Boc 2016 Pre Week 03 Civ

2016

University of the Philippines College of Law Pre-Week Reviewer

PRE-WEEK

CIVIL LAW

UP Law Bar Operations Commission 2016

UP LAW BAR OPS 2016

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CIVIL LAW PRE-WEEK

PERSONS AND FAMILY RELATIONS Q1: Rafael, a wealthy bachelor, filed a petition for the adoption of Dolly, a one-year old foundling who had a severe heart ailment. During the pendency of the adoption proceedings, Rafael died of natural causes. The Office of the Solicitor General files a motion to dismiss the petition on the ground that the case can no longer proceed because of the petitioner’s death. (1) Should the case be dismissed? Explain. (2) Will your answer be the same if it was Dolly who died during the pendency of the adoption proceedings? Explain. A: (1) It depends on the stage of the proceedings when Rafael died. If he died after all the requirements under the law have been complied with and the case is already submitted for resolution, the court may grant the petition and issue a decree of adoption despite the death of the adopter (Section 13, RA 8552). Otherwise, the death of the petitioner shall have the effect terminating the proceedings. (2) No, if it was Dolly who died, the case should be dismissed. Her death terminates the proceedings (Art. 13, Domestic Adoption Law). Q2: Emmanuel and Margarita, American citizens and employees of the U.S. State Department, got married in the African state of Kenya where sterility is a ground for annulment of marriage. Thereafter, the spouses were assigned to the U.S. Embassy in Manila. On the first year of the spouses’ tour of duty in the Philippines, Margarita filed an annulment case against Emmanuel before a Philippine court on the ground of her husband’s sterility at the time of the celebration of the marriage. Assume Emmanuel and Margarita are both Filipinos. After their wedding in Kenya, they come back and took up residence in the Philippines. Can their marriage be annulled on the ground of Emmanuel’s sterility? Explain. A: No, the marriage cannot be annulled in the Philippines. The Philippine court shall apply the law of the place where the marriage was celebrated in determining its formal validity (Article 26, FC; Article 17, NCC). However, while Kenyan law governs the formal validity of the marriage, the legal capacity of the Filipino parties to the marriage is governed not by Kenyan law but by Philippine law (Article 15, NCC). Sterility of a party as a ground for the annulment of the marriage is not a matter of form but a matter of legal capacity. Since sterility does not constitute absence or defect in the legal capacity of the parties under Philippine law, there is no ground to avoid or annul the marriage. Hence, the Philippine court should deny the petition. Q3: Harry married Wilma, a very wealthy woman. Barely five (5) years into the marriage, Wilma fell in love with Joseph. Thus, Wilma went to a small country in Europe, became a naturalized citizen of that country, divorced Harry, and married Joseph. A year thereafter, Wilma and Joseph returned and established permanent residence in the Philippines. Is the divorce obtained by Wilma from Harry recognized in the Philippines? Explain your answer. A: Yes, the divorce obtained by Wilma is recognized as valid in the Philippines. At the time she obtained the divorce, she was already a foreign national having been naturalized as a citizen of that “small country in Europe”. Based on precedents established by the Supreme Court (Bayot v. CA, G.R. No. 155635, November 7, 2008), divorce obtained by a foreigner is recognized in the Philippines if validly obtained in accordance with his or her national law .

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Q4: Roderick and Faye were high school sweethearts. When Roderick was 18 and Faye, 16 years old, they started to live together as husband and wife without the benefit of marriage. When Faye reached 18 years of age, her parents forcibly took her back and arranged for her marriage to Brad. Although Faye lived with Brad after the marriage, Roderick continued to regularly visit Faye while Brad was away at work. During their marriage, Faye gave birth to a baby girl, Laica. When Faye was 25 years old, Brad discovered her continued liaison with Roderick and in one of their heated arguments, Faye shot Brad to death. She lost no time in marrying her true love Roderick, without a marriage license, claiming that they have been continuously cohabiting for more than 5 years. Was the marriage of Roderick and Faye valid? A: No. The marriage of Roderick and Faye is not valid. Art. 4, FC provides that the absence of any of the essential or formal requisites renders the marriage void ab initio. However, no license shall be necessary for the marriage of a man and a woman who have lived together as husband and wife for at least 5 years and without any legal impediment to marry each other. In Republic v. Dayot, G.R. No. 175581, March 28, 2008, this five-year period is characterized by exclusivity and continuity. In the present case, the marriage of Roderick and Faye cannot be considered as a marriage of exceptional character, because there were 2 legal impediments during their cohabitation: minority on the part of Faye, during the first two years of cohabitation; and, lack of legal capacity, since Faye married Brad at the age of 18. The absence of a marriage license made the marriage of Faye and Roderick void ab initio. Q5: Explain the Tender-age presumption in child custody cases. A: The tender-age presumption is embodied in Article 213 of the Family Code, which states that in awarding custody, “the Court shall take into account all relevant considerations, especially the choice of the child over seven years of age, unless the parent chosen is unfit.” It is an express statutory recognition that, as a general rule, a mother is to be preferred in awarding custody of children under the age of seven. This presumption may be overcome only by compelling evidence of the mother’s unfitness. Q6: Rodolfo, married to Sharon, had an illicit affair with his secretary, Nanette, a 19-year old girl, and begot a baby girl, Rona. Nanette sued Rodolfo for damages: actual, for hospital and other medical expenses in delivering the child by caesarean section; moral, claiming that Rodolfo promised to marry her, representing that he was single when, in fact, he was not; and exemplary, to teach a lesson to likeminded Lotharios. When Rona reaches seven (7) years old, she tells Rodolfo that she prefers to live with him, because he is better off financially than Nanette. If Rodolfo files an action for the custody of Rona, alleging that he is Rona’s choice as custodial parent, will the court grant Rodolfo’s petition? Why or why not? A: No, because Rodolfo has no parental authority over Rona. He who has the parental authority has the right to custody. Under the Family Code, the mother alone has parental authority over the illegitimate child. This is true even if illegitimate father recognized the child and even though he is giving support for the child. To acquire custody over Rona, Rodolfo should first deprive Nanette of parental authority if there is ground under the law, and in proper court proceedings. In the same action, the court may award custody of Rona to Rodolfo if it is for her best interest. Q7: Gianna was born to Andy and Aimee, who at the time Gianna's birth were not married to each other. While Andy was single at the time, Aimee was still in the process of securing a judicial declaration of nullity on her marriage to her ex-husband. Gianna's birth certificate, which was signed by both Andy and Aimee, registered the status of Gianna as "legitimate", her surname carrying that of Andy's and that her parents were married to each other. Assuming that Aimee is successful in declaring her former marriage void, and Andy and Aimee subsequently married each other, would Gianna be legitimated? PAGE 2 OF 30

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A: Gianna cannot be legitimated by the subsequent marriage of Andy and Aimee. Art. 177 of the FC provides that "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." In the present case, a legal impediment was existing at the time of the conception of Gianna. Her mother, Aimee, was still in the process of securing judicial declaration of nullity on her marriage to her ex-husband. Q8: Spouses Primo and Monina Lim, childless, were entrusted with the custody of two (2) minor children, the parents of whom were unknown. Eager of having children of their own, the spouses made it appear that they were the children’s parents by naming them Michelle P. Lim and Michael Jude Lim. Subsequently, Monina married Angel Olario after Primo’s death. She decided to adopt the children by availing the amnesty given under R.A. 8552 to those individuals who simulated the birth of a child. She filed separate petitions for the adoption of Michelle, then 25 years old and Michael, 18. Both Michelle and Michael gave consent to the adoption. The trial court dismissed the petition and ruled that Monina should have filed the petition jointly with her new husband. Monina, in a Motion for Reconsideration argues that mere consent of her husband would suffice and that joint adoption is not needed, for the adoptees are already emancipated. Is the trial court correct in dismissing the petitions for adoption? Explain. A: Yes, the trial court was correct. At the time the petitions for adoptions were filed, petitioner had already remarried. Under the law, husband and wife shall adopt jointly, except in the cases enumerated in the law. The adoption cases of Michelle and James do not fall in any of the exceptions provided in the law where a spouse is permitted to adopt alone. Hence, Monina should adopt jointly with her husband Angel (Adoption of Michelle P. Lim, G.R. Nos. 168992-93, May 21, 2009). Q9: Zirxthoussous delos Santos filed a petition for change of name with the Office of the Civil Registrar of Mandaluyong City under the administrative proceeding provided in Republic Act No. 9048. He alleged that his first name sounds ridiculous and is extremely difficult to spell and pronounce. After complying with the requirements of the law, the Civil Registrar granted his petition and changed his first name Zirxthoussous to "Jerry." His full name now reads “Jesus delos Santos.” Jesus delos Santos moved to General Santos City to work in a multi-national company. There, he fell in love and married Mary Grace delos Santos. She requested him to have his first name changed because his new name "Jerry delos Santos" is the same name as that of her father who abandoned her family and became a notorious drug lord. She wanted to forget him. Hence, Jerry filed another petition with the Office of the Local Civil Registrar to change his first name to "Roberto." He claimed that the change is warranted because it will eradicate all vestiges of the infamy of Mary Grace's father. Will the petition for change of name of Jerry delos Santos to Roberto delos Santos under Republic Act No. 9048 prosper? Explain. A: No, under the law, Jerry may only change his name once. In addition, the petition for change of name may be denied on the following grounds: (1) Jerry is neither ridiculous, nor tainted with dishonor nor extremely difficult to write or pronounce. (2) There is no confusion to be avoided or created with the use of the registered first name or nickname of the petitioner. (3) The petition involves the same entry in the same document, which was previously corrected or changed under this Order [Rules and Regulations Implementing RA 9048].

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Q10: Jaime, who is 65, and his son, Willy, who is 25, died in a plane crash. There is no proof as to who died first. Jaime’s only surviving heir is his wife, Julia, who is also Willy’s mother. Willy's surviving heirs are his mother, Julia and his wife, Wilma. (1) In the settlement of Jaime's estate, can Wilma successfully claim that her late husband, Willy had a hereditary share since he was much younger than his father and, therefore, should be presumed to have survived longer? (2) Suppose Jaime had a life insurance policy with his wife, Julia, and his son, Willy, as the beneficiaries. Can Wilma successfully claim that one-half of the proceeds should belong to Willy's estate? A: (1) No, Wilma cannot successfully claim that Willy had a hereditary share in his father's estate. Under Art. 43, Civil Code, two persons "who are called to succeed each other” are presumed to have died at the same time, in the absence of proof as to which of them died first. This presumption of simultaneous death applies in cases involving the question of succession as between the two who died, who in this case are mutual heirs, being father and son. (2) Yes, Wilma can invoke the presumption of survivorship and claim that one-half of the proceeds should belong to Willy's estate, under Sec. 3 (jj) par. 5 Rule 131, Rules of Court, as the dispute does not involve succession. Under this presumption, the person between the ages of 15 and 60 years is deemed to have survived one whose age was over 60 at the time of their deaths. The estate of Willy endowed with juridical personality stands in place and stead of Willy, as beneficiary. Q11: Larry, a 10-year-old boy, accidentally shot his classmate, Dennis, who died. He was then living with his biological parents, while a petition for his adoption was pending. The accident occurred in Manila in October 2015, while his prospective adopters were in the US. A month later, the petition for adoption was granted. The parents of Dennis filed an action for damages against Larry’s biological parents, who raised the defense that the adoptive parents should answer for the claim since parental authority had been transferred. Are they correct? A: No, they are not correct. The biological parents must answer for damages because parental authority is not retroactively transferred to and vested in the adopted parents so as to impose a liability upon the adopting parents accruing at the time when the adopting parents had no actual or physical custody over the child. To hold that parental authority had been retroactively lodged in the adoptive parents so as to burden them with the liability for a tortious act they could not have foreseen and which they could not have prevented, being in the US at that time, would be unfair and unconscionable. [Tamargo v. CA, G.R. No. 85044, June 3, 1992] Q12: Explain the concept of provisional personality of the conceived child. A: A conceived child, although as yet unborn, is given by law a provisional personality of its own for all purposes favorable to it, as explicitly provided in Article 40 of the Civil Code. Its personality is provisional because it depends upon the child being born alive later under the following conditions: 1) the child must be alive for at least 24 hours from complete delivery, if it had an intra-uterine life of less than 7 months, or 2) the child must be alive at the time it is completely delivered from the mother’s womb, if it had an intrauterine life of at least 7 months. [Quimiguing v. Icao, G.R. No. 26795, July 31, 1970] Q13: Daya and Bennet, a widower with two children, were married in 2000. No stipulation was made regarding the property regime governing their marriage. Daya had no property in her name at the time of the marriage, while Bennet owned several parcels of land and other properties. In 2005, several of these lands were levied upon as a result of an adverse judgment in a civil suit. Daya filed for the annulment of the levy, arguing that she was a co-owner of said property and she should therefore have been impleaded in the suit. Is Daya correct? PAGE 4 OF 30

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A: No. Absent any stipulation in the marriage settlements, the governing property regime between the spouses is that of absolute community of property, pursuant to Art. 75 of the Family Code. Article 92 (3) of the Family Code excludes from the absolute community those acquired before the marriage of a spouse with legitimate descendants by a former marriage and the fruits or income of that property. Therefore, none of those belong to 2nd marriage. [Abrenica v. Abrenica, G.R. No. 180572, June 18, 2012]

PROPERTY Q14: Distinguish between illegal and impossible conditions in a simple donation v. illegal and impossible conditions in an onerous donation A: Illegal and impossible in conditions in a simple donation are considered as not written. Such conditions, shall therefore, be disregarded but the donation remains valid (Art. 727, NCC). On the other hand, illegal and impossible donations imposed in an onerous donation shall annul the donation (Art. 1183, NCC). This is so, because onerous donations are governed by the law on contracts (Art. 733, NCC) Q15: Distinguish between occupation and possession A: Occupation is an original mode of acquiring ownership (Art. 712, NCC). Things appropriable by nature which are without an owner, as a general rule, may be acquired by occupation. Possession, on the other hand, is the holding of a thing or an enjoyment of a right (Art. 523, NCC). It may be the real right of possession or it can be merely the right to possess, which are among the basic rights of ownership. Q16: The renunciation by a co-owner of his undivided share in the co-owned property in lieu of the performance of his obligation to contribute to taxes and expenses for the preservation of the property constitutes dacion en pago. True or False? A: True. Under Art. 488, NCC, a co-owner may renounce his share in the co-owned property in lieu of paying for his share in the taxes and expenses for the preservation of the co-owned property. In effect, there is dacion en pago because the co-owner is discharging is monetary obligation by paying it with his non-monetary interest in the co-owned property. Q17: Rudy executed a deed of donation covering a three-hectare land in favor of his daughter, Sara. The deed provides: “For and in consideration of her love and service Sara has shown and given to me, I hereby freely, voluntarily and irrevocable donate to her my three-hectare land covered by TCT No. 56480, located in Davao City, Davao. This donation shall take effect upon my death.” The deed also contained Sara’s signed acceptance, and an attached notarized declaration by Rudy and Sara that the land will remain in Rudy’s possession and cannot be alienated, encumbered, sold, or disposed of while Josefa is still alive. Is the donation one of inter vivos or mortis causa? A: The donation is a donation inter vivos. True that under Art. 729, NCC, when the donor intends that the donation shall take effect during the lifetime of the donor, though the property shall not be delivered until after the donor’s death, this shall be a donation inter vivos. However, what is most significant in determining the type of donation is the absence of stipulation that the donor could revoke the donation; on the contrary, the deeds expressly declare them to be “irrevocable,” a quality absolutely incompatible with the idea of conveyanes mortis causa where revocability is the essence of the act, to the extent that a testator cannot lawfully waive or restrict his right of revocation. The provisions of the deed of donation which state that the same will only take effect upon the death of the donor and that there is a prohibition to alienate, encumber, dispose, or sell the same should be harmonized with its express irrevocability. [Austria-Magat v. CA, G.R. No. 106755, February 1, 2002] PAGE 5 OF 30

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Q18: What are the rights of an owner as against a builder in good faith? A: The owner of the land on which anything has been built, sown, or planted in good faith shall have the right: (1) To appropriate as his own the works after payment of the indemnity provided for in Arts. 546 & 548, NCC (2) To oblige the one who built to pay the price of the land. However, the builder cannot be obliged to buy the land if its value is considerably more than that of the building. In such case, he shall pay reasonable rent to the owner of the land who does not choose to appropriate the building after proper indemnity [Art. 448, NCC] The house constructed thereon is considered as useful expense, since it increased the value of the lot. Should the owner decide to appropriate the house, the builders in good faith are entitled to the right of retention pending reimbursement of the expenses they incurred or the increase in value which the thing may have acquired by reason of the improvement. [Art. 546, NCC] Q19: The properties of Khloe and Kendall, who are neighbours, lie along the banks of the Marikina River. At certain times of the year, the river would swell and as the water recedes, soil, rocks and other materials are deposited on Khloe and Kendall’s properties. This pattern of the river swelling, receding and depositing soil and other materials being deposited on the neighbours’ properties have gone on for many years. Knowing this pattern, Khloe constructed a concrete barrier about 2 meters from her property line and extending towards the river, so that when the water recedes, soil and other materials are trapped within this barrier. After several years, the area between Khloe's property line to the concrete barrier was completely filled with soil, effectively increasing Khloe's property by 2 meters. Kendall's property, where no barrier was constructed, also increased by one meter along the side of the river. a) Can Khloe and Kendall legally claim ownership over the additional 2 meters and one meter, respectively, of land deposited along their properties? b) If Khloe and Kendall’s properties are registered, will the benefit of such registration extend to the increased area of their properties? A: a) Only Kendall can claim ownership over the additional one meter of land deposited along her property. Art. 457 of the Civil Code provides that "to the owners of lands adjoining the banks of river belong the accretion which they gradually receive from the effects of the current of the water." Where the land is not formed solely by the natural effect of the water current of the river bordering land but is also the consequences of the direct and deliberate intervention of man, it is man-made accretion and a part of the public domain (Tiongco v. Director of Lands, cited in Nazareno v. C.A.). Thus, Khloe cannot legally claim ownership of the additional 2 meters of land along her property because she constructed a concrete barrier about 2 meters from her property causing deposits of soil and other materials when the water recedes. In other words, the increase in her property was not caused by nature but was man-made. b) If the properties of Khloe and Kendall are registered, the benefit of such registration does not extend to the increased area of their properties. Accretion does not automatically become registered land because there is a specific technical description of the lot in its Torrens title. There must be a separate application for registration of the alluvial deposits under the Torrens System [Grande v. CA, G.R. No. L-17652, June 30, 1962].

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Q20: Angelina, a building contractor, was engaged by Brad to construct a house on a lot which he owns. While digging on the lot in order to lay down the foundation of the house, Angelina hit a very hard object. It turned out to be the vault of the old Banco de las Islas Filipinas. Using a detonation device, Angelina was able to open the vault containing old notes and coins which were in circulation during the Spanish era. While the notes and coins are no longer legal tender, they were valued at P100 million because of their historical value and the coins’ silver nickel content. Who among the following owns the notes and coins? (i). Angelina, as finder; (ii). Brad, as owner of the property where they were found; (iii). Bank of the Philippine Islands, as successor-in-interest of the owner of the vault; (iv). The Philippine Government because of their historical value. A: The notes and coins are no longer owned by the Bank, which has either lost or abandoned the vault and its contents, and it has not taken any effort to search, locate or recover the vault. In any case, since the vault is in actual possession of Angelina, the bank may attempt, in a judicial action to recover, to rebut the presumption of ownership in favor of Angelina and Brad (Art. 433, Civil Code). Hidden treasure is any hidden and unknown deposit of money, jewelry, or other precious objects, the lawful ownership of which does not appear. Given the age and importance of the items found, it would be safe to consider the vault, notes and coins abandoned by BPI and its predecessor (Art. 439, Civil Code). It belongs to the owner of the land on which it is found. When the discovery is made on the property of another, or of the State and by chance, one-half of it shall belong to the finder who is not a trespasser (Art. 438, Civil Code). As applied, Angelina, as finder, and Brad, as owner of the land, are entitled to share 50-50 in the treasure. The government can only claim if it can establish that the notes and coins are of interest to science or the arts, then it must pay just price of the things found, to be divided equally between Angelina and Brad (Art. 438, Civil Code). Q21: Tom donated to Calvin a parcel of land in 1980. Tom made the deed of donation, entitled ―Donation Inter Vivos, in a public instrument and Calvin accepted the donation in the same document. It was provided in the deed that the land donated shall be immediately delivered to Calvin and that Calvin shall have the right to enjoy the fruits fully. The deed also provided that Tom was reserving the right to dispose of said land during his lifetime, and that Calvin shall not register the deed of donation until after Tom’s death. Upon Tom’s death, Taylor, Tom’s widow and sole heir, filed an action for the recovery of the donated land, contending that the donation made by Tom is a donation mortis causa and not a donation inter vivos. Will said action prosper? Explain your answer. A: Yes, the action will prosper. The donation is a donation mortis causa because the reservation is to dispose of all the property donated and, therefore, the donation is revocable at will. Accordingly, the donation requires the execution of a valid will, either notarial or holographic (Arts 755, 728 NCC). Q22: A drug lord and his family reside in a small bungalow where they sell shabu and other prohibited drugs. When the police found the illegal trade, they immediately demolished the house because according to them, it was a nuisance per se that should be abated. Can this demolition be sustained? Explain. A: No, the demolition cannot be sustained. The house is not a nuisance per se or at law as it is not an act, occupation, or structure which is a nuisance at all times and under any circumstances, regardless of location or surroundings. A nuisance per se is a nuisance in and of itself, without regard to circumstances.

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Q23: Spouses Manny and Jinky donated a 3-hectare residential land to the City of General Santos on the condition that the city government would build thereon a public park with a boxing arena, the construction of which shall commence within six (6) months from the date the parties ratify the donation. The donee accepted the donation and the title to the property was transferred in its name. Five years elapsed but the public park with the boxing arena was never started. Considering the failure of the donee to comply with the condition of the donation, the donor-spouses sold the property to Koko who then sued to recover the land from the city government. Will the suit prosper? A: Koko has no right to recover the land. It is true that the donation was revocable because of breach of the conditions. But until and unless the donation was revoked, it remained valid. Hence, Spouses Manny and Jinky had no right to sell the land to Koko. One cannot give what he does not have. What the donors should have done first was to have the donation annulled or revoked. And after that was done, they could validly have disposed of the land in favor of Koko. Q24: What are the indispensable requirements in an action to quiet to title? A: (1) that the plaintiff has a legal or equitable title to or interest in the real property subject of the action; and (2) that there is a cloud on his title by reason of any instrument, record, deed, claim, encumbrance or proceeding, which must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity. [Mananquil v. Moico, G.R. No. 180076, November 21, 2012] Q25: What is the difference between Quieting of Title and Removal of Cloud? A: In quieting of title, there isn’t always an adverse claim (eg. land registration cases). In removal of cloud, there is always an adverse claim by virtue of an instrument, record, clam, encumbrance, or proceeding. An action to quiet title is a remedial action involving a present adverse claim. An action to remove cloud, on the other hand, is a preventive action to prevent a future cloud on the title. Q26: Under RA 4726 or the Condominium Act, what are the restrictions on the transfer or conveyance of a unit or an apartment, office or store or other space in the condominium? A: The transfer shall include the transfer or conveyance of the undivided interests in the common area, or in a proper case, the membership or shareholdings in the condominium corporation. Provided, that (a) Where the common areas in the condominium project are owned by the owners of separate units as coowners thereof, no condominium unit therein shall be conveyed or transferred to persons other than Filipino citizens, or corporations at least sixty percent of the capital stock of which belong to Filipino citizens, except in cases of hereditary succession; and (b) Where the common areas in a condominium project are held by a corporation, no transfer or conveyance of a unit shall be valid if the concomitant transfer of the appurtenant membership or stockholding in the corporation will cause the alien interest in such corporation to exceed the limits imposed by existing laws. (Section 5, RA 4726)

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SUCCESSION Q27: Gary was signing his 47-page notarial will in the presence of Ash, Brock, and Misty. Ash was on his phone playing Pokemon Go. Brock was occasionally looking out the window to look for pretty girls. Only Misty was actively assisting Gary in signing his will, making sure all the pages contained his signature. Is Gary’s notarial will valid? A: Yes. While the rule is absolute that one who makes a will must sign the same in the presence of the witnesses and that the witnesses must sign in the presence of each other, as well as in the presence of the one making the will, nevertheless, actually seeing of the signatures made is not necessary. It is sufficient if the signatures are made where it is possible for each of the necessary parties, if they desire to see, may see the signatures placed upon the will. As long as the parties are actually and physically present and in such position that they could see everything which took place by merely casting their eyes in the proper direction, and without any physical obstruction, the will is valid [Jaboneta v. Gustilo, G.R. No. 1641, January 19, 1906 and Tua v. Kuan, G.R. No. 6845, September 1, 1914]. Q28: Stu and his wife Didi had a child named Tommy. Stu had an extramarital affair with their neighbor and thus sired a boy named Dil. Lou, Stu’s father, approved of Stu’s extramarital affair because for him it was a macho thing to do. Although at first it was painful for Didi, she eventually accepted Dil into their lives. To surprise Dil on his 21st birthday, Stu and Didi went to Ever Gotesco to buy him a present. Unfortunately, the couple died at the hands of the merciless ASG. Dil was left with Tommy and their grandfather Lou, who took good care of them. Lou died intestate a few years later. Dil sought to inherit from Lou, but Tommy opposed. Is Tommy’s opposition valid? A: Yes. Under the Iron Curtain Bar rule under Article 992, an illegitimate child has no right to inherit ab intestado from the legitimate children and relatives of his father or mother; nor shall such children or relatives inherit in the same manner from the illegitimate child. Because Dil is an illegitimate child, he cannot inherit from the Lou, a legitimate relative of his father. Q29: John and Yoko, British citizens at birth, acquired Philippine citizenship by naturalization after their marriage. During their marriage they acquired substantial landholdings in London and in Manila. They had three children, Paul, George, and Ringo. In one of their trips to London, the John and Yoko executed a joint will appointing each other as their heirs and providing that upon the death of the survivor between them the entire estate would go to Paul and George only but the two could not dispose of nor divide the London estate as long as they live. On their plane ride back to Manila, John and Yoko became victims of an ISIS terrorist attack. Upon hearing the news, Paul and George filed a petition for probate of their parent's will before a Manila Regional Trial Court. Should the will be admitted to probate? A: No. The will cannot be admitted to probate because a joint will is expressly prohibited under Art. 818 of the Civil Code. This provision applies John and Paula became Filipino citizens after their marriage. Q30: Ronald executed a notarial will where he designated Birdie to 1/2, Grimace to 1/4, and Hamburglar to 1/8 of his estate. No other dispositions were made in the said will. Hetty, Ronald’s wife, and Jollibee, Ronald’s youngest child, seek for the annulment of the institution of Birdie, Grimace and Hamburglar as heirs on the ground of preterition. Will Hetty and Jollibee’s claim prosper? What is their remedy, if any? A: No. There is no preterition in this case. With respect to Hetty, no preterition may arise as she is not a compulsory heir in the direct line. With respect to Jollibee, there is also no preterition because Ronald did not dispose of his entire estate in the will. In order for preterition to arise, there must be total and PAGE 9 OF 30

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complete omission of the compulsory heir in the inheritance, such that the said omitted compulsory heir did not and has not received anything from the testator by any title whatsoever. Here, Jollibee was not completely omitted as 1/8 of Ronald’s estate remains after fulfilment of the testamentary dispositions. However both Hetty and Jollibee being compulsory heirs, they are entitled to completion of their legitimes under Arts. 906 and 907 of the CC; hence Birdie, Grimace and Hamburglar’s shares will be reduced accordingly. [CC, art. 854]. Q31: Molly bequeathed her properties to her sons, Bill, Charlie, Percy, Fred, George and Ron through a notarial will. Angered by the small size of his Christmas sweater, Ron cursed his mother and repudiated his share in the will. Ron died at the age of 40 leaving his wife, Hermione, and two children, Rose and Hugo. 2 months after the death of her favorite son Ron, Molly passed away, leaving behind her 5 sons and their respective grandchildren. Can Rose and Hugo inherit from their grandmother Molly in representation of their father Ron? A: No. Under Art. 977, one who repudiates their share may not be represented. Since Ron repudiated his share, his children cannot inherit through representation. Q32: Will the failure of the instrumental witnesses to sign at the end of the will invalidate the same? A: No. Art. 805 only requires that the witnesses attest to the execution of the will, and to subscribe for the purpose of identifying the will as the one executed by the testator. Thus, the signatures of the instrumental witnesses on the left margin of the pages of the will attested not only to the genuineness of the signature of the testator but also the due execution of the will as embodied in the attestation clause. While perfection in the drafting of a will may be desirable, unsubstantial departure from the usual forms should be ignored, especially where the authenticity of the will is not assailed. [Taboada v. Rosal, G.R. No. L-36033, November 5, 1982] Q33: On December 1, 2000, Dr. Juanito Fuentes executed a holographic will, wherein he gave nothing to his recognized illegitimate son, Jay. Dr. Fuentes left for the United States, passed the New York medical licensure examinations, resided therein, and became a naturalized American citizen. He died in New York in 2007. The laws of New York do not recognize holographic wills or compulsory heirs. Can the holographic will of Dr. Fuentes be admitted to probate in the Philippines? Why or why not? A: Yes, the holographic will of Dr. Fuentes may be admitted to probate in the Philippines because there is no public policy violated by such probate. The only issue at probate is the due execution of the will which includes the formal validity of the will. As regards formal validity, the only issue the court will resolve at probate is whether or not the will was executed in accordance with the form prescribed by the law observed by the testator in the execution of his will. For purposes of probate in the Philippines, an alien testator may observe the law of the place where the will was executed (Art 17, NCC), or the formalities of the law of the place where he resides, or according to the formalities of the law of his own country, or in accordance with the Philippine Civil Code (Art. 816, NCC). Since Dr. Fuentes executed his will in accordance with the Philippine law, the Philippine court shall apply the New Civil Code in determining the formal validity of the holographic will. The subsequent change in the citizenship of Dr. Fuentes did not affect the law governing the validity of his will. Under the new Civil Code, which was the law used by Dr. Fuentes, the law enforced at the time of execution of the will shall govern the formal validity of the will (Art. 795, NCC). (2009 Bar Question)

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OBLIGATIONS AND CONTRACTS Q34: What are the general principles in contract? A: The general principles are: (1) Obligatory force or character of contracts [Art. 1159]; (2) Autonomy in that parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. [Art. 1306] (3) Mutuality in that the contract must bind both contracting parties; its validity or compliance cannot be left to the will of one of them. [Art. 1308] (4) Relativity in that they only take effect between the parties, their assigns and heirs, except when the obligations are not transmissible by their nature, or by stipulation, or by provision of law. [Art. 1311] Q35: Distinguish civil from natural obligations. A: Civil obligations are those obligations that give a right or action to compel their performance. Natural obligations do not grant a right of action to enforce their performance, but the voluntary fulfillment authorizes the retention of what may have been delivered or rendered by reason thereof. [CC, Art. 1423] Q36: What is the principle of compensatio morae? A: In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. From the moment one of the parties fulfills his obligation, delay by the other begins. [NCC, art. 1169 par. 3] Q37: W, X, Y, and Z are solidary debtors to creditor A for the amount of PHP 3 Million, in equally divided shares. A sued W, Y, and Z but was able only to collect only 500,000. Can A sue X alone on the remaining 2.5 Million? A: Yes. X may be sued since the creditor may proceed against any one of the solidary debtors, or some or all of them simultaneously. [Art. 1216 par. 1] X may be sued for the entire amount remaining because in solidary obligations, each one is bound to render entire compliance with the prestation [Art. 1207]. A may sue X for the said amount even after the suit against W, Y, and Z because the demand made against one of them shall not be an obstacle to those which may subsequently be directed to others, so long as the debt has not been fully collected [Art. 1216, par. 2] Q38: X entered into a contract with Y, where Y was granted the option to purchase a certain lot owned by X for PHP 6.8 Million, to be exercised within two years. One month before the expiration of the twoyear period, X withdrew the offer and sold the said lot to Z. Y posits that since there was an option contract in his favour, the offer cannot be withdrawn before the period given in the option. Is Y correct? A: No. While it is true that this is an option contract, since there is no distinct and separate consideration for the option, nothing bars X from withdrawing the offer before Y’s acceptance. If the option is without any consideration, the offeror may withdraw his offer by communicating such withdrawal to the offeree at anytime before acceptance; if it is founded upon a consideration, the offeror cannot withdraw his offer before the lapse of the period agreed upon. [Tuazon v. Del Rosario-Suarez, G.R. No. 168325, December 8, 2010]

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Q39: What are the modes of extinguishing obligations? A: (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: annulment, rescission, fulfillment of a resolu-tory condition, and prescription [Art. 1231, CC]. Q40: When may the courts fix the duration of a contract, and on what basis should the period be determined? A: 1) When obligation does not fix a period, but from the nature and circumstances if can be inferred that a period was intended 2) When the period depends on the will of a debtor. The courts shall determine such period as may under the circumstances have been probably contemplated by the parties [Art. 1197] The courts cannot fix a period merely because in its opinion it is or should be reasonable, but must set the time that the parties are shown to have intended. [Araneta v. Phil. Sugar Estate Dev’t., 1967] Q41: Give examples of instances where a person may be held liable for loss even in fortuitous events. A: 1) When it is declared so by stipulation, or when the nature of the obligation requires the assumption of risk [Art. 1174]. 2) Possessors in bad faith in every case. [Art. 552] 3) If the obligor delays, or has promised to deliver the same thing to two or more persons who do not have the same interest. [Art. 1165] 4) In negotiorum gestio, when the officious manager undertakes risky operations the owner was not accustomed to embark; if he had preferred his own interest to that of the owner; if he fails to return the property or business after demand by the owner; or if he had assumed management in bad faith [Art. 2147] 5) In solutio indebiti, the acceptor of payment in bad faith [Art. 2159] 6) In commodatum, when the bailee devotes the thing to a purpose different from that for which it has been intended; when he keeps the thing longer than the stipulated period or after the purpose of the commodatum has been accomplished; if the thing loaned was delivered with appraisal of value (except when stipulated); if he lends or leases the thing to another person who is not a member of his household; or when he chooses to save his own thing than the borrowed thing. [Art. 1942] Q42: What are the four requisites of a stipulation pour atrui? A: The requisites are: (1) that the stipulation in favor of a third person should be a part, not the whole, of the contract; (2) that the favorable stipulation should not be conditioned or compensated by any kind of obligation whatever; and (3) neither of the contracting bears the legal represented or authorization of third person (4) there was acceptance, express or implied, before the benefit was revoked. The acceptance may be in any form and may be implied, such as when the benefits are accepted [Florentino vs. Encarnacion, Sr., G.R. No. L-27696, September 30, 1977]

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Q43: B entered into a verbal contract of lease over his four-door apartment with G for three years with a monthly rental of P56,000. After the first year, G demanded an increase in the rental fee (to P60,000), considering that there was a new commercial development in the area and the value of the real estate surrounding the development had increased. G refused to pay the increase, or to leave the apartment. In the action for ejectment, can G testify on the verbal contract of lease? A: Yes, G may testify. Where the verbal contract has been partially executed through the partial payments made by one party duly received by the other the contract is taken out of the scope of the Statute of Frauds. [Ordua v. Fuentebella, G.R. No. 176841, June 29, 2010] Q44: In 1995, Mrs. Pacman borrowed P1,000,000 from Mr. Ghost. She and her then-13-year-old son, Pacute, signed the promissory note, which did not contain any stipulation or disclaimer as to the capacity of the signatory parties. Mrs. Pacman died after 5 years, leaving a balance of P520,000. In 2008, Mr. Ghost demanded payment from Pacute, who refused to pay, and raised the defense that he was still a minor when he signed the promissory note. Should the defense be sustained? A: Yes, Pacute cannot be bound by his signature in the promissory note, because the promissory note does not say anything about the capacity of the signers. There is no active fraud or misrepresentation, there is merely silence or constructive fraud. The principle of estoppel does not apply. Hence, as far as his share in the obligation is concerned, it is voidable because of minority or non-age. However, Pacute may still be compelled to make restitution to the extent that he may have been benefited by the money he received. Even if more than four years has elapsed since he reached the age of majority, he may still use the defense because no positive relief is prayed for. He is merely interposing his minority as an excuse from liability, and not as a basis to annul the contract. [Braganza v. Villa Abrille, G.R. No. L-12471, April 13, 1959, contrasted with Mercado v. Espiritu, G.R. No. L-11872, December 1, 1917, where there was active misrepresentation by the minor/s, thus, the defense of minority was not available] Q45: What are the essential elements of laches? A: (a) conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation complained of; (b) delay in asserting complainants rights after he had knowledge of defendant’s acts and after he has had the opportunity to sue; (c) lack of knowledge or notice by defendant that the complainant will assert the right on which he bases his suit; and (d) injury or prejudice to the defendant in the event the relief is accorded to the complainant. [Fernando v. Acuna, G.R. No. 161030, September 14, 2011]. Q46: Which contracts must appear in writing? A: The following contracts must appear in writing, as stipulated by law: (1) Donations of personal property where the value of the property exceeds P5,000 [Art. 748]; (2) Stipulations limiting common carrier’s liability [Art. 1744]; (3) Authority of agent to sell a piece of land or any interest therein [Art. 1874]; (4) Agreement to pay interest in a contract of loan [Art. 1956]; and (5) Antichresis [Art. 2134].

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Q47: Which contracts must appear in a public instrument? A: The following contracts must appear in a public instrument: (1) Donations of immovable property [Art. 749]; (2) Partnerships where real property is contributed [Art. 1771]; (3) Acts and contracts, which have for their object the creation, transmission, modification, or extinguishment of real rights over immovable property; (4) The cession, repudiation or renunciation of hereditary rights or those of the conjugal partnership of gains; (5) The power to administer property, or any other power which has for its object an act appearing or which should appear in a public document, or should prejudice a third person; (6) The cession of actions or rights proceeding from an act appearing in a public document; and (7) All other contracts where the amount involved exceeds P500 [Art. 1358]. Q48: What are the void contracts? A: Under Art. 1409: (1) Those whose cause, object or purpose is contrary to law, morals, good customs, public or-der or public policy; (2) Those which are absolutely simulated or fictitious; (3) Those whose cause or object did not exist at the time of the transaction; (4) Those whose object is outside the commerce of men; (5) Those which contemplate an impossible service; (6) Those where the intention of the parties relative to the principal object of the contract cannot be ascertained; (7) Those expressly prohibited or declared void by law. Q49: What are the voidable contracts? A: The following contracts are voidable or annullable, even though there may have been no damage to the contracting parties: (1) Those where one of the parties is incapable of giving consent to a contract; (2) Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud. These contracts are binding, unless they are annulled by a proper action in court. They are susceptible of ratification [Art. 1390, CC] Q50: What are the rescissible contracts? A: The following contracts are rescissible: (1) Those which are entered into by guardians whenever the wards whom they represent suffer lesion by more than one-fourth of the value of the things which are the object thereof; (2) Those agreed upon in representation of absentees, if the latter suffer the lesion stated in the preceding number; (3) Those undertaken in fraud of creditors when the latter cannot in any other manner collect the claims due them; (4) Those which refer to things under litigation if they have been entered into by the defendant without the knowledge and approval of the litigants or of competent judicial authority; (5) All other contracts specially declared by law to be subject to rescission [Art. 1381, CC].

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Q51: What are the unenforceable contracts? A: The following contracts are unenforceable, unless they are ratified: (1) Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers; (2) Those that do not comply with the Statute of Frauds as set forth in this number. In the following cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum, thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents: (a) An agreement that by its terms is not to be performed within a year from the making thereof; (b) A special promise to answer for the debt, default, or miscarriage of another; (c) An agreement made in consideration of marriage, other than a mutual promise to marry; (d) An agreement for the sale of goods, chattels or things in action, at a price not less than five hundred pesos, unless the buyer accept and receive part of such goods and chattels, or the evidences, or some of them, of such things in action or pay at the time some part of the purchase money; but when a sale is made by auction and entry is made by the auctioneer in his sales book, at the time of the sale, of the amount and kind of property sold, terms of sale, price, names of the purchasers and person on whose account the sale is made, it is a sufficient memorandum; (e) An agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein; (f) A representation as to the credit of a third person. (3) Those where both parties are incapable of giving consent to a contract. Article 1404. Unauthorized contracts are governed by article 1317 and the principles of agency in Title X of this Book. Article 1405. Contracts infringing the Statute of Frauds, referred to in No. 2 of article 1403, are ratified by the failure to object to the presentation of oral evidence to prove the same, or by the acceptance of benefit under them [Art. 1403].

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SALES Q52: Distinguish between a contract of sale and a contract to sell. A: In a contract of sale, the title to the property passes to the buyer upon the delivery of the thing sold. In a contract to sell, the ownership is, by agreement, retained by the seller and is not to pass to the vendee until full payment of the purchase price. In the contract of sale, the buyer’s non-payment of the price is a negative resolutory condition; in a contract to sell, the buyer’s full payment of the price is a positive suspensive condition to the coming into effect of the agreement. In a contract of sale, the seller has lost and cannot recover the ownership of the property unless he takes action to set aside the contract of sale. In the second case, the title simply remains in the seller if the buyer does not comply with the condition precedent of making payment at the time specified in the contract. [Heirs of Atienza v. Espidol, G.R. No. 180665, August 11, 2010] Q53: While having dinner, Poseidon said to Hades, “Okay, I will sell you my trident for P100,000,” to which Hades replied, “Great, I’ll pay you next week!” Poseidon delivered the trident the next day, however, three weeks have passed and Hades still has not paid. Was there a perfected contract of sale? A: Yes, there was a perfected contract of sale. Being a consensual contract, the 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. [Art. 1475] From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts. The non-payment of the full price affects the consummation of the contract of sale and not its perfection. Q54: Before Trinidad went to the US for vacation, Henry agreed to give her an option to buy a house in Alabang for P50,000,000, the option being available until a week after her return from the US. Henry told Trinidad that the purchase price of P50,000,000 also covers the option given to her. Trinidad accepted. Is this a valid option contract? A: No, this is not a valid option contract since there was no separate consideration. An option contract is a privilege existing in one person, for which he had paid a consideration, which gives him the right to buy, for example, certain merchandise of certain specified property, from another person, if he chooses, at any time within the agreed period, at a fixed price. The contract of option is a separate and distinct contract from the contract which the parties may enter into upon the consummation of the option. If there was no consideration for the contract of option, then it cannot be entered any more than any other contract where no consideration exists. [Enriquez de la Cavada v. Diaz, G.R. No. L-11668, April 1, 1918] Q55: Robert bought a Fortuner from Toyota for P2,000,000, payable on 24 monthly installments. Robert was able to pay the installments for the first 2 months, but defaulted thereafter. What are the remedies available to Toyota? A: Since this involves an installment sale of a car, which is a movable property, the Recto Law applies. In a contract of sale of personal property the price of which is payable in installments, the vendor may exercise any of the following remedies: (1) Exact fulfillment of the obligation, should the vendee fail to pay; (2) Cancel the sale, should the vendee’s failure to pay cover two or more installments; (3) Foreclose the chattel mortgage on the thing sold, if one has been constituted, should the vendee’s failure to pay cover two or more installments. In this case, he shall have no further action against the purchaser to recover any unpaid balance of the price. Any agreement to the contrary shall be void. [Article 1484 (Recto Law)] PAGE 16 OF 30

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Q56: Seller sold a parcel of land to Buyer A. Because Buyer A was still undecided on what he wants to construct on the land, Buyer A did not take immediate possession of the land, neither did Buyer A have the sale recorded. Seller subsequently sold the same parcel of land to Buyer B. This sale was also not recorded. Buyer B, not knowing that the same parcel of land was previously sold to Buyer A, took possession of the land and started to build his house. Buyer A was later informed that Buyer B was constructing his house on the parcel of land so Buyer A hastily went to the register of deeds to have the previous sale to him recorded. Assuming both the sales to Buyer A and Buyer B were valid, who between the two has priority? A: Buyer B has priority. If the same thing should have been sold to different vendees … Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith. [Article 1544] Here, although Buyer A was the first to have the sale recorded, he did not do so in good faith. On the other hand, although Buyer B did not record the sale, Buyer B first possessed the property in good faith. Therefore, the ownership should pertain to Buyer B. Q57: Toby (seller) and Mary (buyer) entered into a contract of sale of a house and lot located in Bel Air Village, Makati. Under the contract of sale, ownership over the property was to be transferred upon the execution of the contract, and full payment was to be made the month following such execution. The contract of sale also included a stipulation on automatic rescission, providing that upon failure to pay the full purchase price, the contract is considered ipso facto rescinded. Mary failed to pay the purchase price. Toby then sent a private letter to Mary stating the he considered the contract rescinded. Mary argues that there was no valid rescission and she can still pay. Is Mary correct? A: Yes, Mary is correct. There was no valid rescission and Mary can still pay because the private letter sent by Toby cannot be considered a demand for rescission by a notarial act. Article 1592 of the Civil Code provides that in the sale of immovable property, even though it may have been stipulated that upon failure to pay the price at the time agreed upon the rescission of the contract shall of right take place, the vendee may pay, even after the expiration of the period, as long as no demand for rescission of the contract has been made upon him either judicially or by a notarial act. After the demand, the court may not grant him a new term. Q58: Matamis sold sugar to Matabang. The sugar was delivered by Matamis into Matabang’s warehouse, leaving it entirely subject to Matabang’s control. Matabang, however, failed to pay Matamis as per agreement. Is Matamis still the owner of the sugar as to entitle him to recovery of its possession? A: No, Matamis is no longer the owner of the sugar. Article 1477 provides that the ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof, and pursuant to Article 1479, the thing sold shall be understood as delivered, when it is placed in the control and possession of the vendee. Q59: Trump (seller) and Hilary (buyer) entered into a contract of sale of a high-end laptop known for its unbeatable security. For security reasons, Hilary told Trump that he need not deliver the laptop, and that she would instead send her agent to pick-up the laptop from Trump’s office. Months passed but Hilary failed to send her agent to pick-up the laptop, notwithstanding Trump’s constant reminders. When Hilary was finally able to get the laptop, she found that it had already deteriorated. Can Hilary hold Trump liable for the deterioration? PAGE 17 OF 30

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A: No, she cannot. From Article 1504, unless otherwise agreed, the goods remain at the seller’s risk until the ownership therein is transferred to the buyer, but when the ownership therein is transferred to the buyer the goods are at the buyer’s risk whether actual delivery has been made or not, except that: … (2) Where actual delivery has been delayed through the fault of either the buyer or seller the goods are at the risk of the party in fault. Here, although the laptop remained in the seller’s (Trump’s) possession, and ownership had not been transferred yet when the laptop deteriorated, the buyer (Hilary) is still liable because the actual delivery was delayed through her fault.

AGENCY AND PARTNERSHIP Q60: How must a partnership be constituted? A: The general rule is that it may be constituted in any form. However, when immovable property and real rights are contributed, a public instrument and an inventory of the properties contributed must be attached to the public instrument in order for the partnership to be valid. [Article 1771] Q61: Raymond Reddington associated himself with Elizabeth Keen and Samar Navabi to form a law firm. After several years, Reddigton wrote a letter to Keen and Navabi stating that he is withdrawing and retiring from the firm and asking for a meeting with the latter to discuss the mechanics of the liquidation. He subsequently filed a petition to the Securities and Exchange Commision's (SEC) Securities Investigation and Clearing Department for the formal dissolution and liquidation of the partnership. The hearing officer rendered a decision ruling that the withdrawal of Reddington has not dissolved the partnership. On appeal, the SEC en banc reversed the decision and such decision affirmed by the Court of Appeals. Did the CA err in its decision? A: No. Any one of the partners may cause the dissolution of the partnership when no express term was specified for its existence. However, it is required that this action be done in good faith. Among partners, mutual agency arises and the doctrine of delectus personae allows them to have the power, although not necessarily the right, to dissolve the partnership. The dissolution by one partner done in bad faith will not nullify the action but it entitles the other partners to damages. [Article 1830.1b, NCC; Ortega vs. CA, G.R. No. 109248, July 3, 1995] Q62: Ria assigned her interest in the partnership to Jo. Jo now wishes to take part in the decisionmaking and administrative activities of the partnership. May she do so? A: No. The conveyance of a partner of his or her interest does not make the assignee a partner. She cannot interfere in the management or administration of the partnership nor can she require information or inspect the partnership books. She may only receive profits originally allocated for the assignor, avail of the usual remedies in case of fraud and, require an accounting in case of dissolution from the date of the last account agreed to by all the partners. [Article 1813] Q63: R Inc. purchased seven computer desktops from Orange Company on an installment basis. However, R Inc. reneged on its installment payments after six months. Orange Company sought to recover the remaining amount from Richard, Raymond and Raul, the general partners of R Inc. Raul alleged that since he contributed the least amount of capital to the partnership, he should also contribute the least amount to pay off Orange Company. Is Raul’s position correct? A: No. Article 1816 says that the individual partners are made liable pro rata after all the partnership assets have been exhausted. However, jurisprudence has clarified that the meaning of ‘pro rata’ here is PAGE 18 OF 30

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that the liability should be divided equally. [Article 1816; Island Sales vs. United Pioneers, G.R. No. L22493, July 31, 1975] Q64: Is dissolution the final step in terminating the partnership? A: No. Article 1829 says that the partnership continues until the winding up of partnership affairs is completed. Q65: A died during the pendency of her partnership with B and C. C was out of the country purchasing a machine for their business when this happened and was not informed of A’s death. May B be bound by the purchase? A: Yes. Generally, the death of one the partners causes the dissolution of the partnership. However, each partner is still made liable to his co-partners for his share of any liability as if the partnership had not been dissolved if the partner acted without knowledge of the death at the time of the transaction. [Articles 1830; 1833] Q66: The Dynasty Corporation (DC) is a manufacturing company. In 1986, because of the political situation in the Philippines, the management of DC wanted to stop its operations and to dispose its lot in Mandaluyong City. They engaged the services of realtor/broker Jake Peralta. Peralta thereafter offered the land to Amy Santiago, which agreed to buy it for US$1,000,000.00. Peralta then received a letter from DC that it decided not to proceed with the sale. Santiago filed a complaint for specific performance and damages, arguing that, there was no need for a written authority from the Board of Directors of DC for Peralta to validly act as broker. As broker, Peralta was not an ordinary agent because his only job as a broker was to look for a buyer and to bring together the parties to the transaction. He was not authorized to sell the properties; hence, Santiago argues, a written authority to act as agent to sell is not necessary. Will Santiago’s suit prosper? A: No. Since the authority of the agent for the sale of the lot was not in writing, the sale, if it proceeded, will be void anyway. An agency may be expressed or implied from the act of the principal, from his silence or lack of action, or his failure to repudiate the agency knowing that another person is acting on his behalf without authority. Acceptance by the agent may be expressed, or implied from his acts which carry out the agency, or from his silence or inaction according to the circumstances. Agency may be oral unless the law requires a specific form. However, to create or convey real rights over immovable property, a special power of attorney is necessary. Thus, when a sale of a piece of land or any portion thereof is through an agent, the authority of the latter shall be in writing, otherwise, the sale shall be void. [Articles 1868 and 1874 and 1878 no. 12; Litonjua vs. Eternit Corp., G.R. No. 144805, June 8, 2006] Q67: Jenna came to Matty one day asking for her share in the sale of Matty’s Mazda 3. She explained that when Matty sold the car to his friend Jake, Jenna was also in the conversation pitching the car to Jake. She had told Jake how fuel-efficient the car was, how often Matty sends the car for maintenance and how long it will probably still last. Jenna claims that she acted “like an agent” in pitching the car to Jake. Can Jenna recover her share in the sale? How will Matty determine if Jenna is, in fact, an agent? A: No. Jenna cannot recover a part of the Matty’s revenues. In order for a contract of agency to be valid, there must be consent of the parties to establish the relationship, the object of the contract must be the execution of a juridical act in relation to a third person, the agent must act as a representative for the principal and the agent must act within the scope of his authority. In this situation, Matty’s consent was not obtained because he did not even know that they were entering into such relationship. It is also not clear what Jenna’s intention was in stating such facts so it cannot be clearly said that she was acting as PAGE 19 OF 30

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Matty’s representative in the situation. Moreover, Matty, the principal, was there so the agency agreement was not necessary. [Article 1868; Rallos vs. Felix Go Chan, G.R. No. L-24332, January 31, 1978] Q68: Olivia named Fitz as her agent in all of her transactions. As such, Fitz attended a meeting wherein he resolved, as Olivia’s agent, to forego Mellie’s debt to Olivia of P50,000 since he overheard Olivia say that she was planning on doing this herself. Was Fitz’s act valid? A: No. Their relationship was essentially an agency couched in general terms. As such, this only covered acts of administration no matter how broad the power seems. Additionally, Fitz’s act of waiving Mellie’s obligation was one of the specific acts stated in the New Civil Code which needs a special power of attorney. Therefore, the action was invalid. [Article 1877, Article 1888] Q69: Who is a commission agent and what is a guarantee commission? A: A commission agent is engaged in selling goods for others and as a result, this agent receives an amount (called commission) as payment for his or her services. A guarantee commission is that received on top of the commission and is an additional compensation for risks of collection. The commission agent may take this but he or she shall bear the risk of collection and he or she must also pay the principal the proceeds of the sale on the same terms agreed upon with the purchaser. [Article 1903-1908] Q70: Claire and Haley Dunphey were sisters and co-owners of a registered lot. On April 21, 1954, the sisters executed a Special Power of Attorney (SPA) in favor of their brother Phil authorizing him to sell in their behalf the lot. Claire died on March 3, 1955. Phil subsequently sold the lot to Pritchet & Pritchet Co. on Sept. 12, 1995. The deed of sale was registered with the Registry of Deeds and a new TCT was issued to Pritchet & Pritchet Co. after the original one was canceled. On May 18, 1956, Jay Dunphey, the administrator of the Intestate Estate of Claire Dunphey, filed a complaint praying that the sale of Claire's undivided share be declared unenforceable and said share be reconveyed to the estate. Is Phil's act of selling Claire's share after the latter’s death enforceable against the latter’s estate? A: No. By reason of the very nature of the relationship between principal and agent, agency is extinguished ipso jure upon the death of either principal or agent. Although a revocation of a power of attorney to be effective must be communicated to the parties concerned, yet a revocation by operation of law, such as by death of the principal is, as a rule, instantaneously effective inasmuch as "by legal fiction the agent's exercise of authority is regarded as an execution of the principal's continuing will. With death, the principal's will ceases or is the authority is extinguished. [Article 1919; Rallos vs. Felix Go Chan, G.R. No. L-24332, January 31, 1978]

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CREDIT TRANSACTIONS Q71: Differentiate between commodatum and mutuum. A: Commodatum involves non-consumable things while mutuum involves money or other consumable things. In commodatum, ownership of the thing loaned is retained by the lender, while in mutuum, ownership is transferred to the borrower. Commodatum is essentially gratuitous, while mutuum can be gratuitous or onerous, i.e. with stipulated interest. In commodatum, borrower must return the same thing loaned, while in mutuum, borrower need only pay an equal amount of the same kind and quality. Commodatum is a loan for permissive or temporary use, while mutuum is a loan for consumption. In commodatum, the bailor may demand the return of the thing loaned before the expiration of the term in case of urgent need. Bailor suffers the loss of the subject since he is the owner. In mutuum, the lender may not demand its return before the lapse of the term agreed upon. Borrower suffers the loss even if caused exclusively by a fortuitous event, and he is not discharged from his duty to pay. Commodatum is purely personal in character while mutuum is not. Q72: What are the rules for award of interest in the concept of actual and compensatory damages? A: (1) When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 6% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code. (2) When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages, except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially [Art. 1169, Civil Code], but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made [at which time the quantification of damages may be deemed to have been reasonably ascertained]. The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged. (3) When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 6% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit. [Nacar v. Gallery Frames, G.R. No. 189871 [2013] modifying Eastern Shipping Lines vs. CA, [1994] in light of BSP-MB Circular No. 799] Q73: X entered into a contract with Y for the construction of a building to be finished at a stipulated time. Thus, Y had certain construction materials deposited in the warehouse owned by C. The building was not finished at the stipulated time so X sued Y for breach of contract. In the meantime, X demanded from C the return of the materials deposited by Y, but C cannot produce the said materials for Y already withdrew them at an earlier time. X now commences an action C for breach of contract of deposit. Will it prosper? Explain. A: No. In order for C to be held liable for breach of contract of deposit, X must prove (1) the existence of any contract of deposit between him and C, or between C and some other person in X’s favor, and (2) that the objects which are the subject of the subject of the deposit is in C’s possession at the time of demand to return the same. In this case, he failed to prove the existence of any contract of deposit. If at all, it was PAGE 21 OF 30

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only between C and Y. And even if there was indeed a contract of deposit between C and Y, X has to prove its existence and that it was executed in his favor, which he failed to do. He also failed to prove that there were construction materials and equipment in C’s warehouse at the time he made a demand for their return. [Chan v. Maceda, Jr., G.R. No. 142591, April 25, 2003] Q74: What is the nature of a contract for the rent of a safety deposit box with a bank? A: It is a special kind of deposit. It cannot be characterized as an ordinary contract of lease under because the full and absolute possession and control of the safety deposit box was not given to the renters. The guard key of the box remained with the bank; without this key, the renters could open the box. On the other hand, the bank could not likewise open the box without the renter's key. [CA Agro- Industrial Development Corp. v. CA, G.R. No. 90027, March 3, 1993] Q75: Distinguish the right of a depositary under the Civil Code and that of a warehouseman under the Warehouse Receipts Law (Act No. 2137) as regards the commingling of goods. A: Under Article 1976 of the Civil Code, as a general rule a depositary may commingle grain or other articles of the same kind and quality, unless there is a stipulation to the contrary [CC, art. 1976]. As for a warehouseman, under Sec. 22 of the Warehouse Receipts Law, a warehouseman shall keep the goods so far separate from goods of other depositors and from other goods of the same depositor for which a separate receipt has been issued, as to permit at all times the identification and redelivery of the goods deposited. The exception, found in Section 23, is if authorized by agreement or by custom, the warehouseman may mingle fungible goods with other goods of the same kind and grade. Q76: What is the benefit of excussion and how is it exercised? Under the benefit of excussion, the guarantor cannot be compelled to pay the creditor unless the latter has: (1) Exhausted all of the property of the debtor; and (2) Resorted to all the legal remedies against the debtor. [Art. 2058] In order that the guarantor may make use of the benefit of excussion, he must: (a) Set it up against the creditor upon the latter’s demand for payment from him; and (b) Point out to the creditor available property of the debtor within the Philippine territory and sufficient to cover the amount of the debt [Art. 2060] Q77: What is pactum commissorium? A: Pactum comissorium is a stipulation that allows the creditor to appropriate the collateral, or dispose of it, in contravention of the provisions on foreclosure. Hence, it is considered null and void. It has two elements: (1) there is property pledged by way of security for the payment of the principal obligation; and there is a stipulation for automatic appropriation by the creditor in case of non-payment of the principal obligation within the stipulated period. Q78: Is registration in the Registry of Property necessary for the validity of a contract of real estate mortgage? A: No. However, it is necessary for the purpose of binding third persons. Consequently, whether registered or not, the contract is binding upon the parties [Samanilla v. Cajucom, G.R. No. L-13683, March 28, 1960]. This is clear from Art. 2126 of the Civil Code which declares that “in addition to the requisites stated in Art. 2085, it is indispensable, in order that a mortgage may be validly constituted, that the document in which it appears be recorded in the Registry of Property. If the instrument is not recorded, the mortgage is nevertheless binding between the parties. PAGE 22 OF 30

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Q79: Distinguish between equity of redemption and right of redemption. A: Equity of redemption refers to the right of the mortgagor in case of a judicial foreclosure to redeem the mortgaged property after his default in the performance of the conditions of the mortgage but before confirmation of the sale of the mortgaged property. The period for equity of redemption is 90-120 days after entry of judgment requiring the debtor to pay [Rules of Court, sec. 2, Rule 68] On the other hand, right of redemption refers to the right of the mortgagor in case of extrajudicial foreclosure to redeem the mortgaged property within a certain period from and after it was sold for the satisfaction of the mortgage debt. The period for its exercise is within twelve (12) months from the time of the registration of the sale in the Office of the Register of Deeds [Sec. 6, Act. No. 3135]. An exception is found in Sec. 47 of the General Banking Law, which provides that notwithstanding Act 3135, juridical persons whose property is being sold pursuant to an extrajudicial foreclosure, shall have the right to redeem the property in accordance with this provision until, but not after, the registration of the certificate of foreclosure sale with the applicable Register of Deeds which in no case shall be more than three (3) months after foreclosure, whichever is earlier [Goldenway Merchandising Corp. v. Equitable PCI Bank, G.R. No. 195540, March 13, 2013]. Q80: C bought certain shares of stock from PF Corp. The shares of stock were delivered to custodian banks who held such on C’s behalf. When PF Corp. was placed under receivership by the SEC, the receiver withdrew the shares from the custodian banks and were sold without his knowledge and without authority from the SEC. The proceeds were commingled with PF Corp.’s other assets. Upon learning of this, he filed a claim for payment of the value of the stocks in the receivership proceedings. A 15% rate of recovery was approved for PF Corp.’s creditors and investors. C claims that he is entitled to the entire monetary value of the shares of stock, arguing that he is a preferred creditor under Art. 2241 (2) of the Civil Code since his claim for the monetary value of the shares arose from the unauthorized sale of such his stocks. Is C correct? Explain. A: No. Under Art. 2241 (2), claims arising from misappropriation, breach of trust, or malfeasance by public officials committed in the performance of their duties, on the movables, money or securities obtained by them are preferred with reference to specific movable property of the debtor. While C’s shares were specific movable property, the money raised from them after their sale is a generic thing. C’s claim is for the payment of the monetary value of the shares, thus it does not fall under Art. 2241 (2). At most, C is deemed an ordinary creditor whose credit, along with other ordinary credits, shall be paid pro rata [CC, art. 2251 (2)]. [Cordova v. Reyes Daway Lim Bernardo Lindo Rosales Law Offices, G.R. No. 146555, July 3, 2007]. Q81: What is the difference between mortgage credits and unpaid vendor’s liens with respect to preferred credits with reference to the debtor’s specific immovable property and real rights (Art. 2242, Civil Code)? A: While Art. 2242 specifically requires mortgage credits to be recorded in the Registry of Property in order to be given preference, no such requirement is made with respect to the vendor's lien for the unpaid price of real property sold. The law does not make any distinction between a registered and unregistered vendor's lien. Any lien of that kind enjoys the preferred credit status. [De Barretto v. Villanueva, G.R. No. L-14938, January 28, 1961] Q82: Explain the order of preference and concurrence of credits provided in the Civil Code. A: The Civil Code establishes a two-tier order of preference among the enumerated special preferred credits: taxes come first, and all other claims come after. Only taxes, duties, and fees due on the movable or immovable properties enjoy preference among the special preferred credits in Articles 2241 and 2242. PAGE 23 OF 30

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All other claims in the said articles are not preferred over any other, as there is only a concurrence of credits among them.

TORTS AND DAMAGES Q83: In what cases may moral damages be awarded? A: Article 2219. Moral damages may be recovered in the following and analogous cases: (1) A criminal offense resulting in physical injuries; (2) Quasi-delicts causing physical injuries; (3) Seduction, abduction, rape, or other lascivious acts; (4) Adultery or concubinage; (5) Illegal or arbitrary detention or arrest; (6) Illegal search; (7) Libel, slander or any other form of defamation; (8) Malicious prosecution; (9) Acts mentioned in article 309; (10) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. Q84: What is contributory negligence? A: Contributory negligence has been defined as “the act or omission amounting to want of ordinary care on the part of the person injured which, concurring with the defendant’s negligence, is the proximate cause of the injury.” It has been held that “to hold a person as having contributed to his injuries, it must be shown that he performed an act that brought about his injuries in disregard of warnings or signs of an impending danger to health and body.” [Ma-ao Sugar Central Co. v. Court of Appeals, G.R. No. 83491, August 27, 1990]. Q85: When is an action the proximate cause of the injury? A: When it is that cause which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred [Vda de Bataclan v. Medina, G.R. No. L-10126, October 22, 1957]. Q86: What is the doctrine of volenti non fit injuria? A: The doctrine of volenti non fit injuria (“to which a person assents is not esteemed in law as injury”) refers to self-inflicted injury or to the consent to injury which precludes the recovery of damages by one who has knowingly and voluntarily exposed himself to injury, even if he is not negligent in doing so [Nikko Hotel Manila Garden v. Reyes, G.R. No. 154259, February 28, 2005]. Q87: L was accused of homicide through reckless negligence. His negligence was duly proven in the course of trial. As a defense, he alleged that the deceased was guilty of contributory negligence because she was walking near the middle of the road and failed to look at both sides of the street before crossing. How should the trial judge consider this defense? A: He should not consider the defense because an accused cannot allege the negligence of another to evade the effects of his own negligence. In Genobiagon v. CA, G.R. No. 40452, October 12, 1989, the Court held that the defense of contributory negligence on the part of the plaintiff is not available in criminal cases under Art. 365.

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Q88: M, an employee of P&G, hit P, a pedestrian, on his way home from a party on a Saturday night. P suffered severe lacerations and a concussion, as well as a broken toe. At the time of the accident, M was driving a Honda Civic that he bought through a company car loan. P sued P&G for damages as M’s employer, claiming that they are vicariously liable for the negligent act of their employee. Is P&G vicariously liable for M’s negligence, if proven? A: No, because there was no proof that M was acting within the scope of his duties at the time of the accident. The Court has held that the plaintiff seeking to hold the employer of a negligent party liable under Art. 2180 must prove both the employer-employee relationship and that the employee was acting within the scope of his assigned tasks. The rules regarding the use of company cars adopted by the Court in Castilex v. Vasquez, G.R. No.132266, December 21, 1999, are not applicable because the car in the above situation was not a company car; rather, it was simply a private car of the employee purchased with a company loan. Q89: J was riding a bus when its front right tire exploded. The bus went off the side of the road and fell on its side, and J was injured. At the time the tire exploded, the driver of the bus was speeding and the bus was overloaded. The tire which exploded was new and had never been inspected. J sued the bus company for damages. The bus company alleged fortuitous event as a defense, arguing that they could not have foreseen the explosion of the tire, as it was brand new and from a reputable tire brand. May the bus company be held liable for damages? A: Yes. The elements of the defense of fortuitous event are not all present in the situation under (b) because it was not independent of human will. The Court has held that a common carrier is liable for injury caused by a mechanical defect if the flaws were discoverable. At the same time, the driver of the bus was negligent as he was speeding and he allowed the overloading of the bus. Q90: May the court grant a prayer solely for exemplary damages? A: No. Under Article 2234, while the amount of exemplary damages need not be proved, the plaintiff must show that he is entitled to moral, temperate or compensatory damages before the court may consider the question of whether or not exemplary damages should be awarded. Thus, the plaintiff cannot pray solely for exemplary damages. Q91: 19 year old Samantha used her father’s shotgun to shoot Sweetie, who had broken up with her the day before. Sweetie died, and her parents filed a complaint for damages against Samantha and her parents. Samantha’s parents argued that they should not be held vicariously liable for the tort Samantha committed, as she was already 19 and financially capable of answering for the damages herself. Are Samantha’s parents vicariously liable? A: Yes. Samantha is considered a minor for purpose of imputing vicarious liability on her parents under Article 2180. The Family Code, while reducing the age of majority to 18 years of age, explicitly states in Article 236 (3) that “nothing in this Code shall be construed to derogate from the duty or responsibility of parents and guardians for children and wards below 21 years of age mentioned in the 2nd and 3rd paragraphs of 2180 of the Civil Code.” Vicarious responsibility is not conditioned upon the insolvency of or prior recourse against the negligent tortfeasor, making Samantha’s financial condition irrelevant. Q92: Ben was driving on Commonwealth Avenue when he received a startling text message from his wife, causing him to hit the brakes abruptly. Manong, who was then driving a passenger jeep carrying Jane, crashed into Ben’s car from behind. Jane suffered an abrasion on her face and sued Domeng for damages. Domeng alleged in his defense that since Ben’s negligence in abruptly braking was the proximate cause of the accident, Domeng cannot be held liable for damages to Jane. Is Domeng correct? PAGE 25 OF 30

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A: No. The doctrine of proximate cause is applicable only in actions for quasi-delict, not for breach of contract. The doctrine is a device for imputing liability to a person where there is no relations between the parties; but where there is a pre-exisitng contractual relation between them, it is the parties themselves that create the obligation. The action can be prosecuted merely by proving the existence of the contract and the fact that the obligor, in this case the common carrier, failed to transport his passenger safely to his destination. [Calalas v. CA, G.R. No. 122039, May 31, 2000].

PRIVATE INTERNATIONAL LAW Q93: Ms. A, a Filipino national, married Mr. B, a Swedish national. They had a son C. The couple later obtained a divorce decree in Sweden. Mother and son returned to live in the Philippines. B also went to live in the Philippines and later remarried. While B had promised to provide support for C, he failed to do so once the parties were in the Philippines. A filed a case for violation of RA 9262 (VAWC). RTC dismissed the case on the ground that the Information does not constitute an offense since the accused is an alien who is not subject to the Family Code, which provides for the obligation to pay support. Is the RTC correct? A: Yes. Article 15 of the Civil Code stresses the nationality principle, providing that laws relating to family rights and duties are binding upon citizens of the Philippines even though living abroad. By analogy, the same principle applies to foreigners such that they are governed by their national law with respect to family rights and duties. Note: Courts cannot take judicial notice of foreign law. Hence, accused B must still plead and prove the provisions of his national law on support in order to show that he is not obliged to give support. Otherwise, due to the processual presumption, the court will presume that the foreign law is the same as our domestic law. [Del Socorro v. Van Wilsem, G.R. No. 193707, December 10, 2014] Q94: Give at least two reasons why a court may assume jurisdiction over a conflict of laws case. A: a) On the basis of the Statute theory, when there is a domestic law authorizing the local court to assume jurisdiction. b) On the basis of the Comity theory, the local court assumes jurisdiction based on the principle of comity or courtesy. c) On the basis of public order, so that disputes that disturb the peace of the forum should be settled by the court of the forum even though the application of the foreign law is necessary for the purpose. d) On the basis of the Humanitarian Principle, an aggrieved party should not be left without remedy in a forum even though the application of the foreign law by the courts of the forum is unavoidable in order to extend relief. Q95: Alden and Stela were both former Filipino citizens. They were married in the Philippines but they later migrated to the United States where they were naturalized as American citizens. In their union they were able to accumulate several real properties both in the US and in the Philippines. Unfortunately, they were not blessed with children. In the US, they executed a joint will instituting as their common heirs to divide their combined estate in equal shares, the five siblings and of Alden the seven siblings of Stela. Alden passed away in 2013 and a year later, Stela also died. The siblings of Alden who were all citizens of the US instituted probate proceedings in a US court impleading the siblings of Stela who were all in the Philippines. a) Was the joint will executed by Alden and Stela who were both former Filipinos valid? Explain with legal basis. b) Can the joint will produce legal effect in the Philippines with respect to the properties of Alden and Stela found here? If so, how? c) Is the situation presented an example of depecage? PAGE 26 OF 30

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A: a) Yes, the joint will of Alden and Stela is considered valid. Being no longer Filipino citizens at the time they executed their joint will, the prohibition under our Civil Code on joint wills will no longer apply to Alden and Stela. For as long as their will was executed in accordance with the law of the place where they reside, or the law of the country of which they are citizens or even in accordance with the Civil Code, a will executed by an alien is considered valid in the Philippines. [Article 816] b) Yes, the joint will of Alden and Stela can take effect even with respect to the properties located in the Philippines because what governs the distribution of their estate is no longer Philippine law but their national law at the time of their demise. Hence, the joint will produces legal effect even with respect to the properties situated in the Philippines. c) No, because depecage is a process of applying rules of different states on the basis of the precise issue involved. It is a conflict of laws where different issues within a case may be governed by the laws of different states. In this situation, no conflict of laws will arise because Alden and Stela are no longer Filipino citizens at the time of the execution of their joint will and the place of execution is not the Philippines. Q96: X and Y entered into a contract in Australia, whereby it was agreed that X would build a commercial building for Y in the Philippines, and in payment for the construction, Y will transfer and convey his cattle ranch located in the United States in favor of X. What law would govern: a) The validity of the contract? b) The performance of the contract? c) The consideration of the contract? A: a) The validity of the contract will be governed by Australian law, because the validity refers to the element of the making of the contract in this case. b) The performance will be governed by the law of the Philippines where the contract is to be performed. c)

The consideration will be governed by the law of the United States.

Q97: Alma was hired as a domestic helper in Hongkong by the Dragon Services, Ltd., through its local agent. She executed a standard POEA employment contract for overseas Filipino workers. It provided for her employment for one year at a salary of US$1,000.00 a month. However, when she arrived in Hongkong, she was asked to sign another contract by Dragon Services, Ltd. which reduced her salary to only US$600.00 a month. Having no other choice, Alma signed the contract but when she returned to the Philippines, she demanded payment of the salary differential of US$400.00 a month. Both Dragon Services, Ltd. and its local agent claimed that the second contract is valid under the laws of Hongkong, and therefore binding on Alma. Is their claim correct? Explain. A: Their claim is not correct. A contract is the law between the parties but the law can disregard the contract if it is contrary to public policy. The provisions of the 1987 Constitution on the protection of labor and on social justice (Sec. 10. Art II) embody a public policy of the Philippines. Since the application of Hongkong law in this case is in violation of that public policy, the application shall be disregarded by our Courts. [Cadalin v. POEA, G.R. No. 104776, December 5, 1994]

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Q98: While in Afghanistan, a Japanese by the name of Sato sold to Ramoncito, a Filipino, a parcel of land situated in the Philippines which Sato inherited from his Filipino mother. What law governs the formality in the execution of the contract of sale? Explain your answer and give its legal basis. A: Under Art. 16 par. 1, NCC, real property is subject to the law of the country where it is situated. Since the property is situated in the Philippines, Philippine law applies. Q99: What is the doctrine of forum non conveniens? A: Forum non conveniens is a principle in Private International Law that where the ends of justice strongly indicate that the controversy may be more suitably tried elsewhere, jurisdiction should be declined and the parties relegated to relief to be sought in another forum. [Moreno. Philippine Law Dictionary, p. 254, 1982 ed.] Q100: Distinguish briefly between: Domiciliary theory and nationality theory of personal law. A: Domiciliary theory posits that the personal status and rights of a person are governed by the law of his domicile or the place of his habitual residence. The nationality theory, on the other hand, postulates that it is the law of the person's nationality that governs such status and rights. Q101: Harry married Wilma, a very wealthy woman. Wilma went to a small country in Europe and became a naturalized citizen of that country. After 2 years, to remarry, Wilma obtained a divorce. Harry knew of this and decided to marry his first love, Elizabeth. Is Harry capacitated to remarry? A: It depends if the divorce obtained by Wilma capacitated her to remarry. In Garcia v. Recio (2001), the SC held that for a Filipino spouse to have the capacity to contract a subsequent marriage, it must also be proven that the foreign divorce obtained abroad by the foreigner spouse gave such foreigner spouse capacity to remarry. Q102: Felipe is a Filipino citizen. When he went to Sydney for vacation, he met a former business associate, who proposed to him a transaction which took him to Moscow. Felipe brokered a contract between Sydney Coals Corp. (Coals), an Australian firm, and Moscow Energy Corp. (Energy), a Russian firm, for Coals to supply coal to Energy on a monthly basis for three years. Both these firms were not doing, and still do not do, business in the Philippines. Felipe shuttled between Sydney and Moscow to close the contract. He also executed in Sydney a commission contract with Coals and in Moscow with Energy, under which contracts he was guaranteed commissions by both firms based on a percentage of deliveries for the three-year period, payable in Sydney and in Moscow, respectively, through deposits in accounts that he opened in the two cities. Both firms paid Felipe his commission for four months, after which they stopped paying him. Felipe learned from his contacts, who are residents of Sydney and Moscow, that the two firms talked to each other and decided to cut him off. He now files suit in Manila against both Coals and Energy for specific performance. Should the Philippine court assume jurisdiction over the case? Explain A: No, the Philippine courts cannot acquire jurisdiction over the case of Felipe. Firstly, under the rule of forum non conveniens, the Philippine court is not a convenient forum as all the incidents of the case occurred outside the Philippines. Neither are both Coals and Energy doing business inside the Philippines. Secondly, the contracts were not perfected in the Philippines. Under the principle of lex loci contractus, the law of the place where the contract is made shall apply. Lastly, the Philippine court has no power to determine the facts surrounding the execution of said contracts. And even if a proper decision could be reached, such would have no biding effect on Coals and Energy as the court was not able to acquire jurisdiction over the said corporations. [Manila Hotel Corp. v. NLRC, G.R. No. 120077, October 13, 2000] PAGE 28 OF 30

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LAND TITLES AND DEEDS Q103: Pedro and his predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of a parcel of land since 1942. The land applied for was declared alienable and disposable on October 15, 1980. In 1993, Pedro filed a petition for registration of title of the said parcel of land. The Republic opposed on the ground that the land must have been declared alienable and disposable since June 12, 1945 pursuant to Section 14(1) of PD 1529. Is the Republic correct? Explain. A: No. The Supreme Court in the case of Republic v. CA and Naguit, G.R. No. 144057, January 17, 2005, held that Section 14(1) merely requires the property sought to be registered as already alienable and disposable at the time the application for registration of title is filed. This was reiterated in Malabanan v. Republic, G.R. No. 179987, September 3, 2013. Q104: In 1978, X and Y, Filipino citizens, bought a parcel of land from C, who has complied with the requirements for registration under the Public Land Act. A year after the sale, A and B went abroad and subsequently acquired Canadian citizenship. When they returned to the Philippines, they filed an application for the registration of said lots. The government opposed their application on the ground that they are aliens. The trial court allowed the registration. Is the trial court correct? Explain. A: YES. The Supreme Court held in the case of Republic v. CA and Lapiña, G.R. No. 108998, August 24, 1994, that even if X and Y were already Canadian citizens at the time they sought registration, what is important is at the time they bought the land, the land was already private land. Hence, they already acquired a vested right, consisting of an imperfect title, over the property, before they lost their Philippine citizenship. Q105: Juan is the registered owner of a parcel of land. The northeastern boundary was a river. For many years, a gradual accretion took place by action of the current of the said river, so much so that an alluvial deposit of around 20,000 square meters had been added to the registered area. In the meantime, Jose entered upon the portion of land formed by accretion under claim of ownership. Juan filed an action against Jose to quiet title to said portion, alleging that he and his predecessors-ininterest were formerly in peaceful and continuous possession thereof, until the time when Jose entered the land. Will Juan’s action prosper? Explain. A: No. The Supreme Court held in the case of Grande v. CA, G.R. No. L-17652, June 30, 1962, that accretion does not automatically become registered land just because the lot which receives such accretion is covered by a Torrens title. Therefore, the increment never became registered property, and hence is not entitled to the protection enjoyed by registered property. Consequently, it was subject to acquisition through prescription by third persons. Q106: Mario applied for registration of a parcel of land containing 1,000 square meters. During the pendency of the case, he bought the adjoining portion of 200 square meters. Can the additional portion be included in the original application? A: Yes, by amendment of the original application pursuant to Sec. 19, PD 1529 (Property Registration Decree). However, amendments which consist in the inclusion of additional land shall be subject to the same requirements of publication and notice as in an original application.

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UP LAW BOC

CIVIL LAW PRE-WEEK

Q107: The government attempted to sell the Roppongi property in Tokyo, which was acquired by the Philippine government for use as the Chancery of the Philippine Embassy. This was after the Chancery transferred to another location. Can the government validly sell the Roppongi property since it is not being used anymore? Explain. A: No. In Laurel v Garcia, G.R. No. 92013, July 25, 1990, the Court ruled that property of public domain retains such character until formally declared otherwise. The Roppongi property is a property for public service, therefore, it is outside the commerce of man. The fact that the Roppongi property has not been used for a long time for actual Embassy service does not automatically convert it to patrimonial property. Q108: Pedro and Maria filed a complaint against Jose for quieting of title and damages. In his answer, Jose averred, by way of affirmative defense, that the lot in question was a portion of a parcel of land sold to him by a certain Juan. He interposed a counterclaim that Gregorio, Pedro and Maria’s predecessor, obtained his title through fraud. Pedro and Maria countered that Jose’s counterclaim constituted a collateral attack on the title of Gregorio. Are they correct? Explain. A: No. The Supreme Court in Leyson v. Bontuyan held that an action is a direct attack on a title if its object is to nullify the same, and thus challenge the proceeding pursuant to which the title was issued. A direct attack on a title may be in an original action or in a counterclaim assailing it as void. Q109: The municipality of Cabanatuan expropriated the land of Maria for the purpose of a public market site. The court granted the expropriation without condition. Subsequently, Maria filed an action seeking the return of the land to her alleging that the municipality has abandoned that purpose and thereby lost its right to the parcel of land so expropriated. Is the action legally viable? A: No. The municipality had acquired a fee simple title to the land in question, without any condition. When the land has been acquired for public use in fee simple, unconditionally, either by the exercise of eminent domain or by purchase, the former owner retains no rights in the land, and the public use may be abandoned, or the land may be devoted to a different use, without any impairment of the estate or title acquired, or any reversion to the former owner. [Fery v. Municipality of Cabanatuan, G.R. No. 17540, July 23, 1921]

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