee shall be entitled to the excess [Art. 85, FC]
Grounds for Revocation of Donation Propter Nuptias [Art. 86, FC]

A. Marriage not celebrated
Donation contained in marriage Revoked by operation of law
settlement Does not prescribe
Donation contained in a separate Donor’s choice
instrument Prescribes within 5 years from supposed date of
marriage
B. Void marriage
General rule: There must be a judicial declaration of nullity for the void marriage.
1. Art 40, in rel. to Art 52 and If donee spouse contracted the If both parties acted in good
53 (subsequent marriage second marriage in bad faith faith, revocation will be by
before securing judicial (knowing that it was void),
declaration of nullity) donations in favor of the

30
second marriage are revoked donor’s choice; within 5 years
by operation of law. from date of finality of the
2. Art 44 (bad faith in securing If either or both spouses in the judicial declaration of nullity.
declaration of presumptive subsequent marriage acted in
death) bad faith (knowing that the
person was still alive),
donations in favor of the
subsequent marriage is
revoked by operation of law.
3. All other void marriages Donor’s choice, regardless of
good/bad faith of the donee.
C. No consent of parents or guardian

General rule: Does not require final decree of annulment
Revocation will be by donor’s choice and done within 5 years from discovery that consent was not
obtained
D. Other cause of annulment

Revoked by operation of law if donee is the guilty spouse who acted in bad faith
E. No consent of parents or guardian

General rule: Revocation is by donor’s choice and done within 5 years from finality of decree of
legal separation.
Exception: If cause is adultery or concubinage, revoked by operation of law.
F. Resolutory condition complied with

General rule: Revocation is by donor’s choice and done within 5 years from finality of decree of
legal separation
Exception: If the other spouse is the donor, action does not prescribe
G. Acts of ingratitude [Art. 765, CC]

General rule: Revocation is by donor’s choice and done within 1 year from knowledge of fact of
ingratitude with donor being capable of bringing suit.
Void donations by the spouses

Donations Before Marriage
General rule: Future spouses who agree upon a regime other than ACP cannot donate to each other more
than 1/5 of their present property (excess shall be considered void). [Art. 84, FC]
Reason for excluding ACP: All property will again be shared by both spouses after the marriage.
Exception: The limit of 1/5 only applies when the donation is contained in the marriage settlements. If it is
contained in another instrument, the general rules on inofficious donations shall apply.
Donations During Marriage

General rule: Spouses cannot donate to each other, directly or indirectly; donations made by spouses to
each other during the marriage are void. [Art. 87, FC] These donations refer to donations inter vivos.
[Tolentino]
Exception: Moderate gifts on the occasion of any family rejoicing.
 A spouse cannot donate to persons which the other spouse may inherit from as it constitutes an
indirect donation. [Nazareno v. Birog, 45 O.G. No. 5 (1947)]
Donations Between Common-law Spouses

31
 The donation between common-law spouses falls within the provision prohibiting donations
between spouses during marriage. [Matabuena v. Cervantes, G.R. No. L-2877 (1971)]
 In order to fall under the prohibition, it must be proved that they were living in a common-law
relationship at the time of the donation. [Sumbad v. CA, G.R. No. 106060 (1999)]
3. Absolute Community of Property

Definition
The community property consists of all the property owned by the spouses at the time of the celebration of
the marriage, and those either one or both of them acquired during the marriage. There is a presumption
provided in the Family Code that properties acquired during the marriage belong to the community, unless
it is proved that it is one of those excluded therefrom. [Tolentino]
Governing law
 Art. 80, FC. In absence of a contrary stipulation in a marriage settlement, the property relations
of the spouses shall be governed by Philippine laws, regardless of the place of the celebration of
the marriage and their residence.
 By the Nationality Rule [Art. 15, CC], the rule that Absolute Community Property (ACP) is the
default mode of property relations absent any marriage settlement applies to all Filipinos,
regardless of the place of the marriage and their residence. [N.B.]
Exceptions
1. Where both spouses are aliens
2. With respect to the extrinsic validity of contracts affecting property not situated in the Philippines and
executed in the country where the property is located
3. With respect to the extrinsic validity of contracts entered into in the Philippines but affecting property
situated in a foreign country whose laws require different formalities for its extrinsic validity [Art. 80, FC]
If marriage does not take place

Art. 81, FC. Everything stipulated in the settlements or contracts referred to in the preceding articles in
consideration of a future marriage, including donations between the prospective spouses made therein,
shall be rendered void if the marriage does not take place. However, stipulations that do not depend upon
the celebration of the marriages shall be valid.
Waiver Not Allowed

General Rule: No waiver of rights, shares and effects of the absolute community of property during the
marriage can be made.
Exception: In case of judicial separation of property.
 When the waiver takes place upon a judicial separation of property, or after the marriage has been
dissolved or annulled, the same shall appear in a public instrument and shall be recorded as
provided in Article 77. The creditors of the spouse who made such waiver may petition the court to
rescind the waiver to the extent of the amount sufficient to cover the amount of their credits. [Art.
89, FC.]
Provisions on Co-ownership Apply

 The provisions on co-ownership shall apply to the absolute community of property between the
spouses in all matters not provided for in this Chapter. [Art. 90, FC]
 N.B. The creditors of the spouse who made such waiver may petition the court to rescind the waiver
to the extent of the amount sufficient to cover the amount of their credits.
4. Conjugal Partnership of Gains

 This property regime was formerly the default regime under the CC.
 In this regime, the spouses retain ownership of their separate property. However, the spouses also
place in a common fund the proceeds, products, fruits and income of their separate property and
those acquired by either or both spouses through their efforts or by chance.

32
 The presumption applies that all properties acquired during the marriage belong to the CPG. There
are 3 distinct patrimonies in this system, the husband’s capital property, the wife’s paraphernal
property, and the conjugal property.
Comparison of ACP and CPG

Absolute Community of Conjugal Partnership of Gains
Property (ACP) (CPG)
When it commences At the precise moment of the For marriages after the Family Code,
celebration of the marriage [Art. 88, CPG becomes the property regime
FC] only if agreed to by the parties
through a marriage settlement.
What it consists of All the properties owned by the Proceeds, products, fruits, and
spouses at the time of the income of their separate properties
celebration of the marriage or Everything acquired by them during
acquired thereafter [Art. 91, FC] marriage through their own efforts
Under the ACP, spouses cannot Everything acquired through their
exclude specific properties from the efforts or by chance.
regime unless done in settlement.
Winnings from gambling shall Specific properties [Art. 117,
accrue to the community property FC]
but obligations from gambling shall 1. Acquired by onerous title during
not. [Art. 95, FC] the marriage at the expense of the
Common Fund;
Property acquired during marriage 2. Acquired through the labor,
is presumed to have been obtained industry, work, or profession of
through joint efforts of parties, even either or both spouses
though one did not actually 3. Fruits from common property and
participate in the acquisition. This is net fruits of the exclusive property of
true for a party whose efforts each spouse
consisted in the care and 4. Share of either spouse in hidden
maintenance of the family treasure, whether as finder or owner
household. Such is regarded as of property where treasure was found
contributions to the acquisition 5. Acquired through occupation such
ofcommon property by one who has as fishing or hunting
no salary, income, work or industry. 6. Livestock existing at dissolution of
[Ocampo v. Ocampo, G.R. No. partnership in excess of what is
198908 (2015)] brought by either spouse to the
marriage
7. Acquired by chance, such as
winnings from gambling or betting
Moral damages arising from a
contract paid from the CPG [Zulueta
v. Pan American World Airways, G.R.
No. L-28589 (1973)]
Loans contracted during the
marriage are conjugal, and so is any
property acquired therefrom
[Mendoza v. Reyes, G.R. No. L-31625
(1983)]
Property purchased by installment,
paid partly with conjugal funds and
partly with exclusive funds, if full
ownership was vested during the
marriage; the CPG shall reimburse
the owner-spouse [Art. 118, FC]

33
If a winning ticket is bought by
conjugal funds, the prize is conjugal
(otherwise, the prize is exclusive
property of the spouse
who owns the ticket)
Improvement on exclusive property:
if original value is less than new value
(where new value = value of land +
value of improvements + net change
in value), then land becomes conjugal
property, subject to the
reimbursement of the value of the
property of the owner-spouse at the
dissolution of the CPG.
Property belonging to one spouse
converted into another kind totally
different in nature from its original
form during marriage becomes
conjugal in the absence of proof that
the expenses of the conversion were
exclusively for the account of the
original owner-spouse, subject to
reimbursement of the value of the
original property from the conjugal
partnership.
What remains Properties acquired before the Property brought into the marriage
exclusive property marriage, for those with legitimate by each spouse as his/her own
[Art. 92, FC] descendants by a former marriage
(to protect rights of children by a
former marriage)
Properties acquired during the Properties acquired during the
marriage by a gratuitous title, i.e. marriage by a gratuitous title, i.e.
donation, inheritance by testate and donation, inheritance by testate and
intestate succession, including the intestate succession (but the fruits of
fruits of such properties such properties form part of the CPG)
Except: When expressly provided by Except: When expressly provided by

the donor or testator that the the donor or testator that the
property shall form part of the ACP property shall form part of the CPG
Properties for personal use i.e. Property acquired by right of
wearing apparel, toilet articles, redemption, by barter, or by
eyeglasses exchange with property belonging to
either spouse
Except: Plata v. Yatco, G.R. No. L-20825
1. Luxurious jewelry and those of (1964): Plata purchased property
special value that increase in value when she was single. When married,
over time (partakes of the nature of she and her husband Bergosa co-
an investment) signed a mortgage on the property.
Upon foreclosure, Bergosa was sued
for illegal detainer. A writ of
execution on the property was carried
out but Plata refused to leave the
premises. SC ruled that Plata cannot
be held in contempt. Property is not
conjugal.

34
Her husband signing as co-
mortgagor does not convert it to CPG.
She could ignore execution because
the decision was for her husband
alone.
Property purchased with exclusive
money of either spouse
Property purchased by installment,
paid partly with conjugal funds and
partly with exclusive funds, if full
ownership was vested before the
marriage [Art. 118, FC]. Even if the
installment is completed after the
marriage, the property is exclusive if
ownership was vested in one spouse
before the marriage [Lorenzo v.
Nicolas, G.R. No. L-4085 (1952)].
Presumption All properties acquired during the All property acquired during the
marriage form part of the ACP, marriage, whether made, contracted,
unless it be proven that they are or registered in the name of one
excluded. [Art. 93, FC] spouse, are presumed conjugal
unless the contrary is proven. [Art.
116, FC]
Charges and Art. 94, 121-123 FC
Obligations 1. Support of the following:
a. Spouses;
b. Common children;
c. Legitimate children of previous marriage;
d. Illegitimate children – follow the provisions on Support; common
property liable in case of absence or insufficiency of the exclusive
property of the debtor-spouse, but the payment shall be considered as an
advance on the share of the debtor-spouse.
2. Expenses to enable either spouse to commence/complete a
professional/vocational course or activity for self-improvement
3. Value donated or promised by both spouses in favor of common legitimate
children for the exclusive purpose of commencing/ completing a
professional/ vocational course or activity for self-improvement;
4. Generally: all expenses incurred with the consent to the spouses or for the
benefit of the family.
If community property is If conjugal partnership property is
insufficient, the spouses are insufficient, the spouses are
solidarily liable for the unpaid solidarily liable for the unpaid
balance from their separate balance from their separate
properties except for: properties. Gambling losses of any
1. Debts contracted by either kind (i.e. legal or illegal) shall be
spouse before marriage which borne by the losing spouse’s separate
have not redounded to the property [Art. 123, FC]
benefit of the family;
2. Support of illegitimate DBP v. Adil, G.R. No. L-4085 (1988):
children; and Loan contracts signed by both
3. Liabilities incurred by either spouses are conjugal, and they are
spouse arising from crime or jointly liable for payment, even if only
quasi-delict. one spouse signs a subsequent
promissory note.
Gambling losses of any kind (i.e.
legal or illegal) shall be borne by the

35
losing spouse’s separate property Ayala Investment v. Ching, G.R. No.
[Art. 95, FC] 118305 (1998): The Supreme Court
ruled that the indirect benefits that
might accrue to a husband in signing
as a surety or guarantee in an
agreement not in favor of the family
but in favor of his employer
corporation are not benefits that can
be considered as giving a direct
advantage accruing to the family.
Hence, the creditors cannot go
against the conjugal partnership
property in satisfying the obligation
subject of the surety agreement. A
contrary view would put in peril the
conjugal partnership by allowing it to
be given gratuitously as in cases of
donation of conjugal partnership
property, which is prohibited.
Ownership, The administration and enjoyment of the community/conjugal property
administration, shall belong to both spouses jointly.
enjoyment, and
disposition of In case of disagreement, the husband’s decision shall prevail, subject to
property recourse to the court by the wife for a proper remedy, within 5 years from
the date of contract [Art. 96, 124 FC].
De Ansaldo v. Sheriff of Manila, G.R.
No. L-43257 (1937): Spouses are not
co-owners of CPG during the
marriage and cannot alienate the
supposed 1/2 interest of each in the
said properties. The interest of the
spouses in the CPG is only inchoate
or a mere expectancy and does not
ripen into title until it appears after
the dissolution and liquidation of the
partnership that there are net assets.
Either spouse may, through a will, Disposition or encumbrance of
dispose of his or her interest in the conjugal property requires the
community property. [Art. 97, FC] following: Authority of the court or
written consent of the other spouse.
However, the will should refer only The absence of such will render such
to his or her share in the community encumbrance void. [Art. 124, par. 2,
property. FC]
Donation of one spouse without the consent of the other is not allowed. [Art.
98, 125 FC]
Exception:
Moderate donations to charity or on occasion of family rejoicing or distress
Jader-Manalo v. Camaisa, G.R. No. 147978 (2002): Mere awareness of a
transaction is NOT consent.
Homeowner’s Savings & Loan Bank v. Dailo, G.R. No. 153802 (2005): In
the absence of (court) authority or written consent of the other spouse, any
disposition or encumbrance of the conjugal property shall be void.

36
Cheeseman v. IAC, G.R. No. 7483 (1991): If, however, one of the spouses is
an alien, the Filipino spouse may encumber or dispose of the property w/o
the consent of the former. The property is presumed to be owned exclusively
by the Filipino spouse.
Dissolution of the Terminates upon [Art. 99, 126 FC]:
regime 1. Death of either spouse – follow rules in Art. 103
2. Legal separation – follow rules in Arts. 63 and 64
3. Annulment or judicial declaration of nullity – follow rules in Arts. 50 and
52
Judicial separation of property during marriage – follow rules in Arts. 134 to

138
Rules on de facto General rule: De facto separation does NOT affect the ACP/CPG.
separation
Exceptions:
1. Spouse who leaves the conjugal home without just cause shall not be
entitled to support; however, he/she is still required to support the other
spouse and the family
2. If consent is necessary for transaction but is withheld or otherwise
unobtainable, authorization may be obtained from the court
3. Support for family will be taken from the ACP/CPG
4. If ACP/CPG is insufficient, spouses shall be solidarily liable
Effect of de facto If it is necessary to administer or encumber separate property of spouse who
separation left, spouse present may ask for judicial authority to do this.
If ACP/CPG is not enough and one spouse has no separate property, spouse
who has property is liable for support, according to provisions on support.
Rules on Abandonment [Art. 101, 128 FC]
Abandonment Present/aggrieved spouse may petition the court for:
1. Receivership
2. Judicial Separation of Property
3. Authority to be the sole administrator of the absolute community, subject
to precautionary conditions that the court may impose
A spouse is deemed to have abandoned the other when he or she has left the
conjugal dwelling without any intention of returning.
Spouse is prima facie considered to have abandoned the other spouse and
the family if he or she has:
1. Left for a period of 3 months
2. Failed to inform the other spouse of his or her whereabouts for a period of
3 months
Partosa-Jo v. CA, G.R. No. 82606
(1992): Physical separation of the
spouses, coupled with the husband’s
refusal to give support to the wife,
sufficed to constitute abandonment
as a ground for an action for the
judicial separation of their conjugal
property.
Liquidation of Procedure [Art. 102, FC] Procedure [Art. 129, FC]
assets and 1. Prepare an inventory of assets of 1. Prepare an inventory of all
liabilities ACP and of spouses with market properties
values
2. Amounts advanced by CPG in
payment of personal debts and

37
2. Debts and obligations are paid obligations shall be credited to the
with community property, and CPG
separate debts and obligations not
charged to ACP paid by respective 3. Reimburse each spouse for the use
assets of spouses of his/her exclusive funds in the
a. If obligations exceed the assets acquisition of property or for the
of the ACP, nothing is divided. value of his or her exclusive property,
Creditors can go after the the ownership of which has been
separate properties of the vested by law in the conjugal
spouses, which are solidarily partnership
liable for the deficiency
4. Debts and obligations of CPG shall
3. Delivery of whatever remains in be paid out of the conjugal assets,
their exclusive property otherwise both spouses are solidarily
liable with their exclusive property.
4. The balance, or net remainder, is
divided equally between the spouses, 5. Remains of the exclusive
or in accordance to the proportion properties shall be delivered to
agreed upon in the marriage respective owner-spouses.
settlement, irrespective of how much
each brought into the community 6. Indemnification for
loss/deterioration of movables
5. If personal obligations of a spouse belonging to either spouse, even due
exceed his/her separate property, to fortuitous event, used for the
creditor can go after the share of the benefit of the family.
spouse on the net remainder of the
ACP, without prejudice to the 7. Net remainder of CPG shall
provisions of law on forfeitures and constitute the profits which shall be
delivery of presumptive legitimes divided equally between husband
and wife except when:
6. After covering all community a. A different proportion or
obligations and obligations of division was agreed upon in the
spouses, balance of separate marriage settlements
properties shall be delivered to b. There has been a voluntary
respective spouses or their heirs, and waiver or forfeiture of such share
they will also divide into two equal as provided in the FC
shares whatever is left of the c. Presumptive legitimes are
community assets, without prejudice delivered to common children
to the provisions of law on forfeitures d. Conjugal dwelling goes to:
and delivery of presumptive i. Spouse with whom majority
legitimes of common children choose to
remain (below 7 y.o. = deemed
7. Presumptive legitimes are to have chosen the mother
delivered to common children based on the tender years
presumption)
8. Conjugal dwelling goes to: ii. Whoever the court chooses
a. Spouse with whom majority of in case of lack of majority
common children choose to
remain
(below 7 y.o., = deemed to have
chosen the mother based on the
tender years presumption)
b. Whoever the court chooses in
case of lack of majority
Rules in case of termination of marriage by death of one of the
spouses [Art. 103, FC]:

38
1. The community property shall be liquidated in the same proceeding for
the settlement of the estate of the deceased spouse.
2. If no such judicial settlement proceeding is instituted, surviving spouse

shall liquidate the community property either judicially or extra-judicially,
within one year from the death of the deceased spouse.
a. If no liquidation is made within the period, any disposition or
encumbrance involving community property of the terminated marriage
shall be void.
b. Non-compliance with liquidation procedures would mean that a
subsequently contracted marriage will follow a regime of complete
separation of property.
Procedure for liquidation of properties of two marriages [Art.
104, FC]:
1. Determine the capital, fruits, and income of each community upon such
proof as may be considered according to the rules of evidence.
2. In case of doubt as to which community the existing properties belong,
they shall be divided between two communities in proportion to the capital
and duration of each.
5. Separation of property and administration of common property by one spouse during the
marriage
Art. 134. In the absence of an express declaration in the marriage settlements, the separation of property
between spouses during the marriage shall not take place except by judicial order. Such judicial
separation of property may either be voluntary or for sufficient cause.
 If the spouses did not execute a written agreement regarding their property regime prior to the
marriage, they can no longer change it after the marriage ceremony has taken place unless they
have secured judicial approval.
Sufficient Causes and Grounds for Return to Previous Regime

Sufficient Causes for Judicial Separation of Grounds for Return to Previous Regime
Property [Art. 135, FC] [Art. 141, FC]
Spouse of petitioner has been sentenced to a Termination of the civil interdiction
penalty which carries with it the penalty of civil
interdiction
Spouse of petitioner is judicially declared an Reappearance of absentee spouse
absentee
Loss of parental authority of the spouse of Restoration of parental authority to the spouse
petitioner has been decreed by the court previously deprived of it
Spouse of petitioner has abandoned the latter or When the spouse who left the conjugal home
failed to comply with his or her obligations to the without legal separation resumes common life with
family the other
The spouse granted the power of administration in When the court, being satisfied that the spouse
the marriage settlements has abused that power granted the power of administration will not again
abuse that power, authorizes the resumption of
said administration
At the time of the petition, the spouses have been Reconciliation and resumption of common life of
separated in fact for at least 1 year and the spouses who had been separated in fact for at
reconciliation is highly improbable. least 1 year.
When after voluntary dissolution of the ACP or

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

39
Separation of Property
When it applies Agreed upon in the marriage settlements by the spouses
Mandatory under Arts. 103 & 130, FC (subsequent marriages contracted by
a surviving spouse without judicial settlement of previous property regime)
Judicial separation of property (Voluntary or just cause)
Default property regime when there is reconciliation between spouses after
judicial separation of property
What it consists Present or future property or both
of Each spouse’s earnings from his or her own profession, business, or
Industry
Natural, industrial or civil fruits of spouse’s separate properties
May be total or partial. If partial, property not considered separate is
presumed to pertain to the ACP.
Liabilities Family expenses: Both spouses are liable in proportion to their income; if
insufficient, based on the current value of their separate properties
Creditors for family expenses: Spouses solidarily liable
Ownership, Spouses may own, dispose, possess, and administer separate estates without
administration, the consent of the other
enjoyment, and Administration of exclusive properties may be transferred between
disposition spouses when:
1. One spouse becomes the other spouse’s guardian
2. One spouse is judicially declared an absentee
3. One spouse is given the penalty of civil interdiction
4. One spouse becomes a fugitive
Conveyance between the spouses is allowed under Art. 1490, NCC.
In Re: voluntary dissolution of CPG of Sps. Bermas, G.R. No. L-20379 (1965): A voluntary
separation of properties is not perfected by mere consent but upon the decree of the court approving the
same. The petition for voluntary separation of property was denied because the children of the 1st and 2nd
marriages were not informed; the separation of property may prejudice the rights and shares of the
children.
6. Regime of separation of property

Each spouse has complete control and ownership of his or her own properties which will include “all
earnings from his or her profession, business or industry and all fruits, natural, industrial or civil, due or
received during the marriage form his or her separate property.” Expenses of the family shall be shouldered
by the spouses in proportion to their income, or, in case of insufficiency or default thereof, to the current
market value of their separate properties.
7. Property regime of unions without marriage
Art. 147, FC Art. 148, FC

Applicability Man and woman living together as Man and woman living together as
husband and wife, with capacity to marry husband and wife, NOT capacitated to
(Art. 5, without any legal impediment) marry:
1. at least 18 years old
2. not violative of Art. 37 (incestuous void 1. Under 18 years old
marriage) 2. Adulterous relationship
3. not violative of Art. 38 (void marriage by 3. Bigamous/polygamous marriage
reason of public policy) 4. Incestuous marriages under Art. 37
4. not bigamous 5. Void marriages by reason of public
Other void marriages due to absence of policy under Art. 38
formal requisite
Salaries and Owned in equal shares Separately owned by parties
Wages

40
Properties Remains exclusive, provided there is proof Remains exclusive
acquired
through
exclusive
funds
Properties Governed by rules on coownership Owned in common in proportion to
acquired by respective contribution
both through
work and
industry
Properties Owned in equal shares since it is presumed No presumption of joint acquisition.
acquired to have been acquired through joint efforts. When there is evidence of joint
while living acquisition but none as to the extent of
together If one party did not participate in actual contribution, there is a
acquisition, presumed to have contributed presumption of equal sharing.
jointly, if the former’s effort consisted in
the care and maintenance of family and
household
N.B. Neither party can encumber or

dispose by acts inter vivos his share in
coowned property without the consent of
the other party until cohabitation is
terminated.
Forfeiture Where only one party to a void marriage is If one party is validly married to
in good faith, share of party in bad faith is another, his/her share in the co-owned
forfeited: properties will accrue to the ACP/CPG
of his/her existing valid marriage.
In favor of their common children
If the party who acted in bad faith is not
In case of default of or waiver by any or all validly married to another, his/her
of the common children or their share shall be forfeited in the same
descendants, each vacant share shall manner as that provided in Art 147.
belong to the respective surviving
descendants The same rules on forfeiture shall apply
if both parties are in bad faith.
In the absence of such descendants, such
share belongs to the innocent party
F. Family home
What Constitutes the Family Home

The family home is the dwelling house where family resides and the land on which it is sustained. [Art. 152]
Limitations on the Family Home

 The family home must be part of the properties of the absolute community or the conjugal
partnership, or of the exclusive properties of either spouse with the other’s consent. It may also be
constituted by an unmarried head of a family in his or her own property. [Art. 156, FC]
 The actual value of the family home shall not exceed, at the time of its constitution, the amount of
P300,000 in urban areas, and P200,000 in rural areas, or such amounts as may hereafter be fixed
by law. [Art. 157, FC]
 A person may constitute, or be the beneficiary of, only one home. [Art. 161, FC]
Who May Constitute the Family Home

The family home may be constituted
a. Jointly by the husband and wife; or

41
b. An unmarried head of the family [Art. 152, FC]
Note: A person may constitute and be the beneficiary of only one family home [Art. 161, FC]
Beneficiaries of the Family Home

a. The husband and wife, or an unmarried person who is the head of a family; and
b. Their parents, ascendants, descendants, brothers, and sisters whether relationship be legitimate or
illegitimate, who are living in the family home and who depend on the head of the family for support. [Art.
154, FC]
Requisites to be a Beneficiary of the Family Home:

a. The relationship is within those enumerated in Art. 150, FC.
b. They live in the family home
c. They are dependent for legal support on the head of the family
Occupancy of a family home must be “actual” in order for one to be a beneficiary. Actual occupancy, need
not be by the owner of the house specifically. Rather, the property may be occupied by the “beneficiaries”
enumerated in Art. 154, FC, which may include the in-laws where the family home is constituted jointly by
the husband and wife. But the law definitely excludes maids and overseers. They are not the beneficiaries
contemplated by the Code. [Patricio v. Dario, G.R. No. 170829 (2006)]
The term "descendants" contemplates all descendants of the person or persons who constituted the family
home without distinction; hence, it must necessarily include the grandchildren and great grandchildren of
the spouses who constitute a family home. However, descendants cannot be considered beneficiaries if they
are supported by their own parents and not by the ascendants who constituted the family home. [Patricio
v. Dario, G.R. No. 170829 (2006)]
When Deemed Instituted

The family home is deemed constituted on a house and lot from the time it is occupied as a family residence.
[Art. 153, FC]
Exemption from Forced Sale, Execution, Attachment

General Rule: The family home is exempt from the following from the time of its constitution and so long
as any of its beneficiaries actually resides therein:
a. Execution;
b. Forced sale;
c. Attachment [Art. 153].
Exceptions in the exemption of the family home from execution

a. Nonpayment of taxes.
b. Debts incurred prior to the constitution of the family home.
c. Debts secured by mortgages on the premises before or after such constitution.
d. Debts due to laborers, mechanics, architects, builders, materialmen and others who have rendered
service or furnished material for the construction of the building. [Art. 155, FC]
Re: Claims Not Among Those in Art. 155

When a creditor whose claim is not among those mentioned in Art. 155, obtains a judgment in his favor,
and he has reasonable grounds to believe that the family home is actually worth more than the maximum
amount fixed in Art. 157, he may apply to the court which rendered the judgment for an order directing the
sale of the property under execution. [Art. 160, par. 1, FC]
To warrant the execution of sale of the family home under Art 160, the following facts need to be established:
a. there was an increase in actual value,
b. the increase resulted from voluntary improvements,
c. the increase in actual value exceeded the maximum limit allowed by Art 157 [Eulogio vs. Bell, G.R. No.
186322 (2015)]

42
 The actual value of the family home shall not exceed at the time of its constitution the amount of
three hundred thousand pesos in urban areas and two hundred thousand pesos in rural areas or
such amounts as may hereafter be fixed by law.
 In any event, if the value of the currency changes after the adoption of this Code, the value most
favorable for the constitution of a family home shall be the basis of evaluation.
 Urban areas include chartered cities and municipalities. All others are deemed to be rural areas.
[Art. 157, FC]
Procedure to avail of right under Art. 160

a. The creditor must file a motion in the court proceeding where he obtained a favorable decision for a writ
of execution against the family home.
b. There will be a hearing on the motion where the creditor must prove that the actual value of the family
home exceeds the maximum amount fixed by the FC either at the time of its constitution or as a result of
improvements introduced thereafter.
c. If the creditor proves that the actual value exceeds the maximum amount the court will order its sale in
execution.
d. If the family home is sold for more than the value allowed, the proceeds shall be applied as follows:
1. First, the obligation enumerated in Article 157 must be paid
2. Then the judgment in favor of the creditor will be paid, plus all the costs of execution
3. The excess, if any, shall be delivered to the judgment debtor
General Rule
The proof that the house is the family home must be alleged against creditors; Applied the rule in Art. 160,
FC. [Versola v. Mandolaria, G.R. No. 164740 (2006)]
Note: The provisions of this Chapter shall also govern existing family residences insofar as said provisions
are applicable. [Art. 162, FC]
When the Family Home may be Sold

The family home may be sold alienated, donated, assigned, or encumbered by the owner or owners thereof
with the written consent of the person constituting the same the latter’s spouse and a majority of the
beneficiaries of legal age. In case of conflict, the court shall decide. [Art. 158, FC]
Requirements for the sale, alienation, donation, assignment, or encumbrance of the family
home
a. The written consent of the following:
1. the person constituting it;
2. the spouse of the person constituting it; and
3. the majority of the beneficiaries who are of legal age [Art. 158, FC].
When Terminated
The family home shall continue despite the death of one or both of the spouses or of the unmarried head of
the family:
a. for a period of ten years; or
b. for as long as there is a minor beneficiary.
The heirs cannot partition the same unless the court finds compelling reasons therefor. The rule shall apply
regardless of whoever owns the property or constituted the family home [Art. 159, FC]
Article 159 imposes the proscription against the immediate partition of the family home regardless of its
ownership. This signifies that even if the family home has passed by succession to the co-ownership of the
heirs, or has been willed to any one of them, this fact alone cannot transform the family home into an
ordinary property, much less dispel the protection cast upon it by the law. The rights of the individual co-
owner or owner of the family home cannot subjugate the rights granted under Article 159 to the beneficiaries
of the family home. [Arriola v. Arriola, G.R. No. 177703 (2008)]

43
G. Paternity and filiation
The filiation of children may be by nature or by adoption. Natural filiation may be legitimate or illegitimate.
[Art. 163, FC]
Status Children Who Have Rights Effects on Succession

this Status
Legitimate a. Conceived OR born a. Bear the surnames of the Legitimate children are
during the valid marriage father and the mother entitled to 1/2 of the estate
of the parents [Art. 164, of the parent divided
FC] b. Receive support from amongst themselves [Art.
parents, ascendants, and 888, CC]
b. Conceived through brothers/sisters in proper
artificial insemination cases
[Art. 164, FC]
c. Entitled to legitimate
c. Children of a subsequent and other successional
marriage (after declaration rights [Art. 174, FC]
of presumptive death)
conceived prior to its d. Claim legitimacy [Art.
termination [Art. 43, FC] 173, FC]
d. Conceived or born
before the final judgement
of annulment under Art.
45 or absolute nullity
under Art. 36 [Art. 54, FC]
e. Conceived or born of the

subsequent marriage
under Art. 53 [Art. 54, FC]
f. Legitimated children*
[Art. 177, FC]
g. Adopted Children** [RA

8552]
Illegitimate Conceived AND born a. Bear the surname of the Each illegitimate child is
outside a valid marriage mother entitled to an amount 1/2
[Art. 165, FC] the share of a legitimate
b. Bear the surname of the child [Art. 176, FC]
father if filiation has been
expressly recognized by the
father through: record of
birth, public document, or
private handwritten
instrument
c. Receive support
d. Entitled to successional
rights [Art 176, FC]
e. Establish illegitimate
filiation [Art 175, FC]

44
Legitimated* Conceived AND born Same as Legitimate Child Same as Legitimate Child
outside a valid marriage [Art. 179, FC]
provided that:
a. At the time of
conception: the parents
were NOT disqualified to
marry each other (unless
the impediment was
minority of either or both
of them) [Art. 177, FC]
AND
b. The parents
subsequently enter into a
valid marriage [Art. 178,
FC]
Adopted** Those adopted through From the Domestic From Domestic Adoption
Domestic [RA 8552] or Adoption Act: Act:
Intercountry Adoption
[RA 8043 a. Same as Legitimate a. Same as Legitimate
Child [Sec. 17, RA 8552] Child [Sec. 18, RA 8552]
BUT the adopted child
b. Right to rescind cannot inherit by
adoption under specific representation because the
cases [Sec. 19, RA 8552] relationship is only
between adopter and
adoptee [Sayson v. CA,
G.R. No. 89224-25 (1992)]
b. May also inherit from

biological parents if they
left a will [Sec. 18, RA
8552]
1. Legitimate children
Art. 164. Children conceived or born during the marriage of the parents are legitimate.
Children conceived as a result of artificial insemination of the wife with the sperm of the husband or that
of a donor or both are likewise legitimate children of the husband and his wife, provided, that both of them
authorized or ratified such insemination in a written instrument executed and signed by them before the
birth of the child. The instrument shall be recorded in the civil registry together with the birth certificate
of the child.
 A legitimate child is one that is born in lawful wedlock or within a competent time afterwards.
 The time of birth is the criterion of legitimacy. [Tolentino]
WHO ARE LEGITIMATE CHILDREN?

1. Children conceived OR born during the valid marriage of the parents [Art. 164, FC]
2. Children conceived through artificial insemination [Art. 164, FC]
3. Children of a subsequent marriage conceived prior to its termination [Art. 43, FC]
This refers to those subsequent marriages which were terminated after the reappearance of the spouse
presumed dead.

45
4. Children conceived or born before the judgement of annulment under Art. 45 or absolute nullity under
Art. 36 has become final and executory [Art. 54, FC]
5. Children conceived or born of the subsequent marriage under Art. 53 [Art. 54, FC]
6. Legitimated children [Art. 177, FC]
7. Adopted Children [RA 8552]
NATURAL/BIOLOGICAL
A child conceived or born during a valid marriage is presumed to belong to that marriage, regardless of the
existence of extramarital relationships. [Liyao v. Liyao, G.R. No. 138969 (2002)]
ARTIFICIAL INSEMINATION [Art. 164, FC]

 Artificial insemination is the impregnation of a female with the semen from male without sexual
intercourse.
 The child conceived through artificial insemination with the consent of both husband and wife is
legitimate.
 The FC does not require, as a condition for the legitimacy of the child, the impotence of the
husband.
 Even without the initial consent, the child can still be legitimated so long as the husband
subsequently gives his consent before the child is born through AI.
Requisites to be considered legitimate:

a. Artificial insemination made on wife
b. Sperm comes from any of the following:
1. Husband
2. Third Person Donor
3. Husband and third person donor
c. In case of donor sperm, husband and wife must authorize/ratify insemination in a written instrument.
1. Executed & signed by husband and wife before the birth of the child.
2. Recorded in the civil registry together with the birth certificate of the child. [Art. 164, FC]
Notes:
 Dual consent is required whether the semen used comes from the husband or a third person donor.
[Tolentino]
 Common children born before the annulment are legitimate, and therefore entitled to support from
each of the spouses. [De Castro v. Assidao-De Castro, G.R. No. 160172 (2008)]
2. Proof of filiation
Proof of filiation is necessary:

1. Where the child is born after 300 days following the termination of the marriage → child has no status,
and whoever alleges legitimacy must prove it.
2. If the legitimacy of a child conceived or born in wedlock is impugned and the plaintiff has presented
evidence to prove any of the grounds provided in Article 166 → proof of filiation may be used as a defense.
[Tolentino]
Legitimate children may establish their filiation by any of the following [Art. 172, FC]:
a. Primary Evidence (for voluntary recognition)
1. Their record of birth appearing in the civil registry or a final judgement.
2. An admission of his filiation by his parent in a public document or a private handwritten
instrument and signed by said parent.
b. Secondary Evidence (for involuntary recognition)
1. Proof of open and continuous possession of status as legitimate child.
2. Any other means stated by the rules of court or special laws.
Note: Only in the absence of primary evidence can secondary evidence be admitted

46
Action for Claiming Filiation (Legitimate Children) [Art. 173, FC]:
a. The child can bring the action during his or her lifetime.
b. If the child dies during minority or in a state of insanity, such action shall be transmitted to his heirs,
who shall have a period of five years within which to institute the action.
c. The action commenced by the child shall survive notwithstanding the death of either or both of the
parties.
Rights of Legitimate Children [Art. 174, FC]

3S → Support, Surname, Succession
a. To bear the Surnames of the father and the mother, in conformity with the provisions of the CC on
surnames.
b. To receive Support from their parents, their ascendants, and in proper cases, their brothers and sisters,
in conformity with the provisions of the Code on Support.
c. To be entitled to the legitimate and other Successional rights granted to them by the CC.
Future support cannot be the subject of a compromise, pursuant to Article 2035 of CC. The reason behind
this prohibition is because the right to support is founded upon the need of the recipient to maintain his
existence, and thus the renunciation of such will be tantamount to allowing the suicide of the person or his
conversion to a public burden, which is contrary to public policy. [De Asis v. CA, G.R. No. 127578 (1999)]
3. Illegitimate children
Art. 165. Children conceived and born outside a valid marriage are illegitimate, unless otherwise provided
in this Code.
WHO ARE ILLEGITIMATE CHILDREN?

General rule: Those conceived and born outside of a valid marriage. [Art. 165, FC]
Exceptions
a. Children of marriages void under Art. 36 (psychological incapacity); and
b. Under Art. 53 (subsequent marriages which did not comply with Art. 52) [Sempio-Dy]
ACTION FOR CLAIMING ILLEGITIMATE FILIATION

Illegitimate children may establish their illegitimate filiation in the same way and on the same evidence as
legitimate children. [Art. 175, FC]
a. For actions based on primary evidence, the same periods stated in Art. 173 of FC apply - lifetime
of the child, will not be extinguished by death of either parties
b. For actions based on secondary evidence, the action may only be brought during the lifetime of
the alleged parent.
 The same kind of evidence provided in Art. 172 for establishing legitimate filiation may be used to
prove the filiation of illegitimate children, and the action for this purpose must be brought within
the same period and by the same parties as provided in Article 173. [Art. 175, FC]
 However, if the evidence to prove the filiation is secondary, the action must be brought within the
lifetime of the alleged parent. [Art. 175, FC]
Primary evidence
 Baptismal certificates are given probative value only for births before 1930. Birth certificates must
be signed by the parents and sworn for it to be admitted as evidence. [Mendoza v. Mella, G.R. No.
L-18752 (1966)]
 Signature of the father on the birth certificate is considered as an acknowledgement of paternity
and mere presentation of a duly authenticated copy of such certificate will successfully establish
filiation. [Eceta v. Eceta, G.R. 157037 (2004)]
 Unsigned birth certificates are not evidence of recognized filiation. [Baluyut v. Baluyut, G.R. No. L-
33659 (1990)]
 The due recognition of an illegitimate child in a record of birth, a will, a statement before a court of
record, or in any authentic writing, is in itself a consummated act of acknowledgement of the child,

47
and no further court action is required. [De Jesus v. Estate of Decedent Juan Gamboa Dizon, G.R.
No. 142877 (2001)]
Secondary evidence
 Rule 130, Sec. 40 is limited to objects commonly known as family possessions reflective of a family's
reputation or tradition regarding pedigree like inscriptions on tombstones, monuments, or coffin
plates. [Jison v. CA, G.R. No. 124853 (1998)]
 "Su padre [Your father]" ending in a letter is only proof of paternal solicitude and not of actual
paternity. Signature on a report card under the entry of "Parent/Guardian" is likewise inconclusive
of open admission. [Heirs of Rodolfo Bañas v. Heirs of Bibiano Bañas, G.R. No. L-25715 (1985)]
 Mere possession of status as an illegitimate child does not make an illegitimate child recognized
but is only a ground for bringing an action to compel judicial recognition by the assumed parent.
[Gono-Javier v. CA, G.R. No. 111994 (1994)]
 To prove open and continuous possession of the status of an illegitimate child, there must be
evidence of the manifestation of the permanent intention of the supposed father to consider the
child as his, by continuous and clear manifestations of parental affection and care, which cannot be
attributed to pure charity. [Perla v. Baring, G.R. No. 172471 (2012)]
 Meanwhile, the lack of participation of the supposed father in the preparation of a baptismal
certificate renders this document incompetent to prove paternity. Baptismal certificates are per se
inadmissible in evidence as proof of filiation and they cannot be admitted indirectly as
circumstantial evidence to prove the same. [Perla v. Baring, supra]
 By "open and continuous possession of the status of a legitimate child" is meant the enjoyment by
the child of the position and privileges usually attached to the status of a legitimate child, like
bearing the paternal surname, treatment by the parents and family of the child as legitimate,
constant attendance to the child's support and education, and giving the child the reputation of
being a child of his parents. [De Jesus v. Syquia, G.R. No. L-39110 (1933)]
Other evidence
 DNA evidence can be used as proof of paternity. [Agustin v. CA, G.R. No. 162571 (2005)]
 DNA evidence can still be used even after the death of the parent. [Estate of Rogelio Ong v. Diaz,
G.R. No. 171713 (2007)]
 Marriage certificates cannot be used as proof of filiation. [Lim v. CA, G.R. No. L-39381 (1975)]
 There are four significant procedural aspects of a traditional paternity action that parties have to
face: a prima facie case, affirmative defenses, presumption of legitimacy, and physical resemblance
between the putative father and the child. A prima facie case exists if a woman declares —
supported by corroborative proof — that she had sexual relations with the putative father; at this
point, the burden of evidence shifts to the putative father. Further, the two affirmative defenses
available to the putative father are: (1) incapability of sexual relations with the mother due to either
physical absence or impotency, or (2) that the mother had sexual relations with other men at the
time of conception. [Gotardo v. Buling, G.R. No. 165166 (2012)]
RIGHTS OF ILLEGITIMATE CHILDREN

Art. 176. Illegitimate children shall use the surname and shall be under the parental authority of their
mother, and shall be entitled to support in conformity with this Code. The legitime of each illegitimate
child shall consist of one-half of the legitime of a legitimate child. Except for this modification, all other
provisions in the Civil Code governing successional rights shall remain in force. (287a)
Art. 176, FC. Illegitimate children shall use the surname and shall be under the parental authority of their
mother, and shall be entitled to support in conformity with this Code. However, illegitimate children may
use the surname of their father if their filiation has been expressly recognized by the father through the
record of birth appearing in the civil register, or when an admission in a public document or private
handwritten instrument is made by the father. Provided, the father has the right to institute an action before
the regular courts to prove nonfiliation during his lifetime. The legitime of each illegitimate child shall
consist of one half of the legitime of a legitimate child (as amended by RA No. 9255 in 2004).

48
Rights of Illegitimate Children [Art. 176, FC]
a. Use the surname and be under the parental authority of the mother
b. However, may use the surname of father if:
1. Their filiation has been expressly recognized by the father through the record of birth appearing
in the civil register; or
2. There is an admission in a public document or private handwritten
instrument made by the father.
3. Provided, the father has the right to institute an action before the regular courts to prove non-
filiation during his lifetime [RA 9255]
4. The use of the word “may” in Art. 176 readily shows that an acknowledged illegitimate child is
under no compulsion to use the surname of his illegitimate father. The word “may” is permissive
and operates to confer discretion upon the illegitimate children. [Grande v. Antonio, G.R. No.
206248 (2014)]
c. Shall be entitled to support in conformity with the FC.
d. Legitime shall consist of one-half of the legitime of a legitimate child.
CASES
The writ of habeas corpus does not distinguish between a mother of a legitimate and a mother of an
illegitimate child who is deprived of rightful custody of her child. [David v. CA, G.R. No. 111180 (1995)]
The order of payment of allowance need not be conditioned on the grant of custody of the child., since under
Art. 204 of FC, a parent may fulfill his obligation to support by paying the allowance fixed by the court.
[David v. CA, supra]
Compulsory acknowledgment and support of the child are proper as there is no legal impediment in doing
so. The crime of rape carries with it the obligations to acknowledge the child if the character of its origin
does not prevent it, and to support the same. [People v. Namayan, G.R. No. 106539 (1995)]
Criminal liability for neglect of a child under PD 603 does not depend on whether the other parent is also
guilty of neglect. The irresponsible parent cannot exculpate himself from the consequences of his neglect
by invoking the other parent’s faithful compliance with his or her own parental duties because to allow such
defeats the prescription that in all questions regarding the care, custody, education and property of the
child, his welfare shall be the paramount consideration. [De Guzman v. Perez, G.R. No. 156013 (2006)]
Although the issuance of TPO under RA 9262 may include the grant of legal support for the wife and the
child, this assumes that both are entitled to a protection order and to legal support. Illegitimate children
are entitled to support and successional rights, but their filiation must be duly proved through a judicial
action for compulsory recognition or a direct action for support where the issue of compulsory recognition
may be integrated and resolved. [Dolina v. Vallecera, G.R. No. 182367 (2010)]
Summary proceedings under Rule 108 of RC and Art. 412 of CC may be used only to correct clerical or
innocuous errors, not to alter or increase substantive rights, such as those involving the legitimacy or
illegitimacy of a child. Where the effect of a correction in a civil registry will change the civil status of a child
from legitimate to illegitimate, the same cannot be granted except only in an adversarial proceeding.
Moreover, a petition for substantial change in the civil registry should implead not only the civil registrar,
but also all other persons who have or claim to have any interest that would be affected thereby. [Republic
v. Labrador, G.R. No. 132980 (1999)]
The use of the word “may” in Art. 176 of FC, as amended by RA 9255, shows that an acknowledged
illegitimate child is not compelled to use the surname of his illegitimate father. Illegitimate children shall
use the surname of their mother, and the discretion on the part of the illegitimate child to use the surname
of his father is conditional upon proof of compliance with the IRR of RA 9255, including the execution of
an Affidavit to Use the Surname of the Father. [Barcelote v. Republic and Tinitigan, G.R. No. 22095 (2017)]
Legitimacy of a child may be impugned only on the following grounds: [Art. 166, FC]
a. Physical impossibility for the husband to have sexual intercourse with his wife within the first 120 days
of the 300 days which immediately preceded the child's birth due to:

49
1. Physical incapacity of the husband to have sexual intercourse with his wife
2. Husband and wife were living separately as to make sexual intercourse impossible
3. Serious illness of the husband absolutely preventing sexual intercourse
b. Other biological or scientific reasons, except Artificial Insemination.
c. And in case of Artificial Insemination, the written consent of either parent was vitiated through fraud,
violence, mistake, intimidation, or undue influence.
Physical impossibility of access

To overthrow the presumption of legitimacy, it must be shown beyond all reasonable doubt that there was
no access as could have enabled the husband to be the father of the child. Moral impossibility of access,
such as when the wife is in open adultery, or there is bitter hatred between the spouses, cannot defeat the
presumption of legitimacy. [Tolentino]
Impotence of husband
Impotence is the inability of the male organ of copulation to perform its proper function. It does not include
sterility, which refers to the inability to procreate. [Tolentino]
Spouses living separately

The separation between the spouses must be such as to make sexual access impossible. This may take place
when they reside in different countries or provinces, and they have never been together during the period
of conception. [Tolentino]
Serious illness of husband

 The illness must be of such a nature as to exclude the possibility of his having sexual intercourse
with his wife. [Tolentino]
 Mere proximate separation between the spouses is not sufficient physical separation to constitute
as ground for impugning legitimacy. [Macadangdang v. CA, G.R. No. L-49542 (1980)]
Art. 167. The child shall be considered legitimate although the mother may have declared against its
legitimacy or may have been sentenced as an adulteress. (256a)
Legitimacy with Regard to the Mother:

a. Child considered legitimate although [Art. 167, FC]
1. Mother may have declared against its legitimacy
2. Mother may have been sentenced as an adulteress (also applies to wife who was raped)
b. If the marriage is terminated and the mother contracted another marriage within 300 days after the
termination of the former marriage, the following rules shall govern in the absence of proof to the contrary
[Art 168, FC]:
1. If born before 180 days after the solemnization of the subsequent marriage – child is considered
conceived during the former marriage, provided it be born within 300 days after termination of the
former marriage
2. If born after 180 days following the celebration of the subsequent marriage – child is considered
conceived during such marriage, even if it be born within 300 days after the termination of the
former marriage
Day of Birth of the Child Relative to the 2 Marriages Status of the Child [Art 168, FC]
1st marriage: within 300 days of termination Legitimate to 1st Marriage
AND
2nd marriage: before 180 days after solemnization
1st marriage: within 300 days of termination Legitimate to 2nd Marriage
AND
2nd marriage: after 180 days following solemnization
Art. 169. The legitimacy or illegitimacy of a child born after three hundred days following the termination
of the marriage shall be proved by whoever alleges such legitimacy or illegitimacy.

50
 The legitimacy or illegitimacy of a child born after 300 days following the termination of the
marriage – burden of proof upon whoever alleges the status. [Art. 169, FC]
 If nobody asserts the legitimacy or illegitimacy of the child described in Art. 169, the child should
be considered illegitimate unless legitimacy is proved. Legitimacy cannot be presumed here since
the birth was beyond the 300-day period of gestation. While it goes against the policy of law to lean
in favor of legitimacy, this interpretation is better than the anomalous situation created by Art. 169,
which is a child without a status. [Tolentino (261a)
ACTION FOR IMPUGNING LEGITIMACY

An action to impugn legitimacy may be brought within 1, 2, or 3 years from the knowledge of the birth or of
registration of birth. [Arts. 170 and 171, FC]
a. Within 1 year - If the husband or any heirs reside in the same city or municipality where the
child was born or his birth was recorded.
b. Within 2 years - If the husband or all heirs live in the Philippines but do not reside in the same
city or municipality where the child's birth took place or was recorded.
c. Within 3 years - if the husband or all heirs live outside the Philippines when the child's birth
took place or was recorded in the Philippines.
If the birth of the child has been concealed or was unknown to the husband, the above periods shall be
counted:
a. From the discovery or knowledge of the birth of the child, or
b. From the discovery or knowledge of its registration, whichever is earlier.
General rule: Only the husband can impugn the legitimacy of a child. If he does not bring an action within
the prescribed periods, he cannot file such action anymore thereafter, and this is also true with his heirs.
Exception: That the heirs of the husband may file the action or continue the same within the periods
prescribed in Art. 170 [Art. 171, FC]:
a. If the husband died before the expiration of the period fixed for bringing his action
b. If he should die after the filing of the complaint without having desisted therefrom
c. If the child was born after the death of the husband.
Example: If the husband was living in Dubai and the child was born in Quezon City, and he had older
children (heirs) also living in Quezon City, the period for impugning legitimacy would be within 1 year from
knowledge of birth or registration. Although the husband resided abroad, he still had heirs residing in the
same city.
Note: Legitimacy can only be attacked directly. [Sayson v. CA, G.R. No. 89224-25 (1992)]
4. Legitimated children
Art. 177. Only children conceived and born outside of wedlock of parents who, at the time of the conception
of the former, were not disqualified by any impediment to marry each other may be legitimated.
General rule: "Legitimated" children are illegitimate children who because of the subsequent marriage of
their parents are, by legal fiction, considered legitimate.
Requisites for Legitimation:

a. The child must have been conceived and born outside of wedlock; and
b. The parents, at the time of the child's conception, were not disqualified by any impediment to marry each
other, or disqualified only because either or both of them were below 18 years old. [Art. 177, as amended by
RA 9858, FC]
Procedure and Effects:

a. Legitimation shall take place by a subsequent valid marriage between the parents. The annulment of a
voidable marriage shall not affect the legitimation. [Art. 178, FC]
b. Effects of legitimation shall retroact to the time of the child’s birth [Art. 180, FC]

51
c. Legitimation of children who died before the celebration of the marriage shall benefit their descendants
[Art. 181, FC]
Grounds for Impugning Legitimation:

a. The subsequent marriage of the child's parents is void.
b. Those born under these circumstances:
1. There was an impediment to the marriage at the time of conception AND
2. The subsequent marriage of the parents is valid
c. The child is not really the child of the alleged parents. [Sempio-Dy]
Note: Legitimation may be impugned only by those who are prejudiced in their rights, within five years
from the time their cause of action accrues. [Art. 182, FC]
Rights of legitimated children

 Legitimated children have the same rights as those of legitimate children. [Art. 179, FC]
 When an illegitimate child is subsequently legitimated by reason of marriage, he shall be allowed
to use his mother’s surname as his middle name and his father’s surname as his surname. Thus, as
a legitimated child, Julian shall use the surnames of both his mother and father. [In Re: Petition
for Change of Name of Julian Lin Carulasan Wang, G.R. No. 159966 (2005)
H. Adoption
Adoption is a juridical act, a proceeding in rem, which creates between two persons a relationship similar
to that which results from legitimate paternity and filiation. [Lazatin v. Campos, G. R. No. L-43955-56
(1979)]
Since adoption is wholly and entirely artificial, to establish the relation the statutory requirements must be
strictly carried out; otherwise, the adoption is an absolute nullity. [Republic v. CA and Caranto, G.R. No.
103695 (1996)]
LEGITIMATION ADOPTION
Legal effect The law merely makes legal what The law creates by fiction a relation
exists by nature. which did not in fact exist.
Persons affected Natural children Strangers (generally)
Procedure Extrajudicial acts of parents Always judicial
Who should apply Both parents Both parents, except:
1. One spouse seeks to adopt the
legitimate child of the other
2. One spouse seeks to adopt his own
illegitimate child, provided that the
other spouse has signified their
consent thereto
3. Spouses are legally separated
from each other
Effect on parent- Same status and rights with that of a Creates a relationship only between
child relationship legitimate child not only in relation to the child and the adopting parents
the legitimizing parents but also to [Sayson v. CA, G.R. No. 89224-25
other relatives. (1992)]
1. Domestic adoption (R.A. No. 8552)
a. Who may adopt

1. Filipino Citizens [Sec. 7(a), RA 8552]
a. Of legal age
b. With full civil capacity and legal rights
c. Of good moral character and has not been convicted of any crime involving moral turpitude
d. Emotionally and psychologically capable of caring for children

52
e. At least sixteen (16) years older than adoptee, except when adopter is biological parent of the
adoptee or is the spouse of the adoptee’s parent
f. In a position to support and care for his/her children in keeping with the means of the family
g. Has undergone pre-adoption services
2. Aliens [Sec. 7(b), RA 8552]

Same for Filipinos provided further that:
a. His/her country has diplomatic relations with the Philippines
b. Has been living in the Philippines for 3 continuous years prior to the filing of application and
maintains such residence until the decree is entered
Note: absences not exceeding 60 days per 1 year for professional, business, or emergency
reasons are allowed
c. Has been certified by his/her diplomatic or consular office or any appropriate government agency
that he/she has the legal capacity to adopt in his/her country
d. His/her government allows the adoptee to enter his/her country as his/her adoptee and reside
there permanently as an adopted child
e. Has submitted all the necessary clearances and such certifications as may be required
Requirements of residency and certification of legal capacity may be waived under

the following circumstances:
a. Adopter is a former Filipino Citizen who seeks to adopt a relative within the 4th degree of
consanguinity or affinity.
b. Adopter seeks to adopt the legitimate child of his/her Filipino spouse
c. Adopter is married to a Filipino Citizen and seeks to adopt jointly with his/her spouse a relative
within the 4th degree of consanguinity or affinity of the Filipino spouse
● Note: Requirements may not be waived for an alien married to a former Filipino
3. Guardians [Sec. 7(c), RA 8552]

With respect to their wards, after the termination of the guardianship and clearance of his/her
accountabilities.
General Rule: Husband and wife must jointly adopt

Exception [Sec. 7]:
a. One spouse seeks to adopt the legitimate child of the other
b. One spouse seeks to adopt his own illegitimate child, provided that the other spouse has signified their
consent thereto
c. Spouses are legally separated from each other
b. Who may be adopted

Those who can be adopted [Sec. 8, RA 8552]:
1. Minor (below 18) who has been administratively or judicially declared available for adoption
2. Legitimate son/daughter of one spouse by another
3. Illegitimate son/daughter by a qualified adopter to improve the child’s status to that of legitimacy
4. A person of legal age if, prior to the adoption, said person has been consistently considered and
treated by the adopter(s) as his/her child since minority
5. A child whose previous adoption has been rescinded
6. A child whose biological or adoptive parent(s) has died, provided that no proceedings shall be
initiated within 6 months from the time of death of said parent(s)
Exceptions to the Requirement of a Certification that the Child is Available for Adoption
[Sec. 4, RA 8552]:
1. Adoption of an illegitimate child by his/her biological parent;
2. Adoption of a child by his/her stepparent;
3. Adoption by a relative within the 4th civil degree by consanguinity or affinity
Persons whose written consent is necessary for adoption [Sec. 9, RA 8552]

1. The prospective adoptee if 10 years or older

53
2. The prospective adoptee’s biological parents, legal guardian or the government instrumentality or
institution that has custody of the child
3. The prospective adopters’ legitimate and adopted children who are 10 years or older
4. The prospective adopters’ illegitimate children, if any, who are 10 years or older and living with them
5. The spouse, if any, of the person adopting or to be adopted.
Note: A decree of adoption shall be effective as of the date the original petition was filed. It also applies in
case the petitioner dies before the issuance of the decree of adoption to protect the interest of the adoptee.
[Sec. 13, RA 8552]
Foundlings
Foundling shall refer to a deserted or abandoned infant or a child found, with parents, guardian, or relatives
being unknown, or a child committed in an orphanage or charitable or similar institution with unknown
facts of birth and parentage and registered in the Civil Register as a foundling. [Sec. 3(h), Rules And
Regulations To Implement The Domestic Adoption Act Of 1998]
Who may not adopt

Those who may not adopt [Art. 184, FC, amended by RA 8552]:
1. The guardian, with respect to the ward, prior to the approval of the final accounts rendered upon the
termination of the guardianship
2. Any person convicted of a crime of moral turpitude
c. Rights of an adopted child
1. Parental Authority [Sec. 16, RA 8552]

 Except in cases where the biological parent is the adopter’s spouse, all legal ties between biological
parent and adoptee shall be severed, and the same shall then be vested on the adopters.
 The general effect of the adoption decree is to transfer to the adopting parents the parental
authority of the parents by nature, as if the child had been born in lawful wedlock. [Tolentino]
 The relationship established by adoption is limited to the adopting parent and does not extend to
his other relatives, except as expressly provided by law. [Tolentino]
 The law does not prohibit the biological parent(s) from entering an agreement with the adopters
on post adoption visitation. Neither do our laws compel the adopters to grant visitation rights if
such is not beneficial to the child. [Aguiling-Pangalangan]
2. Legitimacy [Sec. 17, RA 8552]

 The adoptee shall be considered the legitimate son/daughter of the adopters for all intents and
purposes, and as such is entitled to all rights and obligations provided by law to legitimate children
born to them without discrimination of any kind. The adoptee is entitled to love, guidance, and
support in keeping with the means of the family.
3. Succession [Sec. 18, RA 8552]

In legal and intestate succession, the adopter and the adoptee shall have reciprocal rights of succession
without distinction from legitimate filiation. However, if the adoptee and his/her biological parents had left
a will, the law on testamentary succession shall govern.
Legal or intestate succession to the estate of the adopted shall be governed by the following
rules:
a. Legitimate and illegitimate children, descendants and the surviving spouse of the adoptee shall inherit in
accordance with the ordinary rules of legal/intestate succession.
b. When the surviving spouse OR illegitimate children AND adopters concur, they shall inherit on a 50-50
basis.
c. When the surviving spouse AND illegitimate children AND adopters concur, they shall inherit on a 1/3-
/1/3-1/3 basis.
d. When only adopters survive, they shall inherit 100% of the estate.

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e. When only collateral blood relatives survive, ordinary rules of legal or intestate succession shall apply.
[Art. 190 (as amended), FC]
Between adoptee and adopter

 The adopter and adoptee have reciprocal rights of succession without distinction from legitimate
children in legal and intestate succession. [Sec. 18, RA 8552]
Between adoptee and adopter’s relatives

 The relationship created by adoption is exclusively between the adopter and the adopted. Hence,
the adopted child has no right to inherit from the relatives of his adopted parents. [Aguiling-
Pangalangan]
 While an adopted child has the same rights as a legitimate child, these rights do not include the
right of representation. The relationship created by the adoption is between only the adopting
parents and the adopted child and does not extend to the blood relatives of either party. [Sayson v.
CA, supra]
Between adoptee and biological parents

One effect of adoption is that the adopted shall remain an intestate heir of his parents and other blood
relatives. [Art. 189, FC]
 Since many biological parents relinquish their child for adoption by reason of poverty or emotional
unpreparedness, their biological child should not be prevented from inheriting if they were able to
improve their lot. There is nothing that precludes the biological parents to give their biological child
his or her rightful share in their last will and testament. [Aguiling-Pangalangan]
4. Name [Art. 365, CC.]

 An adopted child shall bear the surname of the adopter.
 While an effect of adoption is that the adoptee shall bear the surname of the adopter, the change of
surname of the adopted child is mor an incident rather than the object of adoption proceedings.
The purpose of adoption is to effect a new status of relationship between the child and his or her
adoptive parents, and the change of name is more of an incident only than the object of the
proceeding. [Republic v. CA and Wong, G.R. No. 97906 (1992)]
 Sec. 13 of RA 8552 allows the change of first name to be instituted in the same proceeding as the
adoption: “the decree of adoption shall state the name by which the child is to be known.”
 The law is silent as to what middle name the adoptee may use but the SC has held that an adoptee
is entitled to all the rights provided by law to a legitimate child, including the right to bear the
surname of her father and mother. [In re: Adoption of Stephanie Nathy Astorga Garcia, G.R. No.
148311 (2005)]
5. Nationality
 Adoption does not confer citizenship of the adopter to the adopted. Under Sec. 3, Art. IV of the
Constitution, Philippine citizenship may be lost/acquired [only] in the manner provided by law.
The adoption of an alien is not a means of acquiring Philippine citizenship. A Filipino adopted by
an alien does not lose his Philippine citizenship.
 The right to confer citizenship belongs to the State (political) and cannot be granted by a citizen
through adoption. Adoption creates a relationship between the adopter and adoptee, not between
the State and the adoptee. [Tolentino]
d. Instances and effects of rescission

Adoptee may file action for rescission, with the assistance of DSWD if he/she is a minor or over 18 but
incapacitated, based on the following grounds [Sec. 19, RA 8552]:
1. Repeated physical and verbal maltreatment by adopters despite having undergone counseling
2. Attempt on life of adoptee
3. Sexual assault or violence
4. Abandonment or failure to comply with parental obligations

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Adoption is a privilege that is governed by the state’s determination on what it may deem to be for the best
interest and welfare of the child, and as a corollary, a right of action given by statute may be taken away any
time before it has been exercised. [Lahom v. Sibulo, G.R. No. 143989 (1992)]
Adoption, being in the best interest of the child, shall not be subject to rescission by the adopter. However,
the adopter may disinherit the child based on causes enumerated in Art. 919 of CC:
1. Conviction of an attempt on the life of the adopter
2. Having accused, without grounds, the adopter of a crime punishable by imprisonment for more than 6
years
3. Conviction of adultery/concubinage with the adopter’s spouse
4. Having caused the adopter to make or change a will by force, intimidation or undue influence
5. Refusal without just cause to support the adopter
6. Maltreatment of the adopter by word/deed
7. Living a dishonorable/disgraceful life
8. Conviction of a crime which carries with it the penalty of civil interdiction
Effects of Rescission [Sec. 20, RA 8552]:

1. Restoration of parental authority of the adoptee’s biological parent(s) OR the legal custody of the
Department if the adoptee is a minor or incapacitated.
2. Extinguishing of the reciprocal rights and obligations of the adopters and adoptee.
3. Cancellation of the new birth certificate of the adoptee as ordered by the court and restoration of the
adoptee’s original birth certificate.
4. Reverting successional rights to its status prior to adoption but not only as of the date of judgment of
judicial rescission.
5. Vested rights acquired prior to judicial rescission shall be respected.
Note: Rescission contemplates a situation where the adoption decree remains valid until its termination.
2. Inter-country adoption (RA 8043)

Inter-Country Adoption refers to the sociolegal process of adopting a Filipino child by a foreigner or a
Filipino citizen permanently residing abroad where the petition is filed, the supervised trial custody is
undertaken, and the decree of adoption is issued outside the Philippines.
a. When allowed
No child shall be matched to a foreign adoptive family unless it can be satisfactorily shown that the child
cannot be adopted locally [Sec. 11, RA 8043].
b. Who may adopt

Sec. 9. Who May Adopt. — An alien or a Filipino citizen permanently residing abroad may file an
application for inter-country adoption of a Filipino child if he/she:
(a) is at least twenty-seven (27) years of age and at least sixteen (16) years older than the child to be
adopted, at the time of application unless the adopter is the parent by nature of the child to be adopted or
the spouse of such parent:
(b) if married, his/her spouse must jointly file for the adoption;
(c) has the capacity to act and assume all rights and responsibilities of parental authority under his
national laws, and has undergone the appropriate counseling from an accredited counselor in his/her
country;
(d) has not been convicted of a crime involving moral turpitude;
(e) is eligible to adopt under his/her national law;
(f) is in a position to provide the proper care and support and to give the necessary moral values and
example to all his children, including the child to be adopted;
(g) agrees to uphold the basic rights of the child as embodied under Philippine laws, the U.N. Convention
on the Rights of the Child, and to abide by the rules and regulations issued to implement the provisions of
this Act;

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(h) comes from a country with whom the Philippines has diplomatic relations and whose government
maintains a similarly authorized and accredited agency and that adoption is allowed under his/her
national laws; and
(i) possesses all the qualifications and none of the disqualifications provided herein and in other
applicable Philippine laws.
c. Who may be adopted

1. Only a legally-free child may be the subject of inter-country adoption [Sec. 8].
A legally-free child is one who has been voluntarily or involuntarily committed to the DSWD of the
Philippines, in accordance with the Child and Youth Welfare Code [Sec. 3(f)].
2. A Filipino child [Sec. 3(a)]
3. Below 15 years old [Sec. 3(b)]
In order that such child may be considered for placement, the following documents must be submitted to
the Board:
1. Child study
2. Birth Certificate / Foundling Certificate
3. Deed of Voluntary Commitment / Decree of Abandonment / Death Certificate of parents
4. Medical Evaluation / History
5. Psychological Evaluation, if necessary
6. Recent photo of the child [Sec. 8]
Inter-Country Adoption Procedure

1. Pre-Adoptive Placement Costs
The Inter-Country Adoption Board shall also collect fees, charges, and assessments [Sec. 13].
2. Venue for Filing Applications

Applications shall be filed either with:
a. The Philippine Regional Trial Court having jurisdiction over the child, or with
b. The Board, through an intermediate agency (governmental or accredited agency) in the country of the
prospective adoptive parents [Sec. 10].
3. Family Selection / Matching Process

The Board shall ensure that inter-country adoption is done in the best interest of the child [Sec. 7]
 The matching of the child with an applicant involves three stages: (1) pre-matching, (2) matching
conference, and (3) post-matching conference [Sec. 37, RA 8043 Amended IRR]. Before the Board
approves the matching proposal, no matching arrangement shall be made between the applicant
and the child’s parents/guardians or custodians concerning a particular child, except in cases of
adoption of a relative or in cases where the child’s best interests is at stake [Sec. 38, RA 8043
Amended IRR]. This is to preserve the integrity of the adoption proceedings.
4. Applicant’s Acceptance
 Once the matching proposal is approved, a notice of matching shall be sent to the concerned Central
Authority or foreign adoption agency within five (5) days.
 The applicant/s shall notify the Central Authority or Foreign Adoption Agency (FAA) in writing of
their decision on the matching proposal within fifteen (15) working days from receipt of said
proposal.
 If the applicant/s needs additional information about the child and/or they need more time to make
a decision, an extension of thirty (30) working days may be granted. [Sec. 37, RA 8043 Amended
IRR]
5. Pre-Departure Preparation of the Child

 The concerned Child Placing Agency shall prepare the child for his/her placement to minimize the
anxiety and trauma due to separation from persons with whom the child may have formed
attachments. [Sec. 41, RA 8043 Amended IRR]

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6. Physical Transfer of the Child
 For not later than twenty (20) working days after the issuance of the child’s visa, the adoptive
parents or anyone of them shall personally fetch the child from the Philippines. The applicant shall
stay in the country with the child for at least five (5) days to allow bonding among them.
 The unauthorized failure to do so may result in the cancellation of the Placement Authority. [Sec.
42, RA 8043 Amended IRR]
7. Trial Custody
 Trial custody begins upon the physical transfer of the child to the applicant who, as custodian, shall
exercise substitute parental authority over the child. [Sec. 44, RA 8043 Amended IRR]
 The trial custody shall last for six (6) months during which the Central Authority and/or the FAA
shall be responsible for the pre-adoptive placement, care and family counseling of the child. [Sec.
45, RA 8043 Amended IRR]
 Any serious ailment, injury or abuse of the child from the adoptive parent(s) or from other
household members or the adoptive parent(s) suffer from any serious ailment or injury that will
make the adoption untenable shall be reported to the Board. In the event that all efforts to restore
the parent-child relationship between the child and applicant/s fail, the placement may be
terminated and the child may be given a new placement or repatriated. [Secs. 46, 48, 49, RA 8043
Amended IRR]
8. Petition for Adoption

If a satisfactory pre-adoptive relationship is formed between the applicant/s and the child, the Board shall
transmit an Affidavit of Consent to the Adoption. The Central Authority and/or the FAA shall file the
petition for adoption of the child to the proper court or agency in accordance with their national law. [Secs.
50 and 51, RA 8043 Amended IRR]
9. Decree of Adoption
A copy of the final Decree of Adoption or its equivalent shall be transmitted by the Central Authority and/or
the FAA to the Board within one (1) month after its issuance. [Sec. 52, RA 8043 Amended IRR]
DOMESTIC ADOPTION vs. INTER-COUNTRY ADOPTION
I. Support
What it comprises
Support consists of everything indispensable for sustenance, dwelling, clothing, medical attendance,
education and transportation, in keeping with the financial capacity of the family [Art. 194(1), FC].
a. Education includes a person’s schooling or training for some profession, trade or vocation, the
right to which shall subsist beyond the age of majority [Art. 194, FC].
b. Transportation includes expenses in going to and from school, or to and from place of work [Art.
194, FC].
Who are obliged to give support

Those obliged to support each other are:
a. Spouses,
b. Legitimate ascendants and descendants,
c. Parents and their children (legitimate and illegitimate) and the children of the latter (legitimate and
illegitimate),
d. Legitimate brothers and sisters, whether of full or half-blood; [Art. 195, FC]
e. Illegitimate brothers and sisters, whether of full or half-blood
Except when the need for support of one (who is of age) is due to a cause imputable to his/her fault
or negligence [Art. 196, FC]
Mutual Obligation to Support of Spouses [Arts. 142, 143, FC]

 A wife’s right to support depends upon her status as such.

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 A wife is entitled to expenses of the litigation, including attorney’s fees.
 If a wife is forced to leave the conjugal home for a justifiable cause, she is entitled to separate
maintenance.
 In an action by the wife against the husband, the court may grant alimony pendente lite.
Note: Both legitimate and illegitimate children are entitled to support. The only difference is the source of
support which, for illegitimate children, is the parent’s separate properties. Where the illegitimate parent
is legally married to another person, their CPG or ACP cannot answer for support for the illegitimate child
of one of them unless the parent has no adequate separate property, in which case, support will be taken
from the CPG or ACP subject to reimbursement [Arts. 122, 197, FC].
Source of support
CPG or ACP shall answer for the support of the:
(1) spouse,
(2) their common children, and
(3) the legitimate children of their spouse [Arts. 94 and 121, FC].
The separate property of the obligor shall answer for the support of the:
(1) Legitimate ascendants,
(2) (all other) descendants, whether legitimate or illegitimate, and
(3) Brothers and sisters, whether legitimate or illegitimately related.
If no separate property, the ACP/CPG (if financially capable) shall advance the support, to be deducted from
the obligor’s share upon liquidation of such regime [Art. 197, FC].
Order of support
Art. 199. Whenever two or more persons are obliged to give support, the liability shall devolve upon the
following persons in the order herein provided:
(1) The spouse;
(2) The descendants in the nearest degree;
(3) The ascendants in the nearest degree; and
(4) The brothers and sisters.
The order of liability among ascendants and descendants would be:

(1) Legitimate children and descendants,
(2) Legitimate parents and ascendants, and
(3) Illegitimate children and their descendants [Tolentino].
Example: Even if the parents-in-law were the ones who called for the physician’s services for the childbirth
of their daughter-in-law, it is the woman’s husband who is bound to pay the fees due to the physician [Pelayo
v. Lauron, G.R. No. L-4089 (1909)].
In Case of Multiple Obligors

 When the obligation to give support falls upon two or more persons, the payment of the same shall
be divided between them in proportion to their resources [Art. 200(1), FC].
 Also, in case of urgent need and by special circumstance, the judge may order only one obligor to
furnish support without prejudice to reimbursement from other obligors of the share due from
them [Art. 200(2), FC].
In Case of Multiple Recipients

If there are multiple recipients and only one obligor, and the latter has no sufficient means to satisfy all
claims:
a. Observe order in Art. 199 as to whose claim shall be satisfied first;
b. But if the concurrent obligees are the spouse and a child subject to parental authority, the child
shall be preferred [Art. 200(3), FC].

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The above preference given to a child under parental authority over the spouse should prevail only if the
person obliged to support pays it out his separate property. So if the support comes from ACP or CPG, the
above rule of preference for the child does not apply. [Tolentino].
Support Given by a Stranger

Art. 206. When, without the knowledge of the person obliged to give support, it is given by a stranger, the
latter shall have a right to claim the same from the former, unless it appears that he gave it without
intention of being reimbursed.
The stranger contemplated in this provision is one who does not have any obligation to support the
recipient. (2164a)
Person Obliged Refuses or Fails to Give Support

Art. 207. When the person obliged to support another unjustly refuses or fails to give support when
urgently needed by the latter, any third person may furnish support to the needy individual, with right of
reimbursement from the person obliged to give support. This Article shall particularly apply when the
father or mother of a child under the age of majority unjustly refuses to support or fails to give support
to the child when urgently needed.
Example: The father who abandoned his two daughters in their tender years, was ordered by the Court to
pay support in arrears. The Court said that the father could not plausibly expect his children of tender years
to demand support from him. In like manner, the uncle who lent money for the education and support of
the two sisters, may exact reimbursement from the father [Lacson v. Lacson, G.R. No. 150644 (2006)].
Amount of support
 The amount of support is in proportion to the means of the provider and the needs of the receiver,
and can be reduced or increased if such circumstances change [Arts. 201 and 202, FC].
 The amount of support is variable and, for this reason, no final judgment on the amount of support
is made as the amount shall be in proportion to the resources or means of the giver and the
necessities of the recipient [Gotardo v. Buling, G.R. No. 165166 (2012)].
Contractual Support or That Given By Will

The excess in amount beyond that required for legal support shall be subject to levy on attachment or
execution [Art. 208, FC].
Reason: The amount of support agreed upon in the contract or given in the will can be more than what the
recipient needs [Sempio-Diy].
Furthermore, contractual support shall be subject to adjustment whenever modification is necessary due to
changes in circumstances manifestly beyond the contemplation of the parties [Art. 208, FC].
Manner and time of payment

Art. 203. The obligation to give support shall be demandable from the time the person who has a right to
receive the same needs it for maintenance, but it shall not be paid except from the date of judicial or extra-
judicial demand.
Support pendente lite may be claimed in accordance with the Rules of Court.
Payment shall be made within the first five days of each corresponding month or when the recipient dies,
his heirs shall not be obliged to return what he has received in advance.
 Payment of alimony is demandable from the moment the necessity for it arises and is payable from
the time of extrajudicial demand. Unless support is demanded, it is presumed that such necessity
does not exist.
 Support in arrears may be subject to compromise. The Court may consider whether the support is
no longer indispensable for the recipient's sustenance [Tolentino].

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Two Options to Fulfill Obligation to Give Support
a. Payment of the amount; or
b. Receiving and maintaining the recipient in the home of the provider
Requisites:
1. The obligor has his own home or domicile, and
2. There is no moral or legal reason which prevents the recipient from living in the obligor’s home or
domicile [Art. 204, FC].
Renunciation and termination

The obligation of spouses to mutual support lies on the existence of marriage bonds. Once the marriage has
been declared null, this obligation ceases.
 The Court held that the validity of marriage can be collaterally attacked in an action for support.
Although the suit is not instituted to directly address the issue of validity, the Court deems it
essential to the determination of the issue on support. [De Castro v. Assidao-De Castro, G.R. No.
170172 (2008)]
 In case of separation in fact between husband and wife, the spouse who leaves the conjugal home
or refuses to live therein, without just cause, shall not have the right to be supported [Art. 100(1),
FC].
 Under Art. 194, FC, the obligation to support a recipient’s education may continue even after the
person entitled has reached the age of majority.
 However, the Court recognizes that although the duty to support is a continuing one, the child’s
right to support and the parent’s right to custody and services are reciprocal: the father, in return
for maintenance and support may establish and impose reasonable regulations for his child. In case
a child voluntarily abandons the parent’s home for the purpose of avoiding parental discipline and
restraint, that child forfeits the claim to support. [Roe v. Doe, 324 N.Y.S. 2d 71 (1971)]
Support pendente lite

Pending legal separation or annulment, and for declaration of nullity, support pendente lite for spouses and
children will come from the ACP/CPG. After final judgment granting the petition, mutual support
obligation between spouses ceases. However, in legal separation, the court may order the guilty spouse to
give support to the innocent spouse. [Art. 198, FC]
Note: In Art. 100(1), FC, de facto separation does not affect the ACP and the CPG, except that the spouse
who leaves the conjugal home without just cause shall not be entitled to support.
Procedure in applications for support

Petitions for support and/or acknowledgement may be filed with Family Courts which have original
jurisdiction over such cases [Sec. 5, RA 8369].
In cases involving violence among immediate family members living in the same household, the court may
order the temporary custody of children in all civil actions for their custody. The court may also order
support pendente lite, including deduction from the salary and use of conjugal home and other properties
in all civil actions for support. [Sec. 7, RA 8369]
A woman or her child experiencing violence may also be granted a protection order which may include
directing the respondent to provide support to the women and/or her child if entitled to legal support. An
appropriate percentage of the income or salary of the respondent shall be withheld regularly by the
respondent’s employer for it to be automatically remitted to the woman. Failure to remit and/or withhold
or any delay in the remittance of support without justifiable cause shall render the respondent or his
employer liable for indirect contempt of court. [Sec. 8(g), RA 9262]
In case the filiation of a child claiming for support is disputed, the rules on proving filiation apply. An order
for support must be issued only if paternity or filiation is established by clear and convincing evidence; the

61
reason being that such order may create an unwholesome situation in the lives of the parties. [Perla v.
Baring, G.R. No. 172471 (2012)]
J. Parental authority
1. General Provisions
What Comprises Parental Authority [Art. 209, FC]

• Caring for and rearing of children for civic consciousness and efficiency, and;
• Development of the moral, mental, and physical character and well-being of children.
What Characterizes Parental Authority [Art. 210, FC]

General Rule: Parental authority is not renounceable and nontransferable.
Exception: In cases provided by law.
Who Exercises Parental Authority [Arts. 211-213, FC]

General Rule: Joint exercise by the father and the mother of a child [par. 1, Art. 211, FC].
Exceptions:
• In case of disagreement, the father’s decision prevails [par. 2, Art. 211, FC].
o Exception to the exception: If there is judicial order to the contrary.
• In case of absence or death of either parent, the parent present or alive [Art. 212, FC].
• In case of separation of the parents, the parent designated by the court [Art. 213, FC].
When Terminated [Art. 228, FC]

• Art. 228, FC
o Upon the death of the parents;
o Upon the death of the child;
o Upon the emancipation of the child;
• Art. 229, FC
o Upon adoption of the child;
o Upon appointment of a general guardian;
o Upon judicial declaration of abandonment of the child, in a case filed for the purpose;
o Upon the final judgment of a competent court divesting the party concerned of parental authority,
or;
o Upon judicial declaration of absence or incapacity of the person exercising parental authority
2. Substitute Parental Authority
When Substitute Parental Authority is Exercised [Art. 214, FC]

In case of death, absence, or unsuitability of the parents
Who Exercises Substitute Parental Authority (in order)

• The surviving grandparent [Art. 214, FC].
Exception: When several survive, the one designated by the court, taking into account all relevant
considerations [Art. 214, FC].
• The oldest brother or sister, over 21 years of age [Art. 216, FC].
• The child’s actual custodian, over 21 years of age [Art. 216, FC].
3. Special Parental Authority
Who Exercises Special Parental Authority [Art. 218, FC]

• The school (its administrators and teachers), or;
• The individual, entity, or institution engaged in child care
When is Special Parental Authority Exercised [Art. 218, FC]

• While the child is under their supervision, instruction, or custody

62
• During all authorized activities, whether inside or outside the premises of the school, entity, or institution
Difference Substitute Special

Who Exercises Grandparents, oldest sibling, or Schools (administrators and
court-appointed guardian teachers) or individuals, entities
engaged in child care
When Exercised Only in case of death, absence, or Concurrent with parental
unsuitability of parents authority or substitute parental
authority
How Liable Subsidiarily liable for damages Principally and solidarily liable
caused by the minor for damages caused the minor’s
acts or omissions while under
their custody, supervision, or
instruction
4. Effect of parental authority over the child’s person
Rights and Duties of Persons Exercising Parental Authority upon the Person of a Child [Art.
220, FC].
1. To keep the children in their company, to support, educate and instruct them by right precept and good
example, and to provide for their upbringing in keeping with their means;
2. To give the children love and affection, advice and counsel, companionship and understanding;
3. To provide the children with moral and spiritual guidance, inculcate in them honesty, integrity, self-
discipline, self-reliance, industry and thrift, stimulate their interest in civic affairs, and inspire in them
compliance with the duties of citizenship;
4. To enhance, protect, preserve, and maintain the children’s physical and mental health at all times;
5. To furnish the children with good and wholesome educational materials, supervise their activities,
recreation and association with others, protect them from bad company, and prevent them from having
habits detrimental to their health, studies, and morals;
6. To represent the children in all matter affecting their interests;
7. To demand from the children respect and obedience;
8. To impose discipline on the children as may be required under the circumstances, and;
9. To perform such other duties as are imposed by law upon parents and guardians.
Civil Liability [Art. 221, FC]

Parents and other persons exercising parental authority shall be civilly liable for the injuries and damages
caused by the acts or omissions of their unemancipated children living in their company and under their
personal authority subject to the appropriate defenses provided by law.
Disciplinary Measures over the Child [Art. 223, FC]

Persons exercising parental authority over a child may petition the proper court of the place where the child
resides for an order providing for disciplinary measures over the child.
The child shall be entitled to the assistance of counsel, either of his choice or appointed by the court, and a
summary hearing shall be conducted wherein the petition and the child shall be heard.
However, if in the same proceeding the court finds the petitioner at fault, irrespective of the merits of the
petition, or when the circumstances so warrant, the court may also order the deprivation or suspension of
parental authority or adopt such other measures as it may deem just and proper.
For Persons Exercising Substitute Parental Authority [Art. 233, par. 1, FC]
The person exercising substitute parental authority shall have the same authority over the person of the
child as the parents.

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5. Effects of parental authority over the child’s property
Joint Legal Guardianship [Art. 225, par. 1, FC].

The father and the mother shall jointly exercise legal guardianship over the property of their unemancipated
child without the necessity of a court appointment. In case of disagreement, the father’s decision shall
prevail.
Exception: Unless there is judicial order to the contrary.
Nature of Administration
 The property of the unemancipated child earned or acquired with his work or industry or by
onerous or gratuitous title shall belong the child in owner and shall be devoted exclusively to the
latter’s support and education, unless the title or transfer provides otherwise.
 The right of the parents over the fruits and incomes of the child’s property shall be limited primarily
to the child’s support and secondarily to the collective daily needs of the family [Art. 226, FC].
Bonds
Where the market value of the property or the annual income of the child exceeds P50,000, the parent
concerned shall be required to furnish a bond in such amount as the court may determine, but not less than
ten per centum (10%) of the value of the property or annual income, to guarantee the performance of the
obligations prescribed for general guardians [Art. 225, par. 2, FC].
The petition shall be considered as a summary special proceeding, with the ordinary rules on guardianship
being merely suppletory.
Except the following, in which case the ordinary rules on guardianship shall apply:
1. When the child is under substitute parental authority;
2. When the guardian is a stranger, or;
3. A parent has remarried.
Trusts
 If the parents entrust the management or administration of any of their properties to an
unemancipated child, the net proceeds of such property shall belong to the owner.
 The child shall be given a reasonably monthly allowance in an amount not less than that which the
owner would have paid if the administrator were a stranger, unless the owner grants the entire
proceeds to the child. In any case, the proceeds thus given in whole or in part shall not be charged
to the child’s legitime.
6. Suspension or termination of parental authority
When Permanently Terminated [Arts. 228-229, FC].

1. Upon the death of the parents;
2. Upon the death of the child, or;
3. Upon the emancipation of the child.
Unless subsequently revived by final judgment, there is permanent termination [Art. 229,
FC]:
1. Upon adoption of the child;
2. Upon appointment of a general guardian;
3. Upon judicial declaration of abandonment of the child in a case filed for the purpose;
4. Upon final judgment of a competent court divesting the party concerned of parental authority, or;
a. Also mandatory if the person exercising parental authority has subjected the child or allowed him
to be subjected to sexual abuse [Art. 232, FC].
5. Upon judicial declaration of absence or incapacity of the person exercising parental authority.
When Suspended [Arts. 230-231, FC].

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1. Upon conviction of the parent or the person exercising the same of a crime which carries with it the
penalty of civil interdiction;
2. Upon final judgment of a competent court in an action filed for the purpose or in a related case, if the
parent or the person exercising the same:
a. Treats the child with excessive harshness or cruelty;
b. Gives the child corrupting orders, counsel or example;
c. Compels the child to beg, or;
d. Subjects the child or allows him to be subjected to acts of lasciviousness
e. Is culpably negligent [Art. 231, par. 2, FC].
When Reinstated [Arts. 230-231, FC].

1. Automatically upon service of penalty (civil interdiction).
2. Automatically upon pardon or amnesty of the offender.
3. By judicial order, if the court finds that the cause therefore has ceased and will not be repeated [Art. 231,
par. 4, FC].
Prohibition for Persons Exercising Special Parental Authority [Art. 233, FC].
In no case shall the school administrator, teacher or individual engaged in child care and exercising special
parental authority inflict corporal punishment upon the child.
K. Emancipation
When Emancipation Takes Place [Art. 234, FC, as amended by R.A. No. 6089]
By attainment of majority, at the age of eighteen years
Effects of Emancipation
General:
• Termination of parental authority over the person and property of the child emancipated [Art. 228 [3],
FC]
• The person emancipated becomes qualified and responsible for all acts of civil life.
Exception:
• Persons possessing parental authority over the emancipated individual are needed to give their respective
parental consent until the emancipated individual is at the age of twenty-one.
• Nothing shall be construed to derogate the duty and responsibility of parents and guardians for children
and wards below twenty-one years of age mentioned in the second and third paragraphs of Article 2180 of
the Civil Code.
• Other exceptions established by existing laws in special cases.
L. Retroactivity of the Family Code

Art. 256. This Code shall have retroactive effect insofar as it does not prejudice or impair vested or
acquired rights in accordance with the Civil Code or other laws.
GR: This Code shall have retroactive effect

EXP: When it prejudices or impair vested or acquired rights in accordance with the Civil Code or other laws.
III. SUCCESSION
A. General provisions
Succession is a mode of acquisition by virtue of which the property, rights and obligations, to the extent
of the value of the inheritance, of a person are transmitted through his death to another or others either by
his will or by operation of law. [Art. 774, CC]
Kinds of Succession:
a. Testamentary
b. Legal or Intestate

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c. Mixed
d. Compulsory
Scope of Inheritance
General rule:
a. All the property, rights and obligations of a person which are not extinguished by his death [Art. 776, CC]
b. Not only the property and the transmissible rights and obligations existing at the time of his death, but
also those which have accrued thereto since the opening of the succession [Art. 781, CC]
Exceptions:
a. Rights and obligations extinguished by death and are not transmissible [Art. 1311, CC]
1. Intransmissible by nature: this refers to rights and obligations which are strictly personal (intuitu
personae)
Examples:
• Those relating to family relations
• Those arising from public law
• Those which involve or require the personal skills, qualifications, characteristics or
circumstances of a particular individual
• Criminal responsibility
2. Intransmissible by stipulation
3. Intransmissible by provision of law
Examples:
• Usufruct [Art. 603, CC]
• Agency [Art. 1919, CC]
• Commodatum [Art. 1939, CC]
b. Monetary debts left by the decedent are intransmissible in the sense that they are paid from the estate
of the decedent and only the net estate or remainder goes to the heirs. If the decedent’s estate is not
sufficient to pay his debts, his heirs cannot be held liable for said debts in their personal capacity [Rule 88-
90, Rules of Court].
Rule on Transmission
General rule: All property rights which have accrued to the hereditary estate since the opening of
succession are transmitted to the heirs [Art. 777, CC].
Rules on Opening of Succession

a. The rights to succession are transmitted from the moment of the death of the decedent. [Art. 777, CC]
Implications of this principle

1. The law in effect at the time of death of the decedent governs the succession [Art. 2236, CC]
2. The heir becomes the owner of his share as well as all fruits which accrue after the death of the
decedent.
3. Upon death of the decedent, heirs may immediately possess, administer and dispose of their
shares in the estate (in the absence of existing debts/claims against the estate);
4. Since succession takes place by operation of law at the moment of the death of the decedent, the
heirs can sue upon the rights of the decedent, without having to be appointed executor or
administrator [Emnace v. CA, G.R. No. 126334 (2001)], and without need of a judicial declaration
of their status as heirs [De Vera v. Galauran, 67 Phil 213 (1939)]. Heirs may also be sued without a
previous declaration of heirship, provided there is no pending special proceeding for the settlement
of estate of the decedent [Gayon v. Gayon, G.R. No. L-28394 (1970)].
5. The possession of hereditary property is deemed transmitted to the heir without interruption
and from the moment of death of the decedent, in case the inheritance is accepted [Art. 533, CC]
6. Estate taxes accrue upon death of the decedent, even if the heirs come into possession only later.

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b. A person may be “presumed” dead for the purpose of opening his succession. In this case, succession is
only of provisional character because there is always a chance that the absentee may still be alive [Arts.
390-391, CC].
Subjects of Succession
a. Decedent – person whose property is transmitted through succession, whether or not he left a will [Art.
775, CC]
○ Testator – a decedent who left a will [Art. 775, CC]
b. Successor – person who succeeds to the property of the decedent.
Kinds of successors
1. Heirs – those who are called to the whole or an aliquot portion of the inheritance either by will or by
operation of law [Art. 782, CC]
● Compulsory Heirs
● Voluntary or Testamentary Heir
● Legal or Intestate Heirs
2. Devisees and Legatees

• Devisees are persons to whom gifts of real property are given by virtue of a will. [Art. 782]
• Legatees are persons to whom gifts of personal property are given by virtue of a will. [Art. 782]
Note: In case of preterition, the distinction between heir and legatee/devisee is significant. Preterition
annuls the institution of heirs. It does not affect the institution of legatees and devisees provided that the
legitimes are not impaired [Art. 854, CC].
Heirs Legatees / Devisees

Represents the juridical personal obligations not Does not represent regardless of the legacy or
extinguished by death device’s value
Succeeds to the remainder of the decedent’s Succeeds only to the determinate thing or quantity
properties after all the debts and all the legacies which is mentioned in the legacy or device
and devices have been paid
Can exist in either testamentary or intestate Can exist only in testamentary succession
succession
B. Testamentary succession
1. Wills
Definition of a will: An act whereby a person is permitted, with the formalities prescribed by law to
control to a certain degree the disposition of his estate to take effect after his death [Art. 783, CC].
KINDS OF WILLS
1. Notarial – an ordinary or attested will, which must comply with the requirements of the law [Arts. 804-
808, CC]
2. Holographic – a will entirely written, dated and signed by the hand of the testator [Art. 810, CC]
CHARACTERISTICS OF WILLS
1. Purely personal
General rule: the making of a will is a strictly personal act. Thus,
a. It cannot be left in whole or in part to the discretion of a third person, or
b. It cannot be accomplished through an agent or attorney.
Exception
What cannot be delegated to 3rd persons What may be entrusted to 3rd persons
a. designation of heirs, devisees and legatees a. designation of person/institution falling under a
b. duration/efficacy of designation class specified by testator

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c. determination of portions, when referred to by b. manner of distribution of property specified by
name [Art. 785, CC] testator [Art. 786, CC]
Note: testator must first specify the class and the

amount of property for proper delegation
2. Free and intelligent [Art. 839, CC] – Execution of a will tainted by any vices affecting the free will of
the testator can cause its disallowance.
3. Solemn or formal – if the formalities of a will required by law are not complied with, it will be
disallowed. [Art. 839, CC]
4. Revocable and ambulatory – will can be revoked at any time before the testator’s death [Art. 828,
CC]
5. Mortis causa – takes effect upon the testator’s death [Art. 783, CC]
6. Individual – prohibition against joint wills [Art. 818, CC]
7. Executed with animus testandi – intent to dispose of the property
8. Executed with testamentary capacity
9. Unilateral act – does not involve an exchange of values or depend on simultaneous offer and
acceptance
10. Dispositive – disposes of property Even in the absence of dispositive provisions, a will disinheriting
a compulsory heir is still a dispositive will because a disinheritance has the effect of disposing the legitime
of the disinherited compulsory heir in favor of other compulsory heirs [Seangio v. Reyes, G.R. Nos. 140371-
72 (2006)].
Exceptions: Non-dispositive wills.

e.g. A will recognizing an illegitimate child
11. Statutory grant – permitted only by law, not a constitutional right
RULES OF CONSTRUCTION AND INTERPRETATION [Arts. 788-795]

Main principle: Testacy is preferred to intestacy. The intent of the testator is paramount and must be given
effect as far as legally possible.
Governing Laws, In General

Aspect of the Will Governing Law
Formal Validity Law in force at the time the will was executed [Art.
795, CC]
Intrinsic Validity Law of decedent’s nationality at the time of his
death [Arts. 16 and 2263, CC]
Aspects of the Will Governed by the National Law of the Decedent:

1. Order of succession;
2. Amount of successional rights;
3. Intrinsic validity of testamentary provisions; and
4. Capacity to succeed [Art. 16, CC]
TESTAMENTARY CAPACITY AND INTENT

Time of Determining Capacity
 Capacity to make a will is determined as of the time of making thereof [Art. 798, CC].

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 Supervening incapacity does not invalidate an effective will. Likewise, a supervening capacity does
not validate the will of an incapable [Art. 801, CC].
Requisites for Capacity to Make a Will

1. The testator must not be expressly prohibited by law to make a will [Art. 796, CC]
2. The testator must be at least 18 years old [Art. 797, CC]
3. The testator must be of sound mind at the time of execution [Art. 798, CC]
Test of soundness of mind: To be of sound mind, the testator must know:

a. The nature of the estate to be disposed of;
b. The proper objects of his bounty;
c. The character of the testamentary act [Art. 799, CC]
General rule: Soundness of mind is presumed [Art. 800, CC]

Exceptions:
a. When the testator, one month or less before the execution of the will, was publicly known to be insane.
[Art. 800, CC]
b. When the testator executed the will after being placed under guardianship or ordered committed, in
either case, for insanity under Rules 93 and 101 of the Rules of Court, and before said order has been lifted.
[Torres v. Lopez, G.R. No. L-25966 (1926); Balane]
FORMS OF WILLS
In General [Art. 804, CC]
1. The will must be in writing
2. It must be in a language or dialect known to the testator
Applicable Laws as to Formal Validity

Applicable Law
Formal Validity Law in force at the time the will was executed [Art.
795, CC]
Place, Forms & Solemnities of a Will Law of the country in which the will was executed
[Art. 17, CC]
Arts. 815-817, CC (summarized in the table below) provide for the various governing laws in these
instances:
1. A will was made in a foreign country by a Filipino [Art. 815]
2. A will was made in a foreign country by an alien [Art. 816]
3. A will was made in the Philippines by an Alien [Art. 817]
Governing Law as to Place of Execution of Will

Testator Place of Execution of Will Governing Law
Philippines Philippine Law [Art. 16, CC]
Outside of the Philippines 1. Philippine Law [Art. 815, CC]
Filipino
2. Law of the country in which it is
executed [Art. 17, CC]
Philippines 1. Philippine Law; or
2. Law of the country of which testator
is a citizen or subject [Art. 817, CC]
Outside of the Philippines 1. Philippine Law [Art. 816, CC]; or
Alien 2. Law of the testator’s country; or
3. Law of the place where the testator
resides; or
4. Law of the country where the will is
executed [Art. 17, CC]

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TTESTED OR NOTARIAL WILLS
Formal requirements for notarial wills
1. Subscribed at the end
2. Attestation clause
3. Marginal signatures
4. Page numbers
5. Acknowledged by a notary public
6. Additional requirements for handicapped testators
7. Subscribed by 3 or more witnesses in the presence of the testator and of one another
Note: Unlike in holographic wills, there is no requirement that an attested will should be dated.
Formal Requirement
Subscription Subscribed at the end of the will by:
a. Testator himself
b. Testator’s name written by a representative in his presence and
under his express direction
Attestation Clause Attested and subscribed by 3 or more credible witnesses in the
presence of the testator and of one another [Art. 805, CC]
The attestation clause shall state the following [par. 3, Art.

805, CC]:
1. Number of pages;
2. The fact that the testator or his representative under his express
direction signed the will and every page in the presence of instrumental
witnesses
3. That the witnesses signed the will and all its pages in the presence of
the testator and of one another.
The signatures of the witnesses must be at the bottom of the attestation

clause [Cagro v. Cagro, G.R. No. L-5826 (1953)].
The notary public cannot be counted as an attesting witness [Cruz v.

Villasor, G.R. No. L-32213 (1973)].
Test of presence: Not whether they actually saw each other sign, but
whether they might have seen each other sign had they chosen to do so
considering their mental and physical condition and position with
relation to each other at the moment of inscription of each signature
[Jaboneta v. Gustilo, G.R. No. 1641 (1906)].
Effect of Omissions: Omissions can be supplied by an examination

of the will itself, without the need of resorting to extrinsic evidence,
will not be fatal and will not prevent allowance of the will.
Marginal Signatures General rule: Testator or his representative shall write his name, and
the witnesses shall sign each and every page except the last page [Art.
805, CC].
Exceptions:
1. When the will consists of only one page
2. When the will consists of only two pages, the first of which contains
all dispositions and is signed at the bottom by the testator and the
witnesses, and the second page contains only the attestation clause
duly signed at the bottom by the witnesses. [Abangan v. Abangan, G.R.
No. L-13431 (1919)]

70
3. The use of thumbprint was allowed [Matias v. Salud, G.R. No. L-
10751 (1958)]
4. The inadvertent failure of one witness to affix his signature to one

page of a testament, due to the simultaneous lifting of two pages in the
course of signing, is not per se sufficient to justify denial of probate.
[Icasiano v. Icasiano, G.R. No. L-18979 (1964)]
Page Numbers All the pages of the will shall be numbered correlatively in letters
placed on the upper part of each page (i.e. Page One of Five Pages).
[Art. 805, CC]
Acknowledged by a notary The certification of acknowledgement need not be signed by the notary
public [Art. 806, CC] in the presence of the testator and the witnesses.
[Javellana v. Ledesma, G.R. L-7179 (1955)]
Additional Requirements for 1. Deaf Mute [Art. 807, CC]
handicapped testators a. Testator must personally read the will; or
b. Testator shall personally designate two persons to read the contents
and communicate it to him in some practicable manner.
2. Blind [Art. 808, CC]

a. The will shall be read to the testator twice – By one of the subscribing
witnesses and by the notary public acknowledging the will.
b. A testator suffering from glaucoma may be considered as legally
blind [Garcia v. Vasquez, G.R. No. L-26615 (1970)]
Subscribed by 3 or more Qualifications [Art. 820, CC]
witnesses in the presence of the 1. Of sound mind
testator and of one another 2. Aged 18 years or over
3. Not blind, deaf or dumb
4. Able to read and write
Disqualifications [Art. 821, CC]

1. Person not domiciled in the Philippines
2. Those who have been convicted of falsification, perjury, or false
testimony.
Creditors may be witnesses [Art. 824, CC].
Supervening incompetency shall not prevent the allowance of the will

[Art. 822, CC].
HOLOGRAPHIC WILLS
Formal Requirements for Holographic Wills

1. In writing [Art. 804, CC]
2. In a language known to the testator [Art. 804, CC]
3. Entirely written, dated and signed in the hand of the testator himself [Art. 810, CC]
Witnesses Required for Probate [Art. 811, CC]

1. At least one witness who knows the handwriting and signature of the testator; explicitly declare that it is
the testator’s
2. If contested – at least 3 of such witnesses
3. In the absence of a competent witness, expert testimony may be resorted to
General rule: The holographic will itself must be presented for probate [Gan v. Yap, G.R. No. L-12190
(1958)]

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Exception: If there is a photostatic copy or xerox copy of the holographic will, it may be presented for
probate [Rodelas v. Aranza, G.R. No. L58509 (1982)]
Additional Dispositions
 In holographic wills, the dispositions of the testator written below his signature must be dated and
signed by him in order to make them valid as testamentary dispositions [Art. 812, CC]
 When a number of dispositions appearing in a holographic will are signed without being dated, and
the last disposition has a signature and date, such date validates the dispositions preceding it,
whatever be the time of prior dispositions. [Art. 813, CC]
Insertion, Cancellation, Erasure Or Alteration [Art. 814, CC]

 Testator must authenticate by his full signature.
 If such change is not authenticated by the testator, such change is considered not made. Thus, “the
will is not thereby invalidated as a whole, but at most only as regards the particular words erased,
corrected, or inserted.” [Kalaw v. Relova, G.R. No. L-40207 (1984), citing Velasco v. Lopez (1903)]
Note, however, that in the case of Kalaw v. Relova, the alteration involved the designation of the testator’s
sole heir. In this case, the holographic Will had only one substantial provision, which was altered by
substituting the original heir with another, but which alteration did not carry the requisite of full
authentication by the full signature of the testator, the effect must be that the entire Will is voided or
revoked for the simple reason that nothing remains in the Will after that which could remain valid.
Effect of Insertion Written by Another Person on the Validity of a Holographic Will

When Made Effect
After the execution, without consent of testator Insertion considered not written. Validity cannot
be defeated by the malice or caprice of a third
person
After execution, with consent Will is valid, insertion is void
Contemporaneous to the execution of the will Will is void because it is not written entirely by the
testator
JOINT WILLS
Elements
1. A single testamentary instrument,
2. Which contains the wills of two or more persons,
3. Jointly executed by them,
4. Either for their reciprocal benefit or for the benefit of a third person.
Filipinos cannot make Joint Wills

Joint wills executed by Filipinos, whether in the Philippines or abroad, are prohibited.
Note: Separate documents, each serving as one independent will (even if written on the same sheet) are not
considered joint wills.
MUTUAL WILLS - This is prohibited under Article 818.

1. Executed pursuant to an agreement between two or more persons,
2. Jointly executed by them,
3. Either for their reciprocal benefit or for the benefit of a third person.
RECIPROCAL WILLS
1. Testators name each other as beneficiaries in their own wills (there are therefore 2 separate documents),
2. Under similar testamentary plans – valid
CODICILS
1. It is a supplement or addition to a will,
2. made after the execution of a will,

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3. and annexed to be taken as a part of the will,
4. by which any disposition made in the original will is explained, added to, or altered.
5. in order that it may be effective, it shall be executed as in the case of a will. [Arts. 825-826, CC]
Note: A codicil must be in the form of a will – can have a notarial codicil attached to a holographic will, and
a holographic codicil attached to a notarial will.
Incorporation by Reference
Note: Not available to holographic wills.
Requisites [Art. 827, CC]

1. The document or paper referred to in the will must be in existence at the time of the execution of the will.
2. The will must clearly describe and identify the same, stating among other things the number of pages
thereof.
3. It must be identified by clear and satisfactory proof as the document or paper referred to therein; and
4. It must be signed by the testator and the witnesses on each and every page, except in case of voluminous
books of account or inventories.
REVOCATION OF WILLS
A will may be revoked by the testator at any time before his death [Art. 828, CC]
Modes of Revocation [Art. 830, CC]

1. By implication of law
EXAMPLE:
i. Preterition [Art. 854, CC];
ii. Legal separation [Art. 63, FC];
iii. Unworthiness to succeed [Art. 1032, CC], et al.);
2. By the execution of a will, codicil or other writing executed as provided in the case of wills (may be total
or partial)
3. By burning, tearing, canceling, or obliterating the will with the intention of revoking it, by the testator
himself, or by some other person in his presence, and by his express direction.
The act contemplating revocation must be done at any time before the death of the testator. The
right of revocation cannot be waived or restricted. [Art. 828, CC]
Note: Even if a holographic will was not intended to be revoked, unless a xerox copy exists, it can no longer
be proved.
Law Governing Revocation [Art. 829, CC]

Place of Revocation Testator’s Domicile Governing Law
Philippines Philippines, or some other country Philippine Law
Philippines (This situation is not 1. Law of Domicile - Philippine law
governed by Art. 829) 2. Law of lace of Revocation
3. Law of Place of Execution of Will
[Balane]
Outside the Philippines Foreign Country 1. Law of the Place of Execution of
Will; or
2. Law of the place in which the
testator had his domicile at the time
of revocation
General Rule: A revocation made in a subsequent will shall take effect, even if the new will should become
inoperative by reason of the incapacity of the heirs, devisees or legatees designated therein, or by their
renunciation. [Art. 832, CC]
Exception: Doctrine of Dependent Relative Revocation [Molo v. Molo, G.R. No. L-2538 (1951)]

73
 The rule that where the act of destruction is connected with the making of another will so as to fairly
raise the inference that the testator meant the revocation of the old to depend upon the efficacy of
the new disposition intended to be substituted, the revocation will be conditional and dependent
upon the efficacy of the new disposition; and if for any reason, the new will intended to be made as
a substitute is inoperative, the revocation fails and the original will remain in full force.
 The failure of the new testamentary disposition upon whose validity the revocation depends is
equivalent to the non-fulfillment of a suspensive condition and hence prevents the revocation.
False Cause/Illegal Cause

 A revocation based on a false cause or illegal cause is null and void [Art. 833, CC].
 It must appear from the will that the testator is revoking because of the cause which he did not
know was false.
Recognition of Illegitimate Child

The recognition of an illegitimate child does not lose its legal effect even though the will wherein it was
made should be revoked [Art. 834, CC].
Principle of Instanter
Revoking clause in the 2nd will is not testamentary in character but operates to revoke the prior will
instanter (immediately) upon the execution of the will containing it. The revocation of the 2nd will does not
revive the 1st will which has already become a nullity.
REPUBLICATION AND REVIVAL
Republication vs. Revival

Republication Revival
 Takes place by an act of the testator  Takes place by operation of law
 Corrects extrinsic and intrinsic defects  Restores a revoked will
Art. 835 Art. 836

Void as to form [Art. 805, CC] Void as to:
1. Non-formal defect
2. Previously revoked
How to Republish: How to Republish:
1. Execute new will 1. Execute new will or codicil
2. Copy out the provisions from the original void 2. Simply make references to old will
will
Reference to original insufficient Reference to original sufficient
ALLOWANCE AND DISALLOWANCE OF WILLS
Probate Requirement: No will shall pass either real or personal property unless it is proved and allowed
in accordance with the Rules of Court. [Art. 838, CC]
Definition of a Probate: A proceeding in rem required to establish the validity of a will and in order to
pass real or personal property. The testator himself may, during his lifetime petition the court having
jurisdiction for the allowance of his will. [Art. 838, CC]
Kinds of Probate
1. Post-mortem: after death
2. Ante-mortem: during the testator’s lifetime
Note: Probate of a will is mandatory.
Matters to be proved in probate:

1. Identity
2. Due Execution

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3. Capacity of the Testator
SCOPE OF PROBATE PROCEEDINGS [Art. 839, CC]

General rule: The probate court cannot inquire into the intrinsic validity of testamentary provisions. Only
the extrinsic validity of such wills may be examined.
Exceptions:
1. When practical considerations demand that the intrinsic validity of the will be resolved: When the will is
intrinsically void on its face (e.g., when there is clearly a preterition) such that to rule on its formal validity
would be a futile exercise [Acain v. IAC, G.R. No. L-72706 (1987)].
2. Claimants are all heirs and they consent, either expressly or impliedly, to the submission of the question
of intrinsic validity to the court [Valera v. Inserto, G.R. No. L-56504 (1987)].
3. Probate court may pass upon the title to a property, but such determination is provisional and not
conclusive, and is subject to the final decision in a separate action to resolve title [Pastor v.CA, G.R. No. L-
56340 (1983)].
4. Probate court may decide on the ownership of a property when the estate contains only one property to
be adjudicated upon [Portugal v. Portugal-Beltran, G.R. No. 155555 (2005)].
Revocation vs. Disallowance

Revocation Disallowance
Voluntary act of the testator Given by judicial decree
With or without cause Must always be for a legal cause
May be partial or total Always total, except when the ground is fraud or
influence which affects only certain portions of the
will
Effect of Final Decree of Probate, Res Judicata on Formal Validity

The probate of a will by the probate court having jurisdiction thereof is usually considered as conclusive as
to its due execution and validity and is also conclusive that the testator was of sound and disposing mind at
the time when he executed the will, and was not acting under duress, menace, fraud, or undue influence,
and that the will is genuine and not a forgery. [Mercado v. Santos, G.R. No. 45629 (1938)]
Grounds for Denying Probate

1. If the signature of the testator was procured by fraud;
2. If it was procured by undue and improper pressure and influence, on the part of the beneficiary or
some other person;
3. If the testator acted by mistake or did not intend that the instrument he signed should be his will
at the time affixing his signature thereto;
4. If the testator was insane or otherwise mentally incapable of making a will at the time of its
execution;
5. If the formalities required by law have not been complied with; or
6. If it was executed through force or under duress, or the influence of fear, or threats. [Art. 839, CC]
2. Institution of heirs (including declaration of heirship as decided in Treyes v. Larlar, G.R.

No. 232579. September 8, 2020)
A will shall be valid even though it —

a. should not contain an institution of an heir; or
b. such institution should not comprise the entire estate; or
c. the person so instituted should not accept the inheritance or be incapacitated to succeed.
In such cases, the testamentary dispositions made in accordance with law shall be complied with and the
remainder of the estate shall pass to the legal heirs. [Art. 841, CC]

75
Extent of Grant [Art. 842, CC]
Freedom of disposition depends upon the existence, kind and number of compulsory heirs.
a. No compulsory heirs – Testator has full power of disposition
b. With compulsory heirs – Testator cannot disregard the rights of the compulsory heirs. Testator may
dispose of the free portion of his estate only.
Effect of Predecease of Heir [Art. 856, CC]

Any heir who dies before the testator or is incapacitated to succeed or renounces the inheritance transmits
no rights of the testator to his own heirs. This is without prejudice to the rights of representation
[Tolentino].
Manner of Distribution
1. Heirs instituted without designation of shares shall inherit in equal parts [Art. 846, CC]
2. If the institution pertains to some heirs individually and others collectively, the presumption is that all
are individually instituted [Art. 847, CC]
3. If siblings are instituted (whether full or half-blood), the presumption is that the inheritance is to be
distributed equally [Art. 848, CC]. This is different from the rules of distribution in intestate succession.
4. If parents and children are instituted, they are presumed to have been instituted simultaneously and not
successively [Art. 849, CC]
Note: By “unknown,” the Code actually means persons who could not be ascertained; a disposition in favor
of a stranger is valid [Tolentino].
Preterition
Not named Although named
He is not named in the will. He is neither:
1. Instituted as an heir
2. Expressly disinherited
3. Assigned any part of the estate
Thus: tacitly deprived of his right to legitime
Concept [Art. 854, CC]

1. There must be a total omission of one, some or all of the heir/s from the inheritance. [Seangio v. Reyes,
G.R. Nos. 140371-72 (2006)]
2. The omission must be that of a compulsory heir.
3. The compulsory heir omitted must be of the direct line.
4. The omitted compulsory heir must be living at the time of the testator’s death or must at least have been
conceived before the testator’s death.
No Preterition
 If the heir in question is instituted in the will but the portion given to him by the will is less than
his legitime – there is no preterition. [Reyes v. Barretto-Datu, G.R. No. L-17817 (1967)]
 If the heir is given a legacy or devise – there is no preterition. [Aznar v. Duncan, G.R. No. L-24365
(1966)]
 If the heir had received a donation inter vivos from the testator – the better view is that there is no
preterition. The donation inter vivos is treated as an advance on the legitime under Articles 906,
909, 910 and 1062.
 The remedy, if the value of inheritance, legacy or devise, or donation inter vivos is only for
completion of his legitime under Articles 906 and 907.
Distinguished from Disinheritance

Preterition Disinheritance
 Tacit deprivation of a compulsory heir of  Express deprivation of a compulsory heir
his legitime of his legitime
 Always voluntary

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 May be voluntary but the presumption of  For some legal cause
law is that it is involuntary  If the disinheritance is valid, the
 Law presumes there has been merely compulsory heir disinherited is totally
oversight or mistake on the part of the excluded from the inheritance. In case of
testator invalid disinheritance, the compulsory
 Since preterition annuls the institution of heir is merely restored to his legitime
heirs, the omitted heir gets not only his
legitime but also his share in the free
portion not disposed of by way of legacies
and devises
Effects of Preterition [Art. 854, CC]

1. The institution of the heir is annulled.
2. Devises and legacies shall remain valid as long as they are not inofficious.
3. If the omitted compulsory heir should die before the testator, the institution shall be effective, without
prejudice to the right of representation.
When there are no devises and legacies, preterition will result in the annulment of the will and give
rise to intestate succession [Neri v. Akutin, G.R. No. L-47799 (1941)].
3. Substitution of heirs
 Substitution - the appointment of another heir, so that he may enter into the inheritance in
default of the heir originally instituted [Art. 857, CC].
 The substitute shall be subject to the same charges and conditions imposed upon the instituted
heir, unless the testator has expressly provided the contrary, or the charges or conditions are
personally applicable only to the heir instituted [Art. 862, CC].
Kinds of Substitution
1. BRIEF OR COMPENDIOUS [Art. 860, CC]
Brief – Two or more persons were designated by the testator to substitute for only one heir
Compendious – One person is designated to take the place of two or more heirs
2. RECIPROCAL [Art. 861, CC]

If the heirs instituted in unequal shares should be reciprocally substituted, the substitute shall acquire the
share of the heir who dies, renounces, or is incapacitated, unless it clearly appears that the intention of the
testator was otherwise. If there is more than one substitute, they shall have the same share in the
substitution as the institution.
Example (only 1 substitute): If two heirs are reciprocally substituted, then if one of them dies before the
testator dies, renounces, or turns out to be incapacitated, the other will get his share, regardless of whether
or not their shares are equal.
Example (more than 1 substitute): A is instituted to 1/3, B to 1/6, and C to ½. If C dies before the testator,
renounces or turns out to be incapacitated, then the other two will get his shares in the same proportion as
in the institution. A will get twice as much as B (because his share of 1/3 in the institution is twice the size
of B’s share of 1/6)
3. SIMPLE SUBSTITUTION [Art. 859, CC]

The testator may designate one or more persons to substitute the heir/s instituted in case the heirs should:
a. die before him (predecease),
b. should not wish to accept the inheritance (repudiation), or
c. should be incapacitated to accept the inheritance (incapacitated).
4. FIDEICOMMISSARY SUBSTITUTION

77
The testator institutes an heir with an obligation to preserve and to deliver to another the property so
inherited. The heir instituted to such condition is called the First Heir or the Fiduciary Heir; the one to
receive the property is the Fideicommissary or the Second Heir [Art. 863, CC].
Requisites [Arts. 863-865, CC]

a. A Fiduciary or first heir instituted is entrusted with the obligation to preserve and to transmit to a
Fideicommissary Substitute or second heir the whole or part of the inheritance.
b. The substitution must not go beyond one degree from the heir originally instituted.
c. The Fiduciary Heir and the Fideicommissary are living at the time of the death of the testator.
d. The fideicommissary substitution must be expressly made.
e. The fideicommissary substitution is imposed on the free portion of the estate and never on the legitime
In the absence of an obligation on the part of the first heir to preserve the property for the second heir, there
is no fideicommissary substitution. [PCIB v. Escolin, G.R. Nos. L-27860 and L-27896 (1974)]
Effects of predecease of the first heir/fiduciary or the second heir/fideicommissary

Situation 1: If the heir dies followed by the second heir, then the testator dies, who will inherit? The legal
heirs. There is no fideicommissary substitution because first and second heirs are not living at the time of
the testator’s death [Art. 863, CC].
Situation 2: The testator dies first followed by the second heir. The first heir survived them but
subsequently dies, who will inherit? The SH and his heirs under Art. 866, CC. This is because the SH passes
his rights to his own heirs when he dies before FH.
Situation 3: If the first heir dies, followed by the testator, then the second heir, who will inherit? No
specific provision in law, but SH inherits because the T intended him to inherit.
4. Conditional testamentary dispositions and those with a term
3 Kinds of Testamentary Disposition

a. Conditional [Art. 871, CC]
b. Dispositions with a term [Art. 885, CC]
c. Dispositions with a mode/modal dispositions [Art. 882, CC
CONDITIONAL DISPOSITIONS
Prohibited conditions: (considered as not imposed)
Effect: Entire disposition is void.
a. Any charge, condition or substitution whatsoever upon the legitimes [Art. 872, CC]
b. Impossible and illegal conditions [Art. 873, CC]
c. Absolute condition not to contract a first marriage [Art. 874, CC]
d. Absolute condition not to contract a subsequent marriage unless imposed on the widow or widower by
the deceased spouse, or by the latter’s ascendants or descendants [Art. 874, CC]
e. Scriptura captatoria or legacy-hunting dispositions - dispositions made upon the condition that the heir
shall make some provision in his will in favour of the testator or of any other person [Art. 875, CC]
POTESTATIVE, CASUAL, AND MIXED CONDITIONS

Potestative Conditions: Depends solely on the will of the heir
General rule: Must be fulfilled as soon as the heir learns of the testator’s death.
Exception: If the condition was already complied with at the time the heir learns of the testator’s death;
or if the condition is of such a nature that it cannot be fulfilled again. If there is constructive compliance, it
is deemed fulfilled.
Casual or mixed
Casual Mixed

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Fulfillment depends on chance or the will of a third Fulfillment depends partly on the will of the heir
person. and partly on chance or the will of a third person.
General rule: May be fulfilled at any time (before or after testator’s death), unless testator provides
otherwise.
Exception: If already fulfilled at the time of execution of will:

a. If testator unaware of the fact of fulfillment – deemed fulfilled
b. If testator aware:
● can no longer be fulfilled again: deemed fulfilled
● can be fulfilled again: must be fulfilled again.
Constructive Compliance:
a. If casual – not applicable
b. If mixed – applicable only if dependent partly on the will of a third party not interested.
Dispositions with a Term

A term may either be suspensive or resolutory.
Suspensive Resolutory
Before the arrival of the term, the property should Before the arrival of the term, the property should
be delivered to the legal or intestate heirs be delivered to the instituted heir.
A caución muciana has to be posted by the legal or No caución muciana required.
intestate heirs.
Modal Dispositions
 Dispositions with an obligation imposed upon the heir, without suspending the effectivity of the
institution, as a condition does.
 A mode functions similarly to a resolutory condition.
In modal institutions, the testator states:

● the object of the institution,
● the purpose or application of the property left by the testator, or
● the charge imposed by the testator upon the heir [Rabadilla v. CA, G.R. No. 113725 (2000)].
CAUCIÓN MUCIANA
A security to guarantee the return of the value of property, fruits, and interests, in case of contravention of
condition, term or mode.
Instances when it is needed:

1. Suspensive term [Art. 885,CC]
2. Negative potestative condition - when the condition imposed upon the heir is negative, or consists in not
doing or not giving something [Art. 879, CC]
3. Mode [Art. 882, par. 2, CC]
5. Legitime
 It is that part of the testator’s property which he cannot dispose of because the law has reserved it
for his compulsory heirs. [Art. 886, CC]
 Every renunciation or compromise as regards a future legitime between the person owing it and his
compulsory heirs is void, and the latter may claim the same upon the death of the former; but they
must bring to collation whatever they may have received by virtue of the renunciation or
compromise [Art. 905, CC].
Classes of Compulsory Heirs [Art. 887, CC]

1. Primary: Legitimate Children and Legitimate Descendants with respect to their Legitimate Parents and
Ascendants

79
2. Secondary: Those who succeed only in the absence of the primary compulsory heirs:
a. Legitimate Parents and Legitimate Ascendants, with respect to their Legitimate Children and
Descendants. (They will inherit only in default of legitimate children and their descendants)
b. Illegitimate Parents with respect to their Illegitimate Children. (They will inherit only in default
of the illegitimate and legitimate children and their respective descendants).
Note that other illegitimate ascendants are not included.
3. Concurring: Those who succeed together with the primary or the secondary compulsory heirs:
● Surviving Spouse
● Illegitimate Children and Illegitimate Descendants
SPECIFIC RULES ON LEGITIME

1. Direct Descending Line
a. Rule of Preference between lines [Arts. 978 and 985, CC]
● Those in the direct descending line shall exclude those in the direct ascending and
collateral lines; and
● Those in the direct ascending line shall, in turn, exclude those in the collateral line.
● Rule of Proximity [Art. 926, CC]: The relative nearest in degree excludes the farther one.
b. Right of representation ad infinitum in case of predecease, incapacity, or disinheritance [Arts.
972 and 992, CC]
● For decedents who are Legitimate Children, only the Legitimate Descendants are entitled
to right of representation.
● For decedents who are Illegitimate Children, both the Legitimate and the Illegitimate
Descendants can represent, only with respect to the decedent’s illegitimate parents.
c. If all the Legitimate Children repudiate their legitime, the next generation of Legitimate
Descendants may succeed in their own right.
2. Direct Ascending Line

a. Rule of division between lines
● The father and the mother shall inherit equally if both living. One parent succeeds to the entire
estate of the child if the other parent is dead [Art. 986, CC].
● In default of the mother and the father, the ascendants nearest in degree will inherit [Art. 987,
CC].
● If there is more than one relative of the same degree but of different lines, one half will go to the
paternal ascendants and the other half to the maternal ascendants [Art. 987, CC].
b. Rule of equal division
● The relatives who are in the same degree shall inherit in equal shares [Art. 987, CC].
Steps in Determining the Legitimate of Compulsory Heirs [Arts. 908-910, CC]

Value of the Estate
- Taxes
- Less Liabilities
NET ESTATE
+ collationable donations
THEORETICAL* HEREDITARY ESTATE
*Because this amount is what the legitime will be based on, but the actual amount available for physical
distribution is the net estate.
Remedy of a Compulsory Heir in Case of Impairment of Legitime

Extent and Nature of Impairment Remedy
Total omission of a compulsory heir who is a direct Annulment of institution and reduction of legacies
descendant or ascendant (preterition) and devises [Art. 854, CC]
Testamentary dispositions impairing or Reduction of the disposition insofar as they may be
diminishing the legitime inofficious or excessive [Art. 907, CC]
Partial impairment Completion of the legitime [Art. 906, CC]

80
Impairment by inofficious donations Collation – reduction of donations [Arts. 771 and
911, CC]
Method of Reduction [Art. 911, CC]

Order of priorities to be observed in the reduction [Balane]:
1. Reduce pro rata the non-preferred legacies and devises, and the testamentary dispositions to heirs
2. Reduce pro rata the preferred legacies and devises
3. Reduce the donations inter vivos according to the inverse order of their dates (oldest is the most
preferred)
How are Devises and Legacies with usufructs, life annuities and pensions reduced?
1. If the value of these grants exceeds the free portion, it impairs the legitimes and should be reduced
2. The compulsory heir has 2 options:
a. Delivering to the devisee or legatee the free portion
b. Complying with the testamentary provision
Note: If the devise subject to reduction should consist of real property, which cannot be conveniently
divided, it shall go to the devisee if the reduction does not absorb ½ of its value; and in a contrary case, to
the compulsory heirs; but the former and the latter shall reimburse each other in cash for what respectively
belongs to them.
 The devisee who is entitled to a legitime may retain the entire property, provided its value does not
exceed that of the disposable portion and of the share pertaining to him as a legitime [Art. 912, CC].
 If the heirs or devisees do not choose to avail themselves of the right granted by the foregoing, any
heir or devisee who did not have such right may exercise it; should the latter not make use of it, the
property shall be sold at public auction at the instance of any one of the interested parties [Art. 913,
CC].
Note: Rule on Reduction of Legitimes (Shares)

Legitimate children Never reduced, they are primary and preferred
Surviving spouse Never reduced
Illegitimate children Subject to reduction, pro rata, without preference (you get the
remaining portion, divide it by the number of illegitimate children)
RESERVA TRONCAL
The ascendant who inherits from his descendant any property which the latter may have acquired by
gratuitous title from another ascendant, or a brother or sister, is obliged to reserve such property as he may
have acquired by operation of law for the benefit of relatives who are within the third degree and who belong
to the line from which said property came [Art. 891, CC].
Concept of Reserva Troncal

1. A descendant (prepositus) inherits or acquires property from an ascendant or from a brother or sister
(origin or mediate source) by gratuitous title.
2. The same property is inherited by another ascendant (reservista) or is otherwise acquired by him by
operation of law from the said descendant (prepositus).
3. The said ascendant (reservista) must reserve the property for the benefit of the relatives of the deceased
descendant within the third civil degree and who belong to the line from which the said property came
(reservatarios).
Parties: [Balane]
1. Origin or Mediate Source – either an ascendant of any degree of ascent or a brother or sister of the
Prepositus; responsible for the 1st transfer
2. Prepositus – the first transferee of the reserved property
3. Reservista – an ascendant of the Prepositus other than the Origin or Mediate Source; the one obligated
to reserve the property

81
4. Reservatarios – within the 3rd degree of consanguinity from the Prepositus [Cabardo v. Villanueva, G.R.
No. L-19003 (1922)] belonging to the line from which the property came
Requisites for Reserva Troncal [Chua v. CFI, G.R. No. L-29901 (1977)]:
1. That the property was acquired by a descendant (Prepositus) from an ascendant or from a brother or
sister (Origin or Mediate Source) by gratuitous title,
2. That the Prepositus died without (legitimate*) issue,
3. That the property is inherited by another ascendant (Reservista) by operation of law, and
4. That there are relatives within the 3rd degree (Reservatarios) belonging to the line from which said
property came.
Note: Only legitimate descendants will prevent the property from being inherited by the legitimate
ascending line by operation of law [Balane]
Three transmissions involved: [Balane]

a. 1st transfer – by gratuitous title, from a person to his descendant, brother or sister
b. 2nd transfer – by operation of law, from the transferee in the 1st transfer to another ascendant. This
creates the reserva.
c. 3rd transfer – from the transferee in the second transfer to the relatives
The 1st transfer from the origin does not make the property reservable. The 1st transferee owns the
property he receives in full and in fee simple. If he sells the property, then there is no reserva that can be
created. It is at this point, however, that a reserva may ignite, because if the 1st transferee has no legitimate
descendants, the property, by operation of law, will go back up to his ascendant.
The 2nd transferee is the reservor.

The reservor can enjoy the property, but his title is subject to a double resolutory condition. So, if he dies,
you need to ask 2 questions:
a. Does the prepositus have relatives?
b. Are these relatives qualified to inherit from the prepositus?
If the answers are YES: then a reserva occurs.
Note: The reservatarios actually inherit, by delayed intestacy, from the prepositus.
Nature of the reservista’s right: [Edroso v. Sablan, G.R. No. 6878 (1913)]
1. The reservista’s right over the reserved property is one of ownership
2. The right of ownership is subject to a resolutory condition, i.e. the existence of reservatarios at the time
of the reservista's death
3. The right of ownership is alienable, but subject to the same resolutory condition.
4. The reservista’s right of ownership is registrable.
Nature of reservatarios’ right: [Sienes v. Esparcia, G.R. No. L-12957 (1961)]

1. The reservatarios have a right of expectancy over the property.
2. The right is subject to a suspensive condition, i.e. the expectancy ripens into ownership if the
reservatarios survive the reservistas.
3. The right is alienable but subject to the same suspensive condition.
4. The right is registrable.
Reserva Minima vs. Reserva Maxima

1. The prepositus acquired property gratuitously from an ascendant, a brother or sister
2. In his will, he institutes as his heir his ascendant (who is also a compulsory heir) such that the ascendant
receives half of the estate by operation of law as legitime and the other half by testamentary disposition
Two Views
● Reserva Maxima: As much of the potentially reservable property as possible must be deemed included
in the part that passes by operation of law (maximizing the scope of the reserva)

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● Reserva Minima: every single property in the prepositus’s estate must be deemed to pass, partly by
will and partly by operation of law, in the same proportion that the part given by will bears to the part not
so given [Balane]
Either view is defensible, but Reserva Minima finds wider acceptance in the Philippines. [Balane]
Extinguishment of the Reserva

1. Loss of the reservable property
2. Death of the reservista
3. Death of all the relatives within the third degree belonging to the line from which the property came
4. Renunciation by the reservatarios, but a future reservatario is not bound by such renunciation → a
conditional extinguishment.
5. Prescription, when the reservista holds the property adversely against the reservatarios, as free from
reservation
6. Disinheritance
A compulsory heir may, in consequence of disinheritance, be deprived of his legitime, for causes expressly
stated by law [Art. 915, CC].
Effect of Disinheritance
A disinherited heir is totally excluded from the inheritance. This means that he forfeits not only his legitime,
but also his intestate portion (if any), and any testamentary disposition made in a prior will of the
disinheriting testator [Balane].
Requisites of a Valid Disinheritance

a. Heir disinherited must be designated by name or in such a manner as to leave no room for doubt as to
who is intended to be disinherited.
b. It must be for a cause designated by law.
c. It must be made in a valid will.
d. It must be made expressly, stating the cause in the will itself.
e. The cause must be certain and true, and must be proved by the interested heir if the person should deny
it.
f. It must be unconditional.
g. It must be total.
Note: The burden of proving the truth of the cause for disinheritance shall rest upon the other heirs of the
testator, if the disinherited heir should deny it [Art. 917, CC].
Causes Common to Disinheritance and Unworthiness

 Article 1032 enumerates five acts of unworthiness which likewise constitute grounds to disinherit
a compulsory heir.
 The effect of the concurring causes of unworthiness and grounds for disinheritance is as follows: If
the testator failed to disinherit the offender, the law nonetheless intervenes by excluding the
offender from the inheritance of the testator or the decedent by reason of unworthiness.
How do you reconcile unworthiness and disinheritance as regards Restoration to Capacity?

Under the rules on Disinheritance Under the rules on Unworthiness
Note: this is expressly made by testator Note: this is by operation of law
A subsequent reconciliation is enough Either:
1. written pardon, or
2. subsequent will reconciliation is not enough
Overlap of Rules: If he did not know the cause
Remedy ● Unworthiness stays
1. If the offended party does not make a will
subsequent to
the occurrence of the cause

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• Unworthiness sets in
• Written condonation is necessary to restore
2. If the offended party makes a will subsequent to

the occurrence of the cause
• If he knew the cause
• If he disinherits - Art 922
• If he institutes or pardons the offender
• Restored to capacity
• If will silent – unworthiness stays
Modes of Revocation of Disinheritance

a. Reconciliation [Art. 922, CC]
b. Subsequent institution of the disinherited heir
c. Nullity of the will which contains the disinheritance.
Note: The moment that testator uses one of the acts of unworthiness as a cause for disinheritance; he
thereby submits it to the rules on disinheritance. Thus, reconciliation renders the disinheritance ineffective.
RECONCILIATION [ART. 922, CC]

Effect of Reconciliation between Offender and Offended Person:
● If no disinheritance has been made yet, the offended person will be deprived of his right to disinherit.
● If disinheritance has been effected, it will be rendered ineffectual.
Rights of Descendants of Person Disinherited [Art. 923, CC]

Disinheritance gives rise to the right of representation in favor of the children and descendants of the
disinherited person with respect to his legitime.
INEFFECTIVE DISINHERITANCE [Art. 918, CC]

Instances of Ineffective disinheritance:
a. There is no specification of the cause.
b. The cause is not proved.
c. The cause is not among those specified in the provisions.
Effect of Ineffective Disinheritance: if the disinheritance lacks one or other of the requisites
mentioned in this article, the heir in question gets his legitime [Balane].
Ineffective Disinheritance Preterition

Person disinherited may be any compulsory heir Person omitted must be a compulsory heir in the
direct line
Only annuls the institution in so far as it prejudices Annuls the entire institution of heirs
the person Disinherited
7. Legacies and devises

Legacy Devise
A gift of personal property given in a will A gift of real property given in a will
It is bequeathed It is devised
Persons Charged with the Duty to Give Legacies and Devises in a Will
a. Compulsory heir, provided, their legitimes are not impaired [Art. 925, CC]
b. Voluntary heir
c. Legatee or devisee can be charged with the duty of giving a sub-legacy or subdevise but only to the extent
of the value of the legacy or devise given him [Art. 925, CC]
d. The estate represented by the executor or administrator, if no one is charged with this duty to pay or
deliver the legacy or devise in the will

84
If there is an administration proceeding, it constitutes a charge upon the estate. If there is no administration
proceeding, it is a charge upon the heirs.
Validity and Effect of Legacy or Devise

Legacy or Devise of a thing owned in part by the testator [Art. 929, CC]
The legacy or devise shall be understood to be limited to such part or interest
Exception If testator expressly declares that he gives the thing in its entirety.
Legacy or Devise of a thing belonging to another [Art. 930, CC]

Testator erroneously believed that the property VOID
belonged to him
The thing bequeathed afterwards becomes his by EFFECTIVE
whatever title
Testator knew property did not belong to him VALID – estate must try to acquire property or
else give heir monetary value.
Legacy of devise of a thing belonging to the legatee or devisee

The thing already belongs to the legatee or devisee at Ineffective
the time of the execution of the will [Art. 932, CC]
The thing is subject to an encumbrance or interest of Valid only as to the interest or encumbrance
another person [Art. 932, CC]
Legatee or devisee subsequently alienates the thing Ineffective
[Art. 933,CC]
After alienating the thing, the legatee or devisee Ineffective
subsequently reacquires it gratuitously [Art. 933,
CC]
After alienating the thing, the legatee or devisee Legatee or devisee can demand reimbursement
acquires it by onerous title [Art. 933, CC] from the heir or estate
Delivery of Legacy/Devise [Art. 951, CC]

The very thing bequeathed shall be delivered and not its value
a. With all its accessions and accessories
b. In the condition in which it may be upon the death of the testator
c. Legacies of money must be paid in cash
Effect of ineffective legacies or devises [Art. 956, CC]

In case of repudiation, revocation or incapacity of the legatee or devisee, the legacy or devise shall be merged
with the mass of the hereditary estate, except in cases of substitution or accretion
Revocation of Legacies and Devises [Art. 957, CC]

a. Testator transforms the thing such that it does not retain its original form or denomination
b. Testator alienates the thing by any title or for any cause. Reacquisition of the thing by the testator does
not make the legacy or devise valid, unless it is effected by right of repurchase.
c. Thing is totally lost during the lifetime or after the death of the testator
d. Other causes: nullity of will, noncompliance with suspensive condition, sale of the thing to pay the debts
of the deceased during the settlement of his estate.
SUMMARY OF LEGITIMES OF COMPULSORY HEIRS

Legend:
LC – legitimate children
ILC – illegitimate children
SS – surviving spouses
LP – legitimate parents
ILP – illegitimate parents

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Surviving LC and SS ILC LP and ILP
relatives Descendants Ascendants
LC alone ½ of the estate
in equal
portions
1 LC, SS ½ of the estate ¼ of the estate
taken from the
free portion
2 or more ½ of the estate Same portion
LC, SS in equal as 1 LC
portions
LC, ILC ½ of the estate ½ share of 1 LC
in equal
portions
1 LC, SS, ILC ½ of the estate ¼ (preferred ½ share of 1 LC
over ILC)
N.B. May suffer
reduction pro
rata because
share of SS is
given preference
2 or more ½ of the estate Same as share ½ share of 1 LC
LC, SS, ILC in equal of 1 LC
portions
LP alone ½ of the estate
LP, ILC ¼ in equal ½ of the estate
portions
LP, SS ¼ of the estate ½ of the estate
LP, SS, ILC 1/8 ¼ in equal ½ of the estate
portions
ILC alone ½ in equal
portions
ILC, SS 1/3 1/3 in equal
portions
SS alone GR: ½
Exception:
marriage in
articulo mortis
and testator
dies within 3
months from
marriage – 1/3
Exception to
Exception:
Have been
living together
as husband
and wife for
more than 5
years – ½
ILP alone ½ of the
estate
ILP, SS ¼ of the estate ¼ of the
estate

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C. Legal and intestate succession
1. General provisions; relationship and right of representation
Intestacy – that which takes place by operation of law in default of compulsory and testamentary
succession. Not defined in the Civil Code.
Legal succession is a mode of transmission mortis causa which takes place in the absence of the expressed
will of the decedent embodied in a testament [Tolentino].
Instances when Legal or Intestate Succession operates [Art. 960, CC]

a. If a person dies without a will, or with a void will, or will has subsequently lost its validity
b. When the will does not institute an heir
c. Upon the expiration of term, or period of institution of heir [Balane]
d. Upon fulfillment of a resolutory condition attached to the institution of heir, rendering the will ineffective
[Balane]
e. When the will does not dispose of all the property belonging to the testator. Legal succession shall take
place only with respect to the property which the testator has not disposed (mixed succession)
f. If the suspensive condition attached to the institution of the heir does not happen or is not fulfilled
g. If the heir dies before the testator
h. If the heir repudiates the inheritance, there being no substitution, and no right of accretion takes place
i. When the heir instituted is incapable of succeeding, except in cases provided in the Civil Code
j. Preterition – Intestacy may be total or partial depending on whether or not there are legacies or devises
[Balane]
Note: In all cases where there has been an institution of heirs, follow the ISRAI order:
a. If the Institution fails, Substitution occurs.
b. If there is no substitute, the right of Representation applies in the direct descending line to the legitime
if the vacancy is caused by predecease, incapacity, or disinheritance.
c. The right of Accretion applies to the free portion when the requisites in Art. 1016 are present.
d. If there is no substitute, and the right of representation or accretion is not proper, the rules on Intestate
succession shall apply.
FUNDAMENTAL PRINCIPLES IN INTESTATE SUCCESSION
Rule of Preference between Lines

• Those in the direct descending line shall exclude those in the direct ascending and collateral lines;
• Those in the direct ascending line shall, in turn, exclude those in the collateral line.
Rule of Proximity: The relative nearest in degree excludes the farther one [Art. 962(1), CC], saving the
right of representation when it properly takes place.
Rule of Equal Division

General Rule: The relatives who are in the same degree shall inherit in equal shares [Arts. 962(2), 987
and 1006, CC].
Exceptions [Balane]
1. Rule of preference between Lines
2. Distinction between legitimate and illegitimate filiation. The ratio under the present law is 2:1 [Art. 983,
in relation to Art. 895 as amended by Art. 176, FC].
3. Rule of division by line in the ascending line [Art. 987 (2), CC]
4. Distinction between full-blood and halfblood relationship among brothers and sisters, as well as nephews
and nieces [Art. 1006 and 1008, CC]
5. Right of representation

87
Rule of Barrier between the legitimate family and the illegitimate family (the ironcurtain
rule): The illegitimate family cannot inherit by intestate succession from the legitimate family and vice-
versa. [Art. 992, CC]
Rule of Double Share for full blood collaterals: When full and half-blood brothers or sisters,
nephews or nieces, survive, the full blood shall take a portion in the inheritance double that of the half-
blood [Arts. 895 and 983, CC].
Note:
a. If one of the legitimate ascendants, illegitimate parents, legitimate children or illegitimate children
survives, the brother, sisters, nephews, and nieces (BSNN) are excluded.
b. If one of the legitimate ascendants, illegitimate parents, legitimate children, illegitimate children or
surviving spouse survives, the other collateral relatives and the state are excluded.
c. If any of the heirs concur in legitimes, then they also concur in intestacy.
a. Relationship
PROXIMITY OF RELATIONSHIP: determined by the number of generations. Each generation forms

one degree [Art. 963, CC].
Note: It is important to distinguish between direct and collateral, as the direct has preference over the
collateral.
In a line, as many degrees are counted as there are generations [Art. 966, CC].
Note: Descending line is preferred over ascending.
Blood relationship is either full or half-blood [Art. 967, CC].
Note: As among brothers and sisters and nephews and nieces, there is a 2:1 ratio for fullblood and half-
blood relatives. Direct relatives are preferred. But this distinction does not apply with respect to other
collateral relatives.
Incapacity [Art. 968, CC]

General rule: If there are several relatives of the same degree, and one or some of them are unwilling or
incapacitated to succeed, his portion shall accrue to the others of the same degree.
Exception: When the right of representation should take place.
Note: This accretion in intestacy takes place in case of predecease, incapacity, or renunciation among heirs
of the same degree. The relatives must be in the same relationship because of the Rule of Preference of
Lines.
REPUDIATION [Arts. 968-969, CC]

 There is no right of representation in repudiation. If the nearest relative/s repudiates the
inheritance, those of the following degree shall inherit in their own right.
 In case of repudiation by all in the same degree, the right of succession passes on the heirs in
succeeding degrees: descending line first, ascending line next, and collateral line next [Balane].
Adoption [Art. 189, FC]

In adoption, the legal filiation is personal and exists only between the adopter and the adopted. The adopted
is deemed a legitimate child of the adopter, but still remains as an intestate heir of his natural parents and
other blood relatives.
Note: Section 16 of the Domestic Adoption Act (RA 8552) provides that all legal ties between the biological
parent(s) and the adoptee shall be severed and the same shall then be vested on the adopter(s).”

88
b. Right of representation
Representation – right created by fiction of law, by virtue of which the representative is raised to the
place and the degree of the person represented, and acquires the rights which the latter would have if he
were living or if he could have inherited [Art. 970, CC]
Effect of representation
The representative heir acquires the rights which the person represented would have if he were living or if
he could have inherited.
When it occurs
Representation is allowed with respect to inheritance conferred by law (legitime and intestate based on Art.
923)
It occurs only in the following instances: (DIP)

a. Predecease of an heir
b. Incapacity or unworthiness
c. Disinheritance [Art. 923, CC]
Note: There is no representation to a devise or a legacy.
A renouncer can represent, but cannot be represented. Rationale is found in Art. 971 which states that “The
representative does not succeed the person represented but the one whom the person represented would
have succeeded.”
Representation in the Direct Descending Line

Representation takes place ad infinitum in the direct descending line but never in the direct ascending line
[Art. 972, CC].
General rule: Grandchildren inherit from the grandparents by right of representation, if proper.
Exception: Whenever all the children repudiate, the grandchildren inherit in their own right because
representation is not proper [Art. 969, CC].
Representation in Collateral Line

In the collateral line, representation takes place only in favor of the children of the brothers or sisters (i.e.,
nephews and nieces) whether of the full or half-blood [Art. 972, CC] and only if they concur with at least
one.
2. Order of intestate succession

Decedent is a Legitimate Decedent is an Illegitimate Decedent is an Adopted
Child Child Child
Legitimate children or Legitimate children or Legitimate children or
descendants (LCD) descendants (LCD descendants (LCD
Legitimate parents or ascendants Illegitimate children or Illegitimate children or
(LPA) descendants (LPA) descendants (LPA)
Illegitimate children or Illegitimate parents (IP) Legitimate or illegitimate
descendants (ICD) parents, or legitimate
ascendants, adoptive parents
Surviving spouse (SS) Surviving spouse (SS) Surviving spouse (SS)
Brothers and sisters, nephews, Illegitimate brothers and sisters, Brothers and sisters, nephews,
nieces (BS/NN) nephews, nieces (IBS/NN) nieces (BS/NN)
Legitimate collateral relatives State State
within the 5th degree (C5)
State

89
RULES OF EXCLUSION AND CONCURRENCE IN INTESTATE SHARES
Intestate Heirs Excludes Excluded By Concurs With
LC + LD Ascendants, Collaterals No one SS + ILC
and State
ILC + D ILP, Collaterals and No one SS, LC, LP
State
LP + LA Collaterals and State LC ILC + SS
SS Collaterals other than No one LC, ILC, LP, ILP,
siblings, nephews and Siblings, Nephews,
nieces, State Nieces
Siblings, Nephews, All other collaterals and LC, ILC, LP, ILP SS
Nieces State
Other collaterals within Collateral more remote LC, ILC, LP, ILP and SS Collaterals in the same
5th degree in degree and State degree
State No one Everyone No one
Note: In partial intestacy, the testamentary dispositions can reduce the shares of intestate heirs, provided
that their legitimes, if they are also compulsory heirs, are not impaired. More specifically:
a. The law of legitimes must be brought into operation in partial intestacy.
b. If among the concurring intestate heirs there are compulsory heirs whose legal or intestate portions
exceed their respective legitimes, the amount of the testamentary disposition must be deducted from the
disposable portion, to be borne by all the intestate heirs in the proportions that they are entitled to receive
from such disposable portion as intestate heir.
c. If the legal or intestate share of a compulsory heir is equal to his legitime, then the amount of the
testamentary disposition must be deducted only from the legal or intestate shares of the others.
d. If the testamentary dispositions consume the entire disposable portion, then the intestate heirs who are
compulsory heirs will get only their legitimes, and those who are not compulsory heirs will get nothing
[Tolentino].
OUTLINE OF INTESTATE SHARES

a. Legitimate children only ● Divide entire estate equally among all legitimate children [Art. 979, CC]
● Legitimate children include an adopted child.
b. Legitimate children and ● Divide entire estate such that each illegitimate child gets ½ of what a
Illegitimate children legitimate child gets [Art. 983, CC and Art. 176, FC]
● Ensure that the legitime of the legitimate children are first satisfied.
c. Legitimate children and ● Divide entire estate equally between the legitimate children and the
surviving spouse surviving spouse, the latter deemed as one child. The same rule holds
where there is only one child.
d. Legitimate children, ● Divide the entire estate such that the surviving spouse is deemed one
Surviving spouse, and legitimate child and each illegitimate child getting ½ of what the
Illegitimate children legitimate child gets. [Art. 996, CC and Art. 176, FC]
● Ensure that the legitime of the legitimate children and the spouse are
first satisfied.
e. Legitimate parents only ● Divide the entire estate equally [Art. 985, CC].
f. Legitimate ascendants ● Divide the entire estate equally but with the observance of the rule of
only (excluding parents) division by line [Art. 987, CC].
g. Legitimate parents and ● Legitimate parents get ½ of the estate, illegitimate children get the other
illegitimate children ½ [Art. 991, CC].
h. Legitimate parents and ● Legitimate parents get ½ of the estate; The surviving spouse gets the
surviving spouse other ½ [Art. 997, CC].
i. Legitimate parents, ● Legitimate parents get ½ of the estate; surviving spouse and the
surviving spouse and illegitimate child each get ¼ each, the latter to share among themselves if
illegitimate children more than one [Art. 1000, CC].
j. Illegitimate children only ● Divide the entire estate equally [Art. 988, CC].

90
k. Illegitimate children and ● Illegitimate children get ½ of the estate; the surviving spouse gets the
surviving spouse other ½ [Art. 998, CC].
l. Surviving spouse only ● Entire estate goes to the surviving spouse [Art. 994/995, CC].
m. Surviving spouse and ● Illegitimate parents get ½ and the spouse gets the other ½ [by analogy
illegitimate parents with Art. 997, CC].
n. Surviving spouse and ● Surviving spouse gets ½ of the estate, while the rest gets the other ½
legitimate brothers and with the nephews and nieces inheriting by representation if proper [Art.
sisters, nephews and nieces 1001, CC].
o. Surviving spouse and ● Surviving spouse gets ½ of the estate while the rest gets the other ½
illegitimate brothers and with the nephews and nieces inheriting by representation, if proper; Note
sisters, nephews and nieces that all the other relatives should be “illegitimate” because of the iron-
curtain rule [Art. 994, CC].
p. Illegitimate parents only ● Entire estate goes to the illegitimate parents [Art. 993, CC].
q. Illegitimate parents and ● Illegitimate parents are excluded and do not inherit. For the rule on the
children of any kind respective shares of the children, see numbers 1, 2 or 10, whichever is
(whether legitimate or applicable
illegitimate child)
r. Legitimate brothers and ● Divide the entire estate such that full-blood brothers/sisters gets a share
sisters only double the amount of a half-blood brother or sister [Art. 1004 and 1006,
CC].
s. Legitimate brothers and ● Divide the entire estate observing the 2 is to 1 ratio for full and half-
sisters, nephews and nieces blood relationships with respect to the brothers and sisters, with the
nephews and nieces inheriting by representation, if proper [Art. 1005 &
1008, CC].
t. Nephews and nieces only ● Divide the entire estate per capita, observing the 2 is to 1 ratio [Arts. 975
and 1008, CC]
u. Other collaterals [Arts. ● Divide entire estate per capita. Collateral relatives must be with the 5th
1009 and 1010] degree of consanguinity.
● Note: the nearer relative excludes the more remote relatives.
v. State ● If there are no other intestate heirs, the State inherits the entire estate
through escheat proceedings [Art. 1011, CC].
D. Provisions common to testate and intestate succession
1. Right of accretion
Definition of Accretion [Art. 1015, CC]

It is a right by virtue of which, when two or more persons are called to the same inheritance, devise or
legacy, the part assigned to one who renounces or cannot receive his share or who died before the testator
is added or incorporated to that of his co-heirs, codevisees, or co-legatees.
Basis
The right of accretion is based upon the presumed will of the decedent. Thus, the testator can expressly
provide that there shall be no accretion among persons who would otherwise be entitled thereto.
Conversely, the testator may validly provide for accretion in a case where no accretion would take place
under the provisions of the law [Tolentino].
Requisites [Tolentino]
a. Unity of object and plurality of subjects (two or more persons are called to the same inheritance or same
portion thereof)
b. Vacancy of share (one of the heirs dies before the testator, or renounces the inheritance, or is
incapacitated)
When does Accretion Occur?

 Accretion happens when there is repudiation, incapacity, or predecease of an heir.

91
 It is the mechanism where the share of an heir is increased by vacant shares vacated by heirs who
cannot inherit for various reasons. (Rationale: the decedent intended to give the property to nobody
but the co-heirs.)
 There can only be accretion if there is an institution of heirs with respect to specific properties [Art.
1016, CC]. In other words, both heirs were called to inherit the same whole.
If there was “earmarking” – there can be no accretion. What is “earmarking?” – when the whole has been
subdivided into specific portions
Ex: Heir #1 was called to inherit the southern part of Plot A, and Heir #2 was called to inherit the northern
part of Plot A.
Among compulsory heirs, there can only be accretion with respect to the free portion. There can be no
accretion with respect to the
legitimes [Arts. 1021 and 1018, CC].
The heirs to whom the portion goes by the right of accretion take it in the same proportion that they inherit
[Art. 1019, CC].
Exceptions [Balane]
a. In testamentary succession, if the testator provides otherwise
b. If the obligation is purely personal, and hence intransmissible
 The heirs to whom the inheritance accrues shall succeed to all the rights and obligations which the
heir who renounced or could not receive it would have had [Art. 1020, CC].
 In testamentary succession, when the right of accretion does not take place, the vacant portion of
the instituted heirs, if no substitute has been designated, shall pass to the legal heirs of the testator,
who shall receive it with the same charges and obligations [Art. 1022, CC].
 Accretion shall also take place among devisees, legatees and usufructuaries under the same
conditions established for heirs [Art. 1023, CC]
Effect of Predecease, Incapacity, Disinheritance or Repudiation

Cause of Vacancy Legitime Free Portion Intestate Succession
Predecease Representation Accretion Intestate Representation
Intestate Succession Succession Intestate Succession
Incapacity Representation Accretion Intestate Representation
Intestate Succession Succession Intestate Succession
Disinheritance Representation - -
Intestate Succession
Repudiation Intestate Succession Accretion Accretion
2. Capacity to succeed by will or by intestacy
Requisites for Capacity to Succeed by Will or by Intestacy: [Art. 1024 – 1025, CC]
a. The heir, legatee or devisee must be living or in existence at the moment the succession opens; [Art. 1025,
CC] and
b. He must not be incapacitated or disqualified by law to succeed [Art. 1024, par.1, CC].
PERSONS INCAPABLE OF SUCCEEDING [Arts. 1027, 739, 1032, CC]

Based on undue influence or interest [Art. 1027, CC]
a. Priest who heard the last confession of the testator during his last illness, or the minister of the gospel
who extended spiritual aid to him during the same period;
b. Individuals, associations and corporations not permitted by law to inherit;
c. Guardian with respect to testamentary dispositions given by a ward in his favor before the final accounts
of the guardianship have been approved, even if the testator should die after the approval thereof; except if
the guardian is his ascendant, descendant, brother, sister, or spouse;

92
d. Relatives of the priest or minister of the gospel within the fourth degree, the church, order, chapter,
community, organization, or institution to which such priest or minister may belong;
e. Attesting witness to the execution of a will, the spouse, parents, or children, or anyone claiming under
such witness, spouse, parents, or children;
f. Physician, surgeon, nurse, health officer or druggist who took care of the testator during his last illness.
Based on morality or public policy [Arts. 739 and 1028, CC]

a. Those made in favor of a person with whom the testator was guilty of adultery or concubinage at the time
of the making of the will.
b. Those made in consideration of a crime of which both the testator and the beneficiary have been found
guilty.
c. Those made in favor of a public officer or his spouse, descendants and ascendants, by reason of his public
office.
Based on acts of unworthiness [Art. 1032, CC]

The following are incapable of succeeding by reason of unworthiness:
a. Parents who have abandoned their children or induced their daughters to lead a corrupt or immoral life,
or attempted against their virtue;
b. Any person who has been convicted of an attempt against the life of the testator, his or her spouse,
descendants, or ascendants;
c. Any person who has accused the testator of a crime for which the law prescribes imprisonment for six
years or more, if the
accusation has been found groundless;
d. Any heir of full age who, having knowledge of the violent death of the testator, should fail to report it to
an officer of the law within a month, unless the authorities have already taken action; this prohibition shall
not apply to cases wherein, according to
law, there is no obligation to make an accusation;
e. Any person convicted of adultery or concubinage with the spouse of the testator;
f. Any person who by fraud, violence, intimidation, or undue influence should cause the testator to make a
will or to change one already made;
g. Any person who by the same means prevents another from making a will, or from revoking one already
made, or who supplants, conceals, or alters the latter's will;
h. Any person who falsifies or forges a supposed will of the decedent.
Pardon of Acts of Unworthiness

Express Implied
Made by the execution of a document or any Effected when the testator makes a will instituting
writing in which the decedent condones the cause the unworthy heir with knowledge of the cause of
of incapacity incapacity
Cannot be revoked Revoked when the testator revokes the will or the
institution
Effect of Pardon
Once the act of unworthiness has been pardoned, whether expressly or tacitly, the heir is restored to full
capacity to succeed the decedent, as if the cause of unworthiness had never existed.
Unworthiness vs. Disinheritance

Unworthiness Disinheritance
Unworthiness renders a person incapable of Disinheritance is the act by which a testator, for
succeeding to the succession, whether testate or just cause, deprives a compulsory heir of his right
intestate to the legitime [Art. 815, CC]
Determination of Capacity [Tolentino]

General Rule: At the death of the decedent [Art. 1034, CC]
Exceptions
a. Those falling under 2, 3, and 5 of Art. 1032 – when the final judgment is rendered

93
b. Those falling under 4 of Art. 1032 – when the month allowed for the report expired
c. If the institution is conditional – when the condition is complied with
3. Acceptance and repudiation of inheritance
Definition of Acceptance
The act by which the person called to succeed by universal title either by the testator or by law manifests
his will of making his own the universality of the rights and obligations which are transmitted to him
[Tolentino].
Definition of Repudiation
The manifestation by an heir of his desire not to succeed to the rights and obligations transmitted to him
[Tolentino].

a. Certainty of death of the decedent
b. Certainty of the right to the inheritance
FORMS OF ACCEPTANCE [Arts. 1049 – 1050, CC]

a. Express Acceptance – one made in a public or private document [Art. 1049, par. 1, CC]
b. Tacit Acceptance – one resulting from acts by which the intention to accept is necessarily implied or
from acts which one would have no right to do except in the capacity of an heir.
c. Implied Acceptance - Within thirty days after the court has issued an order for the distribution of the
estate in accordance with the Rules of Court, the heirs, devisees and legatees shall signify to the court having
jurisdiction whether they accept or repudiate the inheritance; if they do not do so within that time, they are
deemed to have accepted the inheritance [Art. 1057, CC].
An inheritance is deemed accepted:

a. If the heir sells, donates, or assigns his right to a stranger, or to his co-heirs, or to any of them – the heir
must first accept the inheritance before he can dispose of it.
b. If the heir renounces the same, even though gratuitously, for the benefit of one or more of his co-heirs –
this is actually a donation. The heir must first accept the inheritance before he can donate it.
c. If the heir renounces it for a price in favor of all his co-heirs indiscriminately – this is actually an onerous
disposition. The heir must first accept the inheritance before he can dispose of it.
Note: But if the renunciation should be gratuitous, and in favor of all the co-heirs (to whom the portion
renounced should devolve by accretion), the inheritance shall not be deemed as accepted [Art. 1050, CC].
This is a true case of renunciation.
Forms of Repudiation [Art. 1051, CC]

a. In a public instrument acknowledged before a notary public; or
b. In an authentic document – equivalent of an indubitable writing or a writing whose authenticity is
admitted or proved; or
c. By petition presented to the court having jurisdiction over the testamentary or intestate proceeding
Heirs in Two Capacities [Art. 1055, CC]

a. If a person is called to the same inheritance as an heir by will and by law and he repudiates the inheritance
in his capacity
as a testamentary heir, he will be considered to have also repudiated the inheritance as a legal heir.
b. If he repudiates it as a legal heir, without knowledge of his being a testamentary heir, he may still accept
it in the latter capacity.
Irrevocability of Acceptance or Repudiation

General Rule: The acceptance or repudiation of an inheritance, once made, is irrevocable and cannot be
impugned.
Exceptions

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a. When the acceptance or repudiation suffers from any of the vices which annul consent; and
b. When an unknown will appears [Art. 1056, CC]
Concept of Collation
 To collate is to bring back or to return to the hereditary mass in fact or by fiction, property which
came from the estate of the decedent during his lifetime, by donation or other gratuitous title but
which the law considers as an advance from the inheritance [Art. 1061, CC].
 It is the act by virtue of which, the compulsory heir who concurs with other compulsory heirs in the
inheritance brings back to the common hereditary mass the property which they may have received
from the testator so that a division may be effected according to law and the will of the testator.
 In reducing inofficious donations, the last to be donated should be the first to be reduced.
Rationale for collation: If donations inter vivos will not be collated, then the rule on legitimes shall be
circumvented or disregarded.
OPERATIONS RELATED TO COLLATION [Tolentino]

a. Collation – adding to the mass of the hereditary estate the value of the donation or gratuitous
disposition.
b. Imputing or Charging – crediting the donation as an advance on the legitime (if the donee is a
compulsory heir) or on the free portion (if the donee is a stranger, i.e., not a compulsory heir). [Balane at
522]
c. Reduction – determining to what extent the donation will remain and to what extent it is excessive or
inofficious.
d. Restitution – returning or the act of payment of the excess to the mass of hereditary estate.
Persons Obliged to Collate

General rule: Compulsory heirs
Exceptions
a. When the testator should have so expressly provided [Art. 1062, CC] – in which case you collate against
thedisposable free portion because there MUST be collation.
b. When the compulsory heir should have repudiated his inheritance [Art. 1062, CC]
c. When there is only ONE compulsory heir
Grandchildren who survive with their uncles, aunts, or first cousins and inherit by right of representation
[Art. 1064, CC]
Note: Grandchildren may inherit from their grandparents in their own right, i.e., as heirs next in degree,
and not by right of representation if their parent repudiates the inheritance of the grandparent, as no living
person can be represented except in cases of disinheritance and incapacity. In this case, the grandchildren
are not obliged to bring to collation what their parent has received gratuitously from their grandparent.
What to Collate
a. Any property or right received by gratuitous title during the testator’s lifetime [Art. 1061, CC]
b. All that they may have received from the decedent during his lifetime [Art. 1061, CC]
c. Expenses incurred by the parents in giving their children a professional, vocational or other career shall
not be brought to collation unless the parents so provide, or unless they impair the legitime; but when their
collation is required, the sum which the child would have spent if he had lived in the house and company of
his parents shall be deducted therefrom [Art. 1068, CC]
d. Any sums paid by a parent in satisfaction of the debts of his children, election expenses, fines, and similar
expenses shall be brought to collation [Art. 1069, CC]
Note: Only the value of the thing donated shall be brought to collation.
PROPERTIES NOT SUBJECT TO COLLATION

Absolutely no collation:

95
Expenses for support, education (only elementary and secondary), medical attendance, even in
extraordinary illness, apprenticeship, ordinary equipment, or customary gifts [Art. 1067, CC]
Generally, not imputable to legitime/ cannot be collated, subject to exceptions:

a. Expenses incurred by parents in giving their children professional, vocational or other career unless the
parents so provide, or unless they impair the legitime [Art. 1067, CC]
b. Wedding gifts by parents and ascendants, consisting jewelry, clothing and outfit, except when they exceed
1/10 of the sum disposable by will [Art. 1070, CC]
c. Neither shall donations to the spouse of the child be brought to collation; but if they have been given by
the parent to the spouses jointly, the child shall be obliged to bring to collation one-half of the thing donated
[Art. 1066, CC]
Note: Parents are not obliged to bring to collation in the inheritance of their ascendants any property which
may have been donated by the latter to their children [Art. 1065, CC].
Wedding Gifts
The wedding gift under Article 1070 of the Civil Code may be compared to a donation propter nuptias as
follows:
Donation Propter Nuptias Wedding Gift
The object is not specified. It could be anything of The object is jewelry, clothing or outfit.
value.
The donor is not specified. He or she could be The donor must be a parent or ascendant of the
anyone with capacity to dispose property. donee.
If given by a parent, the donee is either the child of The donee is either a child or a descendant of the
the donor, or the future spouse of the child of the donor.
donor, or both of them jointly.
The gift must be given before the celebration of the The gift may be given at any time, either before or
marriage. after the celebration of the marriage.
The donation is governed by the rules of ordinary The gift is noncollationable to the extent of one-
donations, except as modified by the provisions of tenth of the disposable free portion of the
the Family Code. Thus, a donation propter nuptias hereditary estate of the donor.
given by a parent to a child is collationable in full,
except if the donor declared it to be
noncollationable
4. Partition and distribution of the estate
Definition of Partition: Separation, division and assignment of a thing held in common among those to
whom it may belong.
What can be divided? The thing itself or its value may be divided [Art. 1079, CC].
Before Partition: Whole estate of the decedent is owned in common by the heirs [Art. 1078, CC].
What acts are deemed partition?

Every act which is intended to put an end to indivision among heirs and legatees or devisees is deemed a
partition, although it should purport to be a sale, an exchange, a compromise, or any other transaction [Art.
1082, CC].
A void partition may be valid if:

1. The will was in fact a partition
2. The beneficiaries of the void will were legal heirs
The titles of acquisition or ownership of each property shall be delivered to the co-heir to whom said
property has been adjudicated [Art. 1089, CC].

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JUDICIAL vs. EXTRAJUDICIAL PARTITION
JUDICIAL EXTRAJUDICIAL
Partition done by Court pursuant to an Order of Partition made by the decedent himself by an act
Distribution which may or may not be based on a inter vivos or by will or by a third person entrusted
project of partition. by the decedent or by the heirs themselves [Paras].
Partition Inter Vivos: It is one that merely allocates

specific items o pieces of property on the basis of
the pro-indiviso shares fixed by law or given under
the will to heirs or successors [Art. 1080, CC].
Who may effect 1. The Decedent, during his lifetime by an act inter vivos or by will
Partition? [Art.1080, CC]
2. The decedent’s heirs [Art.1083, CC]
3. A competent court [Art. 1083, CC]
4. A third person not an heir designated by the decedent [Art.1081, CC]
Who may demand 1. Compulsory heir
partition? 2. Voluntary heir upon fulfillment of condition, if any [Art. 1084, CC]
3. Legatee or devisee
4. Any person who has acquired interest in the estate
When Partition cannot 1. When expressly prohibited by the testator for a period not
be demanded? exceeding 20 years [Art. 1083, CC]
2. When the co-heirs agreed that the estate shall not be divided for a
period not exceeding 10 years, renewable for another 10 years [Art. 494,
CC]
3. When prohibited by law
4. When to partition the estate would render it unserviceable for the use
for which it is intended
Prohibition to Partition 1. The prohibition to partition for a period not exceeding 20 years can be
imposed even on the legitime.
2. If the prohibition to the partition is for more than 20 years, the excess
is void.
3. Even if a prohibition is imposed, the heirs by mutual agreement can
still make the partition.
Effects of Inclusion of Intruder in Partition [Art. 1108, CC]

1. Between a true heir and several mistaken heirs – partition is VOID
2. Between several true heirs and a mistaken heir – transmission to mistaken heir is void
3. Through error or mistake, share of true heir is allotted to mistaken heir – partition shall not be rescinded
unless there is bad faith or fraud on the part of the other persons interested, but the latter shall be
proportionately obliged to pay the true heir of his share. The partition with respect to the mistaken heir is
void [Sempio-Dy].
Right of Redemption in Partition

Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of the co-heirs
may be subrogated to the rights of the purchaser by reimbursing him for the price of the sale, provided they
do so within the period of one month from the time they were notified in writing of the sale by the vendor
[Art. 1088, CC].
Strangers – those who are not heirs on the succession.
Legal Redemption by Co-Heir; Requisites

1. That there are several heirs of the common inheritance;
2. That one of them sells his hereditary rights;
3. That the sale is made to a stranger, and before the partition has been made;

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4. That one or more of the co-heirs demand the repurchase within a period of one month, counted from the
time he or they were notified in writing of the sale; and
5. That the buyer is reimbursed the price of the sale [Garcia v. Calaliman, G.R. No. L-26855 (1989)].
Note: The redemption can be exercised only by a co-heir.
EFFECTS OF PARTITION
Effect: A partition legally made confers upon each heir the exclusive ownership of the property adjudicated
to him [Art. 1091, CC].
No partition shall be construed so as to prejudice, defeat, or destroy the right or title of any person claiming
the real estate involved in the action for partition by title under any other person, or by title paramount to
the title of the parties among whom the partition may have been made [Rule 69, Sec. 12, ROC].
Warranty: After the partition has been made, the co-heirs shall be reciprocally bound to warrant the title
to, and the quality of, each property adjudicated [Art. 1092, CC].
Reciprocal obligation of warranty: shall be proportionate to the respective hereditary shares of the
co-heirs.
In case of insolvency of any of the co-heirs: Other co-heirs shall be liable for his part in the same
proportion, deducting the part corresponding to the one who should be indemnified.
RIGHT OF ACTION FOR REIMBURSEMENT:

Those who pay for the insolvent heir shall have a right of action against him for reimbursement, should his
financial condition improve [Art. 1093, CC].
Prescription period for action to enforce warranty among the co-heirs: Ten (10) years from
the date the right of action accrues [Art. 1094, CC].
If a credit should be assigned as collectible: Co-heirs shall not be liable for the subsequent
insolvency of the debtor of the estate, but only for his insolvency at the time the partition is made [Art. 1095,
CC].
Prescription period of the warranty of the solvency of the debtor: Can only be enforced during
the five (5) years following the partition.
Warrant of bad debts

General Rule: Co-heirs do not warrant bad debts, if so known to, and accepted by the distributee.
Exception: But if such debts are not assigned to a co-heir, and should be collected, in whole or in part, the
amount collected shall be distributed proportionately among the heirs [Art. 1095, CC].
Cessation of Obligation of warranty among co-heirs: The obligation of warranty among co-heirs
shall cease in the following cases:
1. The testator himself has made the partition; Unless it appears, or it may be reasonably presumed,
that his intention was otherwise, but the legitime shall always remain unimpaired.
2. When it has been so expressly stipulated in the agreement of partition; Unless there has been
bad faith
3. When the eviction is due to a cause subsequent to the partition, or has been caused by the fault
of the distributee of the property [Art. 1096, CC].
RESCISSION AND NULLIFICATION OF PARTITION

Causes for Rescission or Annulment
1. A partition may be rescinded or annulled for the same causes as contracts [Art. 1097, CC].

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2. A partition, judicial or extrajudicial, may also be rescinded on account of lesion, when any one of the co-
heirs received things whose value is less by at least onefourth (¼) than the share to which he is entitled,
considering the value of the things at the time they were adjudicated [Art. 1098, CC].
● This article applies only to cases of partition among-coheirs
● Lesion is the injury suffered in consequence of inequality of situation by one party who does not
receive the full equivalent for what she gives in a sale or any commutative contract
3. The partition made by the testator cannot be impugned on the ground of lesion, except when the legitime
of the compulsory heirs is thereby prejudiced, or when it appears or may be reasonably presumed that the
intention of the testator was otherwise [Art. 1099, CC].
4. Preterition of a compulsory heir in the partition [Art. 1104, CC]:
● Partition shall not be rescinded unless bad faith or fraud on the part of other heirs is proved.
● The culpable heirs shall share in the damages of the prejudiced compulsory heir proportionately.
5. A partition which includes a person believed to be an heir, but who is not, shall be void only with respect
to such person [Art. 1105, CC].
Rescission on account of lesion

PRESCRIPTION: After four (4) years from the time the partition was made [Art. 1100, CC].
OPTION OF HEIR SUED:

a. Indemnifying the plaintiff for the loss; or
b. Consenting to a new partition
Indemnity may be made:

1. By payment in cash or
2. By the delivery of a thing of the same kind and quality as that awarded to the plaintiff.
If option of consenting to a new partition was chosen: Shall affect neither those who have not been
prejudiced nor those who have not received more than their just share [Art. 1101, CC].
Who cannot maintain an action for rescission on the ground of lesion?

An heir who has alienated the whole or a considerable part of the real property adjudicated to him, but he
shall have a right to be indemnified in cash [Art. 1102, CC].
When is rescission of the partition on the ground of lesion not allowed?

When there is omission of one or more objects or securities of the inheritance, but the partition shall be
completed by the distribution of the objects or securities which have been omitted [Art. 1103, CC].
DIFFERENCE OF NULLITY FROM RESCISSION

● Nullity – the act is supposed to never have existed
● Rescission – the act is valid at the origin though it afterwards became ineffective.
Important Periods in Partition

1 month or less before Testator, if publicly known to be insane, burden of proof is on the
making a will one claiming validity of the will
20 years Maximum period testator can prohibit alienation of dispositions
5 years from delivery to the To claim property escheated to the State
State
1 month To report knowledge of violent death of decedent lest he be
considered unworthy
5 years from the time Action for declaration of incapacity and for recovery of the
disqualified person took inheritance, devise or legacy
possession
30 days from issuance of Must signify acceptance/repudiation; otherwise, deemed accepted
order of distribution
1 month form written notice Right to repurchase hereditary rights sold to a stranger by a co-heir
of sale

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10 years To enforce warranty of title/quality of property adjudicated to co-
heir from the time the right of action accrues
5 years from partition To enforce warranty of solvency of debtor of the estate at the time
partition is made
4 years from partition Action for rescission of partition on account of lesion
IV. OBLIGATIONS AND CONTRACTS
A. Obligations
Definition
Article 1156. An obligation is a juridical necessity to give, to do or not to do.
An obligation is a juridical relation, whereby a person (called the creditor) may demand from another
(called the debtor) the observance of a determinative conduct, and in case of breach, may obtain satisfaction
from the assets of the latter. [Makati Stock Exchange v. Campos, G.R. No. 138814 (2009)]
Elements of an obligation
a. Active Subject (Obligee/Creditor): The person (natural or juridical) who has the right or power to
demand the prestation.
b. Passive Subject (Obligor/Debtor): The person bound to perform the prestation.
c. Prestation (Object): The conduct required to be observed by the debtor/obligor (to give, to do, or not
to do).
Requisites
1. Must be possible - physically and juridically.
2. Must be determinate or at least determinable according to pre-established elements.
3. Must have possible equivalent in money
d. Vinculum Juris (Juridical or Legal Tie; Efficient Cause): That which binds or connects the
parties to the obligation. [de Leon]
It is established by:
1. law
2. bilateral acts (e.g. contracts giving rise to obligations stipulated therein)
3. unilateral acts (e.g. crimes and quasidelicts)
Sources of Obligations
Article 1157. Obligations arise from:
(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts.
a. Law
Obligations arise when imposed by the law itself and cannot be presumed. [Art. 1158, CC]
b. Contracts
Obligations arise from the stipulation of the parties; it has the force of law and should be complied with in
good faith. [Art. 1159, CC]
c. Quasi-Contracts

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Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end
that no one shall be unjustly enriched or benefited at the expense of another. [Art. 2142, CC]
d. Acts or Omissions Punishable by Law

Responsibility for fault or negligence under a quasi-delict [Art. 2176, CC] is entirely separate and distinct
from the civil liability arising from negligence under the penal code. But the plaintiff cannot recover
damages twice for the same act or omission of the defendant. [Art. 2177, CC]
e. Quasi-Delicts
Obligations arise from damages caused to another through an act or omission, there being fault or
negligence but no contractual relations exist between the parties. [Art. 2176, CC]
2. Nature and effect
I. Obligation to give
A. Type of things
Specific/Determinate Thing Generic Thing Limited Generic Thing
Particularly designated or Object is designated only by its When the generic objects are
physically segregated from all class/genus/ species. confined to a particular class.
others of the same class
[Art.1460, CC];
Identified by individuality.
Cannot be substituted against Can be substituted by any of the Can be substituted by any of the
the obligee’s will. same class and same kind. same particular class.
b. Rights and Duties of Parties

Duties of the Debtor Rights of the Creditor
To Give a Specific Thing
1. To preserve or take care of the thing due with the 1. To compel delivery [Art. 1165, CC]
proper diligence of a good father of a family [Art.
1163, CC] 2. To the fruits from the time the obligation to
deliver arises [Art. 1164, CC]
2. To deliver the thing itself [Art. 1165, CC]
3. To the accessions and accessories, even if not
3. To deliver the fruits of the thing [Art. 1164, CC] mentioned [Art. 1166, CC]
4. To deliver its accessions and accessories [Art. 4. Not to be compelled to receive a different one,
1166, CC] although of the same value as, or more valuable
• Accessions – everything which is produced by than that which is due [Art. 1244, CC]
a thing, or which is incorporated or attached
thereto, excluding fruits 5. To recover damages in case of breach, exclusive
• Accessories – things designed for the or in addition to specific performance [Arts. 1165,
embellishment, use or preservation of another 1170, CC]
thing of more importance
5. To pay damages in case of breach [Art. 1170, CC]

To Give a Generic Thing
1. To take care of the thing [Art. 1163, CC] 1. To ask that the obligation be complied with [Art.
1165, CC]
2. To deliver a thing of the quality intended by the
parties taking into consideration the purpose of the 2. To ask that the obligation be complied with by a
obligation and other circumstances [Art. 1246, CC] third person at the expense of the debtor

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3. Creditor cannot demand a thing of superior 3. To recover damages in case of breach [Art. 1165,
quality; neither can the debtor deliver a thing of CC]
inferior quality.
4. Not to be compelled to receive a different one,
4. To pay damages in case of breach [Art. 1170, CC] although of the same value as, or more valuable
than that which is due [Art. 1244, CC]
2. Obligation to do or not to do
a. Rights and Duties of Parties

Duties of the Debtor Rights of the Creditor
Obligation To Do
1. To do it [Art. 1167, CC] 1. To have the obligation executed at the cost of the
2. To shoulder the cost of execution should he fail debtor [Art. 1167, CC]
to do it [Art. 1167, CC]
3. To undo what has been poorly done [Art. 1167, 2. To recover damages in case of breach [Art. 1170,
CC] CC]
4. To pay damages in case of breach [Art. 1170, CC]
Note: The debtor cannot be compelled to perform
his obligation. The ultimate sanction of civil
obligations is indemnification of damages. This
would be tantamount to involuntary servitude.
Obligation Not To Do
1. Not to do what should not be done 1. To ask to undo what should not be done, at the
2. To shoulder cost of undoing what should not debtor’s expense. [Art. 1168, CC]
have been done [Art. 1168, CC] 2. To recover damages, where it would be
3. To pay damages in case of breach [Art. 1170, CC] physically or legally impossible to undo what
should not have been done, because of:
• the very nature of the act itself;

• rights acquired by third persons who acted in
good faith;
• when the effects of the acts prohibited are
definite in character and will not cease even if the
thing prohibited be undone.
3. Transmissibility of obligations
General Rule: All rights acquired by virtue of an obligation are transmissible. [Art. 1178, CC]; Contracts
take effect only between the parties, their assigns and heirs [Art. 1311, CC]
Exception: Nature of obligation, law or stipulation to the contrary provides otherwise [Art. 1178].
Only personal obligations, or those identified with the persons themselves are extinguished by death.
[Stronghold Insurance Co. v. Republic-Asahi Glass Corp., G.R. No. 147561 (2006)]
4. Performance of Obligations
a. Definition
Payment means not only (1) the delivery of money, but also (2) the performance, in any other manner, of
an obligation. [Art. 1232, CC]
b. General Rule/Requirement
The thing or service in which the obligation consists [must be] completely delivered or rendered, as the case
may be. [Art. 1233, CC]

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c. Exceptions
1. Substantial performance
TRIGGER: The obligation has been substantially performed in good faith.
EFFECT: The obligor may recover as though there had been a strict and complete fulfillment, less damages
suffered by the obligee. [Art. 1234, CC]
2. Incomplete/irregular performance
TRIGGER: Obligee accepts performance despite knowledge of its incompleteness or irregularity.
EFFECT: The obligation is deemed fully complied with. [Art. 1235, CC]
3. Partial prestation
General rules:
1. The creditor CANNOT be compelled to receive partial payments.
2. The debtor CANNOT be required to make partial payments.
Exception: when expressly stipulated. [Art. 1248, par. 1, CC]
4. Partial liquidation
TRIGGER: The debt is partly liquidated and partly unliquidated.
EFFECT: The creditor may demand and the debtor may effect the payment of the liquidated debt without
waiting for the liquidation of the unliquidated debt.
5. Breaches of Obligations
Those who in the performance of their obligations are guilty of the following are liable for damages [Art.
1170, CC]:
a. Fraud (dolo): The fraud contemplated by the foregoing provision is the deliberate and
intentional evasion of the normal fulfillment of obligations.
b. Negligence (culpa): Fault or negligence of the debtor as an incident in the fulfillment of an

existing obligation.
c. Delay (mora): Delay in the fulfillment of the obligation. The delay however must be imputable
to the debtor/obligor.
d. And those who in any manner contravene the tenor thereof: Covers any illicit act
which impairs the strict and faithful fulfillment of the obligation.
a. Failure to Perform
Effect of Failure to Perform

Substantial Breach Slight or Casual Breach
1. Total breach 1. Partial breach
2. Amounts to nonperformance, basis for 2. There is partial/substantial performance in good
rescission under Art. 1191 and payment of damages faith
3. Gives rise to liability for damages only [Art. 1234,
CC]
General Rule
Rescission of a contract will not be permitted for a slight or causal breach, but only for such substantial and
fundamental breach as would defeat the very object of the parties in executing the agreement. [Vermen
Realty Corp. v. CA, G.R. No. 101762 (1993)]
Substantial performance contemplates

• an attempt in good faith to perform, without any willful or intentional departure therefrom
• the deviation from the obligation must be slight, and the omission or defect must be technical and
unimportant, and must not pervade the whole or be so material that the object which the parties intended

103
to accomplish in a particular manner is not attained. [International Hotel Corp v. Joaquin, G.R. No. 158361
(2013)]
The question of whether a breach of contract is substantial depends upon the attending circumstances and
not merely on the percentage of the amount not paid. [Cannu v. Galang, G.R. No. 139523 (2005)]
b. Default, Delay, or Mora

Definition: Failure to perform an obligation on time which constitutes a breach of the obligation. [de
Leon]
Rules on Default, Delay, or Mora

Unilateral Obligations Reciprocal Obligations
General Rule: “No demand, No delay.” Neither party incurs in delay if the other does not
comply or is not ready to comply in a proper
The mere expiration of the period fixed by the manner with what is incumbent upon him. From
parties is not enough in order that the debtor may the moment one of the parties fulfills his
incur in delay. obligation, delay by the other begins. [Art. 1169 par.
3, CC]
Those obliged to deliver or to do something incur
in delay from the time the obligee judicially or No delay if neither performs.
extrajudicially demands from them the fulfillment
of their obligation. [Art. 1169 par. 1, CC]
When demand is not necessary in order that delay may exist [par. 2, Art. 1169, CC]
1. When demand would be useless, as when the obligor has rendered it beyond his power to perform; such
as:
a. When the impossibility is caused by some act or fault of the debtor (e.g. debtor absconded or has
destroyed the thing to be delivered);
b. When the impossibility is caused by a fortuitous event, but the debtor has bound himself to be
liable in case of such event. [Tolentino]
2. When from the nature and the circumstances of the obligation it appears that the designation of the time
when the thing is to be delivered or the service is to be rendered was a controlling motive for the
establishment of the contract (time is of the essence);
3. When the law so provides; or
4. When the obligation expressly so declares.
Note: It is insufficient that the law or obligation fixes a date for performance. It must further state expressly
that after the period lapses, default will commence.
KINDS OF DELAY
1. Mora Solvendi;
2. Mora Accipiendi;
3. Compensatio Morae
MORA SOLVENDI
Delay on the part of the debtor to fulfil his obligation either to give (ex re) or to do (ex persona).
Requisites
1. Obligation must be liquidated, due and demandable
2. Non-performance by the debtor within the period agreed upon
3. Demand, judicial or extra-judicial, by the creditor, unless demand is not necessary under the
circumstances enumerated in Art 1169 par (2).
Effects
1. The debtor is liable for damages. [Art. 1170, CC]

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2. For determinate objects, the debtor shall bear the risk of loss, even if the loss is due to fortuitous events.
[Art. 1165 par. 3, CC]
MORA ACCIPIENDI
Delay on the part of the creditor to accept the performance of the obligation.
Requisites
1. Debtor offers performance.
2. Offer must be in compliance with the prestation as it should be performed.
3. Creditor refuses performance without just cause.
Effects
1. The responsibility of the debtor is reduced to fraud and gross negligence.
2. The debtor is exempted from risk of loss of the thing, which is borne by the creditor.
3. The expenses incurred by the debtor for the preservation of the thing after the mora shall be chargeable
to the creditor.
4. If the obligation bears interest, the debtor does not have to pay from the time of delay.
5. The creditor is liable for damages.
6. The debtor may relieve himself of the obligation by consigning the thing. [Tolentino]
COMPENSATIO MORAE
Delay of both parties in reciprocal obligations.
Effects
1. Delay of the obligor cancels delay of obligee (and vice versa) hence it is as if there is no default.
2. The liability of the first infractor shall be equitably tempered by the courts. If it cannot be determined
which of the parties first violated the contract, the same shall be deemed extinguished, and each shall bear
his own damages. [Art. 1192, CC]
Equitable Tempering under Art. 1192 vs. Under Art. 2215 [Ong v. Bognalbal, G.R. No. 149140
(2006)]
Art. 1192 Art. 2215
“In case both parties have committed a breach of “In contracts, quasicontracts, and quasidelicts, the
the obligation, the liability of the first infractor court may equitably mitigate the damages under
shall be equitably tempered by the courts. xxx” circumstances other than the case referred to in the
preceding article, as in the ff. instances:
(1) That the plaintiff himself has contravened the

terms of the contract xxx”
Second infractor not liable for damages at all; only Does not appear to consider which infractor first
the first infractor is liable, but with his liability committed the breach.
mitigated.
c. Fraud (Dolo) in the Performance of the Obligation

Article 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action
for future fraud is void. (1102a)
Definition: Fraud (dolo) is the deliberate or intentional evasion of the normal fulfilment of an obligation.
[de Leon]
Two Types of Fraud

Dolo Causante Dolo Incidente
[Art. 1338, par. 1, Art. 1344, CC] [par. 2, Art. 1344, CC]
Definition
Those deceptions or misrepresentations of a Those which are not serious in character and
serious character employed by one party and without which the other party would still have

105
without which the other party would not have entered into the contract. [Tankeh v. DBP, G.R. No.
entered into the contract. [Tankeh v. DBP, G.R. No. 171428 (2013)]
171428
(2013)]
When Present
Deception used by one party prior to or Deception used by one party at the time of birth or
simultaneous with the contract, in order to secure perfection, or performance of the obligation
the consent of the other [Tankeh v. DBP, G.R. No.
171428 (2013)]
Object
Essential cause of the obligation without which the Some particular or accident of the obligation
other party would not have entered into the
contract.
Effect
Voidable and Damages Damages
Requisites for Fraud to Vitiate a Contract (Dolo Causante)

1. It must have been employed by one contracting party upon the other;
2. It must have induced the other party to enter into the contract;
3. It must have been serious; and
4. It must have resulted in damage or injury to the party seeking annulment. [Tolentino]
d. Negligence (Culpa) in the Performance of the Obligation

Article 1172. Responsibility arising from negligence in the performance of every kind of obligation is also
demandable, but such liability may be regulated by the courts, according to the circumstances.
Article 1173. The fault or negligence of the obligor consists in the omission of that diligence which is
required by the nature of the obligation and corresponds with the circumstances of the persons, of the
time and of the place. When negligence shows bad faith, the provisions of articles 1171 and 2201,
paragraph 2, shall apply.
If the law or contract does not state the diligence which is to be observed in the performance, that which
is expected of a good father of a family shall be required.
General Rule: Standard of care required is diligence of a good father of family.
Exceptions (Other standards of care)

1. Common Carriers
They are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the
passengers transported by them [Art. 1733, CC]
2. Hotel and inn-keepers

The keepers of hotels or inns shall be responsible for the deposit of effects, made by travellers, as
depositaries, provided that notice was given to them, or their employees of such effects and that they take
precautions relative to the care and vigilance of their effects [Art. 1998, CC]
This responsibility shall include the loss of, or injury to the personal property of the guests caused by the
servants or employees of the keepers of hotels or inns as well as strangers; but not that which may proceed
from any force majeure. [Art. 2000, CC]
3. Banks
Banks have the obligation to treat the accounts of its clients ‘meticulously and with the highest degree of
care’. [Poole-Blunden v. UnionBank, G.R. No. 205838 (2017)]
4. Pharmacists

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As active players in the field of dispensing medicines to the public, the highest degree of care and diligence
is expected [Mercury Drug Corporation v. de Leon, G.R. No. 165622 (2008)]
Test of Negligence
“Whether or not the defendant, in doing the alleged negligent act, observed the reasonable care and caution,
which an ordinary and prudent person would have used in the same situation.” If not, then he is guilty of
negligence. [Mandarin Villa Inc. v. CA, G.R. No. 119850 (1996)]
Kinds of Civil Negligence

Culpa Contractual Culpa Aquiliana
Negligence is merely incidental in the performance Negligence is direct, substantive and independent.
of an obligation.
There is always a pre-existing contractual relation. There may or may not be a preexisting contractual
obligation.
The source of the obligation of the defendant to pay The source of obligation is the defendant’s
damages is the breach or non-fulfillment of the negligence itself.
contract.
Proof of the existence of the contract and of its The negligence of the defendant must be proven.
breach or nonfulfillment is sufficient prima facie to
warrant recovery.
Extent of Damages to be Awarded [Art.2201, CC]

Good Faith Bad Faith
Good Faith Obligor is liable for those that are the Bad Faith Obligor shall be responsible for all
natural and probable consequences of the breach of damages which may be reasonably attributed to the
the obligation, and which the parties have foreseen nonperformance of the obligation.
or could have reasonably foreseen at the time the
obligation was constituted. Any waiver or renunciation made in the
anticipation of such liability is null and void.
e. Contravention of the Tenor of the Obligation

“In any manner contravenes the tenor” means any illicit act, which impairs the strict and faithful
fulfillment of the obligation, or every kind of defective performance. [Tolentino]
6. Remedies available to creditor in cases of breach
a. Principal remedies of creditors

Obligation to Give a Specific Thing Obligation to Give a Generic Thing and
Obligation to Do
Alternative Remedies
Compel the debtor to make delivery (specific Ask the obligation be complied with at the expense
performance) [par. 1, Art. 1165, CC] of the debtor. [par. 2, Art. 1165, CC]
Rescission [Art. 1191] If a person obliged to do something fails to do it,
the same shall be executed at his cost [Art. 1167,
CC]
What has been poorly done [may] be undone. [Art.
1167]
Rescission [Art. 1191
Damages in any event
Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who
in any manner contravene the tenor thereof, are liable for damages. [Art. 1170, CC]
Rescission (Resolution in Reciprocal Obligations)

Article 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors
should not comply with what is incumbent upon him.

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The injured party may choose between the fulfillment and the rescission of the obligation, with the
payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if
the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in
accordance with articles 1385 and 1388 and the Mortgage Law.
Rescission
The unmaking of a contract, or its undoing from the beginning, and not merely its termination [Pryce Corp
v. Pagcor, G.R. No. 157480 (2005)]
Right to Rescind
The rescission on account of breach of stipulations is not predicated on injury to economic interests of the
party plaintiff but on the breach of faith by the defendant, that violates the reciprocity between the parties.
[Universal Food Corporation v. CA, G.R. No. L-29155 (1970)]
Effect of Rescission under Art 1191

Extinguishes the obligatory relation as if it had never been created, the extinction having a retroactive effect.
Both parties must surrender what they have respectively received and return each other as far as practicable
to their original situation. [Tolentino]
Rescission may take place extrajudicially, by declaration of the injured party. The party who deems the
contract violated may consider it resolved or rescinded, and act accordingly, without previous court action,
but it proceeds at its own risk. For it is only the final judgment of the corresponding court that will
conclusively and finally settle whether the action taken was or was not correct in law. But the law definitely
does not require that the contracting party who believes itself injured must first file suit and wait for a
judgment before taking extrajudicial steps to protect its interest. [UP v. Delos Angeles, G.R. No. L-28602
(1970)]
Under Art 1191, the right to rescind an obligation is predicated on the violation of the reciprocity between
parties, brought about by a breach of faith by one of them. Rescission, however, is allowed only where the
breach is substantial and fundamental to the fulfillment of the obligation. [Del Castillo Vda de Mistica v.
Naguiat,G.R. No. 137909 (2003); Cannu v. Galang, G.R. No. 139523 (2005)].
It will not be permitted in casual or slight breach. [Song Fo v. Hawaiian Philippines, G.R. No. 23769, (1925)]
Distinguished from Rescission under Art. 1380

Rescission / Resolution [Art. 1191, CC] Rescission [Art. 1380, CC]
Based on nonperformance or non-fulfillment of Based on lesion or fraud upon creditors.
obligation
Action is instituted only by the injured party. Action is instituted by either party or by a third
person.
Principal action, retaliatory in character Subsidiary action, in the absence of any other legal
means to obtain reparation.
Applies only to reciprocal obligations where one Applies to either unilateral or reciprocal
party is guilty of non-fulfillment obligations even when the contract has been fully
fulfilled.
In some cases, court may grant a term for Court cannot grant a period or term within which
performance. one must comply
Non-performance by the other party is important. Non-performance by the other party is immaterial.
b. Subsidiary Remedies of Creditors
ACCION SUBROGATORIA

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Article 1177. The creditors, after having pursued the property in possession of the debtor to satisfy their
claims, may exercise all the rights and bring all the actions of the latter for the same purpose, save those
which are inherent in his person; they may also impugn the acts which the debtor may have done to
defraud them.
Right of the creditor to exercise all of the rights and bring all the actions which his debtor may have against
third persons. In order to satisfy their claims against the debtor, creditors have the ff. successive rights:
1. To levy by attachment and execution upon all the property of the debtor, except those exempt from
execution;
2. To exercise all the rights and actions of the debtor, except such as are inherently personal to him; and
3. To ask for rescission of the contracts made by the debtor in fraud of their rights.
Requisites
1. The person to whom the right of action pertains must be indebted to the creditor
2. The debt is due and demandable
3. The creditor must be prejudiced by the failure of the debtor to collect his debts due him from third
persons, either through malice or negligence
4. The debtors assets are insufficient (debtor is insolvent)
5. The right of action is not purely personal to the debtor
Previous approval of the court is not necessary to exercise the accion subrogatoria.
ACCION PAULIANA
Creditors may also impugn the acts which the debtor may have done to defraud them. [Art. 1177, CC]
Par. 3, Art. 1381. The following contracts are rescissible: (3) Those undertaken in fraud of creditors when
the latter cannot in any other manner collect the claims due them;
Requisites [Cheng v. CA, G.R. No. 144169 (2001)]

1. There is a credit in favor of the plaintiff prior to the alienation by the debtor
2. The debtor has performed a subsequent contract conveying patrimonial benefit to third person/s.
3. The debtor’s acts are fraudulent to the prejudice of the creditor.
4. The creditor has no other legal remedy to satisfy his claim
5. The third person who received the property is an accomplice to the fraud.
An accion pauliana thus presupposes the following:

1. A judgment;
2. the issuance by the trial court of a writ of execution for the satisfaction of the judgment, and;
3. the failure of the sheriff to enforce and satisfy the judgment of the court.
It requires that the creditor has exhausted the property of the debtor. The date of the decision of the trial
court is immaterial. What is important is that the credit of the plaintiff antedates that of the fraudulent
alienation by the debtor of his property. After all, the decision of the trial court against the debtor will
retroact to the time when the debtor became indebted to the creditor. [Cheng v. CA, supra]
Accion Subrogatoria Accion Pauliana

Not necessary that creditor’s claim is prior to the Credit must exist before the fraudulent act
acquisition of the right by the debtor [Tolentino]
Note: Commentators have conflicting views on

WoN new debts contracted by the debtor fall under
the scope of accion pauliana.
No need for fraudulent intent Fraudulent intent is required if the contract
rescinded is onerous
No period for prescription Prescribes in 4 years from the discovery of the
fraud

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3. Kinds of Obligations
1. PURE
Article 1179. Every obligation whose performance does not depend upon a future or uncertain event, or
upon a past event unknown to the parties, is demandable at once.
Every obligation which contains a resolutory condition shall also be demandable, without prejudice to the
effects of the happening of the event.
A pure obligation is IMMEDIATELY DEMANDABLE, regardless of the presence of a condition or a

term/period.
2. CONDITIONAL
Article 1181. In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of
those already acquired, shall depend upon the happening of the event which constitutes the condition.
A condition is a future AND uncertain event. This includes acquisition of proof/knowledge of a past event
unknown to the parties.
a. Kinds of conditions
i. As to effect
1. SUSPENSIVE - Obligation shall only be effective upon the fulfillment of the condition [Art. 1181, CC].
The obligee acquires a mere hope or expectancy, protected by law, upon the constitution of the obligation.
Before Fulfillment After Fulfillment

The demandability and acquisition/effectivity The obligation arises or becomes effective.
of the rights arising from the obligation is
suspended, but the creditor may bring the The obligor can be compelled to comply with
appropriate actions for the preservation of his what is incumbent upon him.
right. [Art. 1188,CC]
Doctrine of Constructive Fulfillment of Suspensive Conditions

Article 1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment.
Suspensive condition is deemed fulfilled when:

1. Obligor intends to prevent obligee from complying with the condition
2. Obligor actually prevents obligee from complying with the condition
Note: The two requisites must concur. Mere intention of the debtor to prevent the happening of the
condition, or to place ineffective obstacles to its compliance, without actually preventing the fulfillment, is
insufficient. [International Hotel Corporation v. Joaquin, G.R. No. 158361 (2013)]
Doctrine does not apply to:

1. Resolutory conditions
2. External contingency that is lawfully within the control of the obligor [Taylor v Uy Tieng, G.R. No. L-
16109 (1922)]
3. Obligor, in preventing the fulfilment of the condition, acts pursuant to a right
Principle of Retroactivity in Suspensive Conditions

Par. 1, Art. 1187, CC. The effects of a conditional obligation to give, once the condition has been fulfilled,
shall retroact to the day of the constitution of the obligation. Nevertheless, when the obligation imposes
reciprocal prestations upon the parties, the fruits and interests during the pendency of the condition shall
be deemed to have been mutually compensated. If the obligation is unilateral, the debtor shall appropriate

110
the fruits and interests received, unless from the nature and circumstances of the obligation it should be
inferred that the intention of the person constituting the same was different.
Rationale: Obligation is constituted when its essential elements concur. The condition imposed is only an
accidental element.
Applicability: This applies to consensual contracts only.
Exception: This does not apply to real contracts which can only be perfected by delivery.
Effects of the Happening of Suspensive Conditions

To Give To Do/Not To Do
If reciprocal, the fruits and interests shall be In obligations to do or not to do, the court shall
deemed to have been mutually compensated a determine the retroactive effect of the condition
matter of justice and convenience [Art. 1187, par. that has been complied with [Art. 1187, par. 2]
1]
If unilateral, the debtor shall appropriate the fruits The power of the court includes the determination
and interests received, unless from the nature and of whether or not there will be any retroactive
circumstance it should be inferred that the effect. This rule shall likewise apply in obligations
intention of the persons constituting the same was with a resolutory condition. [Art. 1190, par. 3]
different. [Art. 1187, par. 1]
2. RESOLUTORY – The obligation is demandable at once, without prejudice to the effects of the
happening of the event [par. 2, Art. 1179, CC].
Before Fulfillment After Fulfillment

Preservation of creditor’s rights [par. 1, Art. Whatever may have been paid or delivered by
1188, CC] also applies to obligations with a one or both of the parties upon the constitution
resolutory condition. of the obligation shall have to be returned upon
the fulfillment of the condition [par. 1, Art.
1190, CC]. There is no return to the status quo.
However, when the condition is not fulfilled,
rights are consolidated and they become
absolute in character.
ii. As to Cause/Origin
a. POTESTATIVE – The fulfillment of the condition depends on the sole act or decision of a party.
b. CASUAL – The fulfilment of the condition depends upon chance or upon the will of a third person. [Art.
1182, CC]
c. MIXED – The fulfilment of the condition depends partly upon the will of a party to the contract and
partly upon chance and/or will of a third person.
Exclusively upon the Creditor’s Will Condition and obligation are valid.
Exclusively upon the Debtor’s Will in case Condition and obligation are void because to allow
of a Suspensive Condition [Art. 1182, CC] such condition would be equivalent to sanctioning
obligations which are illusory. It also constitutes a
direct contravention of the principle of mutuality of
contracts.
Exclusively upon the Debtor’s Will in case Condition and obligation are valid because in such
of a Resolutory Condition [par. 2, Art. 1179, situation, the position of the debtor is exactly the
CC] same as the position of the creditor when the
condition is suspensive. It does not render the
obligation illusory.

111
The condition that payment should be made by Hermosa as soon as he receives funds from the sale of his
property in Spain is a mixed condition. The condition implies that the obligor already decided to sell the
house and all that was needed to make the obligation demandable is that the sale be consummated and the
price thereof remitted to the islands. There were still other conditions that had to concur to effect the sale,
mainly that of the presence of a buyer, ready, able and willing to purchase the property under the conditions
set by the intestate. [Hermosa vs. Longara, G.R. No. L-5267 (1953)]
Loss, Deterioration, or Improvement of a Specific Thing before Fulfillment of Suspensive

Condition in Obligations to Give (Art. 1189) or of Resolutory Condition in Obligations to Do
or Not to Do [par. 2, Art. 1190, CC]
Loss of a Thing A thing is deemed lost:

a. When it perishes;
b. When it goes out of commerce of man; or
c. When it disappears in such a manner that its existence is
unknown or it cannot be recovered
Deterioration of a Thing Any reduction or impairment in the substance or value of a thing
which does not amount to a loss
Improvement of a Thing Anything added to, incorporated in, or attached to the thing that
is due.
Re: Obligation to Deliver a Determinate Thing

When the conditions have been imposed with the intention of suspending the efficacy of an obligation to
give, the following rules shall be observed in case of the improvement, loss or deterioration of the thing
during the pendency of the condition [Art. 1189, CC]:
Without Debtor’s Fault/Act With Debtor’s Fault/Act

Loss
Obligation is extinguished. Obligation is converted into one of indemnity for
damages.
Deterioration
Impairment to be borne by the creditor Creditor may choose between bringing an action
for rescission of the obligation OR bringing an
action for specific performance, with damages in
either case.
Improvement
Improvement at the debtor’s expense, the debtor Improvement by the thing’s nature or by time shall
shall ONLY have usufructuary rights. inure to the benefit of the creditor.
Re: Obligations To Do and Not To Do

Par. 3, Art. 1190, CC. As for the obligations to do and not to do, the provisions of the second paragraph of
article 1187 shall be observed as regards the effect of the extinguishment of the obligation.
Par. 2, Art. 1187, CC. In obligations to do and not to do, the courts shall determine, in each case, the
retroactive effect of the condition that has been complied with.
Re: Obligations With a Resolutory Condition

Upon the happening of the resolutory condition, the rules of Article 1189 shall be applied to the party who
is bound to return (i.e. the creditor in the original obligation).
b. Impossible Conditions
1. Impossible conditions, those contrary to good customs or public policy, and those prohibited by law shall
annul the obligation which depends upon them.
2. The part of a divisible obligation which is not affected by such condition shall be valid. [Art. 1183, CC]

112
c. Positive and Negative Conditions
Positive [Art. 1184, CC] Negative [Art. 1185, CC]
The condition that some event happen at a The condition that some event will not happen at a
determinate time shall extinguish the obligation determinate time shall render the obligation
1. as soon as the time expires or effective from the moment
2. if it has become indubitable that the event will 1. the time indicated has elapsed, or
not take place 2. if it has become evident that the event cannot
occur.
Where no date of fulfilment is stipulated, the condition must be fulfilled within a reasonable time or the
time probably contemplated according to the nature of the obligation [par. 2, Art. 1185, CC].
3. OBLIGATION WITH A PERIOD OR A TERM
1. Obligations for whose fulfillment a day certain has been fixed ⎯ shall be demandable only when that day
comes. [Art. 1193, CC]
2. Obligations with a resolutory period ⎯ take effect at once, but terminate upon arrival of the day certain.
[Art. 1193, CC]
3. When the debtor binds himself to pay when his means permit him to do so, the obligation shall be deemed
to be one with a period [Art. 1180, CC]
Period or Term
 Interval of time, which either suspends demandability or produces extinguishment.
 A fortuitous event does not interrupt the running of the period. It only relieves the contracting
parties from the fulfillment of their respective obligations during the period. [Victoria’s Planters v.
Victoria Milling Co., G.R. No. L-6648]
Term/Period and Condition Distinguished

Term/Period Condition
Interval of time which is future and certain Fact or event which is future and uncertain
Must necessarily come, although it may not be May or may not happen
known when
No effect on existence of the obligation, only its Gives rise to an obligation or extinguishes one
demandability or performance already existing
No retroactive effect unless there is an agreement Has retroactive effect
to the contrary
When it is left exclusively to the will of the debtor, When it is left exclusively to the will of the debtor,
the existence of the obligation is not affected the very existence of the obligation is affected
Kinds of Period [Art. 1193, CC]

1. Ex die/ Suspensive Period – Obligation becomes demandable after the lapse of the period.
2. In die/ Resolutory period – Obligation becomes demandable at once but is extinguished after the
lapse of the period.
Effect of Advance Payment or Delivery [Art. 1195, CC]

Trigger: (1) Something has been paid or delivered before the arrival of the period, (2) the obligor being
unaware of the period or believing that the obligation has become due and demandable.
Effect: That thing paid or delivered may be recovered with fruits and interests
Loss, Deterioration, or Improvement of the Thing Before Period Expires [Art. 1194, CC]
Trigger: In case of loss, deterioration or improvement of the thing before the arrival of the day certain
Effect: The rules in Art. 1189 shall apply.
Benefit of the Period [Art. 1196, CC]

Trigger: Whenever in an obligation a period is designated
Effect: It is presumed to have been established for the benefit of both the creditor and the debtor

113
Exception: From the tenor of the same or other circumstances it should appear that the period has been
established in favor of one or of the other.
Period for the benefit of either creditor or debtor

Creditor Debtor
Creditor may demand the fulfillment or Debtor may oppose any premature demand on the
performance of the obligation at any time but the part of the obligee for the performance of the
obligor cannot compel him to accept payment obligation, or if he so desires, he may renounce the
before the expiration of the period. benefit of the period by performing his obligation
in advance.
If the period is for the benefit of the debtor alone, he shall lose every right to make use of it:
(a) When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty
or security for the debt;
(b) When he does not furnish to the creditor the guaranties or securities which he has promised;
(c) When by his own acts he has impaired said guaranties or securities after their establishment,
and when through a fortuitous event they disappear, unless he immediately gives new ones equally
satisfactory;
(d) When the debtor violates any undertaking, in consideration of which the creditor agreed to the
period;
(e) When the debtor attempts to abscond [Art. 1198, CC]
(f) When required by law or stipulation;
(g) If parties stipulated an acceleration clause [Tolentino]
When Courts May Fix Period

General Rule: Courts may fix the period of an obligation when:
1. the obligation does not fix a period but from its nature and the circumstances it can be inferred that a
period was intended;
2. the obligation depends upon the will of the debtor.
Exceptions: If the Court determines that one of the 3 circumstances [below] are present, it must decide
the period “probably contemplated by the parties” [Araneta v. Phil. Sugar Estates, G.R. No. L-22558 (1967)]
1. obligation does not fix a period, but from its nature and circumstances, it can be inferred that a period
was intended
2. the period is void, such as when it depends upon the will of the debtor
3. If the debtor binds himself when his means permit him to do so.
Courts shall determine such period as may have been probably contemplated by the parties
[Art. 1197, CC]
Application: When a period was intended by the parties [Macasaet v. Macasaet, G.R. Nos. 154391-92
(2004)]
General Rule: Once fixed by the courts, the period cannot be changed by them.
Exception: The rule does not apply to contract of services and to pure obligations. [Tolentino]
4. ALTERNATIVE OR FACULTATIVE
Alternative and Facultative Conditions Distinguished

Alternative Obligations Facultative Obligations
Of the two or more prestations, several are due. Of the two or more prestations, only one is due,
while the other/s may be performed in substitution
of the one due.
May be complied with by performance of one of the May be complied with by performance of another
prestations which are alternatively due. prestation in substitution of that which is due.
The right of choice belongs to the debtor, unless it Choice of prestation pertains only to the debtor.
has been expressly granted to the creditor. [Art.
1200, CC]

114
Loss/impossibility of all prestations due to a Loss/impossibility of the prestation due to a
fortuitous event shall extinguish the obligation. fortuitous event is sufficient to extinguish the
obligation.
Loss/impossibility of one of the prestations does Loss/impossibility of the substitute/s does not
not extinguish the obligation. extinguish the obligation, provided the obligation
which is due subsists
Culpable loss of any of the objects alternatively due Culpable loss of the object which the debtor may
before the choice is made may give rise to liability deliver in substitution before the substitution is
on the part of the debtor. effected does not give rise to any liability on the
part of the debtor.
Right of Choice [Art. 1200, CC]

General Rule: Belongs to the debtor
Exceptions
1. it is expressly granted to the creditor
2. it is expressly granted to a third person
Form of notice
Notice of selection or choice may be in any form provided it is sufficient to make the other party know that
the selection has been made. It can be:
1. oral
2. in writing
3. tacit
4. any other equivocal means [Tolentino]
Consent of other party

The law does not require the other party to consent to the choice made by the party entitled to choose. The
only possible exception is when the debtor has chosen a prestation which could not have been the object of
the obligation; the creditor’s consent would bring about a novation of the obligation [Ibid.]
Debtor cannot make a choice, or delays selection

If through the creditor's acts the debtor cannot make a choice according to the terms of the obligation, the
latter may rescind the contract with damages. [Art. 1203, CC]
If the debtor does not select at the time when performance should be effected, the choice can
be made for him by the creditor by applying Art. 1167
In obligations to do (debtor considered to have waived his right, subject to equity considerations)
[Tolentino].
Effect of notice of choice

The effect of the notice is to limit the obligation to the object or prestation selected. The obligation is
converted into a simple obligation to perform the prestation chosen. Once a selection has been
communicated, it is irrevocable [Ibid.]
Instances when obligation is converted into a simple obligation

1. The person with the right of choice has communicated his choice [Arts. 1201 and par. 1, 1205, CC]
2. Only one prestation is practicable [Art. 1202, CC]
If Debtor’s Choice [Art. 1204, CC]

Fortuitous Event Debtor’s Fault
All prestations lost/impossible
Debtor is released from the obligation. Creditor shall have a right to indemnity for
damages based on the value of the last thing which
disappeared or service which become impossible,
plus damages other than the value may also be
awarded.

115
Some prestations lost/impossible
Debtor to perform that which he shall choose from Debtor to perform that which the debtor shall
among the remainder choose from among the remainder, without
liability for damages.
One prestation remains
Debtor to perform that which remains. Debtor to perform that which remains.
If Creditor’s Choice [Art. 1205, CC]

Fortuitous Event Debtor’s Fault
All prestations lost/impossible
Debtor is released from the obligation. Creditor may claim the price/value of any of them,
with indemnity for damages.
Some prestations lost/impossible
Debtor to deliver that which he shall choose from Creditor may claim any of those subsisting without
among the remainder. a right to damages OR price/value of the thing lost,
with right to damages.
One prestation remains
Debtor to perform that which remains. Creditor may claim the remaining thing without a
right to damages OR the price/value of the thing
lost with right to damages.
Facultative Obligations
Only one prestation is agreed upon, but the obligor may render another in substitution. [Art. 1206, CC]
Loss or deterioration of Substitute in Facultative Obligations [Art. 1206, CC]

Before Substitution is Made After Substitution is Made
If due to bad faith or fraud of obligor: obligor is The loss or deterioration of the substitute on
liable. account of the obligor’s delay, negligence, or fraud,
If due to the negligence of the obligor: obligor is not renders the obligor liable because once the
liable. substitution is made, the obligation is converted
into a simple one with the substituted thing as the
object of the obligation.
5. JOINT AND SOLIDARY OBLIGATIONS
a. Joint Obligations
 The whole obligation, whether capable of division into equal parts or not, is to be paid or performed
by several debtors (joint debtors) and/or demanded by several creditors (joint creditors).
 Each debtor is liable only for a proportionate part of the debt, and each creditor is entitled only to
a proportionate part of the credit. [Tolentino]
Presumption of Joint Obligation [Article 1207, CC]

General Rule: An obligation is presumed joint if there is a concurrence of several creditors, or of several
debtors, or of several creditors and debtors in one and the same obligation.
Exceptions
1. When the obligation expressly states that there is solidarity
2. When the law requires solidarity, i.e. quasi-delicts [Art. 2194, CC], joint payees by mistake [Art. 2157,
CC], acts under articles 19-22 if committed by two or more persons acting jointly
3. When the nature of the obligation requires solidarity
4. When a charge or condition imposed upon heirs or legatees, and the testament expressly makes the
charge or condition in solidum
5. When the solidary responsibility is imputed by a final judgment upon several defendants
Presumption of Divisibility in Joint Obligations [Art. 1208, CC]

116
Credit or debt shall be presumed to be divided into as many equal shares as there are creditors or debtors,
the credits or debts being considered distinct from one another.
JOINT DIVISIBLE OBLIGATION

One where a concurrence of several creditors, or of several debtors, or of several creditors and debtors, by
virtue of which, each of the creditors has a right to demand, and each of the debtors is bound to render
compliance with his proportionate part of the prestation which constitute the object of the obligation.
JOINT INDIVISIBLE OBLIGATION

Article 1209. If the division is impossible, the right of the creditors may be prejudiced only by their
collective acts, and the debt can be enforced only by proceeding against all the debtors. If one of the latter
should be insolvent, the others shall not be liable for his share.
When there are several debtors or creditors, but the prestation is indivisible, the obligation is joint, unless
solidarity has been stipulated [Tolentino]
When Indivisible [Art. 1225, CC]

1. Obligations to give definite things
2. Obligations not susceptible of partial performance
3. Indivisibility is provided by law or intended by the parties, even though the object or service may be
physically divisible
4. In obligations not to do, when character of prestation requires indivisibility
Summary: in case of breach

Joint Divisible Obligations Joint Indivisible Obligations
In case of breach of obligation by one of the In case of breach where one of the joint debtors
debtors, damages due must be borne by him alone. fails to comply with his undertaking, the obligation
can no longer be fulfilled or performed. Thus, the
action must be converted into one for indemnity
for damages, with each debtor liable only for his
part in the price or value of the prestation.
b. Solidary Obligations
 An obligation where there is concurrence of several creditors, or of several debtors, or of several
creditors and several debtors, by virtue of which, each of the creditors has the right to demand, and
each of the debtors is bound to render, entire compliance with the prestation which constitutes the
object of the obligation.
 The indivisibility of an obligation does not necessarily give rise to solidarity. Nor does solidarity of
itself imply indivisibility. [Art. 1210, CC]
 Solidarity may exist although the creditors and the debtors may not be bound in the same manner
and by the same periods and conditions. [Art. 1211, CC]
Solidarity Indivisibility
Refers to the legal tie (vinculum juris), and Refers to the prestation that is not capable of
consequently to the subjects or parties of the partial performance
obligation
More than one creditor or more than one debtor Exists even if there is only one creditor and/or one
(plurality of subjects) debtor
Each creditor may demand the entire prestation Each creditor cannot demand more than his share
and each debtor is bound to pay the entire and each debtor is not bound to pay more than his
prestation share
Effect of breach: Solidarity remains Effect of breach: Obligation is converted to
indemnity for damages
All debtors are liable for breach committed by a co- Only the debtors guilty of breach of obligation is
debtor liable for damages

117
All debtors are proportionately liable for Other debtors are not liable if one debtor is
insolvency of one debtor insolvent
KINDS OF SOLIDARY OBLIGATIONS
As to Source
1. Legal – imposed by law
2. Conventional – agreed upon by parties
3. Real – imposed by the nature of the obligation
As to Parties Bound
1. Active (solidarity among creditors) – Each creditor has the authority to claim and enforce the rights of
all, with the resulting obligation of paying everyone what belongs to him.
2. Passive (solidarity among debtors) – Each debtor can be made to answer for the others, with the right
on the part of the debtor-payor to recover from the others their respective shares.
3. Mixed (solidarity among creditors and debtors) – The creditor can commence an action against anyone
of the debtors for the compliance with the entire obligation minus the portion or share which corresponds
to the debtor affected by the condition or period. [Art. 1211, CC]
ACTIVE SOLIDARY OBLIGATION (among creditors)

Article 1214. The debtor may pay any one of the solidary creditors; but if any demand, judicial or
extrajudicial, has been made by one of them, payment should be made to him.
Effects of Active Solidarity [Tolentino]

1. Death of solidary creditor does not transmit solidarity to his heirs but rather to all of them taken together
(joint)
2. Each represents the other in receiving payment and all other advantageous acts (i.e. interrupt
prescription and render the debtor in default for the benefit of all creditors)
3. Each one of the solidary creditors may do whatever may be useful to the others, but not anything which
may be prejudicial to the latter. [Art. 1212, CC]
4. One creditor does NOT represent all others in acts such as novation (even if advantageous), compensation
and remission. In this case, even if the debtor is released, the other creditors can still enforce their rights
against the creditor who made the novation, compensation or remission [par. 2, Art. 1215, CC]
5. The creditor who collects the debt, shall be liable to the others for the share in the obligation
corresponding to them. [par. 2, Art. 1215, CC]
6. The credit and its benefits are divided equally among them, unless agreement to the contrary.
7. Debtor may pay any one of the solidary creditors; but if any demand, judicial or extrajudicial, has been
made by one of them, payment should be made to him who demanded [Art. 1214, CC]
PASSIVE SOLIDARY OBLIGATION
General Rules
1. The creditor may proceed against any one of the solidary debtors or some or all of them
simultaneously...so long as the debt has not been fully collected [Art. 1216, CC]
2. Payment made by one of the solidary debtors extinguishes the obligation. If two or more solidary debtors
offer to pay, the creditor may choose which offer to accept. [Art. 1217, CC]
3. A solidary debtor may, in actions filed by the creditor, avail himself of all defenses which are derived from
the nature of the obligation and of those which are personal to him, or pertain to his own share. For defenses
which personally belong to the others, such debtor may avail himself thereof only as regards that part of the
debt for which the latter are responsible. [Art. 1222, CC]
Effects of Passive Solidarity [Tolentino]

1. Each debtor can be required to pay the entire obligation, but after payment he can recover from the co-
debtors their respective shares

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2. Each debtor may set up his own claims against the creditor as payment of the obligation
3. Remission of the entire debt affects all debtors, but when remission is limited to the share of one debtor,
the other debtors are still liable for the balance of the obligation
a. The remission of the whole obligation, obtained by one of the solidary debtors, does not entitle
him to reimbursement from his co-debtors. [Art. 1220, CC]
b. The remission made by the creditor of the share which affects one of the solidary debtors does
not release the latter from his responsibility towards the co-debtors, in case the debt had been
totally paid by any one of them before the remission was effected. [Art. 1219, CC]
4. All debtors are liable for the loss of the thing due, even if only one of them is at fault, or after incurring
delay it is lost by fortuitous event
5. Interruption of prescription as to one debtor affects all others, but renunciation of prescription already
had does not prejudice the others. (Reason: prescription extinguishes the mutual representation among
solidary debtors)
6. Interests due by delay of one is borne by all of them
DEFENSES AVAILABLE TO A SOLIDARY DEBTOR [Art. 1222, CC]
1. Those derived from the nature of the obligation

Defenses inherent in an obligation include non-existence of the obligation because of absolute simulation
or illicit object, nullity due to defect in capacity or consent of all debtors, unenforceability, nonperformance
of suspension condition or non-arrival of period, extinguishment of the obligation, res judicata, and
prescription.
2. Those personal to him

Personal defenses such as minority, insanity, fraud, violence, or intimidation will serve as a complete
exemption of the defendant debtor from liability to the creditor
3. Those pertaining to his own share
4. Those personally belonging to other co-debtors but only as regards that part of the debt for which the
latter are responsible.
Comparing demand upon Solidary Debtor and Payment by a Solidary Debtor

Demand Upon a Solidary Debtor Payment by a Solidary Debtor
The demand made against one of them shall not be Full payment made by one of the solidary debtors
an obstacle to those which may subsequently be extinguishes the obligation [Art. 1217, CC].
directed against the others so long as the debt has
not been fully collected [Art. 1216, CC].
The creditor may proceed against any one of the If two or more solidary debtors offer to pay, the
solidary debtors or all simultaneously [Art. 1216, creditor may choose which offer to accept [Art.
CC]. 1217, CC].
A creditor’s right to proceed against the surety The solidary debtor who made the payment shall
exists independently of his right to proceed against have the right to claim from his co-debtors the
the principal. share which corresponds to them with interest,
UNLESS barred by prescription or illegality [Art.
1218, CC].
Loss of the thing or impossibility of performance of the passive/mixed solidary obligation

[Art. 1221, CC]
Without fault of the The obligation shall be extinguished.
debtors

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With fault of any of the All debtors shall be responsible to the creditor, for the price and the
debtors payment of damages and interest, without prejudice to their action
against the guilty or negligent debtor.
Through a fortuitous All debtors shall be responsible to the creditor, for the price and the
event after one incurred in payment of damages and interest, without prejudice to their action
delay against the guilty or negligent debtor.
6. OBLIGATIONS WITH A PENAL CLAUSE
Penal Clause
 An accessory undertaking to assume greater liability in case of breach. It is generally a sum of
money, but it can be any other thing like an act or abstention. [Tolentino]
 If the principal obligation is void, the penal clause shall also be void. However, the nullity of the
penal clause does not carry with it the nullity of the principal obligation [Art.1230, CC].
Rules on Penalty
a. The penalty shall substitute the indemnity for damages and payment of interest in case of non-compliance
[Art. 1226, CC], unless:
i. There is an express provision to that effect
ii. The obligor refuses to pay the penalty
iii. The obligor is guilty of fraud in non-fulfillment
b. Debtor cannot exempt himself from the performance of the principal obligation by paying the stipulated
penalty unless this right has been expressly reserved for him [Art. 1227, CC].
c. Creditor cannot demand the fulfillment of the principal obligation and demanding the satisfaction of the
penalty at the same time unless the right has been clearly granted to him [Art. 1227, CC]. A tacit or implied
grant is admissible.
i. If the creditor chooses to demand the satisfaction of the penalty, he cannot afterwards demand
the fulfillment of the obligation.
ii. If there was fault on the part of the debtor, creditor may demand not only the satisfaction of the
penalty but also the payment of damages.
iii. If the creditor has chosen to demand the fulfillment of the principal obligation and the
performance thereof becomes impossible without his fault, he may still demand the satisfaction of
the penalty.
Enforcement of the Penalty

The enforcement of the penalty can be demanded by the creditor only when the nonperformance is due to
the fault or fraud of the debtor. However, the creditor does not have to prove fault or fraud, since the non-
performance gives rise to the presumption of fault. [Tolentino]
Proof of Actual Damage

Proof of actual damage suffered by the creditor is not necessary in order that the penalty may be enforced
[Art. 1228, CC].
When Penalty may be Reduced [Art. 1229, CC]:

1. If the principal obligation has been partly complied with.
2. If the principal obligation has been irregularly complied with.
3. If the penalty is iniquitous or unconscionable, even if there has been no performance.
The question of whether a penalty is reasonable or iniquitous can be partly subjective and
partly objective.
Its resolution would depend on such factors as, but not necessarily confined to, the type, extent and purpose
of the penalty, the nature of the obligation, the mode of breach and its consequences, the supervening
realities, the standing and relationship of the parties, and the like, the application of which, by and large, is
addressed to the sound discretion of the court. [Ligutan v CA, G.R. No. 138677 (2002)

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4. Extinguishment of Obligations
Modes of extinguishing obligations

Article 1231. Obligations are extinguished:
(1) By payment or performance;

(2) By the loss of the thing due;
(3) By the condonation or remission of the debt;
(4) By the confusion or merger of the rights of creditor and debtor;
(5) By compensation;
(6) By novation.
Other causes of extinguishment of obligations, such as annulment, rescission, fulfillment of a resolutory

condition, and prescription, are governed elsewhere in this Code.
1. PAYMENT OR PERFORMANCE
a. Payment
The delivery of money OR The performance of obligation [Art. 1232, CC]
OBJECT OF PAYMENT
1. Integrity of Prestation
General Rule: A debt is understood to have been paid when the thing or service in which the obligation
consists has been completely delivered or rendered [Art. 1233, CC]
2. Identity of Prestation
For obligations to give: The debtor of a thing cannot compel the creditor to receive a different one,
although the latter may be of the same value as, or more valuable than that which is due. [Art. 1244, CC]
For obligations to do or not to do: an act or forbearance cannot be substituted by another act or
forbearance against the obligee's will. [Art. 1244, CC]
Exceptions to Art. 1244, CC:

a. If the obligation is facultative [Art. 1206, CC]
b. If the creditor agrees (Dation in payment) [Art. 1245, CC]
c. Substantial Performance by Debtor (Creditor only has a right to damages) [Art. 1234, CC]
If the obligation has been substantially performed in good faith, the obligor may recover as though
there had been a strict and complete fulfillment, less damages suffered by the obligee.
d. When the obligee accepts the performance, knowing its incompleteness or irregularity, and without
expressing any protest or objection, the obligation is deemed fully complied with. [Art. 1235, CC]
Necessity of Complete Performance [Art. 1248, CC]

General Rules:
1. Creditor cannot be compelled partially to receive the prestations in which the obligation consists.
2. Debtor may not be required to make partial payments
Exception:
1. There is an express stipulation that permits partial performance.
2. When the debt is in part liquidated and in part unliquidated, the creditor may demand and the debtor
may effect the payment of the former without waiting for the liquidation of the latter.
BY WHOM
 Payor must have (1) free disposal of the thing due and (2) capacity to alienate it. [Art. 1239, CC]

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 Free disposal of the thing due means that the thing to be delivered must not be subject to any claim
or lien or encumbrance of a third person. Capacity to alienate means that the person is not
incapacitated to enter into contracts [Arts. 1327, 1329, CC] and for that matter, to make a
disposition of the thing due. [de Leon]
Payor may either be:

1. The debtor or his duly authorized agent
2. The debtor’s heir or successor in interest
3. A third person interested in the fulfillment of the obligation (i.e. codebtor, guarantor) whether the debtor
consents to it or not, and even without debtor’s knowledge [Art. 1302, CC]. This includes payment by a joint
debtor [Monte de Piedad y Caja de Ahorros de Manila v. Rodrigo, G.R. No. L-42928 (1936)] but not a
solidary co-debtor.
4. A third person not interested in the obligation; but the creditor is not bound to accept payment by him,
unless there is a stipulation to the contrary [Art. 1236, CC].
Payment by a third person

General Rule: The creditor is not bound to accept payment or performance by a third person who has no
interest in the fulfillment of the obligation [Art. 1236, CC]
Exception: Stipulation to the contrary [Art. 1236, NCC]
Reimbursement for Payment Made by a Third Person

The third party pays with the consent of the The third party pays without the
debtor knowledge or consent of the debtor
The third party may claim reimbursement for the The third party may only claim insofar as the
full amount. [Art. 1236, CC] payment has been beneficial to the debtor. [Art.
1236, CC]
The third party is presumed to be legally The third party cannot compel the creditor to
subrogated [Art. 1302, CC] subrogate him on his rights. [Art. 1237, CC]
Reimbursement & Subrogation Distinguished

Reimbursement Subrogation
Personal action to recover amount paid Includes reimbursement, but also the exercise of
other rights attached to the original obligation (e.g.
guaranties, securities)
Article 1238. Payment made by a third person who does not intend to be reimbursed by the debtor is
deemed to be a donation, which requires the debtor's consent. But the payment is in any case valid as to
the creditor who has accepted it.
TO WHOM
1. The person in whose favor the obligation has been constituted; or His successor in interest; or any person
authorized to receive it [Art. 1240, CC]
2. Payment to a person who is incapacitated to administer his property shall be valid:
3. if he has kept the thing delivered, OR
4. insofar as the payment has been beneficial to him. [Art. 1241 par 1, CC]
5. Payment made in good faith to any person in possession of the credit shall release the debtor. [Art. 1242,
CC]
6. Payment to a third person
7. Payment made to the creditor by the debtor after the latter has been judicially ordered to retain the debt
shall not be valid. [Art. 1243, CC]
General Rule
1. Valid insofar as it has redounded to the benefit of the creditor [par. 2, Art. 1241, CC]
2. Proof that such payment has redounded to the benefit of the creditor is required.
Exceptions: [par. 2, Art. 1241, CC]

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1. If after the payment, the third person acquires the creditor's rights (SUBROGATION);
2. If the creditor ratifies the payment to the third person (RATIFICATION);
3. If by the creditor's conduct, the debtor has been led to believe that the third person had authority to
receive the payment (ESTOPPEL). [Art. 1241, CC]
PLACE OF PAYMENT
1. In the place designated in the obligation.
2. In the absence of stipulation—
a. If obligation is to deliver a determinate thing: wherever the thing might be at the moment the
obligation was constituted.
b. In any other case: domicile of debtor [Art. 1251]
TIME OF PAYMENT
General Rule: Upon demand
Exceptions:
1. When time is of the essence
2. When the debtor loses the benefit of the period
3. When the obligation is reciprocal
FORM OF PAYMENT
Article 1249. The payment of debts in money shall be made in the currency stipulated, and if it is not
possible to deliver such currency, then in the currency which is legal tender in the Philippines.
The delivery of promissory notes payable to order, or bills of exchange or other mercantile documents
shall produce the effect of payment only when they have been cashed, or when through the fault of the
creditor they have been impaired.
In the meantime, the action derived from the original obligation shall be held in the abeyance.
When payment is made in money/ legal tender

General Rule: pay in the currency stipulated
Exception: payment not possible in such currency, then pay in legal tender.
Legal Tender
Such currency which in a given jurisdiction can be used in the payment of debts, and which cannot be
refused by the creditor.
When payment is not in legal tender

General Rule: The creditor may refuse to accept payment (e.g. checks) not made in legal tender
[Philippine Airlines v. Court of Appeals, G.R. No. L-49188 (1990)].
Extraordinary Inflation or Deflation

Article 1250. In case an extraordinary inflation or deflation of the currency stipulated should supervene,
the value of the currency at the time of the establishment of the obligation shall be the basis of payment,
unless there is an agreement to the contrary.
b. Application of Payments
Art. 1252, par. 1, CC. He who has various debts of the same kind in favor of one and the same creditor,
may declare at the time of making the payment, to which of them the same must be applied. Unless the
parties so stipulate, or when the application of payment is made by the party for whose benefit the term
has been constituted, application shall not be made as to debts which are not yet due. xxx
Requisites
1. There is a plurality of debts
2. Debts are of the same kind
3. Debts are owed to the same creditor and by the same debtor

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4. All debts must be due, UNLESS parties so stipulate, or when application is made by the party for whose
benefit the term has been constituted
5. Payment made is not sufficient to cover all debts [Art. 1252, CC]
Rules on Application of Payments

1. Preferential right of debtor - debtor has the right to select which of his debts he is paying. [Art. 1252, CC]
2. The debtor makes the designation at the time he makes the payment.
3. If not, the creditor makes the application, by so stating in the receipt that he issues, unless there is cause
for invalidating the contract.
4. If neither the creditor nor debtor exercises the right to apply, or if the application is not valid, the
application is made by operation of law. (see no. 6)
5. If debt produces interest, the payment is not to be applied to the principal unless the interests are covered.
[Art. 1253, CC]
6. When no application can be inferred from the circumstances of payment, it is applied:
(a) to the most onerous debt of the debtor; or
(b) if debts due are of the same nature and burden, to all the debts in proportion. [Art. 1254, CC]
7. Rules on application of payment may not be invoked by a surety or solidary guarantor.
Exceptions
1. Rules on application of payment cannot be made applicable to a person whose obligation as a mere surety
is both contingent and singular. There must be full and faithful compliance with the terms of the contract.
[Reparations Commission v. Universal Deep Sea Fishing Corp, G.R. Nos. L-21901 and L-21996 (1978)]
2. The debtor’s right to apply payment can be waived and even granted to the creditor if the debtor so agrees
[Premiere Development v. Central Surety, G.R. No. 176246 (2009)]
Limitations
1. Right of creditor to refuse partial payment [Art. 1248, CC]
2. Rule on satisfaction of interest before the Principal. [Art. 1453, CC]
3. Debtor cannot apply payment to a debt which is not yet liquidated
4. He cannot choose a debt with a period (established for the creditor’s benefit) before the period has
arrived.
5. Stipulation as to preference of payment. [Tolentino]
c. Dation in Payment
Delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent
of the performance of the obligation (dacion en pago).
Requisites
1. Existence of a money obligation
2. Alienation to the creditor of a property by the debtor with the creditor’s consent
3. Satisfaction of the money obligation
d. Payment by Cession
Special form of payment where the debtor assigns/abandons ALL his property for the benefit of his creditors
in order that from the proceeds thereof, the latter may obtain payment of their credits.
Requisites
1. There is a plurality of debts
2. There is a plurality of creditors
3. Partial or relative insolvency of debtor
4. Acceptance of the cession by the creditors [Art. 1255, CC]
5. Debtor is released only for the net proceeds unless there is a stipulation to the contrary.
Cession and Dation Distinguished

Cession Dation
Plurality of creditors One creditor

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Debtor must be partially or relatively insolvent Debtor not necessarily in state of financial
difficulty
Universality of property is ceded Thing delivered is equivalent of performance
Merely releases debtor for the net proceeds of Extinguishes obligation to the extent of the value of
things ceded or assigned, unless there is contrary the thing delivered, as agreed upon, proved or
intention implied from the conduct of the creditor
Involves all properties of debtor Does not involve all properties of debtor
Creditor does not become owner of the ceded Creditor becomes owner
property
e. Tender of Payment and Consignation
Tender of payment
 Manifestation made by the debtor to the creditor of his desire to comply with his obligation, with
offer of immediate performance. [Del Carmen v. Sps. Sabordo, G.R. No. 181723 (2014)]
 Tender of payment must be made in the lawful currency. The tender of a check to pay for an
obligation is not a valid tender of payment thereof. [Soco v. Militante, G.R. No. L-58961, (1983)]
Consignation
Deposit of the object of obligation in a competent court in accordance with the rules prescribed by law
whenever the creditor unjustly refuses payment or because of some circumstances which render direct
payment to the creditor impossible or inadvisable.
Requisites of consignation
1. There is a debt due
2. Consignation is made because of some legal cause
a. There was tender of payment and creditor refuses without just cause to accept it
b. Instances when consignation alone would suffice as provided under Art. 1256
3. Previous notice of consignation was given to those persons interested in the performance of the
obligation. Previous notice is essential to the validity of the consignation and its lack invalidates the same.
[Soco v. Militante, G.R. No. L-58961, (1983)] (1st notice)
4. Amount or thing due was placed at the disposal of the court
5. After the consignation has been made, the persons interested were notified thereof (2nd notice)
When tender and refusal not required [Art. 1256, CC]

1. Creditor is absent or unknown, or does not appear at the place of payment.
2. Creditor is incapacitated to receive the thing due at the time of payment.
3. Without just cause, creditor refuses to give receipt.
4. Two or more persons claim the same right to collect (i.e. Interpleader)
5. Title of the obligation has been lost.
Unless there is an unjust refusal by a creditor to accept payment from a debtor, Article 1256 cannot apply.
[Llobrera v. Fernandez, G.R. No. 142882 (2006)].
What constitutes valid consignation

In order that the consignation of the thing due may release the obligor, it must first be announced to the
persons interested in the fulfilment of the obligation. The consignation shall be ineffectual if it is not made
strictly in consonance with the provisions which regulate payment. [Art. 1257, CC]
How consignation is made

Consignation shall be made by depositing the things due at the disposal of judicial authority, before whom
the tender of payment shall be proved, in a proper case, and the announcement of the consignation in other
cases. The consignation having been made, the interested parties shall also be notified thereof. [Art. 1258,
CC]

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Who bears the expenses
The expenses of consignation, when properly made, shall be charged against the creditor. [Art. 1259, CC]
Effects of Consignation
If accepted by the creditor or declared properly made by the Court:
1. Debtor is released in same manner as if he had performed the obligation at the time of consignation
2. Accrual of interest is suspended from the moment of consignation.
3. Deterioration or loss of the thing or amount consigned, occurring without the fault of debtor, must be
borne by creditor from the moment of deposit.
Withdrawal of Consigned Amount by the Debtor

1. Before approval of the court or acceptance of the creditor- Obligation remains in force. [par. 2, Art. 1260,
CC]
2. After approval of the court or acceptance by the creditor, with the consent of the latter - Obligation
remains in force, but guarantors and co-debtors are liberated. Preference of the creditor over the thing is
lost. [Art. 1261, CC]
3. After approval of the court or acceptance by the creditor, and without creditor’s consent - debtor can no
longer withdraw the consigned amount since the obligation has already been extinguished [Pabugais v.
Sahijwani, G.R. No. 156846 (2004)]
4. If the creditor authorizes the debtor to withdraw, third persons who were benefited by the consignation
are not prejudiced by the revival of the obligation.
2. LOSS OF DETERMINATE THING DUE OR IMPOSSIBILITY OR DIFFICULTY OF

PERFORMANCE
a. Loss
1. Loss of Determinate Things

General Rule: Loss of determinate things extinguishes the obligation when: [Par. 1, Art. 1262 CC].
a. An obligation which consists in the delivery of a determinate thing
b. Thing is lost or destroyed
c. Debtor is without fault
d. Delay not incurred - However, the obligor is still liable for damages when the following requisites concur:
[Par. 2, Art. 1262 CC].
e. There is law or a stipulation for fortuitous events or the nature of the obligation requires an assumption
of risk
f. The thing is lost
Exceptions (When the Loss Does Not Extinguish)

a. When the obligation to deliver a determinate object arises from a criminal act. [Art. 1268, CC]
b. Acceptance of payments in bad faith. [Art. 2159, CC]
When the legal excuse of fortuitous event is not applicable, in cases of:
1. Delay or promise to deliver thing to two or more persons. [Art. 1165 (3), CC]
2. Nature of the Obligation Requires Assumption of Risk [Art. 1174, CC]
3. Liability of a Bailee in fortuitous events. [Art. 1942, CC]
4. Liability of a depositary in fortuitous events. [Art. 1979, CC]
5. Liability of the officious manager in fortuitous events. [Art. 2147, CC]
2. Loss of Generic Things

Obligation is NOT Extinguished: In an obligation to deliver a generic thing, the loss or destruction of
anything of the same kind does not extinguish the obligation. [Art. 1263, CC]
3. Partial Losses
Upon the Determination of the Court: The courts shall determine whether, under the circumstances, the
partial loss of the object of the obligation is so important as to extinguish the obligation. [Art. 1264, CC]

126
4. Presumption of Fault
When Presumption Applies [Art. 1265, CC]:
a. Thing is lost while in the possession of the debtor
b. No proof of fortuitous event
Effect: It is presumed that loss was due to his fault.
Exceptions [Art. 1265, CC]

a. There is proof to the contrary
b. In case of earthquake, flood, storm or other natural calamity.
5. Loss in Obligations to Give With Resolutory Conditions

When the conditions have been imposed with the intention of suspending the efficacy of an obligation to
give, the following rules shall be observed in case of the improvement, loss or deterioration of the thing
during the pendency of the condition:
a. If the thing is lost without the fault of the debtor, the obligation shall be extinguished;
b. If the thing is lost through the fault of the debtor, he shall be obliged to pay damages; it is
understood that the thing is lost when it perishes, or goes out of commerce, or disappears in such
a way that its existence is unknown or it cannot be recovered. [Art. 1189, CC]
Effects of Loss [Arts. 1262-1263, CC]

Obligation to Deliver a Specific Thing Obligation to Deliver a Generic Thing
Obligation is extinguished if the thing was Loss of a generic thing does not extinguish an
destroyed without fault of the debtor and before he obligation, EXCEPT in case of delimited generic
has incurred delay. things, where the kind or class is limited itself, and
the whole class perishes.
b. Impossibility or Difficulty of Performance
1. Impossibility
The debtor in obligations to do shall also be released when the prestation becomes legally or physically
impossible without the fault of the obligor. [Art. 1266, CC]
Triggers
a. Obligation to do
b. Becomes legally or physically impossible
Impossibility at Constitution and Subsequent Impossibility Distinguished

Impossibility at the Time the Obligation Impossibility which Supervenes at the
was Constituted [Art. 1348, CC] Time of Performance [Art. 1266]
Brings about the nullity of the contract Brings about a modification or extinguishment of
the obligation, depending on whether or not it is
imputable to the debtor
TYPES OF IMPOSSIBILITY
a. Physical and Legal
 Physical Impossibility: There is physical impossibility when the act, by reason of its nature,
cannot be accomplished. [Tolentino]
 Legal Impossibility: There is legal impossibility when, the act, by subsequent law, is prohibited.
[Tolentino]
b. Subjective and Objective

 Objective Impossibility: There is objective impossibility when the act or service in itself,
without considering the person of the obligor, becomes impossible. [Tolentino]
 Subjective Impossibility: There is subjective impossibility when the act or service cannot be
done by the debtor himself, but it can be accomplished by others. [Tolentino]

127
 Partial Impossibility: The rule in Art. 1264 (Partial Loss) may be applied. Thus the Courts shall
determine whether it is so important as to extinguish the obligation. If the debtor has performed
part of the obligation when impossibility occurred, the creditor must pay the part done as long as
he benefits from it. [Tolentino]
2. Unforeseen Difficulty
When the service has become so difficult as to be manifestly beyond the contemplation of all the parties,
the obligor may also be released therefrom, in whole or in part. [Art. 1267, CC].
Requisites
a. The event or change in circumstances could not have been foreseen at the time of the execution of the
contract;
b. It makes the performance of the contract extremely difficult but not impossible;
c. The event must not be due to the act of any of the parties; and
d. The contract is for a future prestation. [Tagaytay Realty Co, Inc. v. Gacutan G.R. No. 160033, July 01,
2015]
Doctrine of Unforeseen Events

The parties to the contract must be presumed to have assumed the risks of unfavorable developments. It is
therefore only in absolutely exceptional changes of circumstances that equity demands assistance for the
debtor. [PNCC v. CA, G.R. No. 1116896 May 5, 1997.]
Fortuitous Events, Loss/Impossibility, and Unforeseen Difficulty Distinguished

Fortuitous Events Loss/Impossibility Unforeseen
Difficulty
Elements Could not have been Perishes, goes out of Could not have been
forseen or forseen but commerce or forseen. Service has
inevitable. Causes loss disappears become so difficult but
of the thing or not impossible.
obligation could not be
complied with in the
normal manner.
Fault Without fault May be with or without Without fault
fault
Effect Non-liability for If without fault, Release from the
delay/damages extinguishes the obligation in whole or in
obligation; If with fault, part
liability for damages
Creditors’ rights
Article 1269. The obligation having been extinguished by the loss of the thing, the creditor shall have all
the rights of action which the debtor may have against third persons by reason of the loss.
Requisites:
a. Obligation is extinguished
b. Extinguishment is due to the loss of the thing
Effect: Creditor shall have all rights of action which the debtor may have against third persons by reason
of the loss.
3. CONDONATION OR REMISSION OF DEBT
a. Definition and General Rule

General Rules
1. Condonation or remission is essentially gratuitous, and
2. requires the acceptance by the obligor.

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3. It may be made expressly or impliedly.
4. One and the other kinds shall be subject to the rules which govern inofficious donations. Express
condonation shall, furthermore, comply with the forms of donation. [Art. 1270, CC]
Requisites [Tolentino]
1. The debt must be existing and demandable;
2. The renunciation must be gratuitous; and
3. The debtor must accept the remission
Effect: The obligation is extinguished.
Definition
Remission is an act of liberality, by virtue of which, without receiving any equivalent, the creditor
renounces the enforcement of the obligation. The obligation is extinguished either in whole or in such part
of the same to which remission refers. [Tolentino]
If 2nd Requisite not Met

If the renunciation is not gratuitous, the nature of the act changes and it may become:
1. Dation in payment – when the creditor receives a thing different from that stipulated;
2. Novation – when the object or principal conditions of the obligation have changed; or
3. Compromise – when the matter renounced is in litigation or dispute and in exchange of some concession
which the creditor receives. [Tolentino]
b. Kinds of Remission
1. As to Form
a. Express Condonation
 It is formally: in accordance with forms of ordinary donations. [Art. 1270, CC]
 An express remission must be accepted in order to be effective.
 When the debt refers to movable or personal property, Art. 748 will govern; if it refers to immovable
or real property, Art. 749 applies.
b. Implied Condonation
It is inferred from the acts of the parties.
2. As to Extent
a. Total - extinguishes the entire obligation; or
b. Partial - refers to only a particular aspect of the obligation, i.e. amount of indebtedness or an accessory
obligation. [Tolentino]
3. As to Manner
a. Inter vivos - effective during the lifetime of the creditor; or
b. Mortis Causa - effective upon the death of the creditor.
c. Rules and Form

1. Express Remission
Art. 1270 (2), CC: One and the other kinds shall be subject to the rules which govern inofficious donations.
Express condonation shall, furthermore, comply with the forms of donation.
Note: The law subjects express remission to the same formalities as donations.
Express Remission of Movable or Personal Property

 The donation of a movable may be made orally or in writing.
 An oral donation requires the simultaneous delivery of the thing or of the document representing
the right donated.

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 If the value of the personal property donated exceeds five thousand pesos, the donation and the
acceptance shall be made in writing. Otherwise, the donation shall be void. [Art. 748, CC]
Express Remission of Immovable or Real Property

 In order that the donation of an immovable may be valid, it must be made in a public document,
specifying therein the property donated and the value of the charges which the donee must satisfy.
 The acceptance may be made in the same deed of donation or in a separate public document, but it
shall not take effect unless it is done during the lifetime of the donor.
 If the acceptance is made in a separate instrument, the donor shall be notified thereof in an
authentic form, and this step shall be noted in both instruments. [Art. 749, CC]
2. Implied Remission
Presumption of Renunciation
The delivery of a private document evidencing a credit, made voluntarily by the creditor to the debtor,
implies the renunciation of the action which the former had against the latter [Art. 1271, CC]
Trigger: (1) Delivery of a private document evidencing a credit; and (2) delivery was made
voluntarily by the creditor to the debtor
Effect: There will be implied renunciation.
Exception: The contrary is proved.
Note: If in order to nullify this waiver it should be claimed to be inofficious, the debtor and his heirs may
uphold it by proving that the delivery of the document was made in virtue of payment of the debt. [Art. 1271,
CC]
Presumption of Renunciation of Accessory Obligation

Accessory obligation of pledge has been remitted when the thing after its delivery is found in the possession
of the debtor or third person. [Art. 1274, CC]
Triggers: (1) A thing is pledged; (2) there has been a delivery of such thing to the creditor; or (3)
the thing pledged is found in the possession of the debtor, or of a third person who owns the thing.
Effect: It is presumed that the accessory obligation of pledge has been remitted.
Presumption of Delivery
Whenever the private document in which the debt appears is found in the possession of the debtor, it shall
be presumed that the creditor delivered it voluntarily, unless the contrary is proved. [Art. 1272, CC]
Trigger: The private document in which the debt appears is found in the possession of the debtor.
Effect: There is a presumption that it has been voluntarily delivered by the creditor.
Exception: The contrary is proved.
3. Partial Remission
Renunciation of the principal debt shall extinguish the accessory obligations, but remission of the latter
leaves the principal obligation in force. [Art. 1273, CC]
Trigger: The remission was only to the extent of the accessory obligation
Effect: The principal obligation remains in force
4. Other Rules on Donation Applicable to Remission

Condonation or remission is essentially a donation. It is a bilateral act which requires acceptance by the
debtor. It is therefore subject to the rule on donations with respect to acceptance, amount and revocation;
where donor refers to the creditor, and donee to the debtor, and donation to the remission. [Tolentino]
On Acceptance
1. The donee must accept the donation personally, or through an authorized person with a special power for
the purpose, or with a general and sufficient power; otherwise, the donation shall be void. [Art. 745, CC]
2. Acceptance must be made during the lifetime of the donor and of the donee. [Art. 746, CC]
On Amount

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1. The donation may comprehend all the present property of the donor, or part thereof, provided he
reserves, in full ownership or in usufruct, sufficient means for the support of himself, and of all relatives
who, at the time of the acceptance of the donation, are by law entitled to be supported by the donor. Without
such reservation, the donation shall be reduced on petition of any person affected. [Art. 750, CC]
2. The provisions of Art. 750 notwithstanding, no person may give or receive, by way of donation, more than
he may give or receive by will. The donation shall be inofficious in all that it may exceed this limitation. [Art.
752, CC]
Effect: Renunciation of the principal debt shall extinguish the accessory obligations, but remission of the
latter leaves the principal obligation in force. [Art. 1273, CC]
4. CONFUSION / MERGER
Definition
The meeting in one person of the qualities of creditor and debtor of the same obligation. [Tolentino]
Requisites
a. It should take place between principal debtor and creditor;
b. The very same obligation must be involved; and
c. The confusion must be total, i.e. as regards the whole obligation. [Valmonte v. CA, G.R. No. L-41621,
February 18, 1999]
Effects
a. In general
The obligation is extinguished from the time the characters of the debtor and creditor are merged in the
same person. [Art. 1275, CC]
b. Confusion among the Guarantors

A merger which takes place in the person of the principal debtor or creditor benefits the guarantors.
Confusion which takes place in the person of any of the latter does not extinguish the obligation.
c. In case of joint or solidary obligations

Confusion in Joint Obligation Confusion in Solidary Obligation
Confusion DOES NOT extinguish a joint obligation Extinguishes the entire obligation, but the other
EXCEPT as regards the share of the person in debtors may be liable for reimbursement if
whom the two characters concur [Art. 1277, CC] payment was made prior to remission.
Obligation is not extinguished when confusion takes place in the person of subsidiary debtor (i.e.
guarantor), but merger in the person of the principal debtor shall benefit the former.
Note: Where, however, the mortgagee acquires ownership of the entire mortgaged property, the mortgage
is extinguished; but this does not necessarily mean the extinguishment of the obligation secured thereby,
which may become an unsecured obligation.
5. COMPENSATION
Definition [Art. 1278, CC]

Compensation shall take place when two persons, in their own right, are creditors and debtors of each other.

a. Each obligor is bound principally, and at the same time a principal creditor of the other;
b. Both debts must consist in a sum of money, or if the things due are consumable, of the same kind and
quality;
Note: The term ‘consumable’ is erroneously used in Art 1279. The appropriate term is ‘fungible’.
[Tolentino]
c. Both debts are due;

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d. Debts are liquidated and demandable; and
e. There must be no retention or controversy over either of the debts, commenced by third persons and
communicated in due time to the debtor.
To warrant the application of set off under Article 1278 of the Civil Code, the debtor’s admission of his
obligation must be clear and categorical and not one which merely arise by inference or implication from
the customary execution of official documents in assuming the responsibilities of a predecessor [Bangko
Sentral v. COA, G.R. No. 168964 (2006)]
a. Nature and Effects
General Rule
When all requisites mentioned in Art. 1279 are present, compensation takes effect by operation of law, and
extinguishes both debts to the concurrent amount, even though the creditors and debtors are not aware of
the compensation. [Art. 1290, CC]
By Operation of Law
Compensation takes place by operation of law, even though the debts may be payable at different places,
but there shall be an indemnity for expenses of exchange or transportation to the place of payment. [Art.
1286 CC]
Compensation takes effect by operation of law even without the consent or knowledge of the parties
concerned when all the requisites mentioned in Article 1279 of the Civil Code are present. [Trinidad v.
Acapulco, G.R. No. 147477, June 27, 2006.]
Compensation Distinguished from Other Modes of Extinguishment

Compensation Confusion
There must always be two obligations. Involves only one obligation.
There are two persons who are mutually debtors There is only one person whom the characters of
and creditors of each other in two separate the creditor and debtor meet.
obligations, each arising from the same cause.
Compensation Payment
Capacity to dispose and receive the thing is Requires capacity to dispose of the thing paid and
unnecessary since compensation operates by law capacity to receive
May be partial Must be total performance
Compensation Counterclaim
Takes place by operation of law Must be pleaded to be effectual
b. Kinds of Compensation
As to extent [Art. 1281, CC]

1. Total – when two debts are of the same amount
2. Partial - when the two obligations are of different amounts and a balance remain
As to cause
1. Legal
2. Voluntary
3. Judicial
4. Facultative
LEGAL COMPENSATION
 Takes place by operation of law from the moment all requisites are present.
 Since it takes place ipso jure, when used as a defense, it retroacts to the date when all its requisites
are fulfilled.

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Art. 1290, CC. When all the requisites mentioned in article 1279 are present, compensation takes effect by
operation of law, and extinguishes both debts to the concurrent amount, even though the creditors and
debtors are not aware of the compensation.
Legal compensation may apply to:

1. Awards of attorney’s fees, against the litigant and not his lawyer [Gan Tion v. CA, G.R. No. L-22490
(1969)]
2. Bank deposits, against the accounts of a depositor whose checks were dishonored [BPI v. CA, G.R. No.
116792 (1996)]
VOLUNTARY COMPENSATION
Takes place when parties who are mutually creditors and debtors of each other agree to compensate their
respective obligations even though one of the requisites of compensation may be lacking.
Art. 1282, CC. The parties may agree upon the compensation of debts which are not yet due.
The only requisites of conventional compensation are (1) that each of the parties can dispose of the credit
he seeks to compensate, and (2) that they agree to the mutual extinguishment of their credits [United
Planters v. CA, G.R. No. 126890 ((2009)].
JUDICIAL COMPENSATION
Takes place by judicial decree.
Art. 1283, CC. If one of the parties to a suit over an obligation has a claim for damages against the other,
the former may set it off by proving his right to said damages and the amount thereof.
FACULTATIVE COMPENSATION
 When it can be claimed by one of the parties who, however, has the right to object to it.
 This kind of compensation can only be set up at the option of a creditor, when legal compensation
cannot take place because some legal requisites in favor of the creditor are lacking.
Obligations which cannot be compensated [Arts. 1287-1288, CC]

1. Contracts of depositum
2. Contracts of commodatum
3. Future support due by gratuitous title
4. Civil liability arising from a penal offense
5. Obligations due to the government
6. Damage caused to the partnership by a partner
Right of a Guarantor
A guarantor may set up compensation as regards what the creditor may owe the principal debtor. [Art.
1280, CC]
Effect of Assignment of Rights by the Creditor to a Third Person [Art. 1285, CC]
With debtor’s consent Debtor cannot set up against assignee compensation pertaining to
him against assignor UNLESS he reserved such right at the time
he gave his consent
With debtor’s knowledge but Debtor may set up compensation of debts previous to the
without consent assignment but not of subsequent ones
Without debtor’s knowledge Debtor may set up compensation of all credits prior and also later
to the assignment until he had knowledge of the assignment
Order of Compensation
If a person should have against him several debts which are susceptible of compensation, the rules on
application of payments shall apply to the order of the compensation. [Art. 1289, CC]

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6. NOVATION
Obligations may be modified by:

a. Changing their object or principal conditions;
b. Substituting the person of the debtor; and
c. Subrogating a third person in the rights of the creditor. [Art. 1291, CC]
Unlike other modes of extinguishment, it is a juridical act of dual function—it extinguishes an obligation,
and at the same time, it creates a new one in lieu of the old. It operates as a relative, not an absolute,
extinction.
Requisites:
a. A previous valid obligation
b. Agreement of all the parties to the new obligation
c. Animus novandi or intent to novate
d. Substantial difference between old and new obligations and, consequently, extinguishment of the old
obligation
e. Validity of the new obligation
Effects
In General If Original Obligation is If New Obligation is Void
Void
Old obligation is extinguished Novation is void if the original New obligation is void, the old
and replaced by the new one obligation was void, EXCEPT obligation subsists, UNLESS the
stipulated. when annulment may be claimed parties intended that the former
only by the debtor, or when relations shall be extinguished
ratification validates acts that are in any event [Art. 1297, CC]
voidable [Art. 1298, CC]
a. New obligation void: No
a. Original obligation is void: No novation.
novation.
B. New obligation voidable:
b. Original obligation voidable: Novation is effective.
Effective if contract is ratified
before novation.
Accessory Obligations
Accessory obligations are also extinguished, but may subsist only insofar as they may benefit third persons
who did not give their consent to the novation. [Art. 1296, CC]
Accidental Modifications
The extension or shortening of the period for the performance of the obligation is generally considered as
merely accidental and does not bring about a novation. [Tolentino]
Original or new obligation with suspensive or resolutory condition

Art. 1299, CC. If the original obligation was subject to a suspensive or resolutory condition, the new
obligation shall be under the same condition, unless it is otherwise stipulated.
Compatible Conditions Incompatible Conditions

a. Fulfillment of both conditions: new obligation a. Original obligation is extinguished, while new
becomes demandable. obligation exists.
b. Fulfillment of condition concerning the original b. Demandability shall be subject to

obligation: old obligation is revived; new obligation fulfillment/nonfulfillment of the condition
loses force. affecting it.

134
c. Fulfillment of condition concerning the new
obligation: no novation; requisite of a previous
valid and effective obligation lacking.
a. Kinds of Novation
AS TO FORM
1. Express – declared in unequivocal terms
2. Implied – the old and new obligations are on every point incompatible with each other
Novation is not presumed

In the absence of an unequivocal declaration of extinguishment of the pre-existing obligation, only proof of
incompatibility between the old and new obligation would warrant a novation by implication. [California
Bus Line v. State Investment, G.R. No. 147950 (2003)]
Test of Incompatibility
The test of incompatibility is whether or not the two obligations can stand together, each one having its
independent existence. If they cannot, they are incompatible and the latter obligation novates the first. The
incompatibility must take place in any of the essential elements of the obligation, such as its object, cause
or principal conditions thereof; otherwise, the change would be merely modificatory in nature and
insufficient to extinguish the original obligation [Quinto v. People, G.R. No. 126712 (1999)]
AS TO ESSENCE OR OBJECT
1. Objective/Real
2. Subjective/Personal
AS TO ESSENCE OR OBJECT
Objective/Real Subjective/Personal
1. Change of the subject matter; 1. Substitution of debtors
2. Change of cause or consideration; or a. Expromision
3. Change of the principal conditions or terms b. Delegacion
2. Subrogation of a third person to the rights of the

creditor
a. Conventional
b. Legal
1. Substitution of Debtors
Expromision Delegacion
Initiative for change does not emanate from the Debtor (delegante) offers or initiates the change,
debtor, and may even be made without his and the creditor (delegatorio) accepts a third
knowledge. person (delegado) as consenting to the
substitution.
Requisites
1. Consent of the creditor and the new debtor; and Consent of
2. Knowledge or consent of the old debtor is not 1. old debtor;
required. 2. new debtor; and
3. creditor.
Effects
1. Old debtor is released 1. Insolvency of the new debtor revives the
obligation of the old debtor if it was anterior and
2. Insolvency of the new debtor does not revive the public, and known to the old debtor.
old obligation in case the old debtor did not agree
to expromision.

135
2. New debtor can demand reimbursement of the
3. If with the knowledge and consent of the old entire amount he has paid from the original debtor.
debtor, the new debtor can demand He may compel the creditor to subrogate him to all
reimbursement of the entire amount paid and with of his rights.
subrogation of creditor’s rights.
4. If without knowledge of the old debtor, the new

debtor can demand reimbursement only up to the
extent that the latter has been benefited without
subrogation of creditor’s rights.
For subjective novation, it is insufficient that the juridical relation between the parties to the original
contract is extended to a third person. If the old debtor is not released, no novation occurs and the third
person who has assumed the debtor’s obligation becomes merely a co-debtor or surety or co-surety.
[Conchinyan, Jr. v. R&B Surety and Insurance Company, G.R. No. L-47369, (1987)]
An accessory surety may not be released if he expressly waives his discharge from the obligation in case of
change or novation in the original agreement. [Molino v. Security Diners International Corp, G.R. No.
136780 (2001)].
2. Subrogation
Transfers to the person subrogated the credit with all the rights thereto appertaining, either against the
debtor or against third persons, be they guarantors or possessors of mortgages, subject to stipulation in a
conventional subrogation. [Art. 1303, CC]
Effects
Total Partial
Transfers to the person subrogated, the credit with A creditor, to whom partial payment has been
all the rights thereto appertaining, either against made, may exercise his right for the remainder, and
the debtor or third persons. shall be preferred to the person subrogated in his
place in virtue of the partial payment.
Conventional Subrogation – takes place by agreement of parties
Difference between Conventional Subrogation and Assignment of Credit [Licaros v.

Gatmaitan, G.R. No. 142838 (2001)]
Conventional subrogation Assignment of credit
Debtor’s consent is necessary. Debtor’s consent is not required.
Extinguishes an obligation and gives rise to a new Refers to the same right which passes from one
one. person to another, without modifying or
extinguishing the obligation.
Defects/vices in the old obligation are cured. Defects/vices in the old obligation are not cured.
Legal Subrogation
Takes place by operation of law.
Legal subrogation is not presumed, except in the following circumstances:

a. When creditor pays another creditor who is preferred, even without the debtor’s knowledge
b. When a third person not interested in the obligation pays with the express or tacit approval of the debtor
c. When, even without the knowledge of the debtor, a person interested in the fulfillment of the obligation
pays, without prejudice to the effects of confusion as to the latter’s share [Art. 1302, CC]

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B. Contracts
I. STAGES OF CONTRACTS
1. Preparation/Negotiation - period from the time the prospective contracting parties indicate their
interest in the contract to the time the contract is perfected.
2. Perfection/Birth
(a) Consensual contracts
As a general rule, contracts are perfected by mere consent of the parties regarding the subject
matter and the cause of the contract. (CIVIL CODE, arts. 1315, 1319) They are obligatory in whatever
form they may have been entered into, provided all the essential requisites for their validity are
present. (CIVIL CODE, art. 1356)
(b) Real contracts

The exceptions are real contracts, which are perfected not merely by consent but by the actual or
constructive delivery of the object of the obligation. (CIVIL CODE, art. 1316)
(c) Formal/Solemn contracts

When the law requires that a contract be in some form to be valid (CIVIL CODE, art. 1356), this
special form is necessary for its perfection
3. Consummation - period when the parties perform their respective undertaking under the contract,
culminating in the extinguishment thereof (HECTOR S. DE LEON & HECTOR M. DE LEON, JR.,
COMMENTS AND CASES ON OBLIGATIONS AND CONTRACTS 542 (2014))
Negotiation begins from the time the prospective contracting parties manifest their interest in the contract
and ends at the moment of agreement of the parties. The perfection or birth of the contract takes place when
the parties agree upon the essential elements of the contract. The last stage is the consummation of the
contract where the parties fulfill or perform the terms they agreed on, culminating in its extinguishment.
(International Freeport Traders, Inc. v. Danzas Intercontinental, Inc., 640 SCRA 621, Jan. 26, 2011)
II. CLASSIFICATIONS
Auto Contracts - only one person represents two opposite parties, but in different capacities. (ERNESTO
L. PINEDA, OBLIGATIONS AND CONTRACTS 367 (2009))
Example: An agent representing his principal sells a specific car to himself, as a buyer
Collective Contracts - will of the majority binds the minority to an agreement notwithstanding the
opposition of the latter. (4 ARTURO M. TOLENTINO, COMMENTARIES AND JURISPRUDENCE ON
THE CIVIL CODE OF THE PHILIPPINES 437 (1991))
Example: Collective bargaining contracts by labor organizations under R.A. No. 875.
Contracts of Adhesion - One party imposes a ready-made form of contract which the other party may
accept or reject but cannot modify; one party prepares the stipulation in the contract, while the other party
merely affixes his signature or his “adhesion” thereto, giving no room for negotiation and depriving the
latter of the opportunity to bargain on equal footing (Polotan, Sr. v. CA, G.R. No. 119379, Sept. 25, 1998);
construed strictly against the one who drafted the same (Geraldez v. CA, G.R. No. 108253, Feb. 23, 1994).
1. As to perfection or formation
(a) Consensual – perfected by mere consent of the parties on the subject matter and cause (CIVIL CODE,
art. 1315) (e.g., contract of sale)
(b) Real – perfected by delivery (CIVIL CODE, art. 1316) (e.g. commodatum, pledge, deposit)
(c) Formal/Solemn – require a certain specified form, in addition to consent, subject matter and cause
(CIVIL CODE, art. 1356) (e.g., donation of real property)

137
2. As to cause
(a) Onerous – The cause is, for each contracting party, the prestation or promise of a thing or service by
the other (e.g., contract of sale) (CIVIL CODE, art. 1350)
(b) Remuneratory– The cause is some past service or benefit which by itself is a recoverable debt (CIVIL
CODE, art. 1350)
Note: In a remuneratory donation, the past service or debt is not by itself a recoverable debt.
(CIVIL CODE, art. 726)
(c) Gratuitous (or contracts of pure beneficence) – founded on the mere liberality of the benefactor
(e.g., pure donation) (CIVIL CODE, art. 1350)
3. As to importance or dependence of one upon another

(a) Principal – when the contract does not depend for its existence and validity upon another contract
(e.g. sale, lease)
(b) Accessory – depends on another contract for its existence and validity (e.g., mortgage, guaranty)
(c) Preparatory – the contract is entered into as a means through which future contracts may be made
(e.g. agency, partnership) (ERNESTO L. PINEDA, OBLIGATIONS AND CONTRACTS 36 (2009))
4. As to parties obliged
(a) Unilateral – only one of the parties has an obligation (ERNESTO L. PINEDA, OBLIGATIONS AND
CONTRACTS 366 (2009))
(b) Bilateral – both parties are required to render reciprocal prestations (CIVIL CODE, art. 1191)
5. As to form
(a) Common or informal – require no particular form (CIVIL CODE, art. 1356)
(b) Special or formal – require some particular form (CIVIL CODE, art. 1356)
6. As to their purpose
(a) Transfer of ownership
(b) Conveyance of use
(c) Rendition of service (4 ARTURO M. TOLENTINO, COMMENTARIES AND JURISPRUDENCE ON THE
CIVIL CODE OF THE PHILIPPINES 410-411 (1991))
7. As to their subject matter

(a) Things
(b) Services (4 ARTURO M. TOLENTINO, COMMENTARIES AND JURISPRUDENCE ON THE CIVIL
CODE OF THE PHILIPPINES 410-411 (1991))
8. As to the risk involved

(a) Commutative – when the undertaking of one party is considered the equivalent of that of the other
(e.g. sale, lease)
(b) Aleatory – when it depends upon an uncertain event or contingency both as to benefit or loss (e.g.
insurance, sale of hope) (DESIDERIO P. JURADO, COMMENTS AND JURISPRUDENCE ON
OBLIGATIONS AND CONTRACTS 361 (2010))
9. As to name or designation
(a) Nominate – those which have a specific name or designation in law (e.g., lease, sale, agency, etc.)
(b) Innominate – those which have no specific designation or name in law (CIVIL CODE, art. 1307)
Do ut des – I give that you may give
Do ut facias – I give that you may do
Facio ut des – I do that you may give
Facio ut facias – I do that you may do
(ERNESTO L. PINEDA, OBLIGATIONS AND CONTRACTS 380 (2009))
Note: Do ut des is, however, no longer an innominate contract. It has already been given a name of its own,
i.e., barter or exchange. (CIVIL CODE, art. 1638)
2. Essential requisites

138
1. Consent
2. Subject Matter/Object
3. Consideration
1. CONSENT
Meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract;
concurrence of a certain offer and an absolute acceptance (CIVIL CODE, art. 1319)
Requisites (C3):
1. Must be manifested by the Concurrence of the offer and acceptance upon the thing and cause;
2. Parties are legally Capacitated to enter into contracts
3. Consent must be intelligent, free, spontaneous, and real (ERNESTO L. PINEDA, OBLIGATIONS AND
Offer – A proposal made by one party to another to enter into a contract; must be certain or definite,
complete and intentional. (CIVIL CODE, art. 1319)
Acceptance – Manifestation by the offeree of his assent to the terms of the offer; must be absolute (i.e.
must not qualify the terms of the offer) (Oesmer v. Paraiso Development Corporation, G.R. No. 157493,
Feb. 5, 2007)
Note: A qualified acceptance constitutes counteroffer. (CIVIL CODE, art. 1319)
Elements of a valid offer

1. Definite
2. Complete
3. Intentional (Palattao v. CA, G.R. No. 131726, May 7, 2002)
Elements of a valid acceptance

1. Unequivocal
2. Unconditional (Palattao v. CA, G.R. No. 131726, May 7, 2002)
When offer becomes ineffective (QR-DRIP)

i. Death, civil interdiction, insanity or insolvency of either party before acceptance is conveyed (CIVIL
CODE, art. 1323);
ii. Express or implied Rejection of the offer by the offeree; (NHA v. Grace Baptist Church, G.R. No. 156437,
Mar. 1, 2004)
iii. Qualified or conditional acceptance of the offer, which becomes a counter-offer; (CIVIL CODE, art. 1319)
iv. Subject matter becomes Illegal or impossible before acceptance is communicated; (EDGARDO L.
PARAS, CIVIL CODE OF THE PHILIPPINES ANNOTATED: PRESCRIPTION; OBLIGATIONS AND
v. Lapse of Period given to the offeree within which to signify acceptance; (CIVIL CODE, art. 1324) or
vi. Revocation of the offer in due time (i.e. before the offeror has learned of its acceptance by the offeree)
Period for acceptance

1. Stated fixed period in the offer – The offeree may accept at any time until such period expires (Young
v. Court of Appeals, G.R. No. 83271, May 8, 1991).
2. No stated fixed period
(a) Offer is made to a person present – Acceptance must be made immediately (Malbarosa v. Court
of Appeals, G.R No. 125761, Apr. 30, 2003).
(b) Offer is made to a person absent – Acceptance may be made within such time that, under
normal circumstances, an answer can be received from him. (ERNESTO L. PINEDA,

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Note: For a contract to arise, the acceptance must be made known to the offeror. Accordingly, the
acceptance can be withdrawn or revoked before it is made known to the offeror. (Oesmer v. Paraiso
Development Corporation, G.R. No. 157493, Feb. 5, 2007)
Note: We follow the theory of cognition (CIVIL CODE, art. 1319) and not the theory of
manifestation. Under our Civil Law, the offer and acceptance concur only when the offeror comes to know
of, and not when the offeree merely manifests his acceptance.
Rule on complex offers

1. Offers are interrelated – Contract is perfected if all the offers are accepted.
2. Offers are not interrelated – Single acceptance of each offer results in a perfected contract unless
the offeror has made it clear that one is dependent upon the other and acceptance of both is necessary.
3. Offer interpraesentes must be accepted immediately. If the parties intended that there should be an
express acceptance, the contract will be perfected only upon knowledge by the offeror of the express
acceptance by the offeree of the offer. An acceptance which is not made in the manner prescribe by the
offeror is not effective, but a counter-offer which the offeror may accept or reject. (Malbarosa v. Court of
Appeals, G.R No. 125761, Apr. 30, 2003)
Rule on advertisements as offers

1. Business advertisements – Not a definite offer, but mere invitation to make an offer, unless it appears
otherwise (CIVIL CODE, art. 1325)
2. Advertisements for bidders – They are simply invitations to make proposals and the advertiser is
not bound to accept the highest or lowest bidder, unless the contrary appears (CIVIL CODE, art. 1326)
Article 1326 of the Civil Code, which specifically tackles offer and acceptance of bids, provides that
advertisements for bidders are simply invitations to make proposals, and that an advertiser is not bound to
accept the highest bidder unless the contrary appears. (PMO v. STRADEC, G.R. No. 200402, June 13, 2013)
Four (4) theories on acceptance of offer by telegram or letter

(a) Manifestation – perfected from the moment the acceptance is declared or made.
(b) Expedition – perfected from the moment the offeree transmits the notification of acceptance.
(c) Reception – perfected from the moment the offeror receives the letter.
(d) Cognition – perfected from the moment the acceptance comes to the knowledge of the offeror.
(DESIDERIO P. JURADO, COMMENTS AND JURISPRUDENCE ON OBLIGATIONS AND CONTRACTS
402 (2010))
Note:
 Contracts under the Civil Code generally adhere to the Cognition Theory while transactions
under the Code of Commerce adhere to the Manifestation Theory. (DESIDERIO P. JURADO,
COMMENTS AND JURISPRUDENCE ON OBLIGATIONS AND CONTRACTS 402 (2010))
 When the offeror refuses to open the letter or telegram he is held to have a constructive notice of
the contents thereof and will be bound by the acceptance of the offeree. (DESIDERIO P. JURADO,
COMMENTS AND JURISPRUDENCE ON OBLIGATIONS AND CONTRACTS 403-404 (2010))
Options
General rule: If the offeror has allowed the offeree a certain period to accept, the offer may be withdrawn
at any time before acceptance by communicating such withdrawal. (CIVIL CODE, art. 1324)
Exception:
 When the option is founded upon a consideration as something paid or promised. (CIVIL CODE,
art. 1324)
 An option, sometimes called an “unaccepted offer,” is simply a contract by which the owner of
property agrees with another person that he shall have the right to buy his property at a fixed price
within a certain time. An option is not of itself a purchase, but merely secures the privilege to buy.
It is not a sale of property but a sale of the right to purchase. (Adelfa Properties, Inc. v. CA, G.R. No.
111238, Jan. 25, 1995)

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Effects of option:
1. Not supported by an independent consideration (i.e., distinct from the purchase price) – offeror can
withdraw the offer at any time before acceptance by communicating such withdrawal
2. Supported by independent consideration – offeror cannot withdraw his offer (CIVIL CODE, art. 1324)
Persons incapacitated to give consent (DDMI):

i. Minors (CIVIL CODE, art. 1327).
ii. Insane or demented persons (CIVIL CODE, art. 1327), unless the contract was entered into during a lucid
interval (CIVIL CODE, art. 1328)
iii. Deaf-mutes who do not know how to write (CIVIL CODE, art. 1327).
iv. In a state of Drunkenness or under a hypnotic spell (CIVIL CODE, art. 1328)
Contracts entered into by the persons above are in generally valid until annulled; however, annulment
cannot prosper when they have been ratified. (CIVIL CODE, art. 1390).
Rule on contracts entered into by minors

General rule: Voidable (CIVIL CODE, art. 1391)
Exceptions (MENGS) (These contracts are valid):

1. If upon reaching age of Majority, they ratify the same. (Ibanez v. Rodriguez, G.R. No. 23153, Mar.
7, 1925)
2. They were entered unto by a Guardian and the court having jurisdiction had approved the same.
(Roa v. Roa, G.R. No. 28532, Mar. 4, 1929)
3. They were in the form of Savings account in the Postal Savings Bank, provided furthermore that
the minor was at least 7 years old. (Rev. Adm. Code, Sec. 2007)
4. They were contracts for Necessaries such as food, but here the persons who are bound to give them
support should pay therefor (CIVIL CODE, arts. 1489 & 2164; FAMILY CODE, E.O. 209, art. 194
(1987))
5. Contracts where the minor misrepresented his age and pretended to be one of major age and is thus
in Estoppel. (Hermosa v. Zobel, G.R. No. L-11835, Oct. 30, 1958). It is, however, essential here that
the other party must have been MISLED (Bambalan v. Maramba, G.R. No. L-27710, Jan. 30, 1928).
HOWEVER, minors can set up the defense of minority to resist the claim when there is only passive
misrepresentation, as when they did not disclose their minority because they had no juridical duty
to disclose their inability. (Braganza v. De Villa Abrille, G.R. No. L-12471, Apr. 13, 1959)
Note: If both parties to a contract are minors, the contract is unenforceable. (CIVIL CODE, art. 1403(3)).
Examples of persons specially disqualified to enter into contracts (Contracts entered into
are VOID):
1. Husband and wife selling to one another (CIVIL CODE, art. 1490) or donating to one another (CIVIL
CODE, art. 134)
2. Insolvents before they are discharged cannot, for example, make payments.
Exception: Payment of administrative expenses shall be allowed. (An Act Providing For The
Rehabilitation Or Liquidation Of Financially Distressed Enterprises And Individuals [Financial
Rehabilitation and Insolvency Act of 2010], Republic Act No. 10142, § 57 (2010))
3. Persons disqualified because of fiduciary relationship (CIVIL CODE, art. 1491)
INCAPACITY DISQUALIFICATION
Restrains the exercise of the right Restrains the very right itself
to contract
May still enter into contract Absolutely disqualified
through parent, guardian or legal
representative
Based upon subjective Based upon public policy and
circumstance of certain person morality

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Contracts entered into are merely Contracts entered into are void
voidable
Causes which vitiate consent

A contract where consent is given through Mistake, Violence, Intimidation, Undue Influence, or Fraud is
voidable (VIMFU). (CIVIL CODE, art. 1330)
i. Mistake
Must include both ignorance, which is the absence of knowledge with respect to a thing, and mistake
properly speaking, which is a wrong conception about said thing, or a belief in the existence of some
circumstance, fact, or event, which in reality does not exist. (Theis v. Court of Appeals, G.R. No. 126013,
Feb. 12, 1997)
Requisites (FES):
1. The error must be Substantial regarding:
i. The object of the contract, or
ii. The conditions which principally moved or induced one of the parties (error in quality or in
quantity), or
iii. Identity of qualifications, but only if such was the principal cause of the contract (CIVIL CODE,
art. 1331)
2. The error must not be Excusable (not caused by negligence). There is no mistake if the party alleging it
knew the doubt, contingency or risk affecting the object of the contract. (CIVIL CODE, art. 1333)
3. The error must be mistake of Fact, and not of law. (Luna v. Linatoc, G.R. No. L-48403, Oct. 28, 1942)
Two (2) General Kinds of Mistake

(a) Mistake of Fact – When one or both of the contracting parties believe that a fact exists when in reality
it does not, or that such fact does not exist when in reality it does (ERNESTO L. PINEDA, OBLIGATIONS
AND CONTRACTS 443 (2009))
(b) Mistake of Law
• General Rule: Mistake does not vitiate consent (CIVIL CODE, art. 1331)
Reason: Ignorance of the law does not excuse anyone from compliance therewith (CIVIL CODE, art. 3)
• Exception: Mutual error as to the legal effect of an agreement when the real purpose of the parties is
frustrated (CIVIL CODE, art. 1334).
“Legal effect” here refers to the rights of the parties as stated in the legal provisions.
ii. Violence
Requisites (PFR):
1. Serious or irresistible Physical Force
2. Such force is the Reason why the contract was entered into. (CIVIL CODE, art. 1335)
Note: Violence refers to physical coercion, while intimidation refers to moral coercion. (EDGARDO L.
PARAS, CIVIL CODE OF THE PHILIPPINES ANNOTATED: PRESCRIPTION; OBLIGATIONS AND
iii. Intimidation
Requisites (FReT):
1. Reasonable and well-grounded Fear of an imminent and grave evil upon his person, property, or upon
the person or property of his spouse, descendants, or ascendants
2. It is the Reason why the contract was entered into
3. The Threat must be of an unjust act, an actionable wrong (A threat to enforce a just or legal claim through
competent authority does not vitiate consent.) (CIVIL CODE, art. 1335)
Example: What the respondent did was merely inform them of petitioner Edna’s conviction in the criminal
cases for estafa. It might have evoked a sense of fear or dread on the petitioners’ part, but certainly there is
nothing unjust, unlawful or evil in the respondent's act. ... The petitioners must remember that petitioner

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Edna's conviction was a result of a valid judicial process and even without the respondent allegedly
“ramming it into petitioner Victor's throat,” petitioner Edna's imprisonment would be a legal consequence
of such conviction. (Spouses Binua v. Ong, G.R. No. 207176, June 18, 2014)
Reluctant Consent – It is necessary to distinguish between real duress and the motive which is present
when one gives his consent reluctantly. A contract is valid even though one of the parties entered into it
against his wishes or even against his better judgment. Contracts are also valid even though they are entered
into by one of the parties without hope of advantage or profit. (Martinez v. Hongkong and Shanghai Bank,
G.R. No. L-5496, Feb. 19, 1910)
Note: Violence or intimidation shall annul the obligation, although it may have been employed by a third
person who did not take part in the contract. (CIVIL CODE, art. 1336)
iv. Undue Influence

Requisites (DIP):
1. Improper advantage
2. Power over the will of another
3. Deprivation of the latter of a reasonable freedom of choice. (CIVIL CODE, art. 1337)
Circumstances to be considered (FIRM)

(a) Confidential, family, spiritual, and other Relations between the parties
(b) Mental weakness
(c) Ignorance
(d) Financial distress (CIVIL CODE, art. 1337).
Fraud
Fraud in Obtaining Consent
In order that fraud may vitiate consent, it must be the causal (dolo causante), not merely the incidental
(dolo incidente), inducement to the making of the contract. (Ponce de Leon v. Rehabilitation Finance
Corporation, G.R. No. L-24571, Dec. 18, 1970)
(a) Causal Fraud (Dolo Causante)

 This is the use of insidious words or machinations by one of the contracting parties to induce the
other party to enter into a contract, which, without them, he would not have agreed to. (CIVIL
CODE, art. 1338)
 Determines or is the essential cause of consent.
 It is the deception employed by one party prior to or simultaneous to the contract in order to secure
the consent of the other (Metropolitan Fabrics, Inc. v. Prosperity Credit Resources, Inc., G.R. No.
154390, Mar. 17, 2014)
Effects: Voidability of the contract and the indemnification for damages (Geraldez v. CA, G.R. No. 108253,
Feb. 23, 1994)
Requisites (PS-SOBIA)
1. There must be misrepresentation or concealment (CIVIL CODE, arts. 1338 & 1339) by a party Prior to or
Simultaneous to the consent or creation of the contract.
2. Must be Serious. (CIVIL CODE, art. 1344)
3. Must have been employed by only One of the contracting parties. (CIVIL CODE, art.1342)
4. Must be made in Bad faith or with intent to deceive. (CIVIL CODE, art. 1343)
5. Must have Induced the consent of the other contracting party. (CIVIL CODE, art. 1338)
6. Must be Alleged and proved by clear and convincing evidence, and not merely by a preponderance
thereof. (Tan Sua Sia v. Sontua, 56 Phil. 711, 1932)
(b) Incidental Fraud (Dolo Incidente)

 Deceptions or misrepresentations which are not serious and without which the other party would
still have entered into the contract.

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 It is not the cause which induced the party to enter into a contract and refers only to some particular
or accident of the obligations. (Geraldez v. CA, G.R. No. 108253, Feb. 23, 1994)
Effect: Only renders the person employing it liable for damages. (CIVIL CODE, art. 1344)
Simulated Contracts
(a) Absolute – the parties have no intention to be bound at all (CIVIL CODE, art. 1345); void from
beginning (CIVIL CODE, art. 1346).
(b) Relative – the parties conceal their true agreement (CIVIL CODE, art. 1345): the real agreement binds
the parties when:
i. There is no prejudice to 3rd persons; and
ii. It is not contrary to law, moral, good customs, public order or public policy (CIVIL CODE, art.
1346)
(c) Dealer’s Talk (Dolo bonus)

This oxymoron (literally, good fraud) refers to dealer’s talk, the kind of exaggerations in advertisement the
public is familiar with. The ancient principle still governs in this regard: Caveat emptor -- Buyer beware.
But once the dealer’s talk goes beyond innocent conventional exaggeration and later the realm of bad faith,
then deceit (either causante or incidental) may set in. (RUBEN F. BALANE, JOTTINGS AND
JURISPRUDENCE IN CIVIL LAW (OBLIGATIONS AND CONTRACTS) 635-36 (2020))
NOTE: In absolute simulation, there is a colorable contract but the parties have no intention to be bound
by it. However, if the parties state a false cause in the contract to conceal their real agreement, the contract
is relatively simulated and the parties are still bound by their real agreement. (CIVIL CODE, art. 1345;
Valerio v. Refresca, G.R. No. 163687, Mar. 28, 2006)
2. SUBJECT MATTER (SM) / OBJECT
Requisites of things as SM (W-PLDT):

1. Within the commerce of man (CIVIL CODE, art. 1347) – either existing or in potency
2. Licit or not contrary to law, morals, good customs, public order or public policy (CIVIL CODE, art. 1347)
3. Possible, legally or physically (CIVIL CODE, art. 1348).
4. Determinate as to its kind or determinable without need to enter into a new contract (CIVIL CODE, art.
1349)
5. Transmissible (CIVIL CODE, art. 1347)
Requisites of services as SM (PWD):

1. Within the commerce of man (CIVIL CODE, art. 1347)
2. Possible, physically or legally (CIVIL CODE, art. 1348)
3. Determinate or capable of being made determinate (CIVIL CODE, arts. 1318[2] & 1349)
Things which cannot be the subject matter of a contract (I-COFID):

1. Things which are Outside the commerce of men (CIVIL CODE, art. 1347)
2. Intransmissible rights (CIVIL CODE, art. 1347)
3. Future inheritance, except in cases expressly authorized by law (CIVIL CODE, art. 1347)
4. Services Contrary to law, morals, good customs, public order or public policy (CIVIL CODE, art. 1347)
5. Impossible things or services (CIVIL CODE, art. 1348).
6. Objects which are not possible of Determination as to their kind (CIVIL CODE, art. 1349)
NOTE: Contracts upon future inheritance are void when:

• The succession has not yet been opened;
• The object of the contract forms part of the inheritance; and
• The promissor has, with respect to the object, an expectancy of a right, which is purely hereditary in nature.
(De Belen Vda. De Cabalu v. Tabu, G.R. No. 188417, Sept. 24, 2012)
3. CAUSE OR CONSIDERATION

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Refers to the immediate, direct and most proximate reason which justifies the creation of an obligation
through the will of the contracting parties and is the essential reason for the contract. (Uy v. CA, G.R. No.
120465, Sept. 9, 1999)
Requisites (LET)
1. It must Exist at the time the contract is entered into. (CIVIL CODE, art. 1352 & 1409[3])
2. It must be True. (CIVIL CODE, art 1353)
3. It must be Licit. (CIVIL CODE, art. 1352)
Motive – refers to the particular reason of one party for entering into the contract which does not affect
the other party nor the validity of the contract; however, when the motive predetermines the cause or when
the realization of such motive has been made a condition upon which the contract is made to depend, the
motive may be regarded as the cause (Uy v. CA, G.R. No. 120465, Sept. 9, 1999).
Cause distinguished from Motive

Cause Motive
Immediate or direct reason of a contract Remote or indirect reason
Objective and juridical reason of contract; always Psychological or purely personal reason; may be
known to both parties unknown to the other party
Remains the same regardless of a party’s motive for May vary although a party enters into the same
entering into a contract kind of contract
Legality or illegality of cause affects the existence Legality or illegality of motive does not affect the
or validity of the contract existence or validity of contract
Causes in some contracts:

1. Onerous contracts – The prestation of promise of a thing or service by the other. (CIVIL CODE, art.
1350)
2. Remuneratory contracts – The service or benefit remunerated. (CIVIL CODE, art. 1350)
3. Contracts of Pure Beneficence – Mere liberality of the donor or benefactor. (CIVIL CODE, art. 1350)
4. Accessory Contracts Like Mortgage and Pledge – The cause is generally the same as the cause
for the principal contract of loan. (China Bank v. Lichauco, G.R. No. L-22001, Nov. 4, 1924)
5. Accessory Contracts of Personal Guaranty – Generally pure liberality but sometimes material
consideration may be given. (Standard Oil Co. v. Arenas, G.R. No. L-5921, Jul. 25, 1911)
Effect in Cause Effect

Absence of causa – Total lack or absence of Void – Contract produces no legal effect (CIVIL
cause CODE, art. 1352)
– The cause is contrary to law, morals, good Void – Contract produces no legal effect (CIVIL
Illegality of causa customs, public order and CODE, art. 1352)
public policy
Falsity of causa – A cause is stated but it is not Void IF it should not be proved that the contract
true was founded upon another cause which is true and
lawful (CIVIL CODE, art. 1353)
Causa not stated in the contract Presumed to Exist – Burden of proof is on the
person assailing its existence (CIVIL CODE, art.
1354)
Inadequacy of causa or lesion (CIVIL CODE, General Rule: Does not invalidate contract
art. 1355)
Exceptions:
1. When, together with lesion, there has been:
fraud, mistake or undue influence
2. In cases specified by law (the ff. contracts may be
rescinded)
• Those entered into by guardians when the wards
suffer lesion by more than ¼ of the value of the

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things which are the object thereof (CIVIL CODE,
art. 1381, par. 1)
• Those agreed upon in representation of absentee,
if the latter suffer lesion stated in par. 1 (CIVIL
CODE, art. 1381, par. 2)
• Partition among co-heirs, when any one of them
received things with a value less by at least ¼ than
the share to which he is entitled (CIVIL CODE, art.
1098)
Moral Obligation as Cause

 Where the moral obligation arises wholly from ethical considerations, unconnected with any civil
obligations, it cannot constitute a sufficient cause or consideration to support an onerous contract.
(Fisher v. Robb, G.R. No. 46274, Nov. 2, 1939)
 Where such moral obligation is based upon a previous civil obligation which has already been
barred by the statute of limitations at the time when the contract is entered into, it constitutes a
sufficient cause or consideration to support a contract. (Villaroel v. Estrada, G.R. No. L-47362, Dec.
19, 1940)
B. FORMALITY
FORM refers to the manner in which a contract is executed or manifested (HECTOR S. DE LEON &
HECTOR M. DE LEON, JR., COMMENTS AND CASES ON OBLIGATIONS AND CONTRACTS 697 (2014)).
In general, form does not matter for the validity of a contract. It is enough that there be consent, object, and
cause. (CIVIL CODE, art. 1356)
(a) Informal Contracts – may be entered into whatever form as long as there is consent, object and
cause
(b) Formal Contracts – required by law to be in certain specified form, such as donation of real property,
stipulation to pay interest, transfer of large cattle, sale of land thru agent, contract of antichresis, contract
of partnership, registration of chattel mortgage, donation of personal property in excess of 5,000.
(HECTOR S. DE LEON & HECTOR M. DE LEON, JR., COMMENTS AND CASES ON OBLIGATIONS AND
CONTRACTS 699, 701 (2014))
Formal / Solemn Contracts

1. Donation
 The donation of a movable may be made orally or in writing. (CIVIL CODE, art. 748)
 An oral donation requires the simultaneous delivery of the thing or of the document representing
the right donated. (CIVIL CODE, art. 748)
 If the value of the personal property donated exceeds five thousand pesos, the donation and the
acceptance shall be made in writing. Otherwise, the donation shall be void. (CIVIL CODE, art. 748)
 In order that the donation of an immovable may be valid, it must be made in a public document,
specifying therein the property donated and the value of the charges which the donee must satisfy.
 The acceptance may be made in the same deed of donation or in a separate public document, but it
shall not take effect unless it is done during the lifetime of the donor. (CIVIL CODE, art. 749)
 If the acceptance is made in a separate instrument, the donor shall be notified thereof in an
authentic form, and this step shall be noted in both instruments. (CIVIL CODE, art. 749)
2. Partnership
 A partnership may be constituted in any form, except where immovable property or real rights are
contributed thereto, in which case a public instrument shall be necessary. (CIVIL CODE, art. 1771)

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 A contract of partnership is void, whenever immovable property is contributed thereto, if an
inventory of said property is not made, signed by the parties, and attached to the public instrument.
3. Antichresis
 The amount of the principal and of the interest shall be specified in writing; otherwise, the contract
of antichresis shall be void. (CIVIL CODE, art. 2134)
4. Agency to Sell Real Property

 When a sale of a piece of land or any interest therein is through an agent, the authority of the latter
shall be in writing; otherwise, the sale shall be void. (CIVIL CODE, art. 1874)
5. Interest
 No interest shall be due unless it has been expressly stipulated in writing. (CIVIL CODE, art. 1956)
6. Ordinary Diligence
 A stipulation between the common carrier and the shipper or owner limiting the liability of the
former for the loss, destruction, or deterioration of the goods to a degree less than extraordinary
diligence shall be valid, provided it be:
(a) In writing, signed by the shipper or owner;
(b) Supported by a valuable consideration other than the service rendered by the common carrier;
and
(c) Reasonable, just and not contrary to public policy (CIVIL CODE, art. 1744)
7. Chattel Mortgage
 By a chattel mortgage, personal property is recorded in the Chattel Mortgage Register as a security
for the performance of an obligation. If the movable, instead of being recorded, is delivered to the
creditor or a third person, the contract is a pledge and not a chattel mortgage. (CIVIL CODE, art.
2140)
8. Sale of Large Cattle

 The form sale of large cattle shall be governed by special laws. (CIVIL CODE, art. 1581)
General rule: A contract is valid and binding in whatever form provided that the 3 essential requisites of
a contract (consent, object, and cause) concur. (CIVIL CODE, art. 1356)
Exceptions:
i. Law requires the contract to be in some form for validity (e.g., donation and acceptance of real property)
(CIVIL CODE, art. 749).
ii. Law requires the contract to be in some form to be enforceable – Contracts enumerated in Art. 1403(2)
are valid but cannot be enforced in court or sued upon unless they are cured or ratified.
The following agreements shall be unenforceable by action, unless the same, or some note or memorandum,
thereof, be in writing, and subscribed by the party charged, or by his agent: (CYS-DLM)
(a) An agreement that by its terms is not to be performed within a Year from the making thereof;
(b) A special promise to answer for the Debt, default, or miscarriage of another;
(c) An agreement made in consideration of Marriage, other than a mutual promise to marry;
(d) An agreement for the Sale of goods, chattels or things in action, at a price not less than five
hundred pesos, unless the buyer accept and receive part of such goods and chattels, or the
evidences, or some of them, of such things in action or pay at the time some part of the purchase
money; but when a sale is made by auction and entry is made by the auctioneer in his sales book,
at the time of the sale, of the amount and kind of property sold, terms of sale, price, names of the
purchasers and person on whose account the sale is made, it is a sufficient memorandum
(e) An agreement for the Leasing for a longer period than one year, or for the sale of real property
or of an interest therein;
(f) A representation as to the Credit of a third person. (CIVIL CODE, art. 1403)

147
NOTE: Article 1443 requires an express trust over an immovable or an interest therein to be in writing for
purposes of proof.
iii. Law requires the contract to be in some form for convenience - Contracts enumerated in Art. 1358 are
valid. Formal requirements are only for the benefit of third parties. Noncompliance therewith does not
adversely affect the validity of neither the contract nor the contractual rights and obligations of the parties
thereunder. (Fule v. CA, G.R. No. 112212, Mar. 2, 1998)
The following must appear in a public document:

(a) Contracts whose object is the creation, transmission, modification or extinguishment of real rights over
immovables
(b) Cession, repudiation, renunciation of hereditary rights or those of the conjugal partnership of gains
(c) Power to administer property for another, or any other power which has for its object an act appearing
or which should appear in a public document, or should prejudice a third person;
(d) Cession of action of rights proceeding from an act appearing in a public document.
(e) All other contracts where the amount involved exceeds P500 must appear in writing, even a private one.
NOTE: Electronic documents shall have the legal effect, validity or enforceability as any other document
or legal writing, and where the law requires a document to be in writing, that requirement is met by an
electronic document if the said electronic document maintains its integrity and reliability and can be
authenticated so as to be usable for subsequent reference. (Act Providing for the Recognition and Use of
Electronic Commercial and Non-commercial Transactions and Documents, Penalties for Unlawful Use
Thereof and For Other Purposes [e-Commerce Act of 2000], Republic Act No. 8792, § 7 (2000))
3. REFORMATION OF INSTRUMENTS
As distinguished from annulment where there is no meeting of the minds, in reformation, there is meeting
of the minds but attended by mistake, fraud, inequitable conduct, or accident. (CIVIL CODE, art. 1359)
Requisites for action for reformation (VP-PIM)

1. Meeting of the minds (CIVIL CODE, art. 1359)
2. True Intention is not expressed (CIVIL CODE, art. 1359)
3. Clear and convincing Proof (HECTOR S. DE LEON & HECTOR M. DE LEON, JR., COMMENTS AND
CASES ON OBLIGATIONS AND CONTRACTS 713 (2014))
4. Within proper prescriptive Period (10 years)
5. Not simple unconditional donation inter vivos or contract where real agreement is Void (CIVIL CODE,
art. 1366)
NOTE: In reformation, no new contract is made.
Contracts that may be reformed: (CM-TIFF)

(a) Mutual mistake fails to disclose the real agreement (but it must be a mistake of Fact) (CIVIL CODE, art.
1361)
(b) Unilateral mistake or the other party acted Fraudulently (CIVIL CODE, art. 1362)
(c) Unilateral mistake and the other party is guilty of Concealment (CIVIL CODE, art. 1363)
(d) Person drafting the instrument or clerk or typist through ignorance, lack of skill, negligence or bad faith,
does not show the True Intention (CIVIL CODE, art. 1364)
(e) Parties agree on Mortgage, pledge of real or personal property but instrument says that it is sold
absolutely or involves a right to repurchase (CIVIL CODE, art. 1365)
No reformation is allowed in: (SD-WV)

(a) Simple Donation
(b) Wills
(c) Real agreement is Void (CIVIL CODE, art. 1366)
Who may ask for reformation: (NOT-FE-MM)

(a) The party who is NOT at Fault (i.e., injured party, heirs or assigns) (CIVIL CODE, art. 1367)

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(b) Party who is NOT asked to Enforce the instrument (CIVIL CODE, art. 1368)
(c) If there is a Mutual Mistake, reformation may be had by either party or successor in interest (CIVIL
CODE, art. 1368)
Procedure for reformation shall be governed by the Rules of Court as promulgated by the Supreme Court.
4. INTERPRETATION OF CONTRACTS
 If the terms of the agreement are clear and unequivocal, their plain and literal meanings should be
followed. (CIVIL CODE, art. 1370)
 In the construction or interpretation of an instrument, the intention of the parties is primordial and
is to be pursued. (Valdez v. CA, G.R. No. 140715, Sept. 24, 2004
 In order to judge the intention of the contracting parties, their contemporaneous and subsequent
acts shall be principally considered. (CIVIL CODE, art. 1371)
 In case of doubt concerning the surrounding circumstances in the execution of a contract, the least
transmission of rights and interest shall prevail if the contract is gratuitous, and if onerous, the
doubt is to be settled in favor of greatest reciprocity. (CIVIL CODE, art. 1378)
 The terms of an agreement or writing are presumed to be have been used in their primary and
general acceptation. However, evidence may be admitted to show that they have a local, technical,
or otherwise peculiar signification and were used and understood in that particular instance, in
which case, the agreement or writing must be construed accordingly. (REVISED RULES ON
EVIDENCE, rule 130, § 15)
 Only laws existing at the time of the execution of a contract are applicable to it and not the later
statutes unless the latter are specifically intended to have retroactive effect. (Vive Eagle Land, Inc.
v. CA, G.R. No. 150308, Nov. 26, 2004)
 When there are several provisions in a contract, the construction to be adopted should be that one
which will give effect to all provisions. A contract must be read in its entirety. (Rigor v. Consolidated
Orix Leasing Finance Corporation, G.R. No. 136423, Aug. 20, 2002)
 The ambiguity in a contract should be construed against the party who caused the same. (CIVIL
CODE, art. 1377)
CONTRACT OF ADHESION: Its terms are prepared by only one party while the other party merely
affixes his signature signifying his admission thereto. It is binding as ordinary contracts the reason being
that the party who adheres to it is free to reject its entirety. It is stricken down as void when the weaker
party is imposed upon in dealing with the dominant bargaining party and is reduced to the alternative of
taking it or leaving it, completely deprived of the opportunity to bargain on equal footing. (Dio v. St.
Ferdinand Memorial Park, Inc., G.R. No. 169578, Nov. 30, 2006)
5. RESCISSIBLE CONTRACTS
Those which have caused economic damage either to one of the parties or to a third person and which may
be set aside even if valid. They may be set aside in whole or in part, to the extent of the damage caused. (4
ARTURO M. TOLENTINO, COMMENTARIES AND JURISPRUDENCE ON THE CIVIL CODE OF THE
PHILIPPINES 574 (1991))
Rescissible Contracts under Art. 1381: (ALLGF)

(a) Entered into by Guardian whenever ward suffers damage by more than 1/4 of value of object;
(b) Agreed upon in representation of Absentees, if absentee suffers lesion by more than ¼ of value of
property;
(c) Contracts where rescission is based on Fraud committed on creditors (accion pauliana);
(d) Objects of Litigation; contract entered into by defendant without knowledge or approval of litigants or
judicial authority; and Contracts involving things under litigation are rescissible. Art. 1381 (4) requires the
concurrence of the following:
(1) the defendant, during the pendency of the case, enters into a contract which refers to the subject
of litigation; and

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(2) said contract was entered into without the knowledge and approval of the litigants or of a
competent judicial authority. The court then has the duty to order the rescission of the contract
upon the concurrence of such requisites. (Ada v. Baylon, G.R. No. 182435, Aug. 13, 2012)
(e) Provided for by Law – e.g. Arts. 1526, 1534, 1539, 1542, 1556, 1560, 1567 and 1659
i. Art. 1526 – Unpaid seller of goods, notwithstanding that the ownership in the goods may have
passed to the buyer, subject to other provisions on Sales
ii. Art. 1534 – Unpaid seller having the right of lien or having stopped the goods in transit, where
he expressly reserved his right to do so in case the buyer should make default, or the buyer has been
in default in the payment of the price for an unreasonable time
iii. Art. 1539 – In the sale of real estate at a rate of a certain price for a unit of measure or number,
at the will of the vendee, when the inferior value of the thing sold exceeds one-tenth of the price
agreed upon, or if the vendee would not have bought the immovable had he known of its smaller
area or inferior quality
iv. Art. 1542 – In the sale of real estate, made for a lump sum, where the boundaries are mentioned
and the area or number within the boundaries exceed that specified in the contract, when the
vendee does not accede to the failure to deliver what has been stipulated
v. Art. 1556 – Should the vendee lose, by reason of eviction, a part of the thing sold of such
importance, in relation to the whole, that he would not have bought it without said part
vi. Art. 1560 – Vendee may ask for recession if the immovable sold should be encumbered with
any non-apparent burden or servitude, not mentioned in the agreement, of such a nature that it
must be presumed that the vendee would not have acquired it had he been aware thereof
vii. Art. 1567 – In cases of breach of warranty against hidden defects of or encumbrances upon
the thing sold
viii. Art. 1659 – If the lessor or lessee should not comply with their obligations, the aggrieved
party may ask for rescission.
Accion pauliana refers to the action to rescind contracts in fraud of creditors under Art. 1381.
Requisites: (NR-CAFS)
1. The plaintiff asking for rescission has a Credit prior to the alienation, although demandable later;
2. The debtor has made a Subsequent contract conveying a patrimonial benefit to a third person;
3. The creditor has No other legal Remedy to satisfy his claim;
4. The act being impugned is Fraudulent;
5. The third person who received the property conveyed, if it is by onerous title, has been an Accomplice in
the fraud. (Anchor Savings Bank v. Furigay, G.R. No. 191178, Mar. 13, 2013; Lee v. Bangkok Bank Public
Company, Limited, G.R. No. 173349, Feb. 9, 2011)
Under Art. 1382, payments made in a state of insolvency for obligations to whose fulfillment the
debtor could not be compelled at the time they were effected are also rescissible.
Requisites:
1. The debtor-payer must have been insolvent (the insolvency need not be a judicially declared one).
2. The debt was not yet due and demandable (CIVIL CODE, art. 1382)
Obligation created by the rescission of the contract
Mutual Restitution
1. Things which are the objects of the contract and their fruits
2. Price with interest (CIVIL CODE, art. 1385)
NOTE: The obligation of restitution obviously does not apply to creditors who seek to impugn fraudulent
transactions of their debtors. The obligation of mutual restitution applies to OTHERS so that that status
quo may be restored. (EDGARDO L. PARAS, CIVIL CODE OF THE PHILIPPINES ANNOTATED:
PRESCRIPTION; OBLIGATIONS AND CONTRACTS (2016))
Requisites: (4-TRR)

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1. Plaintiff must be able to Return what has been received by virtue of the rescissible contract (CIVIL CODE,
art. 1385)
2. Object of the contract is not in the legal possession of Third persons in good faith. (CIVIL CODE, art.
1385)
3. Plaintiff has no other legal Remedy. (CIVIL CODE, art. 1383)
4. Action must be brought within the proper prescriptive period of 4 years. (CIVIL CODE, art. 1389)
Badges of fraud are circumstances indicating that certain alienation has been made in fraud of creditors.
Some examples are:
i. Consideration of the conveyance is inadequate or fictitious;
ii. Transfer was made by a debtor after a suit has been begun and while it is pending against him;
iii. Sale upon credit by an insolvent debtor;
iv. Evidence of indebtedness or complete insolvency;
v. Transfer of all his property by a debtor when he is financially embarrassed or insolvent;
vi. Transfer made between father and son where this fact is considered together with the preceding
circumstances; and
vii. Failure of the vendee to take exclusive possession of the property (Caltex Philippines, Inc. v. PNOC
Shipping and Transport Corporation, G.R. No. 150711, Aug. 10, 2006)
The presumption of fraud in case of alienations by onerous title of a person against whom a judgment has
been rendered or attachment issued does not apply to registered lands if the judgment or attachment made
is not also registered. (Lee v. Bangkok Bank, G.R. No. 173349, Feb. 9, 2011)
6. VOIDABLE CONTRACTS
Intrinsic defect; valid until annulled; defect is due to vice of consent or legal incapacity (ERNESTO L.
PINEDA, OBLIGATIONS AND CONTRACTS 601-602(2009))
Characteristics (ACED)
(a) Effective until set aside
(b) May be assailed or attacked only in an Action for that purpose
(c) Can be Confirmed
Note: Confirmation is the proper term for curing the defect of a voidable contract.
(d) Can be assailed only by the party whose consent was Defective or his heirs or assigns
What contracts are voidable:

Contracts entered into: (SIM-D3)
(a) By Minors (CIVIL CODE, art. 1327)
(b) By Insane unless he/she acted during a lucid interval (CIVIL CODE, art. 1327 & 1328)
(c) By Deaf mute who can’t read or write (CIVIL CODE, art. 1327)
(d) By Persons specially Disqualified: civil interdiction (CIVIL CODE, art. 1329 & 38)
(e) In state of Drunkenness (CIVIL CODE, art. 1328)
(f) In state of hypnotic Spell (CIVIL CODE, art. 1328)
Mistake
False belief of something which is contrary to the real intention of the parties (ERNESTO L. PINEDA,
Requisites: (CP-SEN)
1. Refers to the Subject of the thing which is the object of the contract
2. Refers to the Nature of the contract
3. Refers to the principal Conditions in an agreement (ERNESTO L. PINEDA, OBLIGATIONS AND
4. Error as to Person – When it is the principal consideration of the contract
5. Error as to legal Effect – When mistake is mutual and frustrates the real purpose of parties (CIVIL CODE,
art. 1334)
Violence - Serious or irresistible force is employed to wrest consent (CIVIL CODE, art. 1335)

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Intimidation - One party is compelled by a reasonable and well-grounded fear of an imminent and grave
danger upon person and property of himself, spouse, ascendants or descendants (moral coercion) (CIVIL
CODE, art. 1335)
Undue Influence - Person takes improper advantage of his power over will of another depriving latter of
reasonable freedom of choice (CIVIL CODE, art. 1337)
The doctrine on reluctant consent provides that a contract is still valid even if one of the parties entered
it against his wishes or even against his better judgment. Contracts are also valid even though they are
entered into by one of the parties without hope of advantage or profit. (Martinez v. HSBC, G.R. No. L-5496,
Feb. 19, 1910)
Fraud - Thru insidious words or machinations of one of the contracting parties, the other is induced to
enter into a contract without which he will not enter it (dolo causante). (Samson v. CA, G.R. No. 108245,
Nov. 25, 1994)
Kinds of Fraud in the Performance of Obligations or Contracts

(a) Causal Fraud (dolo causante)
(b) Incidental Fraud (dolo incidente)
(c) Tolerated Fraud – includes minimizing the defects of the thing, exaggeration of its good qualities and
giving it qualities it does not have; lawful misrepresentation (CIVIL CODE, art. 1340)
Note:
Expression of an opinion – not fraud unless made by expert and other party relied on the former’s special
knowledge (CIVIL CODE, art. 1341)
Fraud by third person – does not vitiate consent; only action for damages except if there is collusion
between one party and the third person, or resulted to substantial mistake, mutual between parties. (CIVIL
CODE, art. 1342)
Causes of Extinction of the Action to Annul

1. Prescription - Period to bring an action for Annulment
(a) Intimidation, violence, undue influence – 4 years from time defect of consent ceases
(b) Mistake, fraud – 4 years from time of discovery
(c) Incapacity - From time guardianship ceases (CIVIL CODE, art. 1391)
Discovery of fraud must be reckoned to have taken place from the time the document was registered in the
office of the register of deeds. Registration constitutes constructive notice to the whole world (Carantes v.
CA, G.R. No. L-33360, Apr. 25, 1977).
2. Ratification
Requisites: (Wack)
(a) Knowledge of reason rendering contract voidable (CIVIL CODE, art. 1393)
(b) Such reason must have Ceased (CIVIL CODE, art. 1393). Except in case of ratification effected by the
guardian to contracts entered into by an incapacitated (CIVIL CODE, art. 1394)
(c) The injured party must have executed an act which expressly or impliedly conveys an intention to Waive
his right (CIVIL CODE, art. 1393)
 Even assuming that petitioner’s misrepresentation consists of fraud which could be a ground for
annulling their Contract to Sell, respondent’s act of affixing her signature to the said Contract, after
having acquired knowledge of the property's actual location, can be construed as an implied
ratification thereof.
 Implied ratification may take diverse forms, such as by silence or acquiescence; by acts showing
approval or adoption of the contract; or by acceptance and retention of benefits flowing therefrom.
(ECE Realty v. Mandap, G.R. No. 196182, Sept. 1, 2014)

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3. Loss of the Thing which is the object of the contract through fraud or fault of the person who is entitled
to annul the contract. (CIVIL CODE, art. 1401)
Note: If the object is lost through a fortuitous event, the contract can still be annulled, but the person
obliged to return the same can be held liable only for the value of the thing at the time of the loss, but
without interest thereon. (4 ARTURO M. TOLENTINO, COMMENTARIES AND JURISPRUDENCE ON
THE CIVIL CODE OF THE PHILIPPINES 614 (1991))
Ratification cleanses the contract of its defects from the moment it was constituted. (CIVIL CODE, art.
1396)
7. UNENFORCEABLE CONTRACTS
They are valid but the execution cannot be compelled unless ratified; extrinsic defect; produce legal effects
only after ratified.
Kinds: (URA)
(a) Unauthorized or no sufficient authority – Entered into in the name of another when: (CIVIL
CODE, art. 1404)
i. No authority conferred (CIVIL CODE, art. 1317)
ii. In excess of authority conferred (ultra vires) (CIVIL CODE, art. 1317)
(b) Curable by Ratification – Both parties incapable of giving consent (2 minor or 2 insane persons)
(c) Curable by Acknowledgment – Failure to comply with Statute of Frauds. (CIVIL CODE, art. 1405)
Statute of Frauds
(a) Agreement to be performed within a year after making contract
(b) Special promise to answer for debt, default or miscarriage of another
(c) Agreement made in consideration of promise to marry
(d) Agreement for sale of goods, chattels or things in action at price not less than 500; exception: auction
when recorded sale in sales book
(e) Agreement for lease of property for more than one year and sale of real property regardless of price
(f) Representation as to credit of another (CIVIL CODE, art. 1403 (2))
Two Ways of Curing Unenforceable Contracts

(a) Failure of defendant to object in time, to the presentation of parole evidence in court, the defect
of unenforceability is cured
(b) Acceptance of benefits under the contract. If there is performance in either part and there is
acceptance of performance, it takes it out of unenforceable contracts; also estoppel sets in by accepting
performance, the defect is waived. (CIVIL CODE, art. 1405)
(c) Cross-examination of witness of oral contract.
Note:
 The contracts/agreements under the Statute of Frauds require that the same be evidenced by some
note or memorandum or writing, subscribed by the party charged or by his agent, otherwise, the
said contracts shall be unenforceable. (CIVIL CODE, art. 1403)
 The Statute of Frauds applies only to executory contracts, not to those that are partially or
completely fulfilled. (Carbonnel v. Poncio, G.R. No. L-11231, May 12, 1958)
8. VOID OR INEXISTENT CONTRACTS

These contracts have no legal effect (Modina v. CA, G.R. No. 109355, Oct. 29, 1999)
Characteristics:
1. It produces no effect whatsoever either against or in favor of anyone; (Modina v. CA, G.R. No. 109355,
Oct. 29, 1999)
2. There is no action for annulment necessary as such is ipso jure. A judicial declaration to that effect is
merely a declaration;
3. It cannot be confirmed, ratified or cured;

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NOTE:
 Assuming that the nullified ... resolutions may be deemed as contracts, we declared in our [previous
ruling] that the infirmity in the nullified ... resolutions did not stem from the absence of consent or
authority, which would have made them unenforceable contracts under Article 1401 (1) of the Civil
Code. The infirmity comes from the failure of the NPC to comply with the requirements set forth in
the EPIRA.
 On this basis, they cannot be classified as an unenforceable contract under Article 1403 (1) of the
Civil Code, but as void contracts under Article 1409 (7) of the Civil Code for being "expressly
prohibited or declared void by law." The last paragraph of Article 1409 of the Civil Code expressly
provides that void contracts cannot be ratified. (NPC DAMA v. NPC, G.R. No. 156208, June 30,
2014)
4. If performed, restoration is in order, except if pari delicto will apply; (CIVIL CODE, art. 1411 & 1412)
5. The right to set up the defense of nullity cannot be waived; (CIVIL CODE, art. 1409)
6. Imprescriptible (CIVIL CODE, art. 1410); and
7. Anyone may invoke the nullity of the contract whenever its juridical effects are asserted against him
Kinds of void contract: (CIVIL CODE, art. 1409)

(a) Those lacking in essential elements: No consent, no object, no cause (inexistent ones) – essential
formalities are not complied with.
Example: Donation propter nuptias – Should conform to formalities of a donation to be valid)
(b) Those which are absolutely simulated or fictitious – no cause. An absolutely simulated or
fictitious contract is void, and the parties may recover from each other what they may have given under the
contract. In absolute simulation, there is a colorable contract but it has no substance as the parties have no
intention to be bound by it. (Heirs of Dr. Mario S. Intac and Angelina Mendoza-Intac v. CA, G.R. 173211,
Oct. 11, 2012).
(c) Those which cause or object did not exist at the time of the transaction – no cause/object.
This refers to a contract whose cause or object could not have existed or could not come into existence at
the time of the transaction. (RUBEN F. BALANE, JOTTINGS AND JURISPRUDENCE IN CIVIL LAW
(OBLIGATIONS AND CONTRACTS) 778 (2020))
(d) Those whose object is outside the commerce of man – no object

(e) Those which contemplate an impossible service – no object
(f) Those which intention of parties relative to principal object of the contract cannot be ascertained
(g) Those expressly prohibited or declared void by law – Contracts w/c violate any legal provision,
whether it amounts to a crime or not
(h) Those whose cause, object or purpose is contrary to law, morals, good customs, public order
or public policy.
Example: Contract to sell marijuana
Other void contracts:

(a) Pactum Commissorium (CIVIL CODE, art. 2088, 2130, 1390)
Elements: (MAp)
i. There should be a property Mortgaged by way of security for the payment of the principal
obligation.
ii. There should be a stipulation for automatic Appropriation by the creditor of the thing mortgaged
in case of nonpayment of the principal obligation within the stipulated period. (Development Bank
of the Philippines v. CA, G.R. No. 118342, Jan. 5, 1998)
(b) Pactum De Non Alienando (CIVIL CODE, art. 2130)

• A stipulation forbidding the owner from alienating the immovable mortgaged shall be void.

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• It is a clause in a mortgage giving the mortgagee the right to foreclose by executory process directed solely
against the mortgagor and giving him or her the right to seize and sell the mortgaged property, regardless
of any subsequent alienations.
(c) Pactum Leonina (CIVIL CODE, art. 1799)

• A stipulation which excludes one or more partners from any share in profit or loss is void.
Illegal Contracts
Pari Delicto Doctrine

General Rule:
• Both parties are guilty, no action against each other; (CIVIL CODE, art. 1412)
• Those who come in equity must come with clean hands; (Department of Public Works and Highways v.
Quiwa, G.R. No. 183444, Feb. 8, 2012)
• Applies only to illegal contracts and not to inexistent contracts;
• Does not apply when a superior public policy intervenes.
The Clean Hands Doctrine states that “a litigant may be denied relief by a court of equity on the ground
that his conduct has been inequitable, unfair and dishonest, or fraudulent, or deceitful as to the controversy
in issue.” Bad faith and fraud are allegations of fact that demand clear and convincing proof. (Department
of Public Works and Highways v. Quiwa, G.R. No.183444, Feb. 8, 2012)
Exception: If purpose has not yet been accomplished and if damage has not been caused to any 3rd person.
Other exceptions:
i. Payment of usurious interest. (CIVIL CODE, art. 1413)
ii. Payment of money or delivery of property for an illegal purpose, where the party who paid or delivered
repudiates the contract before the purpose has been accomplished, or before any damage has been caused
to a third person. (CIVIL CODE, art. 1414)
iii. Payment of money or delivery of property made by an incapacitated person. (CIVIL CODE, art. 1415)
iv. Agreement or contract which is not illegal per se and the prohibition is designed for the protection of the
plaintiff. (CIVIL CODE, art. 1416)
v. Payment of any amount in excess of the maximum price of any article or commodity fixed by law or
regulation by competent authority. (CIVIL CODE, art. 1417)
vi. Contract whereby a laborer undertakes to work longer than the maximum number of hours fixed by law
(CIVIL CODE, art. 1418 & 1419)
vii. One who lost in gambling because of fraudulent schemes practiced on him is allowed to recover his
losses (REVISED PENAL CODE, art. 313) even if gambling is prohibited.
Requisites of Illegal Contracts:

1. Contract is for an illegal purpose;
2. Contract must be repudiated by any of the parties before purpose is accomplished or damage is caused
to third parties; and
3. Court believes that public interest will be served by allowing recovery (discretionary upon the court).
• Based on remorse;
• Illegality is accomplished when parties entered into contract;
• Before it takes effect – Party which is remorseful prevents it.
Where laws are issued to protect certain sectors: consumer protection, labor, and usury law
(a) Consumer Protection – If price of commodity is determined by statute, any person paying an
amount in excess of the maximum price allowed may recover such excess. (CIVIL CODE, art. 1417)

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(b) Labor – If the law sets the minimum wage for laborers, any laborer who agreed to receive less may still
be entitled to recover the deficiency; if the law sets max working hours and laborer who undertakes to work
longer may demand additional compensation. (CIVIL CODE, art. 1418 & 1419)
(c) Interest paid in excess of the interest allowed by the usury law may be recovered by debtor with
interest from date of payment. (CIVIL CODE, art. 1413)
Effects of illegal contracts

1. If one party is incapacitated, courts may allow recovery of money, property delivered by incapacitated
person in the interest of justice. (CIVIL CODE, art. 1415)
• Pari delicto doctrine cannot apply because an incapacitated person does not know what he is
entering into and is unable to understand the consequences of his own action.
2. If agreement is not illegal per se but merely prohibited and prohibition is designated for the protection
of the plaintiff – may recover what he has paid or delivered by virtue of public policy. (CIVIL CODE, art.
1416)
3. If a subsequent contract results directly because of a previous illegal contract, the subsequent contract is
also void and inexistent. “The illegality of the Sub-Contract Agreement necessarily affects the [resulting]
Deed of Assignment because the rule is that an illegal agreement cannot give birth to a valid contract. To
rule otherwise is to sanction the act of entering into transaction the object of which is expressly prohibited
by law and thereafter execute an apparently valid contract to subterfuge the illegality. The legal proscription
in such an instance will be easily rendered nugatory and meaningless to the prejudice of the general public.”
(Gonzalo v. Tarnate, G.R. No. 160600, Jan. 15, 2014)
Mutual restitution in void contracts

General rule: Parties should return to each other what they have given by virtue of the void contract in
case
Where nullity arose from defect in essential elements

1. Return object of contract and fruits
2. Return price plus interest
Exception: No recovery can be had in cases where nullity of contract arose from illegality of contract where
parties are in pari delicto. (CIVIL CODE, art. 1412)
Exceptions to the exception:

1. When incapacitated – Not obliged to return what he gave but may recover what he has given
2. Other party is less guilty or not guilty. (CIVIL CODE, art. 1412)
V. DISTINGUISH: RESOLUTION AND RESCISSION OF CONTRACTS
Similarity and distinction between resolution or cancellation in Art. 1191; and rescission in
Art. 1383-84
Similarity: Both apply to valid contracts (Cannot cancel/rescind invalid contracts because there is nothing
to cancel or rescind). Both also require mutual restitution. (EDGARDO L. PARAS, CIVIL CODE OF THE
PHILIPPINES ANNOTATED: PRESCRIPTION; OBLIGATIONS AND CONTRACTS 735 (2016))
Mutual restitution is required in cases of resolution/cancellation under Art. 1191 so as to bring the parties
back to their original situation, prior to the inception of the contract. (Forest Hills Golf & Country Club v.
Vertex Sales and Trading Inc., G.R. No. 202205, Mar. 6, 2013)
Distinction: (Suria v. IAC, G.R. No. 73893, June 30, 1987)

(a) Art. 1191 applies only to reciprocal obligations, i.e., those that arise from the same cause, and which each
party is a debtor and creditor of each other. Performance by one is a condition to performance by the other
party. If one party is unable to perform his obligation, the other can ask for resolution as a remedy for the

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breach. Since this is based on breach of contract, it is a principal action. On the other hand, Art. 1383 is a
subsidiary action which is based on lesion or fraud of creditors (Wellex Group v. U-Land Airlines, Jan. 14,
2015).
(b) Resolution or cancellation in Art. 1191 is predicated on breach, and not on injury to economic interests
of a party, that violates the reciprocity between the parties.
(c) The operation of Arts.1383 and 1384 is limited to the cases of rescission for lesion enumerated in Article
1381 of the Civil Code of the Philippines and does not apply to cases under Article 1191.
Art. 1191 does not apply to a Contract to Sell where the condition is breached. Payment is the condition in a
Contract to Sell and if full payment is not made, it is breach of the condition. Art. 1191 refers to an
existing obligation and what is breached is the obligation, not the condition. (Rivera v. Del
Rosario, G.R. No. 144934, Jan. 15, 2004)
A party may not extrajudicially rescind a contract without a specific stipulation in the
contract authorizing extrajudicial rescission. The party needs to file an action for rescission under
Art. 1191. (Eds Manufacturing, v. Healthcheck International, Inc., Oct. 9, 2013)
But see: Art. 1191 provides that the power to rescind is implied in reciprocal obligations, in cases where one
of the obligors should fail to comply with what is incumbent upon him. Otherwise stated, an aggrieved party
is not prevented from extrajudicially rescinding a contract to protect its interests, even in the absence of
any provision expressly providing for such right. (Nissan Car Lease v. Lica Management, Jan. 13, 2016)
The law definitely does not require that the contracting party who believes itself injured must first file suit
and wait for a judgment before taking extrajudicial steps to protect its interest. Otherwise, the party injured
by the other's breach will have to passively sit and watch its damages accumulate during the pendency of
the suit until the final judgment of rescission is rendered when the law itself requires that he should exercise
due diligence to minimize its own damages. (U.P. v. delos Angeles, Sept. 29, 1970
Whether a contract provides for it or not, the remedy of rescission is always available as a remedy against a
defaulting party. When done without prior judicial imprimatur, however, it may still be subject to a possible
court review. (Nissan Car Lease v. Lica Management, Jan. 13, 2016)
B. NATURAL OBLIGATIONS
Natural obligations, not being based on positive law but on equity and natural law, do not grant a right of
action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the
retention of what has been delivered or rendered by reason thereof. (CIVIL CODE, art. 1423)
Examples of natural obligations enumerated under the Civil Code:

i. Performance after the civil obligation has prescribed
ii. Reimbursement of a third person for a debt that has prescribed
iii. Restitution by minor after annulment of contract
iv. Delivery by minor of money or fungible thing in fulfillment of obligation
v. Performance after action to enforce civil obligation has failed
vi. Payment by heir of debt exceeding value of property inherited
vii. Payment of legacy after will has been declared void. (CIVIL CODE, art. 1423-1430)
C. Estoppel
 Estoppel – a condition or state by virtue of which an admission or representation is rendered
conclusive upon the person making it and cannot be denied or disproved as against the person
relying thereon. (CIVIL CODE, art. 1431)
 Estoppel is effective only between the parties thereto or their successors in interest. (CIVIL CODE,
art. 1439)
Kinds:
1. Estoppel in pais (by conduct)
(a) Estoppel by silence
(b) Estoppel by acceptance of benefits

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2. Technical estoppel
(a) Estoppel by deed
(b) Estoppel by record
(c) Estoppel by judgment
(d) Estoppel by laches
Requisites of estoppel in pais

A. As related to the party to be estopped (CIK)
1. Conduct which amounts to a false representation or concealment of material facts, or at least which is
calculated to convey the impression that the facts are otherwise than, and inconsistent with those which the
party subsequently attempts to assert;
2. Intention or at least the expectation, that such conduct shall be acted upon, or influence, the other party
or other persons;
3. Knowledge, actual or constructive, of the real facts
B. As related to the party claiming the estoppel (IRA)

1. Ignorance or lack of knowledge and of the means of knowledge of the truth as to the facts in question
2. Reliance in good faith, upon the conduct or statement of the party to be estopped; and
3. Action or inaction based thereon of such a character as to change the position or status of the party
claiming the estoppel, to his injury, detriment, or prejudice. (Manila International Airport Authority v. Ding
Velayo Sports Center, Inc., G.R. No. 161718, Dec. 14, 2011)
Requisites of estoppel by laches (CLID)

1. Conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation of
which complaint is made;
2. Delay in asserting the complainant’s right, the complainant having had knowledge or notice of the
defendant’s conduct and having been afforded an opportunity to sue; actual knowledge of the commission
of the adverse act is not necessary, it being enough that such knowledge may be imputed to the complainant
because of circumstances of which he was cognizant;
3. Lack of knowledge or notice on the part of the defendant that the complainant would assert the right on
which he bases his suit; and
4. Injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not
held to be barred. (Cimafranca v. IAC, G.R. No. L-68687, Jan. 31, 1987)
D. TRUSTS
I. DEFINITION
 Trust – A fiduciary relationship between a person who establishes a trust (trustor), one in whom
confidence is reposed as regards property for the benefit of another person (trustee), and a person
for whose benefit the trust has been created (beneficiary). (CIVIL CODE, Art. 1440)
 It is a legal relationship between one person who has equitable ownership of the property and
another who owns the legal title to the property. (Oco v. Limbaring, G.R. No. 161298, Jan. 31, 2006.)
Characteristics of a Trust
1. It is a relationship;
2. Fiduciary;
3. Created by law or agreement
4. Involves property, not merely personal duties;
5. Where the legal title is held by one, the equitable title or beneficial title is held by another
6. Involves the existence of equitable duties imposed upon the holder of the title to the property to deal with
it for the benefit of another; and
7. Arises as a result of a manifestation of intention to create the relationship. (Morales v. CA, G.R. No.
117228, June 19, 1997.)
Parties to a Trust
1. Trustor – The person who establishes the trust.
2. Trustee – The person in whom confidence is reposed as regards property for the benefit of another.

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3. Beneficiary – The person for whose benefit the trust has been created. (Penalber v. Ramos, G.R. No.
178645, Jan. 30, 2009.)
TRUST (CIVIL CODE, Art. 1441) STIPULATION POUR AUTRUI (Mamaril v.

BSP, G.R. No. 179382, Jan. 14, 2013.)
Arises either by virtue of a contract or by operation Arises only by virtue of a contract
of law
Either express or implied Always express
Continues to exist unless repudiated Third person must have communicated his
acceptance to the obligor before its revocation by
the obligee or the original parties
Trustees Cannot Donate Property in Trust

Trustees cannot donate the property entrusted to them. (CIVIL CODE, Art. 736)
NOTE: The principles of the general law of trusts, insofar as they are not in conflict with the Civil Code, the
Code of Commerce, the Rules of Court and special laws applies. (CIVIL CODE, Art. 1442)
II. KINDS OF TRUST

1. Express Trust - created by express agreement of the parties, or by intention of trustor. (CIVIL CODE,
Art. 1441)
Requisites in Creating an Express Trust

1. Clear intent to establish trust; (Art. 1444)
2. Direct and positive acts of the parties evidence the intention to create trust by means of:
a. Writing;
b. Deed;
c. Will;
d. Words. (Canezo v. Rojas, G.R. No. 148788, Nov. 23, 2007.)
NOTE: No particular words are required for the creation of an express trust, it being sufficient that a trust
is clearly intended. (CIVIL CODE, Art. 1444)
Proof Required for Express Trusts Concerning Immovables

 No express trust concerning an immovable or any interest therein may be proved by parol evidence.
(CIVIL CODE, Art. 1443)
 However, when oppositors failed to timely object when the petitioner tried to prove by parol
evidence the existence of an express trust over immovable, there is deemed to be a waiver since Art.
1443 ―is in the nature of a statute of frauds. (Penalber v. Ramos, G.R. No. 178645, Jan. 30, 2009.).
NOTE: To prove an express trust over an immovable or any interest therein, there must always be a
showing of some documents proving the same. (Pascual v. Meneses, G.R. No. L-18838, May 25, 1967.)
Requisites for Creating a Testamentary Trust

1. Sufficient words to raise a trust;
2. Definite subject;
3. Certain or ascertained object. (Lorenzo v. Posadas, Jr., G.R. No. L-43082, June 18, 1937.)
On Declining Trustees
General Rule: No trust shall fail because the trustee appointed declines the designation. (CIVIL CODE,
Art. 1445)
NOTE: In case of refusal to accept an express trust, the court will appoint a trustee.
Exception: When the contrary appears in the instrument constituting the trust. (CIVIL CODE, Art. 1445)
Acceptance by Beneficiary

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Acceptance by the beneficiary is necessary. If he repudiates or declines, the trust does not become effective.
NOTE: The beneficiary’s acceptance shall be presumed if the trust imposes no onerous condition upon the
beneficiary and if there is no proof to the contrary. (CIVIL CODE, Art. 1446)
On Acquisitive Prescription
General Rule: A trustee cannot acquire ownership of property entrusted to him through prescription, as
possession of a trustee is not adverse. (Canezo v. Rojas, G.R. No. 148788, Nov. 23, 2007.)
Exception: (REKA)
1. Trustee performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust;
2. Positive acts of repudiation have been made known to the cestui que trust;
3. Evidence is clear and conclusive; and
4. Adverse possession of the trustee must be at least 10 years in the concept of an owner. (Canezo v. Rojas,
G.R. No. 148788, Nov. 23, 2007.)
NOTE: Above elements must concur.
Extinguishment of an Express Trust

a) Accomplishment of the aims of the trust;
b) Expiration of the agreed term;
c) Mutual agreement of all parties;
d) Happening of a resolutory condition;
e) Total loss of the object of the trust;
f) Annulment or rescission of the trust;
g) Decision of the court declaring termination;
h) Merger of the rights of the trustor and the trustee;
i) Prescription; and
j) Upon the trustee's death (Canezo v. Rojas, G.R. No. 148788, Nov. 23, 2007.)
2. Implied Trust
Basis of implied trust is equity
Implied trusts are remedies against unjust enrichment. Under the general principles on trust, equity
converts the holder of property right as trustee for the benefit of another if the circumstances of its
acquisition makes the holder ineligible in good conscience to hold and enjoy it. (Juan v. Yap, Sr., G.R. No.
182177, March 30, 2011.)
Chapter on Implied Trusts is not an exclusive list

The chapter on implied trust does not exclude others established by the general law of trust which do not
violate our rules and laws. (CIVIL CODE, Art. 1447)
When there is no IMPLIED trust

 A trust will not be created when for the purpose of evading the law prohibiting one from taking or
holding real property, one takes conveyance thereof in the name of a third person. (Kiel v. Estate of
Sabert, G.R. No. 21639, Sept. 25, 1924.)
 If there is an express intention to create a trust, the trust is express and not implied, even if the
situations falls under any of the provisions in this chapter. (Cuaycong v. Cuaycong, G.R. No. L-
21616, Dec. 1, 1967.)
 There can be no implied trust created over land in favor of a foreigner that would amount to a
violation of the constitution. (Encarnacion v. Johnson, G.R. No. 192285, July 11, 2018.)
Resulting Trust vs. Constructive Trust (O’Laco v. Co Cho Chit, G.R. No. 58010, March 31,
1993.)
Resulting Trust Constructive Trust

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Based on the equitable doctrine that valuable Created by the construction of equity in order to
consideration & not legal title determines equitable satisfy the demands of justice & prevent unjust
title or interest; presumed to always have been enrichment
contemplated by the parties
Arise from the nature or circumstances of the Arise contrary to intention against one who, by
consideration involved in a transaction whereby fraud, duress or abuse of confidence, obtains or
one person thereby becomes invested with legal hold the legal right to property, which he ought not,
title but is obligated in equity to hold his legal title in equity, & good conscience, to hold
for the benefit of another
Constructive Trust
 Article 1450 is an illustration of an implied trust which is constructive. It presupposes a situation
where a person, using his own funds, purchases a certain piece of land in behalf of another who, in
the meantime, may not have sufficient funds to purchase the land. The property is then transferred
in the name of the trustee, the person who paid for the land, until he is reimbursed by the
beneficiary, the person for whom the land is purchased. It is only after the beneficiary reimburses
the trustee of the purchase price that the former can compel conveyance of the purchased property
from the latter. (Nakpil v. IAC, G.R. No. 74449, Aug. 20, 1993.)
 A constructive trust does not arise on every moral wrong in acquiring or holding property or on
every abuse of confidence in business or other affairs; such a trust arises & will be declared only on
wrongful acquisitions or retentions of property of which equity takes cognizance. It has been
broadly ruled that a breach of confidence although in business or social relations, rendering an
acquisition or retention of property by one person unconscionable against another, raises a
constructive trust. (Policarpio v. CA, G.R. No. 116211, March 7, 1997.)
Resulting Trust
Resulting trusts are species of implied trusts that are presumed always to have been intended by the parties
(Ossorio Pension Foundation v. Court of Appeals, G.R. No. 162175, June 28, 2010.)
1. Implied Trust When Property is Granted to One/Trustee But Price is Paid by Another for
the Interest of Beneficiary
There is an implied trust when property is sold, & the legal estate is granted to one party but the price is
paid by another for the purpose of having the beneficial interest of the property. The former is the trustee,
while the latter is the beneficiary. However, if the person to whom the title is conveyed is a child, legitimate
or illegitimate, of the one paying the price of the sale, no trust is implied by law, it being disputably
presumed that there is a gift in favor of the child. (CIVIL CODE, Art. 1448)
Elements of purchase money resulting trust

1. Actual payment of money, property, or service, or an equivalent valuable consideration; and
2. Such consideration must be furnished by the alleged beneficiary of a resulting trust. (Trinidad v. Imson,
G.R. No. 197728, Sept. 16, 2015.
Burden of proof
The burden of proving the existence of a trust is on the party asserting existence of trust, and such proof
must be clearly and satisfactorily show the existence of the trust and its elements. (Jarantilla, Jr. v.
Jarantilla, G.R. No. 154486, Sept. 16, 2010.)
NOTE: Presumption is that he who pays for a thing intends a beneficial interest for himself. (e.g. where the
club share was bought and paid for by A and placed in the name of its officer B, a resulting trust is presumed
as a matter of law in favor of A. The burden shifts to show otherwise) (Sime Darby Pilipinas v. Mendoza,
G.R. No. 20227, June 19, 2013.)
2. Implied Trust in Donation

There is also an implied trust when a donation is made to a person but it appears that although the legal
estate is transmitted to the donee, he nevertheless is either to have no beneficial interest or only a part
thereof. (CIVIL CODE, Art. 1449)

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3. Implied Trust in Sale of Property
If the price of a sale of property is loaned or paid by one person for the benefit of another & the conveyance
is made to the lender or payor to secure the payment of the debt, a trust arises by operation of law in favor
of the person to whom the money is loaned or for whom it is paid. The latter may redeem the property &
compel a conveyance thereof to him. (CIVIL CODE, Art. 1450)
4. Implied Trust in Co-Ownership

 If two or more persons agree to purchase property & by common consent the legal title is taken in
the name of one of them for the benefit of all, a trust is created by force of law in favor of the others
in proportion to the interest of each. (CIVIL CODE, Art. 1452)
 A resulting trust arises in the situation, because of the intention to create one. Purchasers are
coowners of the property. In the absence of any specific agreement to the contrary, their shares are
presumed equal.
5. Implied Trust in Succession

 When land passes by succession to any person and he causes the legal title to be put in the name of
another, a trust is established by implication of law for the benefit of the true owner. (CIVIL CODE,
Art. 1451)
 This article provides for a resulting trust there being a clear intention to establish a trust. The refers
to inherited land. There is no good reason why the principle cannot apply to personal properties.
6. Implied Trust in Co-Ownership

 If two or more persons agree to purchase property and by common consent the legal title is taken
in the name of one of them for the benefit of all, a trust is created by force of law in favor of the
others in proportion to the interest of each. (CIVIL CODE, Art. 1452)
 A resulting trust arises in the situation, because of the intention to create one. Purchasers are
coowners of the property. In the absence of any specific agreement to the contrary, their shares are
presumed equal.
7. Property Conveyed in Reliance upon His Declared Intention to Hold it For Another
 When property is conveyed to a person in reliance upon his declared intention to hold it for, or
transfer it to another or the grantor, there is an implied trust in favor of the person whose benefit
is contemplated. (CIVIL CODE, Art. 1453)
 An implied resulting trust is created because of the declared intention of the grantee to hold or
transfer the property to the grantor or to another person.
8. An Absolute Conveyance to Secure Performance of Obligation

 If an absolute conveyance of property is made in order to secure the performance of an obligation
of the grantor toward the grantee, a trust by virtue of law is established. If the fulfillment of the
obligation is offered by the grantor when it becomes due, he may demand the reconveyance of the
property to him. (CIVIL CODE, Art. 1454)
 A resulting trust is one that arises by implication of law and presumed always to have been
contemplated by the parties, the intention as to which can be found in the nature of their
transaction although not expressed in a deed or instrument of conveyance. (Heirs of Yap v. CA, G.R.
No. 133047, Aug. 17, 1999.) There is an intention to create trust, although it was not reflected in the
deed of reconveyance, therefore, an implied resulting trust is created.
9. Trustee’s Use of Funds Held in Trust

 When any trustee, guardian or other person holding a fiduciary relationship uses trust funds for
the purchase of property & causes the conveyance to be made to him or to a third person, a trust is
established by operation of law in favor of the person to whom the funds belong. (CIVIL CODE, Art.
1455)
 In order to prevent unjust enrichment on the part of the fiduciary, an implied constructive trust is
created in this circumstance.

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Persons covered: Any person holding a fiduciary position such as a trustee, guardian, agent, partner, or
a confidential employee, among others
Rationale of rule
To prevent fiduciary from temptation of putting his own self-interest above that of his principal whom he
is supposed to protect. It also is intended to keep and encourage the fiduciary to remain honest and loyal to
his principal
10. Property Acquired Through Mistake or Fraud

 If property is acquired through mistake or fraud, the person obtaining it is, by force of law,
considered a trustee of an implied trust for the benefit of the person from whom the property comes.
 This trust is created by law to prevent unjust enrichment on the part of the acquirer to the prejudice
of the true owner. The mistake must be committed by a third person. If made by a party, there is
no trust.
 E.g. Conveyance made by seller of a property acquired through pactum commisorium is void, and
thus not vest title to the buyer. Such a situation falls squarely under Art. 1456, where the buyer is
deemed to have acquired the property by mistake or through ineffectual transfer (Home Guaranty
Corp. v. La Savoie Dev. Corp G.R. No. 168616, Jan. 28, 2015.).
Violation of a condition in donation

No trust is created if a condition in a valid donation has been breached by the donee. The property remains
in ownership of the donee subject to proper action for revocation. If the action has prescribed however, the
donee will remain as the rightful owner.
Oral Evidence
 An implied trust may be proved by oral evidence. (CIVIL CODE, Art. 1457)
 It is deducible from the nature of the transactions as matters of intent or which are super-induced
on the transaction by operation of law, independently of the particular intention of the parties.
 When an immovable or an interest therein is involved in an express trust, parol evidence is not
allowed. But, when trust is implied, parol evidence is allowed to prove its existence. Consequently,
if property involved in express trust is movable, parol evidence is allowed.
Proof needed to prove trust by parol evidence

It must be trustworthy and received by the courts with caution, and should not be made to rest on loose,
equivocal or indefinite declarations. Trustworthy evidence is required because oral evidence can easily be
fabricated. (Herbon v. Palad, G.R. No. 149542, July 20, 2006.). Further, it must be clear, satisfactory, and
convincing, as intent to establish trust cannot rest on vague, uncertain evidence, or on loose, equivocal, or
indefinite declaration. (Heirs of Narvasa Sr. v. Imbornal, G.R. 182908, Aug. 6, 2014.)
Q: What is the applicable prescriptive period for actions for the reconveyance of real
property based on implied trust?
A: 10 years, reckoned from the time the cause of action accrues. (CIVIL CODE, Art. 1144; Sps. Dico v.
Vizcaya Management Corporation, G.R. No. 161211, July 17, 2013.)
E. QUASI-CONTRACTS
Juridical relations resulting from lawful, voluntary and unilateral acts, which has for its purpose, the
payment of indemnity to the end that no one shall be unjustly enriched or benefited at the expense of
another. (CIVIL CODE, art. 2142)
Distinguished from other Sources (LUV)

1. The act giving rise to a quasi-contract must be Lawful distinguishing it from delict;
2. The act must be Voluntary distinguishing it from a quasi-delict which is based on fault or negligence; and
3. The act must be Unilateral distinguishing it from contract which is based on agreement. (ERNESTO L.
PINEDA, OBLIGATIONS AND CONTRACTS 15 (2009))
Kinds of quasi-contract

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a) Negotiorum Gestio - is the voluntary management of the property or affairs of another in times of
emergency without the owner’s authority. (CIVIL CODE, art. 2144)
Obligation created: Return of the property by the officious manager to the owner once the emergency
ceases, and for the owner to reimburse expenses incurred by the officious manager. (CIVIL CODE, art.
2150)
b) Solutio Indebiti - is the juridical relation, which is created when something is received when there is
no right to demand it and it was unduly delivered through mistake. (CIVIL CODE, art. 2154)
Obligation created: Recipient to return the property delivered through mistake.
Note: The Civil Code provides [the abovementioned] enumeration of quasi-contracts, but the list is not
exhaustive and merely provides examples. (Metrobank v. AMC, G.R. No. 170498, Jan. 9, 2013)
Solutio indebiti vs. Natural obligations

 In natural obligations, the person making the payment or delivery knows that he has no legal
obligation to pay or to deliver but still voluntarily makes such payment or delivery. For this reason,
once payment or delivery has been made, there is no right to ask for the return. (CIVIL CODE, art.
1423)
 In solutio indebiti, the payment or delivery is made on the basis of a mistake, hence the recipient
has the legal obligation to return. (CIVIL CODE, art. 2154)
V. SALES
A. Nature and form
Contract of Sale
It is a contract where one of the contracting parties (Seller) obligates himself to transfer the ownership and
to deliver a determinate thing, and the other party (Buyer) to pay a price certain in money or its equivalent.
A contract of sale may be absolute or conditional. (Art. 1458)
1. Essential requisites
Elements of a Contract of Sale: (CSP)

1. Consent
2. Determinate or Determinable Subject Matter
3. Price certain in money or its equivalent (Coronel v. CA, G.R. No. 103577, 1996)
The absence of any essential elements negates the existence of a perfected contract of sale. (Dizon v. CA,
G.R. 122544, 1999)
Characteristics of Contract of Sale: (NOCPCBR)

1. Nominate
2. Onerous
3. Consensual
4. Principal
5. Commutative
6. Bilateral
7. Reciprocal
FORMALITIES OF CONTRACT
Form not important in validity of sale
GR: Sale being consensual, may be oral or written, perfected by mere consent as to price and subject matter
(Art. 1475)
Non-compliance with the formal requirements does not affect the validity of contract (Fule v. CA, G.R. No.
L-40502 & L-42607, 1976)

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When Form is Important for Validity; Exception by Specific Provision of Law;
1. Donations and wills (Arts. 749, 804)
2. Power to sell a piece of land granted to an agent must be in writing– otherwise sale is VOID (Art. 1874)
3. Sale of large cattle; must also be registered with Municipal treasurer – otherwise VOID (Art. 1581;
Revised Administrative Code, Sec. 529)
4. Sale of land by non-Christian if not approved by Governor – VOID (Tac-an v. CA, G.R. No. L-38736,
1984)
Article 1358, which requires the embodiment of certain contracts in a public instrument, is only for
convenience, and registration of the instrument only adversely affects third parties. Formal requirements
are, therefore, for the benefit of third parties; and non-compliance therewith does not adversely affect the
validity of the contract and the rights and obligations of the parties thereunder. (Dalion v. CA, 182 SCRA
872,1990)
Statute of Frauds
Note that if particular form is required under the statute of frauds and the same is not followed:
• While the sale is valid, it is UNENFORCEABLE even as to the parties to the contract of sale.
When Form (should be in writing and not merely verbal) is Important for Enforceability
[Statute of Frauds] (Art. 1403 [2])
1. A contract not to be performed in 1 year: A sale agreement which by its terms is not to be performed
within a year from the making thereof;
2. Php 500 and Above: An agreement for the sale of goods, chattels or things in action, at a price not less
than PhP500
3. Sale of Land: A sale of real property or of an interest therein.
Exceptions to Coverage of Statute in Sales Contracts:

1. Written: When there is a note or memorandum in writing and subscribed to by party or his agent
(contains essential terms of the contract) (Art. 1403)
2. Partial Execution: When there has been partial performance/execution (seller delivers with intent to
transfer title/receives price; or when buyer partially pays the price) (Art. 1405)
3. Failure to object: When there has been failure to object to presentation of evidence (oral) (Art. 1405)
4. E-commerce: When sales are effected through electronic commerce (R.A. 8792, Sec. 12)
While a sale of land appearing in a private deed is binding between the parties, it cannot be considered
binding on third persons if not embodied in a public instrument and recorded in the Registry of Deeds.
(Secuya v. Vda. De Selma, G.R. No. 136021, 2000)
FORMATION OF THE CONTRACT

Three Stages in Life of a Contract of Sale
1. Policitacion/Negotiation Stage – offer floated, acceptance is floated but they do not meet; covers the
period when parties indicate their interest but no concurrence of offer and acceptance.
2. Perfection – the “birth” of the contract, concurrence of all requisites; meeting of the minds upon the
object and price.
3. Consummation – the “death” of the contract, parties perform their respective undertakings (Arts. 1475,
1479, 1493-1506; Villanueva & Tiansay, Law on Sales, 118-119, 2016)
Rules:
1. Offer is floated Prior to acceptance, may be withdrawn at will by offeror
2. Offer floated with a period Without acceptance, extinguished when period has ended and may be
withdrawn at will by offeror; right to withdraw must not be arbitrary
otherwise, liable to damage under Art. 19, 20, 21 of Civil Code
3. Offer floated / condition Extinguished by happening/non-happening of condition
4. Offer floated without Continue to be valid depending upon circumstances of time, place and
period/ without condition person

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5. Offer is floated and there is Original offer is destroyed, there is a new offer; cannot go back to
counteroffer original offer
6. Offer is floated No authority of offeror to modify offer
7. Offer accepted absolutely Proceed to perfected stage
Option Contract - a contract granting an exclusive right in one person, for which he has paid a separate
consideration, to buy a certain object within an agreed period of time. (Art. 1479)
NOTE: There is no presumption of consideration, it needs to be proven (Sanchez v. Rigos, G.R. No. L-
25494, 1972)
Option-an unaccepted or unexercised contractual offer (Adelfa Properties v. CA, G.R. No. 111238, 1995)
Elements of Valid Option Contract:

1. Consent – meeting of the minds
2. Subject matter – an option right to an “unaccepted unilateral offer to buy or sell”, or an “accepted
promise to sell, or to buy”:
(a) A determinate or determinable object
(b) For a price certain (including manner of payment)
3. Prestation – a consideration separate from purchase price for option given, i.e., Option (Villanueva &
Tiansay, Law on Sales, 126, 2016)
Characteristics of Option Contract: (SPNOCUUP)

1. Not the contract of sale by itself, Separate and distinct
2. Nominate
3. Principal - but can be attached to other principal contracts
4. Onerous
5. Commutative
6. Unilateral – versus contract of sale which is bilateral
7. Preparatory
8. Unaccepted or unexercised contractual offer
Consideration in an option contract may be anything of value, unlike in sale where it must be price certain
in money. (San Miguel Philippines v. Huang, G.R. No. 137290, 2000) However, when the consideration is
not monetary, the consideration must be clearly specified as such in the option contract or clause. When
the written agreement itself does not state the consideration for the option contract, the offeree bears the
burden of proving the existence of a separate consideration for the option. (PNOC v. Keppel Phils. Holdings,
Inc., G.R. No. 202050, 2016)
How Exercised: Notice of acceptance should be communicated to offeror even without actual payment of
the option money as long as there is delivery of payment in consummation stage. (Nietes v. CA, G.R. No. L-
32873, 1972)
Situations in an Option Contract:

1. With separate consideration
• Option contract is valid
• Offeror cannot withdraw offer until after expiry period
• Subject to damages for breach of option contract if offeror withdraws during the time stipulated but not
to specific performance because an option contract does not create an obligation to give (Tuazon v. Del
Rosario-Suares, G.R. No. 168325, 2010)
2. Without separate consideration

Even if the option without separate consideration constitute a certain offer, still it must still be exercised
within the option period and the acceptance must still be absolute. (Tuazon v. Del Rosario-Suares, G.R. No.
168325, 2010)

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Rules on Option Contract:
1. If the period is not supported by a separate consideration, the offeror is still free and has the right to
withdraw the offer before its acceptance, or, if an acceptance has been made, before the offeror’s coming to
know of such fact, by communicating that withdrawal to the offeree.
2. The right to withdraw, however, must not be exercised whimsically or arbitrarily; otherwise, it could give
rise to a damage claim under Article 19 (Abuse of Rights).
3. If the period has a separate consideration, a contract of “option” is deemed perfected, and it would be a
breach of contract to withdraw the offer during the agreed period.
4. The option is an independent contract in itself, and it is to be distinguished from the proposed sales
contract. If the optioner-offeror withdraws the offer before its acceptance by the optionee-offeree, the
optionee-offeree may not sue for specific performance on the proposed contract since it has not been
perfected; however, the optioner-offeror is liable for damages for breach of the option.
5. In these cases, if the consideration is intended to be part of the consideration for the main contract with
a right of withdrawal on the part of the optionee, the main contract could be deemed perfected; a similar
instance would be an “earnest money” in sale that can evidence its perfection. (Ang Yu Asuncion v. CA, G.R.
No. 109125, 1994)
Right of First Refusal

 A right of first refusal (“RFR”) covers a situation wherein a promise on the part of the owner of a
property is made that if he decides to sell the property in the future, he will first negotiate its sale
to the promisee.
 It creates a promise to enter into a contract of sale in the event the seller decides to sell his/her
property and it has no separate consideration. It is not subject to specific performance because
there is no contractual relationship here and it is not an obligation to give (not a real contract).
New doctrine: May be subject to specific performance in a specific instance.

The RFR is only subject to specific performance insofar as it is attached to a valid written principal contract
(e.g. lease). RFR becomes one of the considerations in the contract. If RFR is violated, and property sold to
another buyer in bad faith, the sale to the 3rd party buyer is rescissible. The price for the 3rd party buyer is
to be the basis for the price of the sale back to the one with the RFR. Lessee can exercise the right of first
refusal once the sale to the third party is set aside or rescinded. (Equatorial Dev’t v. Mayfair Theater, G.R.
No. 106063, 2006)
Effect of new doctrine:

 Turned the world of policitacion upside down because while valid option contract is not subject to
specific performance, right of first refusal, which does not even have a separate consideration, may
be subject to specific performance. It recognizes recovery of damage based on abuse of rights
doctrine.
 Only after the optionee fails to exercise his right of first priority under the same terms and within
the period contemplated, could the owner validly offer to sell the property to a third person under
the same terms as offered to the optionee. (Parañaque Kings v. CA, G.R. No. 111538, 1997)
Option Contract Distinguished from Right of First Refusal

Option Contract Right of First Refusal
Principal contract; stands on its own Accessory; cannot stand on its own
Needs separate consideration Does not need separate consideration
Subject matter and price must be valid There must be subject matter but price not
important
Not conditional Conditional
Not subject to specific performance Subject to specific performance
Mutual promise to buy and sell (Art. 1479)

1. Promise to buy and sell a determinate thing for a price certain: reciprocally demandable;
2. Accepted unilateral promise to buy or to sell: binding upon the promissor if promise supported by a
consideration distinct from the price.

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Q: Spouses X & Y entered into a lease contract with Z over a property in Tacloban. It appears that the
Lease Contract lapsed in 2006, with no express renewal. However, the Spouses X & Y continued using the
premises and paying the rentals, without any objections from Z. However, in 2008, Z sold several parcels
of land including the land being leased to Spouses X & Y. Spouses X&Y contend that the right of first refusal
was violated; however, Z claims that since the contract was only impliedly renewed, first refusal does not
attach to it. Who is correct?
A: Z is correct. Implied renewals do not include the option to buy, as it is not germane to the lessee's
continued use of the property. Based on Article 1643, the lessee's main obligation is to allow the lessee to
enjoy the use of the thing leased. Other contract stipulations unrelated to this — for instance, the right of
first refusal — cannot be presumed included in the implied contract renewal. The law itself limits the terms
that are included in implied renewals. One cannot simply presume that all conditions in the original
contract are also revived; after all, a contract is based on the meeting of the minds between parties. (Spouses
Manas v Nicolasora, G.R. No. 208845, February 3, 2020).
2. PERFECTION
General Rule: A contract of sale is perfected at the moment there is a meeting of the minds upon the thing
which is the object of the contract and upon the price; consensual contract (Art. 1475)
Exception: When the sale is subject to a suspensive condition. (People’s Homesite v. CA, G.R. No. L-61623,
1984)
Requirements:
1. When parties are face to face – when there is absolute acceptance of an offer that is certain
2. When thru correspondence or telegram – when the offeror receives or had knowledge of the acceptance
(Art. 1319)
3. When the sale is subject to a suspensive condition – from the moment the condition is fulfilled (People’s
Homesite v. CA, G.R. No. L-61623, 1984)
NOTE:
 Qualified acceptance is a mere counteroffer which needs to be absolutely accepted to give rise to
perfected contract of sale. (Art. 1319; Manila Metal Container v. PNB, G.R. No. 166862, 2006)
 Business ads are mere invitations to make an offer except when it appears to be otherwise. (Art.
1325)
Rules Governing Auction Sales

• Sale is perfected by the fall of the hammer
• Seller has the right to bid at the auction provided such right was reserved and notice was given to that
effect. (Art. 1476)
In bidding contracts, the award of the contract to the bidder is an acceptance of the bidder's offer. Its effect
is to perfect a contract between the bidder and the contractor upon notice of the award to the bidder. Failure
to sign the physical contract does not affect the contract's existence or the obligations arising. (Metro Rail
Transit Development Corp v. Gammon Phil, G.R. No. 200401, 2018.)
SUBJECT MATTER OF SALE

Requisites of a valid subject matter (Arts. 1459-1465)
1. Possible
2. Licit
3. Determinate or Determinable
Note: If requisite not present, resulting contract is VOID.
1. Possible
Existing, having potential of existence, future, or contingent (Arts. 1347, 1348, 1462)
(a) Existing goods – goods owned or possessed by the seller at the time of perfection

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(b) Future goods – goods to be manufactured, raise, or acquired by the seller after the perfection of
the contract (forward contracts)
Whether the subject matter is of a type and nature that exists or could be made to exist to allow the seller
reasonable certainty of being able to comply with his obligations.
Minimum requirement of potential existence: taking into consideration the state of science and technology
at the time of perfection of the contract.
2. Licit
• Not outside the commerce of man (Art. 1459)
• If illicit, contract is void
• Sale declared illegal by law (i.e., narcotics, wild birds and mammals, rare wild plants, etc.)
Prohibited:
(a) Narcotics (RA 6425);
(b) Wild Birds or mammals (R.A. No. 2590); rare wild plants (R.A. No. 3983); poisonous plants or fruits
(R.A. No. 1288); dynamited fish (R.A. 428);
(c) Gunpowder and explosives (Act No. 2255); and firearms and ammunitions (P.D. No, 9);
(d) Sale of land by non-Christians (Sec. 145, Administrative Code of 1987)
(e) Animals with contagious diseases (Art. 1575)
(f) Sale of animals unfit for the use or service for which they were acquired (Art. 1575)
(g) Sale of future inheritance and other rights that are not transmissible (Art. 1347)
3. Determinate or Determinable
Determinate: always specific
• particularly designated or physically segregated from all others of the same class; (Art. 1460)

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Determinable: always generic
• Thing is capable of being made determinate (Capacity to Segregate Test)
• Without the necessity of a new or further contract between the parties (No Further Agreement Test). (Art.
1460)
NOTE: Subject matter CANNOT be DETERMINED BY a 3rd PARTY. (Villanueva & Tiansay, Law on Sales,
102, 2016)
When Subject Matter is a Right: It must be transmissible. (Art. 1311)

• Future inheritance cannot be sold (Art. 1347)
• Service cannot be sold (Art. 1348)
 Quantity of subject matter is not essential for perfection, but quantity is essential if it goes into the
determinability of the subject matter and the price or consideration in the contract; Determine the
nature and quality of subject matter (National Grains Authority v. IAC, G.R. No. 74470, 1989)
 Generic things may be the object of a sale, but the obligation to deliver the subject matter can only
be complied with when the subject matter has been made determinate (either by physical
segregation or particular designation) (Yu Tek & Co. v. Gonzales, G.R. No. L-9935, 1915)
PRICE
The sum stipulated as the equivalent of the thing sold and also every incident taken into consideration for
the fixing of the price, put to the debit of the vendee and agreed to by him. (Inchausti & Co. v. Cromwell,
G.R. No. L-6584, 1991)
NOTE: Sale is valid when consideration is partly in money and partly in another thing. (Art. 1468).
REQUISITES FOR A VALID PRICE (ReM-C)

1. Real
2. In Money or its equivalent
3. Certain or ascertainable (Francisco v. Desierto, G.R. No. 154117, 2009)
1. Real, not simulated

When at the perfection of the contract of sale, there is every intention on the buyer to pay the price, and
every expectation on the part of the seller to receive such price as the value of the subject matter he obligates
himself to deliver. (Test of intention) (Rongavilla v. CA, G.R No. 83974, 1998)
Effect Where Price is Simulated

i. The act may be shown to have been in reality a donation, or some other act or contract. (Art. 1471)
ii. If not, and neither party had any intention whatsoever that the amount will be paid (absolutely
simulated): the sale is void (Rongavilla v. CA, G.R. No. 83974, 1998)
iii. If there is a real price but what is stated in the contract is not the one intended to be paid (only
relatively simulated or what is called a “False Price”): the ostensible contract of sale is valid but
subject to reformation. (Macapagal v. Remorin, G.R. No. 158380, 2005)
2. In money or its equivalent

Consideration for a valid contract of sale can be the price and other valuable consideration; at the very least,
a true contract of sale must have price, which consist of valuable consideration (i.e., something that can be
quantifiable by pesos and centavos) as part of its consideration (Test of value consideration). (Republic v.
Phil. Resources Dev., G.R. No. L-10141, 1958)
3. Certain or ascertainable
Certain: expressed and agreed in terms of specific pesos and/or centavos (Art. 1469)
Ascertainable:
i. Set by third persons (Art. 1469)

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ii. Set by the courts – only in cases where the third person designated to fix the price, fixes the same in bad
faith or by mistake (Art. 1469)
iii. Set by reference to a definite day, particular exchange or market (Art. 1472)
iv. Set by reference to another thing certain (Art. 1472)
v. But never by only one party to the contract of sale as it amounts to a potestative condition (unless the
price is accepted by the other party) (Art. 1473)
NOTE: When the 3rd party is unwilling to set the price, the parties may not ask the court to fix the price
because the condition imposed on the contract has not happened yet and thus, no enforceable contract has
arisen. (Art. 1474)
IF PRICE IS NEITHER CERTAIN NOR ASCERTAINABLE: The contract of sale is inefficacious.

Effect of Non-Payment of Price
Non-payment of price does not cancel or avoid the sale, as the sale is still considered perfected.
But it is a cause for either:
(a) Specific performance or
(b) Rescission. (Heirs of Escanlar v. CA, G.R. No. 119777, 1997)
HOW PRICE IS DETERMINED

Price is determined by the contracting parties. (Art. 1473)
INADEQUACY OF PRICE
Effect of Gross Inadequacy of Price
General Rule: Mere inadequacy of the price does not affect the validity of the sale. (Bautista v. CA, G.R.
No. 158015, 2004)
Exceptions:
1. When there is fraud, mistake, or undue influence indicative of a defect in consent thereby making the
contract voidable. (Art. 1470)
NOTE: Art. 1456 of the CIVIL CODE provides that a person acquiring a property through fraud
becomes an implied trustee of the property’s true and lawful owner. This case involved constructive
trust. The action for reconveyance of the title to the rightful owner prescribes in 10 years from the
issuance of the title. This ten-year prescriptive period begins to run from the date the adverse party
repudiates the implied trust, which repudiation takes place when the adverse party registers the
land. (Spouses Aboitiz v. Spouses Po, G.R. Nos. 208450 & 208497, 2017)
2. When it shows that the parties really intended a donation or some other act or contract thereby making
the contract of sale void but may be valid as a contract of donation or some other contract. (Art. 1470)
3. In Judicial Sale, where the inadequacy is shocking to the conscience of man (Pascua v. Heirs of Simeon,
G.R. No. L-47717, 1988) and there is showing that, in the event of resale, a better price can be obtained, the
contract of sale is void. (Bie v. CA, G.R. No. L-17294, 1965)
NOTE: If there was a failure of the contract to set a price but the buyer has already appropriated
it, then the buyer must pay a reasonable price. (Art. 1474)
MANNER OF PAYMENT MUST BE AGREED UPON

 The manner of payment must be agreed upon. (Marnelego v. Banco Filipino Savings and Mortgage
Bank, G.R. No. 161524, 2006)
 It is an essential ingredient before a valid and binding contract of sale can be said to exist, because
it is part of the prestation of the contract. (Sps. Navarra v. Planters Development Bank, G.R. No.
172674, 2007)
EARNEST v. OPTION MONEY

Earnest Money (Art. 1482)

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• Money given as part of purchase price
• Acceptance is the proof that contract of sale exists
• Nothing in law prevents parties from treating earnest money differently
Absent proof of a clear agreement to the contrary, it is intended to be forfeited if the sale does not happen
without the seller's fault. The potential buyer bears the burden of proving that the earnest money was
intended other than as part of the purchase price and to be forfeited if the sale does not occur without the
fault of the seller. (Racelis v. Spouses Javier, G.R. No. 189609, January 29, 2018).
Qualification: if old concept is stipulated – valid

• Presumption of perfection of contract of sale and such earnest money as part of purchase price is
disputable
Option Money Distinguished from Earnest Money

Option Money Earnest Money
Given as distinct consideration for an option Given as part of the purchase price
contract
Applies to a sale that is not perfected Applies when there is already a sale
When given, buyer is not required to buy When given, buyer is bound to pay the balance
(Oesmer v. Paraiso Development Corporation, G.R. No. 157493, 2007)
3. Contract of sale v. contract to sell
Contract to Sell vs. Conditional Contract of Sale

Contract of Sale vs. Contract for a piece of work

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B. Capacity to buy or sell
INSERT TABLE
CAPACITY OF PARTIES
General rule: All persons who are authorized in this Code to obligate themselves may enter into a contract
of sale (Art. 1489); as long as these persons are with civil capacity.
When one of the parties is incapable of giving consent, the contract of sale is voidable (Art. 1390), subject
to annulment or ratification. (Art. 1393)
ABSOLUTE INCAPACITY
Parties Disqualified to Enter into Sale Contract:
1. Minors (Art. 1327)
2. Insane and Demented Persons (Art. 1327)
3. Deaf-Mutes who do not know how to write (Art. 1327)
Also includes state of drunkenness and hypnotic spell (Art. 1328)
GR: Status of Contract: Voidable, BUT it is subject to annulment or ratification.

Exception: Where necessaries are sold and delivered to minors or other persons without capacity to act,
he must still pay a reasonable price therefore, thus, the resulting contract is valid and not voidable. (Art.
1489)
RELATIVE INCAPACITY
1. Spouses - A spouse may, without the consent of the other spouse, enter into sales transactions in the
regular pursuit of their profession, vocation, or trade. (Family Code, Arts. 73, 96, 124)
General Rule: The husband and the wife cannot sell property to each other. The contract is void. There is
no transfer of ownership, thus the creditors may go after the property. (Modina v. CA, G.R. No. 109355,
1999)
Exceptions:
(a) When a separation of property was agreed upon in the marriage settlement (Art. 1490)
(b) When there has been a judicial separation of property under Art. 191 (Art. 1490)
NOTE:
 Prohibition likewise applies to common-law spouses (Matabuena v. Cervantes, G.R. No. L-28771,
1971)
 The sale of conjugal property by a spouse without the other's consent is void. All subsequent
transferees of the conjugal property acquire no rights whatsoever from the conjugal property's
unauthorized sale. (Malabanan v. Malabanan, Jr., G.R. No. 187225, 2019)
2. Others - Trust Relationships

Two groups of parties prohibited from acquiring by purchase certain properties: (GAAE - PEJJOL) (Art.
1491)
1. Guardian/Agent/Executors and Administrators
• Direct or indirect
• May be “ratified” since only private wrong is involved, i.e., really in the form of entering into a
new contract
2. Public Officers and Employees/ Justices and Judges/ Officers of Court/ Lawyers
• Cannot be ratified since public wrong is involved.
Requisites for the prohibition to apply to attorneys and their clients’ properties:
1. Existence of attorney client relationship;
2. Property is the subject matter in litigation;
3. While in litigation (from filing of complaint to final judgment)

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NOTE: Exception to the prohibition against attorneys: contingent fee arrangement where the amount of
legal fees is based on a value of property involved in litigation (rationale: the transfer or assignment of the
property takes effect only after the finality of a favorable judgment and is always subject to supervision by
the court) (Fabillo v. IAC, G.R. No. L-68838, 1991)
Legal Status of Contract

 Void (case law) – guardian/executor/public officers/officers of the court. (Rubias v. Batiller, G.R.
No. L-35702, 1973)
 Unenforceable (civil code) – agent; VALID if with consent (Art. 1491)
SPECIAL DISQUALIFICATIONS
Any others specially disqualified by law (Art. 1491 [6])
NOTE: These contracts are void for public policy. They cannot be ratified neither can the right to set up the
defense of illegality be waived. (Rubias v. Batiller, G.R. No. L-35702, 1973)
C. EFFECTS OF THE CONTRACT WHEN THE THING SOLD HAS BEEN LOST
Article 1493. If at the time the contract of sale is perfected, the thing which is the object of the contract
has been entirely lost, the contract shall be without any effect.
But if the thing should have been lost in part only, the vendee may choose between withdrawing from
the contract and demanding the remaining part, paying its price in proportion to the total sum agreed
upon. (1460a)
Article 1494. Where the parties purport a sale of specific goods, and the goods without the knowledge
of the seller have perished in part or have wholly or in a material part so deteriorated in quality as to be
substantially changed in character, the buyer may at his option treat the sale:
(1) As avoided; or
(2) As valid in all of the existing goods or in so much thereof as have not deteriorated, and as
binding the buyer to pay the agreed price for the goods in which the ownership will pass, if the
sale was divisible
RISK OF LOSS
GENERAL RULE
 Legal consequences from point of perfection are the same in both legal systems: upon perfection of
an unconditional contract of sale involving specific or determinate subject matter, the risk of loss
deterioration and the benefits of fruits and improvements, were for the account of the buyer.
 If the subject matter is generic, simply replace item. (Art. 1263)
WHO BEARS RISK OF LOSS/DETERIORATION/ FRUITS BEFORE PERFECTION

• Res perit domino
• The seller is the owner, so he bears risk of loss. (Art. 1504)
WHO BEARS RISK OF LOSS/DETERIORATION/FRUITS AT PERFECTION

• Contract is merely inefficacious because loss of the subject matter does not affect the validity of the sale
• Seller cannot anymore comply with obligation so buyer cannot anymore be compelled to pay the price.
(Arts. 1493, 1494)
WHO BEARS RISK OF LOSS/DETERIORATION/ FRUITS AFTER PERFECTION BUT

BEFORE DELIVERY
• Loss – confused state

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o Paras: BUYER
o Tolentino: SELLER
• Deterioration and fruits - Buyer bears loss and claims the fruits. (Art. 1538, 1189)
AFTER DELIVERY
• Delivery extinguishes ownership of the seller and creates a new one in favor of the buyer and, therefore,
buyer bears risk of loss. (Art. 1504)
D. OBLIGATIONS OF VENDOR
Obligation of the Vendor

The vendor (seller) is bound to transfer the ownership of and deliver, as well as warrant the thing which is
the object of the sale. (Art. 1495)
Objects that the vendor has to deliver: (Thi-FA)

1. The thing sold (Art. 1495)
2. Fruits, belong to the buyer from the day the contract of sale is perfected (Art. 1537)
3. Accessions and accessories, in the condition in which they were upon the perfection of the sale (Art. 1537)
Obligations of the Vendor

1. Preserve the subject matter – proper diligence of a good father of a family unless law or parties stipulate
another standard (Art. 1163)
2. Deliver – transfer ownership and deliver object (Art. 1495)
3. Deliver fruits and accessories existing from the time of perfection (Arts. 1164, 1166, 1537)
4. Warrant subject matter against eviction and hidden defects (Arts. 1546-1581)
General Rule: Seller need not be the owner of the subject matter at the time of perfection: sufficient that
he is the owner at the time of delivery. (Art. 1459)
Exception: Foreclosure sale (mortgagor must be absolute owner) (Art. 2085)
NOTE: A perfected contract of sale cannot be challenged on the ground of the seller’s non ownership of the
thing sold at the time of the perfection of the contract. It is at delivery that the law requires the seller to
have right to transfer ownership of the thing sold. (Cavite Development Bank v. Sps. Lim, G.R. No. 131679,
2000)
DELIVERY OF SUBJECT MATTER

Delivery- “the absolute giving-up of the control and custody of the property on the part of the vendor, and
the assumption of the same by the vendee” (Equatorial Realty Dev. v. Mayfair Theater, G.R. No. 133879,
2001)
Two Types of Delivery:

1. Actual- physical delivery
2. Constructive
a. Execution of Public Instrument (Art. 1498) only produces the effect of delivery when:
i. The thing sold is subject to control of seller at the time of execution of instrument.
(Addison v. Felix, G.R. No. L-12342, 1918); and
ii. Such control should remain for a reasonable period after execution of the Instrument.
(Power Commercial and Industrial Corp. v. CA, G.R. No. 119745, 1997)
b. Constitutum Possessorium (Art. 1500) – the seller held possession of the subject matter
(real property) in the concept of owner, and pursuant to the sale, the seller continues to hold
physical possession but no longer in the concept of the owner (owner to lessee)
c. Traditio Brevi Manu – the would-be buyer was already in the possession (i.e., as lessee) of the
subject matter (real property) and pursuant to the sale, he would now hold possession as owner
d. Traditio Longa Manu – delivery by mere consent or agreement.

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SALE BY A PERSON NOT THE OWNER AT THE TIME OF DELIVERY (Arts. 1462, 1505, 1459)
1. Rules on Legal Effects of Sale by a Nonowner

General Rule: If sale is by a non-owner, buyer acquires no better title than seller had. (Art. 1505)
Exceptions:
1. Owner by his conduct is precluded from denying seller’s authority (Estoppel) (Art. 1434)
2. Contrary is provided for in recording laws (Art. 1505; P.D. 1529)
3. Sale is made under statutory power of sale or under order of a court of competent jurisdiction
(Art. 1505)
4. Sale is made in a merchant’s store in accordance with code of commerce and special laws. (Art.
1505)
2. Title as to Movable Properties

General Rule: Possession is equivalent to title (Art. 559)
Requisites:(PG)
1. Possession of movable
2. Made in Good faith (Art. 559)
Exceptions:
1. Owner lost movable – owner can recover by reimbursing price, including those acquired in
public sale or auction, provided in good faith (not a fencer) (Art. 559)
2. Owner is unlawfully deprived (stolen or delivered without intention of transferring title) –
owner can recover w/o reimbursing price (Art. 559)
3. Bought in a merchant store – owner cannot recover even if unlawfully deprived (Art. 1505)
Exceptions to the Exceptions:

1. Movable is bought at public sale – owner can only recover after reimbursing price
2. Acquired in good faith and for value from auction
SALE BY NON-OWNER OR BY ONE HAVING VOIDABLE TITLE
1. Perfection Stage
• Sale by owner – VALID
• Sale by non-owner – VALID (Arts. 1459, 1475)
Reason why both sales are valid: ownership is necessary only at time of delivery; at perfection stage,
no obligation on part of seller to transfer ownership (Villanueva, Law on Sales, 294, 2016)
Law on estoppel further bolsters it: title passes by operation of law to grantee when person who is not
owner of the goods sold delivers it and later on acquires title thereto (Art. 1434)
Since valid, action to annul is improper; there is already a perfected contract.
2. Consummation Stage
Contract of sale is valid because it has passed perfected stage, despite seller not being the owner or seller
having no authority to sell
• What is void is the transfer of title -- ownership did not pass
• Effect: buyer acquired no better right than transferor (Art. 1505)
• Legal effect: CAVEAT EMPTOR – BUYER BEWARE but Buyer always has cause of action against the
Seller
SALE OF CO-OWNER OF WHOLE PROPERTY OR DEFINITE PORTION

General Rule:
1. Co-owner sells whole property prior to partition – sale of property itself is void but valid as to his spiritual
share (Panganiban v. Oamil, G.R. No. 149313, 2008)
2. Co-owner sells definite portion prior to partition – sale is void as to other co-owner but valid as to his
spiritual share if the buyer would have still bought such spiritual share had he known that he would not
acquire the definite portion sold. (Lopez v. Cuaycong, G.R. No. L-46079, 1944)

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Exceptions to the rule on the effect of sale of a definite portion by a co-owner
1. Subject matter is indivisible in nature or by intent, hence, entire sale is void; (Mindanao Academy, Inc. v.
Yap, G.R. No. L-17681, 1965)
2. Sale of a particular portion of a property is with consent of other co-owners, sale of entire property is
valid; (Pamplona v. Moreto, G.R. No. L-33187, 1980)
3. Co-owner sells 1 of 2 commonly owned lands and does not turn over ½ of the proceeds, other co-owner,
by law and equity, has exclusive claim over remaining land. (Imperial v. CA, G.R. No. 102037, 1996)
E. SALE BY SELLER WITH VOIDABLE TITLE IN GOOD FAITH and WITHOUT NOTICE OF
THE DEFECT
1. Perfection stage
Valid sale – buyer acquires title of goods
2. Consummation stage
Valid sale – if title has not yet been avoided, buyer becomes owner of the goods under the condition that
the sale:
1. was made in good faith
2. is for value
3. is without notice of seller’s defect of title (Art. 1506)
E. Obligations of vendee
There is real or actual delivery of the thing sold when it is placed in the control and possession of the vendee.
(Art. 1497)
Obligations of Vendee (Buyer)

1. Pay the price
Buyer is obligated to pay the price according to the terms agreed upon regarding time, place and amount
(Art. 1582)
i. If payment of interest is stipulated – must pay; if amount of interest not mentioned – apply legal
rate
ii. When buyer defaults – constitutes breach; subject to specific performance/rescission and
damages; interest to be paid also from default
2. Accept delivery of thing sold

Where to accept:
(a) at time and place stipulated in the contract
(b) if none specified – at the time and place of delivery goods (Art. 1582)
There is acceptance when:

(a) He intimates to seller that he has accepted
(b) When delivered and buyer does any act inconsistent with ownership of seller
(c) Retains without intimating to seller that he has rejected (Art. 1585)
3. Sale of Goods on installment

 Goods must be delivered in full, except when stipulated (Art. 1583)
 When not examined by buyer – not accepted until examined or at least had reasonable time to
examine (Art. 1584)
 Acceptance of goods in general, absent contrary express stipulation, does not discharge seller from
liability in case of breach of warranties (unless no notice or failure to give it within reasonable time)
(Art. 1586)
 When buyer has a right to refuse goods, no need to return; shall be considered as depositary; unless
there is stipulation to the contrary (Art. 1587)
F. Breach of contract

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1. Remedies
A. REMEDIES OF SELLER IN CASE OF MOVABLES
General Remedies:
1. Specific Performance with damages; OR
2. Rescission with damages
(a) When ownership is transferred to the buyer – the seller may maintain an action against him for the price
of the goods, i.e., specific performance (Art. 1595)
(b) When there is no transfer of ownership to the buyer

i. If the goods can be resold for a reasonable price – seller may resell
ii. If the goods cannot be resold – the seller can deliver the goods and if buyer refuses, then the
seller may notify the buyer that the same is being held by the seller as bailee for the buyer then
maintain an action for the price, i.e., specific performance. (Art. 1595)
(c) When price is Payable on Certain Day and Buyer Fails to Pay on the Day Set – the seller can maintain
action for the price, i.e., specific performance (Art. 1595)
NOTE: Read Articles 1595-1596 of the Civil Code
UNPAID SELLER
A seller of the goods is deemed to be an unpaid seller either:
(a) When the whole of the price has not been paid or tendered; or
(b) When the seller received bill of exchange or negotiable instrument as a condition for payment and the
condition has been broken by reason of the dishonor of instrument, the insolvency of the buyer, or
otherwise. (Art. 1525)
Requisites of Unpaid Seller: (PUG)

1. Physical possession is with seller
2. Seller is Unpaid
3. Subject matter – Goods
Special remedies of unpaid seller: (PSRR)

1. Possessory lien
2. Stoppage in Transitu
3. Special right of Re-sale
4. Special right to Rescind (Art. 1526)
NOTE: Hierarchical Application – only when unpaid seller has exercised possessory lien or stoppage in
transitu can the seller proceed with his other special rights of resale or to rescind. (Villanueva & Tiansay,
Law on Sales, 335, 2016)
1. Possessory lien
Seller is not bound to deliver if buyer has not paid him the price. (Art. 1524)
Right to retain cannot be availed when seller does not have custody (Art. 1526)
• Exercisable only in following circumstances:(CCI)
(a) Goods sold without stipulation as to Credit
(b) Goods sold on Credit but term of credit has expired
(c) Buyer becomes Insolvent (Art. 1527)
• When part of goods delivered, may still exercise right on goods undelivered
Instances when possessory lien is lost:

1. Seller delivers goods to carrier for transmission to buyer without reserving ownership in goods or right
to possess them
2. Buyer or his agent lawfully obtains possession of goods

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3. Waiver (Art. 1529)
4. When he parts with goods (still has stoppage in transitu)
NOTE: Notice by seller to buyer not essential
2. Stoppage in transitu
• Goods are in transit
• Remedy is available only when buyer is insolvent (Art. 1526)
Requisites when goods are in transit (DR)

1. From the time goods are Delivered to carrier for purpose of transmission to buyer
2. Goods Rejected by buyer and carrier continues to possess them (Art. 1531)
When goods no longer in transit

(a) Reached point of destination;
(b) Before reaching destination, buyer or his agent obtains delivery of the goods;
(c) Goods are supposed to have been delivered to buyer but carrier refused;
(d) Bailee or carrier acknowledges that he is holding the goods for the buyer or his agent. (Art. 1531)
How is right exercised

1. Obtain actual possession of goods
2. Give notice of claim to carrier/bailee in possession thereof
NOTE: Notice by seller to buyer is not required; notice to carrier is what is essential (Art. 1532)
3. Special Right to Resell the Goods

Can be exercised under the following instances:
(a) Goods are perishable;
(b) Stipulated the right of resale in case buyer defaults in payment;
(c) Buyer in default on payment of price for unreasonable time. (Art. 1533)
Why ‘special’? There are things which seller cannot do in ordinary sale:
1. Ownership is with buyer but seller can sell goods
2. Title accorded to buyer is destroyed even without court intervention (Villanueva & Tiansay, Law on Sales,
342, 2016)
NOTE: In ordinary sale, need to go to court to destroy transfer of ownership.
4. Special Right to Rescind

Can be exercised under the following instances:
1. Expressly stipulated
2. Buyer is in default for unreasonable time (Art. 1534)
NOTE: Notice needed to be given by seller to buyer.
B. RECTO LAW: SALE OF MOVABLES ON INSTALLMENT (ARTS. 1484-1486)
Coverage: Sale on installment (two or more installments required) and financing transaction (Equitable
Savings Bank v. Palces, G.R. No. 214752, 2016) on movable property and contracts of lease of movable
property with option to purchase (PCI Leasing and Finance v. Giraffe-X Creative Imaging, G.R. No. 142618,
2007)
Note: Contract to sell is not covered. (Visayan Sawmill Co. v. CA, G.R. No. 83851, 1993).
Rule on Forfeiture of Partial Payments in a Contract to Sell

In a contract to sell, the forfeiture of partial payments may only be valid if there is a stipulation to that effect,
subject to payments of reasonable rents. In a contract to sell, failure to fully pay the purchase price results

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in the cancellation of the contract, and the parties shall stand as if the obligation to sell never existed."
(Spouses Godinez v. Spouses Norman, GR No. 225449, February 26, 2020, citing Olivarez Realty
Corporation v. Castillo)
Remedies available under the Recto Law:

In a sale of personal property, the price of which is payable in installments, the seller may exercise the
following remedies: (REF)
1. Exact fulfillment of the obligation, should the buyer fail to pay any installment;
2. Rescind the sale, should the buyer’s failure to pay cover two or more installments;
3. Foreclose the chattel mortgage, if one is constituted, should the buyer’s failure to pay cover two or more
installments (Art. 1484)
NOTE: This also applies to contracts purporting to be leases of personal property with option to buy, when
the lessor has deprived the lessee of the possession or enjoyment. (Art. 1485) Sale on installment: Payment
by several partial payments (two or more) in small amount (Levy Hermanos, Inc. v. Gervacio, G.R. No. L-
46306, 1939)
Rationale of the law: Buyer is lulled into thinking that he could afford because of small amounts per
installment and at the same time to remedy abuse of commercial houses. (Manila Trading and Supply Co.
v. Reyes, G.R. No. L-43263, 1935)
Nature of remedies: Alternative, not cumulative (Nonato v. IAC, G.R. No. L-67181, 1985)
The fact that the seller did not foreclose the chattel mortgage constituted on the movable purchased on
credit, but opted specific performance, with a plea for a writ of replevin, does not amount to a foreclosure
of the chattel mortgage to be covered by Art. 1484. (Tajanglangit v. Southern Motors, G.R. No. L-10789,
1957)
REMEDIES are NOT CUMULATIVE but are ALTERNATIVE and EXCLUSIVE
1. Specific Performance
General Rule: Once chosen, can no longer rescind nor foreclose mortgage.
Exception: After choosing specific performance but the same becomes impossible, rescission may be
pursued subsequently. (Villanueva & Tiansay, Law on Sales, 352-353, 2016
2. Rescission
 When chosen, there is a correlative obligation to restitute.
 Stipulations that installments paid are forfeited are valid if not unconscionable.
Deemed chosen when:

1. Notice of rescission is sent;
2. Takes possession of subject matter of sale;
3. Files action for rescission;
4. Barring effect on recovery of balance. (Villanueva & Tiansay, Law on Sales, 353-356, 2016)
3. Foreclosure
Once there has been foreclosure sale, the seller can no longer claim for remaining balance on the purchase
price. (Northern Motors v. Sapinoso, G.R. No. L-28074, 1970)
GR: When foreclosure is chosen, seller can no longer claim all amounts due from the sale, including
damages and attorney’s fees. (Macondray & Co. v. Eustaquio, G.R. No. 43683, 1937)
E: In case of Perverse Buyer-Mortgagor, if mortgagor refuses to deliver property to effect foreclosure,

expenses incurred in recovering the property may also be recovered, i.e., attorney’s fees, etc. (Filipinas
Investment & Finance Corp. v. Ridad, G.R. No. L-27645, 1969)

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C. REMEDIES OF SELLER IN CASE OF SALE OF IMMOVABLES
General Remedies
1. Specific Performance with damages; or
2. Rescission with damages
Anticipatory Breach
1. Seller has reasonable grounds to fear loss of immovable sold and its price, sue for Rescission
2. Non–payment of price, sue for Rescission (Art. 1591)
D. MACEDA LAW (R.A. 6552)

Rationale of the Law
Public policy to protect buyers of real estate on installment payments against onerous and oppressive
conditions.
Covered transactions
Applies to all sale of residential real estate on installments including Contracts to Sell and those financed
through banking institutions (R.A. 6552, Sec. 3)
Excluded:
1. Industrial real estate
2. Commercial real estate
3. Sale to tenants under agrarian laws (R.A. 6552, Sec. 3)
Requisites of Sec. 3 of Maceda Law: (FReT)

1. Failure to pay installments was due to reasons, other than failure of the developer to develop the
subdivision or condominium according to the approved plan and to comply with such within the time limit;
2. Only covers Residential lots including condominium units, excluding, sales to tenants;
3. The buyer has paid at least Two years of installments. (R.A. 6552, Sec. 3)
Rights of the Buyer under Maceda Law with at least two (2) years of Installment: (R.A. 6552,
Sec. 3)
1. To pay, without additional interest, the unpaid installments due within the total grace period earned by
him. Said grace period is fixed at the rate of one-month grace period for every one year of installments
payments made. Thus, here the buyer has at least two months grace period for he should have paid at least
two years of installments to avail of the rights under this section.
NOTE: This right can be exercised only once in every five (5) years of the life of the contract and
its extensions, if any.
2. To be refunded the cash surrender value of his payments equal to 50% of his total payments if the contract
is cancelled. But if he has paid five years or more, he is entitled to an increase of 5% every year and so on
but the cash surrender value shall not exceed 90% of his total payments. (McLaughlin v. CA, G.R. No. L-
57552, 1986)
The actual cancellation of the contract referred to above shall take place only:
1. After 30 days from receipt by the buyer of the notarial notice of cancellation or demand for rescission,
AND
2. Upon full payment to the buyer of the cash surrender value (R.A. 6552, Sec. 3)
NOTE: Buyer may update payment during the 30-day waiting period which will render the cancellation
ineffective.
In the computation of the total number of installment payments the following are included:
1. Down payment and
2. Deposit or option money (R.A. 6552, Sec. 3)
Rights of the Buyer under Maceda Law with less than two (2) years of installments: (R.A.
6552, Sec. 4)

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1. Still has the right to pay within a grace period of not less than sixty (60) days from the date the installment
became due.
2. If the buyer fails to pay the installment due at the expiration of the grace period, i.e. 60 days, the seller
may cancel the contract after 30 days from receipt by the buyer of the notice of cancellation or demand for
rescission of the contract by a notarial act. NOTE: Here, the buyer is not entitled to any refund.
Other rights granted under the Maceda Law: (R.A. 6552, Sec. 5 & 6)
1. Sell rights to another;
2. Assign the same to another person;
3. Reinstate contract by updating during grace period and before actual cancellation;
4. Deed of Sale to be done by notarial act;
5. To pay in advance any installment or the full balance of price anytime without interest and have such full
payment annotated in certificate of title.
Purpose of the law: Protect buyers in installments against oppressive conditions. Applies to contracts
even before the law was enacted. (R.A. 6552, Sec. 2; Siska Dev. Corp. v. Office of the President, G.R. No.
93176, 1994)
NOTE: Stipulations contrary to the provisions of Sections 3, 4, 5 and 6 are null and void. (R.A. 6552, Sec.
7) Waiver of the required notice is oppressive.
E. REMEDIES OF THE BUYER
Suspension of Payment
General Rule: Buyer may suspend payment in case:
1. He is disturbed in the possession or ownership of the thing acquired;
2. He has reasonable grounds to fear such disturbance. (Art. 1590)
Exception:
 No right to suspension of payment if the seller gives security for the return of the price. (Art. 1590)
 In case of subdivision or condominium projects, the buyer may rescind the contract or suspend
payment if real estate developer fails to comply with obligation according to approved plan. (P.D.
957, Sec. 23)
F. REMEDIES IN DOUBLE SALES

General Rule: FIRST IN TIME, PRIORITY IN RIGHT (Art. 1544)
When general rule does not apply: when not all requisites embodied in Art. 1544 concur.
Requisites for Double Sales to Exist (VOCS)

1. That two (or more) sales transactions in the issue must pertain to exactly the same subject matter, and
must be valid sales transactions.
2. That two (or more) buyers at odds over the rightful ownership of the subject matter must each represent
conflicting interests; and
3. That two (or more) buyers at odds over the rightful ownership of the subject matter must each have
bought from the very same seller. (Spouses German v. Spouses Santuyo, G.R. No. 210845, January 22,
2020)
If not all the elements are present for Art. 1544 to apply, the principle of prior tempore, potior jure or simply
“he who is first in time is preferred in right” should apply. Indisputably, he is a purchaser in good faith
because at the time he bought the real property, there was still no sale to as a second vendee. (Consolidated
Rural Bank v. CA, G.R. No. 132161, 2005)
NOTE:
 If the two contracts involved are not both contracts of sale, as when one is a contract to sell, and the
other one a contract of sale, Art. 1544 does not apply. This follows the principle that in a contract
to sell, the seller has no obligation to deliver title until there is full payment of the purchase price.

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Thus, for as long as the condition of full payment has not been fulfilled, a subsequent sale of the
same property will be valid since the seller still has title to the property. With more reason, if the
seller in a contract to sell has defaulted, the breach in the condition entitles the seller to sell the
same property for full consideration. Even if the buyer in the contract to sell annotates his right in
the title, the buyer in the contract of sale is not in bad faith. (Sps. Domingo v. Sps. Manzano, G.R.
No. 201883, 2016)
 Note that the Court applied this in this case even if the buyer in the contract to sell was not in default
since the seller accepted payment after due date. Seller however must reimburse payments made
to the buyer even if he has only paid less than 2 years of installments because he was not in default.
Court distinguished this from earlier case of Abarquez v. CA even if in that case, one also involved
a contract to sell – because in Abarquez, the seller already delivered to the buyer who accepted and
took possession, and even constructed a house on the land under installment sale. (Sps. Domingo
v. Sps. Manzano, G.R. No. 201883, 2016)
Double Sales Rules according to Art. 1544:

1. Movable: First to possess in good faith shall prevail (Art. 1544)
2. Immovable
(a) First to register in good faith shall prevail;
(b) In case no registration is made, then first to possess in good faith shall prevail;
(c) No registration and no possession in good faith, then the person who presents oldest title in
good faith, shall prevail. (Art. 1544)
NOTE: The FIRST BUYER is always in good faith and will always prevail if he registers his sale first. His
good faith is not destroyed by the subsequent knowledge of the second sale. The reason behind this is that
at the time of perfection of his contract of sale, he was the only buyer. (Carbonell v. CA, G.R. No. L-29972,
1976) But the knowledge gained by the 2nd buyer of the first sale defeats his rights even if he is first to
register, since such knowledge taints his registration with bad faith. (Ordua v. Fuentebella, G.R. No. 176841,
2010)
Buyer in Good Faith – one who purchases and pays a fair price for a property without notice that another
has an interest or right to it. (Amoguis v. Ballado, G.R. No. 189626, 2018.)
If a land is registered and is covered by a certificate of title, any person may rely on the correctness of the
certificate of title. However, this does not apply where the party has actual knowledge of facts and
circumstances that would impel a reasonably cautious man to make such inquiry or when the purchaser has
knowledge of a defect or the lack of title in his vendor or of sufficient facts to induce a reasonably prudent
man to inquire into the status of the title of the property in litigation. It is incumbent upon a buyer to prove
good faith should he or she assert this status. (Amoguis v. Ballado, G.R. No. 189626, 2018.)
Lis pendens – notice that subject matter is in litigation (Sps. Lim v. Vera Cruz, G.R. No. 143646, 2001) is
a form of registration accorded priority right.
A buyer cannot be considered a transferee in good faith if it was aware of the title’s notices of lis pendens.
(Register of Deeds of Negros Occidental v. Anglo, Sr., G.R. No. 171804, 2015)
Adverse claim – notice that somebody is claiming better right (Gardner v. CA, G.R. No. L-59952, 1984)
is a form of registration accorded priority right.
Possession – both actual and constructive (Roman Catholic Church v. Pante, G.R. No. 174118, 2012)
Registration – any entry made in the books of the registry, including both registration in its ordinary and
strict sense, and cancellation, annotation, and even marginal notes. It is the entry made in the registry which
records solemnly and permanently the right of ownership and other real rights.. (Cheng v. Genato, G.R. No.
129760, 1998)
• Registered under Torrens system – 1544 applies
• Not registered under the Torrens system – 1544 still applies

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If 2nd sale is a judicial sale (made by way of levy on execution), buyer merely steps into the shoes of the
judgment debtor. Outside of such situation – must apply to conflicting sales over the same unregistered
parcel of land. If sale 1 occurs when land is not yet registered and sale 2 is done when land is already
registered – apply first in time, priority in right.
Good faith must concur with registration. To be entitled to priority, the second purchaser must not only
establish prior recording of his deed, but must have acted in good faith. (Gabriel v. Mabanta, G.R. No.
142403, 2003)
Under the Torrens system, a sale of property that is not registered under the Torrens system is binding
only between the buyer and the seller and does not affect innocent third persons. (Evy Construction and
Development Corp. v. Valiant Roll Forming Sales Corp., G.R. No. 207938, 2017)
As an exception, “knowledge of an unregistered sale is equivalent to registration.” (Evy Construction and

Development Corp. v. Valiant Roll Forming Sales Corp., G.R. No. 207938, 2017)
RATIONALE FOR THE ADOPTION OF THE TORRENS SYSTEM

The Torrens system was adopted so that one need not inquire beyond the certificate of title when dealing
with registered property. P.D. 1529 or the Property Registration Decree recognizes innocent purchasers in
good faith for value and their right to rely on a clean title. An innocent purchaser for value is someone who
“buys the property of another without notice that some other person has a right to or interest in it, and who
pays a full and fair price at the time of the purchase or before receiving any notice of another person’s claim.”
One claiming to be an innocent purchaser for value has the burden of proving such status. (Leong v. See,
G.R. No. 204700, 2014)
Requisite Diligence for Buyer in Good Faith:

1. Diligence in verifying the validity of the title of the property;
2. Diligence in inquiring into the authority of the transacting spouse to sell conjugal property in behalf of
the other spouse. (Aggabao v. Parulan, G.R. No. 165803, 2010).
G. REMEDY OF RESCISSION IN CONTRACTS COVERING IMMOVABLES (ARTS. 1191 &

1592)
General Rule: Judicial Rescission (Art. 1191)
Exception: Extrajudicial Rescission allowed but SUBJECT to COURT Confirmation.
• Allowed if stipulated; burden to sue shifts to party who does not like rescission
• Court still has final say as to propriety of rescission (Iriñgan v. CA, G.R. No. 129107, 2001)
• Forfeiture of amounts valid being in nature of penal clause
NOTE: Article 1191 of the CIVIL CODE provides that in case of breach of reciprocal obligations, such as in
a contract of sale, the injured party may choose between rescission and specific performance ‘with the
payment of damages in either case’. Mutual restitution under Article 1191 is no license for the negation of
contractually stipulated liquidated damages. The very same breach or delay in performance that triggers
rescission is what makes damages due. Further, when the contracting parties, by their own free acts of will,
agreed on what these damages ought to be, they established the law between themselves. Thus, in order to
uphold both Article 1191 of the CIVIL CODE and the parties’ will, contractually stipulated liquidated
damages must, as a rule, be maintained. (PEZA v. Pilhino Sales Corp, G.R. No. 185765, 2016).
Contract of Sale – Rescission is applicable

Contract to Sell – Rescission not applicable (Roque v. Lapuz, G.R. No. L-32811, 1980)
Nonpayment of purchase price would automatically cancel even without further action for rescission.
Exception: If subject matter is residential lots, the law on rescission applies when there is substantial
breach as Maceda law applies.

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G. Extinguishment
1. In general
Grounds (same grounds by which obligations in general are extinguished) (PLCCC - PNARF)
1. Payment or performance
2. Loss of the subject matter
3. Condonation or remission
4. Confusion or merger of rights of creditor and debtor
5. Compensation
6. Novation
7. Annulment
8. Rescission
9. Fulfillment of a resolutory condition
10. Prescription
11. Conventional Redemption
12. Legal Redemption (Art. 1231)
2. Pacto de retro sale

CONVENTIONAL REDEMPTION (SALE WITH RIGHT TO REPURCHASE)
There is conventional redemption when the seller reserved for himself the right to repurchase the thing
sold, with the obligation to return:
1. The price of the sale;
2. The expenses of contract,
3. Other legitimate payments,
4. The necessary and useful expenses made on the thing sold (Art. 1601)
NOTE: This only extinguishes obligations pertaining to contract of sale. It does not extinguish contract
itself.
The right is exercised only by the seller in whom right is recognized in the contract or by any person to
whom right was transferred; It must be in the same contract. (Villanueva & Tiansay, Law on Sales, 474-475,
2016)
Period to redeem:
(a) No period agreed upon – 4 years from date of contract
(b) Period agreed upon – should not exceed 10 years; if it exceeded, valid only for the first 10 years.
(c) When period to redeem has expired and there has been a previous suit on the nature of the contract –
seller still has 30 days from final judgment on the basis that contract was a sale with pacto de retro. (Art.
1606)
Rationale:
 No redemption due to erroneous belief that it is equitable mortgage which can be extinguished by
paying the loan.
 This refers to cases involving a transaction where one of the parties contests or denies that the true
agreement is one of sale with the right to repurchase; not to cases where the transaction is
conclusively a pacto de retro sale. (Villanueva & Tiansay, Law on Sales, 486, 2016)
Example: Where a buyer a retro honestly believed that he entered merely into an equitable mortgage, not
a pacto de retro transaction, and because of such belief he had not redeemed within the proper period.
(Leonardo v. CA, G.R. No. 82457, 1993)
NOTE:
 When period has expired, and seller has allowed the period of redemption to expire – seller is at
fault for not having exercised his rights so he should not be granted a new period.
 Tender of payment is SUFFICIENT to compel redemption but is not in itself a payment that relieves
the vendor from his liability to pay the redemption price. (Paez v. Magno, G.R. No. L-793, 1949)

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Effect When There is No Redemption Made
• Jurisprudence before the NCC: buyer a retro automatically acquires full ownership
• Under present Art. 1607: there must be judicial order before ownership of real property is consolidated in
the buyer a retro.
The seller who is given the right to repurchase may exercise his right of redemption by paying the buyer: 1)
the price of the sale; 2) the expenses of the contract; 3) legitimate payments made by reason of the sale; and
4) the necessary and useful expenses made on the thing sold. The repurchase was exercised because from
the P10M purchase price directly paid to B, he deducted the P2M purchase price, his expenses, interest, and
the price of the loan paid to DBP. He returned the remaining amount and one of the tractors. This is a tacit
acknowledgment of the A’s exercise of his right to repurchase. (David v. David, G.R. No. 162365, 2014)
How is Redemption Effected

Seller a retro must first pay the following: (PENT)
1. The Price of the thing sold
2. Expenses of the contract and other legitimate payments made by reason of the sale
3. Necessary and useful expenses made on the thing sold (Art. 1616)
4. Valid Tender of payment is sufficient (Legaspi v. CA, G.R. No. L-45510, 1986)
• Mere sending of notice without valid tender is insufficient.
• Failure to pay useful and unnecessary expenses entitles vendee to retain land unless actual
reimbursement is made
In Case of Multi-Parties
(a) When an undivided thing is sold because coowners cannot agree that it be allotted to one of them –
vendee a retro may compel the vendor to redeem the whole thing (Art. 1611)
(b) When an undivided thing is sold by coowners/co-heirs, vendors a retro may only exercise his right over
his respective share; vendee a retro may demand that they must come to an agreement first and may not be
compelled to consent to a partial redemption (Art. 1612)
(c) When rights of co-owners over an undivided thing is sold as regards to their own share – vendee retro
cannot compel one to redeem the whole property
(d) Should one of the co-heirs/co-owners succeed in redeeming the property – such vendor a retro shall be
considered as trustee with respect to the share of the other coowners/co-heirs. (De Guzman v. CA, G.R. No.
L-47378, 1987)
NOTE: A Seller can only sell what he or she owns, or that which he or she does not own but has authority
to transfer, and a buyer can only acquire what the seller can legally transfer. Before the property is
partitioned, the heirs are co-owners of the property. The heirs cannot alienate the shares that do not belong
to them. Any sale by one heir of the rest of the property will not affect the rights of the other heirs who did
not consent to the sale. Such sale is void with respect to the shares of the other heirs. Issuance of a certificate
of title is not a grant of title over petitioners' undivided portions of the property. Nevertheless, a buyer could
acquire valid title over the whole property if the buyer were an innocent purchaser for value. (Heirs of
Gregorio Lopez v. Development Bank of the Phils., G.R. No. 193551, 2014.)
NOTE: A co-owner has “no right to sell or alienate a concrete, specific or determinate part of the thing
owned in common, because his right over the thing is represented by quota or ideal portion without any
physical adjudication.” (Cabrera v. Ysaac, G.R. No. 166790, 2014)
Fruits
What controls is the stipulation between parties as regards the fruits.
If none:
1. At time of execution of the sale a retro, there are visible or growing fruits – there shall be no pro-rating at
time of redemption if no indemnity was paid by the vendee a retro.
2. At time of execution sale a retro, there be no fruits but there are fruits at time of redemption – pro-rated
between vendor a retro and vendee a retro giving the vendee a retro a part corresponding to the time he
possessed the land. (Art. 1617)

186
PRE-EMPTION REDEMPTION
Arises before sale Arises after sale
No rescission because no sale exists yet There can be rescission of the original sale
Action is directed against prospective seller Action is directed against buyer
3. Equitable mortgage
 One which lacks the proper formalities, form of words, or other requisites prescribed by law for a
mortgage, but shows the intention of the parties to make the property subject of the contract as
security for a debt and contains nothing impossible contrary to law. (Cachola v. CA, G.R. No. 97822,
1992)
 Any money, fruits, or other benefit to be received by the vendee as rent or otherwise shall be
considered as interest and is subject to usury laws.
The essential requisites of an equitable mortgage are:

1. The parties entered into a contract denominated as a contract of sale; and
2. Their intention was to secure an existing debt by way of a mortgage. (Molina vs. CA, G.R. No. 125755,
2003)
A contract with right to repurchase may be deemed to be an equitable mortgage under the
following conditions (IPERTI):
1. Price of sale with right to repurchase is unusually Inadequate
2. Seller remains in Possession as lessee or otherwise
3. Upon or after expiration of right to repurchase, another instrument Extending the period of redemption
or granting new period is executed
4. Buyer Retains for himself a part of the purchase price
5. Seller binds himself to pay Taxes on thing sold
6. Any other case where the real Intention of parties is to secure the payment of a debt or performance of
other obligation (Art. 1602)
NOTE: In case of doubt – in determining whether it is an equitable mortgage or a sale a retro, the sale shall
be construed as an equitable mortgage. (Art. 1603)
What to Look for in Determining Nature of Contract

1. Language of the contract
2. Conduct of parties – to reveal real intent
Remedies available to the vendor:

1. Reformation of contract (Art. 1359)
2. Action for declaration of nullity of deed of sale
3. Action for specific performance (Tolentino v. CA, G.R. No. 128759, 2002); or
4. Foreclosure of the mortgage in equity (Briones-Vasquez v. CA, G.R. No. 144882, 2005)
Rationale Behind Provision on Equitable Mortgage:

1. Circumvention of usury law
2. Circumvention of prohibition against pactum commissorium – creditor cannot appropriate the things
given by way of pledge or mortgage; remedy here is foreclosure. The real intention of parties is that the
pretended purchase price is money loaned and to secure payment of the loan, sale with pacto de retro is
drawn up. (Heirs of Reyes, Jr. v. Reyes, G.R. No. 158377, 2010)
D. LEGAL REDEMPTION
The right to be subrogated upon the same terms and conditions stipulated in the contract, in the place of
one who acquires the thing by (1) purchase OR (2) by dation in payment OR (3) by other transaction
whereby ownership is transmitted by onerous title. (Art. 1619)
NOTE: Only applies to contracts of sale.

187
Types of Legal Redemption:
1. Among co-heirs
Any of the heirs sells his hereditary rights to a stranger before partition:
• Any of the co-heirs may be subrogated to the rights of the purchaser by redeeming said hereditary right:
reimburse the buyer of the price of the sale
• Co-heirs have 1 month from receipt of notice in writing (Art. 1088)
2. Among co-owners
Any or all of co-owners sell their shares to 3rd person:
• Any co-owner may exercise the right of redemption by paying reasonable price of property to the buyer
• If 2 or more co-owners desire to exercise right of redemption, they may only do so in proportion to the
share they respectively have in thing owned in common (Art. 1620)
3. Among adjoining owners

Rural land
(a) Where piece of rural land has an area not exceeding 1-hectare, adjoining owner has right to redeem
unless grantee does not own a rural land
(b) If two or more adjacent lot owners desire to exercise right to redeem, owner of adjoining lot with smaller
area shall be preferred
(c) If two or more adjacent lot owners desire to exercise right to redeem and both have same lot area, one
who first requested shall be granted (Art. 1621)
Urban land
(a) When piece of land is small and cannot be used for any practical purpose and bought merely for
speculation, owner of adjoining land can redeem
(b) When 2 or more owners of adjoining lot desire to exercise right to redeem, owner whose intended use
is best justified shall be preferred. (Art. 1622)
4. Sale of credit in litigation

 When a credit or other incorporeal right in litigation is sold, debtor shall have a right to extinguish
it by reimbursing the assignee for the price the latter paid therefor plus judicial costs, interest;
except when the assignment or sale is made: (a) to a co-heir or co-owner of the right assigned; (b)
to a creditor in payment of his credit; or (c) to the possessor of a tenement or piece of land which is
subject to the right in litigation assigned. (Arts. 1634, 1635)
 Debtor may exercise right within 30 days from the date assignee demands payment from him (Art.
1634)
Other Instances When Right of Legal Redemption is Granted:

1. Redemption of homesteads
2. Public Land Act
3. Land acquired under free patent homestead subject to repurchase by wife, legal heirs within 5 years from
date of conveyance granted by law, need not be stipulated
Redemption in tax sales

 In case of tax delinquency/failure to pay tax assessments, property shall be foreclosed.
 Delinquent payer has 1 year from date of sale to redeem by paying to the revenue District Officer
the amount of tax delinquencies, and interest or purchase price. (National Internal Revenue Code,
Sec. 214)
Redemption by judgment debtor: 1 year from date of registration of certificate of sale to redeem by
paying purchaser at public auction with interest (Rules of Court, Rule 39, Secs. 27, 28)
Redemption in extrajudicial foreclosure: 1 year from date of sale and registration (Act No. 3135, Sec.
6)

188
Redemption in judicial foreclosure of mortgage: right to redeem is granted to debtor mortgagor
except when mortgagee is bank of a banking institution 90 days after finality of judgment. (GSIS v. CFI,
G.R. No. 45322, 1989)
When Period of Redemption Begins to Run: Right of legal pre-emption of redemption shall be
exercised within 30 days from notice by the seller. (Art. 1623)
How exercised: Tender of payment is not necessary; offer to redeem is enough. (Vda. de Panaligan v. CA,
G.R. No. 112611, 1996)
NOTE: Written notice under Art. 1623 is mandatory for the right of redemption to commence. (PSC vs.
Sps. Valencia, G.R. No. 150060, 2003)
General Rule: Actual knowledge notwithstanding, written notice is still required. (Verdad v. CA, G.R. No.
109972, 1996)
Exception:
 When actual knowledge is acquired by co-heirs living in same land with purchaser (Alonzo v. IAC,
G.R. No. L-72873, 1987) or coowner was middleman in sale to 3rd party (Disitro v. CA, G.R. No.
95256, 1991)
 Art. 1623 does not prescribe any distinctive method for notifying the redemptioner. (Etcuban v. CA,
G.R. No. L-45164, 1987)
H. Assignment of credits
Transfer of ownership
1. By tradition or delivery and not by perfection;
2. By execution of public instrument because intangibles cannot be physically transferred;
3. Without necessity of delivering the document evidencing the credit.
NOTE: This rule does not apply to negotiable documents and documents of title which are governed by
special laws.
Assignment
The owner of a credit transfers to another his rights and actions in consideration of a price certain in money
or its equivalent
1. Transfers the right to collect the full value of the credit, even if he paid a price less than such value;
2. Transfers all the accessory rights (e.g. guaranty, mortgage, pledge, preference) (Art. 1427);
3. Debtor can set up against the assignee all the defenses he could have set up against the assignor.
Difference from sale

• Technical term but basically a sale
• Sale of credits and other incorporeal things (Villanueva, Law on Sales, 524-526, 2016)
Effects of assignment
Lack of knowledge or consent of debtor not essential for validity but has legal effects (“meeting of minds”
in assignment contemplates that between assignor of the credit and his assignee) (Rodriguez v. CA, G.R.
No. 84220, 1992)
Assignment of rights made w/o knowledge of debtor: Debtor may set up against assignee the
compensation which would pertain to him against assignor of all credits prior to assignment and of later
ones until he had knowledge of the assignment.
Debtor has consented to assignment: Cannot set up against assignee the compensation which would
pertain to him against assignor of all credits prior to assignment and of later ones until he had knowledge
of the assignment

189
• Compensation unless assignor was notified by debtor that he reserved his right to the
compensation
Debtor has knowledge but no consent: may still set up compensation of debts previous to assignment
but not the subsequent ones. (Art. 1285)
Effect of payment of debtor after assignment of credits

1. Before Notice of the Assignment – Payment to the original creditor is valid and debtor shall be
released from his obligation
2. After Notice – Payment to the original creditor is not valid as against the assignee. He may be made to
pay again by the assignee (Art. 1626)
Warranties of the assignor

1. NO warranty against hidden defect - N/A because intangibles have no physical existence (Villanueva &
Tiansay, Law on Sales, 532, 2016)
2. He warrants the existence and legality of credit – there is warranty except when expressly sold as a
doubtful account
3. NO warranty as to the solvency of debtor unless it is expressly stipulated OR unless the insolvency was
already existing and of public knowledge at the time of the assignment (Art. 1628)
NOTES:
 Warranty shall last for 1 year only (Art. 1629)
 One who assigns inheritance right w/o enumerating rights shall be answerable for his character as
an heir (Art. 1630)
 One who sells whole of certain rights for a lump sum, shall be answerable for legitimacy of the whole
in general but not for each of the various parts (Art. 1631)
Breach of warranty: liabilities of the assignor of credit for violation of his warranties
Assignor in good faith – Liability is limited to price received, expenses of the contract and other
legitimate payments made by reason of the assessment
Assignor in bad faith – Liable ALSO for (expenses of contract and other legitimate payments plus useful
and necessary expenses) damages (Art. 1628)
ASSIGNMENT OF CREDIT OR INCORPOREAL RIGHT IN LITIGATION

Requisites (SPA)
1. There must be a Sale or assignment of credit
2. There must be a Pending litigation
3. The debtor must pay the Assignee:
i. Price paid by him AND
ii. Judicial costs incurred by him AND
iii. Interest on the price from the date of payment (Art. 1634)
The right must be exercised by the debtor within 30 days from the date the assignee demands (judicially or
extra-judicially) payment from him. (Art. 1634)
NOTES:
 Presumption: buyer’s purpose is speculation and law would rather benefit the debtor of such credits
rather than the one who merely speculates for profit. (Villanueva, Law on Sales, 533, 2016)
(Assignee speculates)
 When credit or incorporeal right in litigation is assigned or sold, debtor has a right to extinguish it
by reimbursing the assignee for the price the buyer paid plus interest (Art. 1634)
Right to redeem by debtor not available in the following instances (not considered
speculative (Art. 1635)

190
1. Assignment of credit/incorporeal right to coheir or co-owner; the law does not favor coownership
2. Assignment to creditor in payment for his credit
o Presumption is that the assignment is above suspicion; assignment is in the form of dacion en
pago, thus perfectly legal
3. Assignment to possessor of tenement or piece of land which is subject to the right in litigation assigned
o Purpose is to presumably preserve the tenement
VI. LEASE
A. General provisions
Contract of Lease is a contract by which one agrees to give to the other for a fixed time and price the use or
profit of a thing or his services (The Employees’ Club, Inc. v. China Banking Corporation, G.R. No. L-40188,
1934).
Characteristics of Lease of things (CLONSPEP-TP)

(a) Consensual
(b) Lessor need not be the owner
(c) Onerous
(d) Nominate
(e) Subject matter must be within the commerce of man (i.e., not belonging to the public domain)
(f) Principal contract
(g) Purpose is to allow enjoyment or use of a thing
(h) Purpose to which the thing will be devoted should not be immoral
(i) Period is temporary
(j) Period may be definite or indefinite
NOTE: Persons disqualified to buy under ARTS. 1490 and 1491 of the Civil Code are also disqualified from
becoming lessees of the things mentioned therein. (Art. 1646)
Kinds of Leases
1. LEASE OF THINGS
• Concerns movable or immovable property
• One of the parties binds himself to give to another the enjoyment or use of a thing
• For a price certain and
• For a period which may be definite or indefinite
NOTE: However, no lease for more than 99 years shall be valid.

General Rule: The contract of lease may be made orally.
Exception: Lease of real property for more than one year (must be in writing to comply with Statute of
Frauds).
2. LEASE OF WORK AND SERVICES

• One of the parties binds himself to execute a piece of work or to render to the other some service for a
price certain
• The relation of principal and agent does not exist between them
CONTRACT OF LEASE OF SERVICE CONTRACT OF LEASE OF THING

The object of the contract is the service itself and The object of a contract is a thing
not the result which it generates
Lessor’s services must still be paid even if the result Lessor has to deliver the thing leased
intended is not attained In case of breach, there may be an action for
In case of breach, no action for specific specific performance
performance
B. Rights and obligations of the lessor

191
Obligations of the Lessor (Art. 1654) (DNM)
1. To Deliver the thing which is the object of the contract in such condition as to render it fit for the use
intended.
2. To make on the same during the lease all the Necessary repairs in order to keep it suitable for the use to
which it has been devoted unless there is a stipulation to the contrary.
3. To Maintain the lessee in the peaceful and adequate enjoyment of the lease for the entire duration of the
contract.
• This is true only if the contract is valid. Where the contract is void, for having an existent contract
of lease, the lessor has no right to lease the same property. (Bercero v. Capitol Development
Corporation, G.R. No. 154765, 2007)
Nature of the duty of the Lessor to maintain peaceful possession of the premises by the
Lessor
This is merely a warranty that the lessee shall not be disturbed in his legal, and not physical, possession.
(Chua Tee Dee v. Court of Appeals, G.R. No. 135721, 2004)
C. Rights and obligations of the lessee
Obligations of the Lessee (Art. 1657) (PUP)

1. Pay the price of the lease according to the terms stipulated.
2. Use the thing leased as a diligent father of a family devoting it to the use stipulated, and in the absence
of stipulation, to that which may be inferred from the nature of the thing leased, according to the custom of
the place.
3. Pay the expenses for the deed of lease.
Rights of the Lessee

1. Right to be respected in his possession.
2. Right to be restored to said possession by the means established by law or by the Rules of Court, should
he be disturbed therein.
Remedies when lessor or lessee does not comply with their obligations
(a) Rescission and damages; or
(b) Damages while allowing the contract to remain in force.
Remedy of lessee if lessor refuses to accept the rentals

To make a proper tender of payment and consignation in order to extinguish the debt.
Rules on changing the form of the lease

• The lessor can alter the thing leased provided there is no impairment of the use to which the thing is
devoted under the terms of the lease.
• The lessee can also make alterations so long as the value of the property is not substantially impaired.
Rules in case of urgent repairs

• If the repairs last for not more than 40 days, the lessee is obliged to tolerate the work even though the
work may annoy him, or he may be deprived of a part of the premises if repairs last for not more than 40
days.
• If repairs last for 40 days or more, lessee can ask for reduction of the rent in proportion to the time –
including the 1st 40 days – and the part of the property of which he is deprived.
NOTE: In either case, rescission may be availed of if the main purpose of the lease is to provide a dwelling
place and the property becomes uninhabitable.
Effects if lessor fails to make urgent repairs

The lessee may (ROSS):
(a) Ask for Rescission, in case of substantial damage to him;
(b) Order repairs at the lessor’s cost;
(c) Sue for damages; or

192
(d) Suspend the payment of the rent.
Effect of destruction of the subject matter with respect to the lease

IF TOTALLY DESTROYED IF ONLY PARTIALLY DESTROYED
Lease is extinguished Lessee can choose between reduction of the rent
and rescission
Rules upon Termination of Lease governing useful improvements caused by the lessee
(OAR)
If made in good faith and suitable to the use for which the lease is intended, without altering the form or
substance of the property:
1. Lessor may Appropriate the improvements provided he pays the lessee ½ of its value at that time;
2. If lessor does not appropriate, lessee may Remove the improvements even if the principal thing may
suffer damage;
3. If improvement is Ornamental, no right of reimbursement, but lessee may remove them provided no
damage is caused to the principal thing.
NOTE: Lessee has no right of retention of the premises if the lessor does not pay. His only right is right of
removal if lessor does opt not to pay and appropriate.
Kinds of Trespass in Lease

(a) Trespass in fact (perturbacion de mere hecho):
• Lessor is not liable for the mere fact of a trespass or trespass in fact made by a third person of a
leased property.
• Mere fact or mere act of trespass is when the third person claims no right whatever.
• Physical enjoyment is reduced.
(b) Trespass in law (perturbacion de derecho):

• A third person claims legal right to enjoy the premises
• Lessor will be held liable
Duration of Lease
(a) Lease may be for a determinate time or fixed period
• Lease will be for the said period and it ends on the day fixed without need of a demand.
(b) Lease may be without a fixed period
i. For rural lands (Art. 1682) - It shall be for all time necessary for the gathering of fruits which the
whole estate may yield in 1 year, or which it may yield once.
ii. For urban lands (Art. 1687)
(i) If rent is paid daily, lease is from day to day.
(ii) If rent is paid weekly, lease is from week to week.
(iii) If rent is paid monthly, lease is from month to month.
(iv) If rent is paid yearly, lease is from year to year.
 The general rule is lease contracts survive the death of the parties and continue to bind the heirs
except if the contract states otherwise. (Inocencio vs. Hospicio de San Jose, G.R. No. 201787, 2013)
 The well-entrenched principle is that a lease from month-to-month is with a definite period and
expires at the end of each month upon the demand to vacate by the lessor. (Cebu Bionic Builders
Supply, Inc. vs. Development Bank of the Philippines, G.R. No. 154366, 2010)
Rules on Extension of the Lease Period

1. If a lease contract for a definite term allows lessee to extend the term, there is no necessity for lessee to
duly notify lessor of his desire to so extend the term, unless the contrary is stipulated.
2. “May be extended” as stipulation: lessee can extend without lessor’s consent, but lessee must notify
lessor.
3. “May be extended for 6 years, agreed upon by both parties” as stipulation: this must be interpreted in
favor of the lessee. Hence, ordinarily the lessee, at the end of the original period, may either:

193
(a) Leave the premises
(b) Remain in possession
4. In co-ownership, assent of co-owner is needed; otherwise, it is void or ineffective as against non-
consenting co-owners.
5. Where according to the terms of the contract, the lease can be extended only by the written consent of
the parties thereto, no right of extension can rise without such written consent.
Implied new lease (Tacita Reconducion)

• Lease that arises if at the end of the contract the lessee should continue enjoying the thing leased for 15
days with the acquiescence of the lessor, unless a notice to the contrary had previously been given by either
party.
• Period of the implied new lease is not that of the original contract, but the time established in Arts. 1682
and 1687 (see Duration of Lease above).
• Other terms of the original contract are revived except option to purchase in case such was in the original
contract.
NOTE: Terms that are revived are only those which are germane to the enjoyment of possession, but not
those with respect to special agreements which are by nature foreign to the right of occupancy or enjoyment
inherent in a contract of lease – such as an option to purchase the leased premises. (Dizon v. Magsaysay,
G.R. No. 23399, 1974)
Requisites for Implied New Lease (ENC)

1. The term of the original contract has Expired;
2. The lessor has Not given the lessee a notice to vacate;
3. The lessee Continued enjoying the thing leased for at least 15 days with the acquiescence of the lessor.
When there is no implied new lease

(a) When before or after the expiration of the term, there is a notice to vacate given by either party.
(b) When there is no definite fixed period in the original lease contract as in the case of successive renewals.
EXTENSION OF LEASE CONTRACT RENEWAL OF LEASE CONTRACT

Original contract subsists Original contract ceases to exist
Creates additional term Creates a new contract
Perpetual Lease
• A lease contract providing that the lessee can stay in the premises for as long as he wants and for as long
as he can pay the rentals and its increases.
• This is not permissible; it is a purely potestative condition because it leaves the effectivity and enjoyment
of leasehold rights to the sole and exclusive will of the lessee.
Sublease
• A lessee may sublease the thing leased unless there is an express prohibition to do so.
• Remedy of lessor if lessee violates prohibition: action for rescission of the lease and damages.
• If the prohibition to sublease is not express but only implied, the sublease will still be allowed.
• Duration of sublease cannot be longer than that of the lease to which it is dependent.
• The prohibition against subleasing may not embrace the taking in of boarders. (Mallare v. Court of
Appeals, G.R. No. 85108, 1989)
• In a sublease arrangement, there are two distinct leases: the principal lease and the sublease.
SUBLEASE ASSIGNMENT OF LEASE

Lessee remains a party in the contract. Lessee is disassociated from the original contract of
lease.
Two leases and two distinct juridical relationship Only one (lessor-assignee who becomes the lessee)
(lessor-lessee and sublessor-sublessee) because lessee transmits absolutely his rights and
his personality disappears

194
Sublessee does not have any direct action against Assignee has a direct action against the lessor,
the lessor there being novation
Subleasing is allowed unless there is an express Assignment is not allowed unless the lessor gives
prohibition his consent
NOTE: The sub-lessee is primarily liable to his sub-lessor and only a court can extinguish or modify this
primary liability if the sub-lessor contests the pre-termination of the principal lease by the lessor. (Tamio
v. Ticson, G.R. No. 154895, 2004)
Circumstances when a sub-lessee is made liable to the lessor:

i. For all acts which affect the use and preservation of the thing leased in the manner stipulated between the
lessor and the lessee.
ii. For any rent due to the lessor from the lessee which the latter failed to pay:
• Sublessee is subsidiarily liable
• Sublessee shall not be responsible beyond amount of rent due from him, in accordance with the
terms of the sublease, at the time of the extrajudicial demand by the lessor.
Grounds for Ejectment

(a) When the period agreed upon or that which is fixed for the duration of leases (Arts.1682, 1687) has
expired (see Duration of Lease).
(b) Lack of payment of the price stipulated.
• In case lessor refuses to accept rentals, lessee should make tender of payment, and consignation
otherwise there is no payment.
• Willingness to pay is not payment.
(c) Violation of any of the conditions agreed upon in the contract.
(d) When the lessee devotes thing leased to any use or service not stipulated which causes the deterioration
thereof, or if he does not observe the requirement in Art. 1657.
 In a contract of lease, the twin remedies of rescission and judicial ejectment become available after
either the failure to pay rent or to comply with the conditions of the lease.
 Technically, no extrajudicial rescission effectively takes place as a result of the violations until the
demand to pay or comply is duly served and is rejected or disregarded by the lessee.
 The tenant's refusal to heed the demand to vacate, coming after the demand to pay or to comply
similarly went unheeded, renders unlawful the continued possession of the leased premises. (Cebu
Automatic Motors, Inc. vs. General Milling Corporations, G.R. No. 151168, 2010)
The lessor may judicially eject the lessee for any of the following causes: (EPCU)
1. When the period agreed upon, or that which is fixed for the duration of leases under Articles 1682 and
1687, has Expired;
2. Lack of Payment of the price stipulated;
3. Violation of any of the Conditions agreed upon in the contract.
Lessee devotes the thing leased to any Use or service not stipulated which causes the deterioration thereof;
or if he does not observe the requirement in No. 2 of Article 1657.

195

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I.

A. Effect and application of laws

When the Laws Become Effective

Compliance with the Law

General Rule: Laws are not retroactive. (Art. 4)

Exceptions to the exception (prospective):

MANDATORY OR PROHIBITORY LAWS

Requisites of a valid waiver: (Herrera v. Borromeo)

Exceptions: When waiver is

Repeal of Laws (Art. 7)

CIVIL LAW | PEÑALOSA

Principle of Abuse of Rights (Art. 19)

Standards to Observe in the Exercise of One’s Rights or Performance of Duty:

Acts Contrary to Law (Art. 20)

Acts Contra Bonos Mores (Art. 21)

Actions for Breach of Promise to Marry

Unjust Enrichment / Accion in rem verso (Art. 22)

Conditions for Unjust Enrichment to Arise

CIVIL LAW | PEÑALOSA

Duty of Courts to Protect a Party in a Contract

Thoughtless Extravagance (Art. 25)

Rights to Personal Dignity and Privacy (Art. 26)

Relief Against Public Officials (Art. 26)

Unfair Competition through Unjust, Oppressive, or Highhanded Methods (Art. 28)

APPLICABILITY OF PENAL LAWS

Territoriality Rule (Art. 14)

Governing Laws (Arts. 14-17)

CIVIL LAW | PEÑALOSA

Principle of Generality: Law applies to

Note: The enumeration is governed by the

Exception: If executed before Philippine

II. PERSONS AND FAMILY RELATIONS

CIVIL LAW | PEÑALOSA

Rules on Survivorship (Art. 43)

Laws Governing Juridical Persons (Art. 45):

Rights of a Juridical Person (Art. 46)

Restrictions on Capacity to Act (MInD-ICIP)

Circumstances that Modify or Limit Capacity to Act (FAT-DA-PAPIII)

CIVIL LAW | PEÑALOSA

DOMICILE AND RESIDENCE OF PERSONS

Place of Domicile (Art. 50-51)

A minor follows the domicile of his parents

Requirements for the Acquisition of New Domicile

CIVIL LAW | PEÑALOSA

Identity of names and surnames

Between ascendants and descendants (Art. 375):

Except: Clerical or typographical errors and change of first name or nickname.

Grounds for change of first name or nickname:

Usurpation of name or surname

What shall be recorded in the civil register

CIVIL LAW | PEÑALOSA

Other matters pertaining to the registration of civil status

Case: Republic v. Gallo, G.R. No. 207074, 2018

CIVIL LAW | PEÑALOSA

a. Civil Code provisions

A judge may appoint a representative when:

Who may file:

Scope of authority of representative: All that may be necessary (Art. 381)

The order of the judge shall: