Civil Law (Albano Notes)

CIVIL LAW 2014 Dean Ed Vincent S. Albano 1. *** Art. 15. Laws relating to family rights and duties, or to the status, condition and legal capacity of persons are binding upon citizens of the Philippines, even though living abroad. (9a) Art. 26. All marriages solemnized outside the Philippines, in accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under Articles 35 (1), (4), (5) and (6), 3637 and 38. (17a) Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse shall have capacity to remarry under Philippine law. (As amended by Executive Order 227) a. Corpuz vs. Sto. Tomas [G.R. No. 186571 : August 11, 2010 | BRION, J.] The alien spouse can claim no right under the second paragraph of Article 26 of the Family Code as the substantive right it establishes is in favor of the Filipino spouse.

The provision was included in the law "to avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after obtaining a divorce, is no longer married to the Filipino spouse (Republic v. Orbecido). To maintain x x x that, under our laws, [the Filipino spouse] has to be considered still married to [the alien spouse] and still subject to a wife's obligations x x x cannot be just. [The Filipino spouse] should not be obliged to live together with, observe respect and fidelity, and render support to [the alien spouse]. The latter should not continue to be one of her heirs with possible rights to conjugal property. She should not be discriminated against in her own country if the ends of justice are to be served. The legislative intent is for the benefit of the Filipino spouse, by clarifying his or her marital status, settling the doubts created by the divorce decree. Essentially, the second paragraph of Article 26 of the Family Code provided the Filipino spouse a substantive right to have his or her marriage to the alien spouse considered as dissolved, capacitating him or her to remarry (Van Dorn v. Romillo, Jr. and Pilapil v. Ibay-Somera). 2. ***

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Without the second paragraph of Article 26 of the Family Code, the judicial recognition of the foreign decree of divorce, whether in a proceeding instituted precisely for that purpose or as a related issue in another proceeding, would be of no significance to the Filipino spouse since our laws do not recognize divorce as a mode of severing the marital bond; Article 17 of the Civil Code provides that the policy against absolute divorces cannot be subverted by judgments promulgated in a foreign country. The inclusion of the second paragraph in Article 26 of the Family Code provides the direct exception to this rule and serves as basis for recognizing the dissolution of the marriage between the Filipino spouse and his or her alien spouse. (Art 15 in relation to Art 17)

Art. 16. Real property as well as personal property is subject to the law of the country where it is stipulated. However, intestate and testamentary successions, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country wherein said property may be found. (10a) a. Quita vs. CA and Dandan [G.R. No. 124862. December 22, 1998. | BELLOSILLO, J.] Private respondent stressed that the citizenship of petitioner was relevant in the light of the ruling in Van Dorn v. Romillo Jr. that aliens may obtain divorces abroad, which may be recognized in the Philippines, provided they are valid according to their national law. The trial court found that both were "Filipino citizens and were married in the Philippines." It maintained that their divorce obtained in 1954 in California, U.S.A., was not valid in Philippine jurisdiction. [SC] deduced that the finding on their citizenship pertained solely to the time of their marriage as the trial court was not supplied with a basis to determine petitioner’s citizenship at the time of their divorce x x x Once proved that she was no longer a Filipino citizen at the time of their divorce, Van Dorn would become applicable and petitioner could very well lose her right to inherit from Arturo. b. Llorente v. CA and Llorente [G.R. No. 124371. November 23, 2000. | PARDO, J.] First, there is no such thing as one American law. The "national law" indicated in Article 16 of the Civil Code cannot possibly apply to general American law. There is no such law governing the validity of testamentary provisions in the United States. Each State of the union has its own law applicable to its citizens and in force only within the State. It can therefore refer to no other than the law of the State of which the decedent was a resident. Second, there is no showing that the application of the renvoi doctrine is called for or required by New York State law. The hasty application of Philippine law and the complete disregard of the will, already probated as duly executed in accordance with the formalities of Philippine law is fatal.

ISSUE: May a will executed by a foreigner abroad be probated in the Philippines although it has not been previously probated and allowed in the country where it was executed? Our laws do not prohibit the probate of wills executed by foreigners abroad although the same have not as yet been probated and allowed in the countries of their execution. A foreign will can be given legal effects in our jurisdiction. Article 816 of the Civil Code states that the will of an alien who is abroad produces effect in the Philippines if made in accordance with the formalities prescribed by the law of the place where he resides, or according to the formalities observed in his country.

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c. IN RE: In The Matter Of The Petition To Approve The Will Of Ruperta Palaganas v. Palaganas [G.R. No. 169144 : January 26, 2011 | ABAD, J.]

3. *** Art. 17. The forms and solemnities of contracts, wills, and other public instruments shall be governed by the laws of the country in which they are executed. When the acts referred to are executed before the diplomatic or consular officials of the Republic of the Philippines in a foreign country, the solemnities established by Philippine laws shall be observed in their execution. Prohibitive laws concerning persons, their acts or property, and those which have, for their object, public order, public policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign country. (11a) a. United Airlines, Inc. v. CA [G.R. No. 124110. April 20, 2001. | KAPUNAN, J.] According to the doctrine of lex loci contractus, as a general rule, the law of the place where a contract is made or entered into governs with respect to its nature and validity, obligation and interpretation. This has been said to be the rule even though the place where the contract was made is different from the place where it is to be performed, and particularly so, if the place of the making and the place of performance are the same. Hence, the court should apply the law of the place where the airline ticket was issued, when the passengers are residents and nationals of the forum and the ticket is issued in such State by the defendant airline. 4. Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. Art. 20. Every person who, contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same. Art. 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage.

Petitioners insist that they are entitled to the issuance of a Writ of Preliminary Injunction because respondents’ installation of a stationary camera directly facing petitioners’ property and a revolving camera covering a significant portion of the same property constitutes a violation of petitioners’ right to privacy. ISSUE: Is there a violation of petitioners’ right to privacy? Article 26(1) of the Civil Code x x x protects an individual’s right to privacy and provides a legal remedy against abuses that may be committed against him by other individuals. This provision recognizes that a man’s house is his castle, where his right to privacy cannot be denied or even restricted by others x x x an individual’s right to privacy

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a. Spouses Hing v. Choachuy, Sr (G.R. No. 179736, June 26, 2013 | DEL CASTILLO, J.)

under Article 26 should not be confined to his house or residence as it may extend to places where he has the right to exclude the public or deny them access. The phrase “prying into the privacy of another’s residence,” therefore, covers places, locations, or even situations which an individual considers as private. And as long as his right is recognized by society, other individuals may not infringe on his right to privacy x x x petitioners have a “reasonable expectation of privacy” in their property, whether they use it as a business office or as a residence and that the installation of video surveillance cameras directly facing petitioners’ property or covering a significant portion thereof, without their consent, is a clear violation of their right to privacy. b. California Clothing, Inc v. Quiñones (G.R. No.175822, October 23, 2013 | PERALTA, J.) Petitioners claimed that there was a miscommunication between the cashier and the invoicer leading to the erroneous issuance of the receipt to respondent. When they realized the mistake, they made a cash count and discovered that the amount which is equivalent to the price of the black jeans was missing. They, thus, concluded that it was respondent who failed to make such payment. It was, therefore, within their right to verify from respondent whether she indeed paid or not and collect from her if she did not. ISSUE: Did the petitioner exercise their right to verify the payment made by the respondent in good faith? The elements of abuse of rights are as follows: (1) there is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another. Under the abuse of rights principle found in Article 19, a person must, in the exercise of legal right or duty, act in good faith. He would be liable if he instead acted in bad faith, with intent to prejudice another. Good faith refers to the state of mind which is manifested by the acts of the individual concerned. It consists of the intention to abstain from taking an unconscionable and unscrupulous advantage of another. Malice or bad faith, on the other hand, implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity.

A right, though by itself legal because recognized or granted by law as such, may nevertheless become the source of some illegality. When a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be held responsible. But while Article 19 lays down a rule of conduct for the government of human relations and for the maintenance of social order, it does not provide a remedy for its violation. Generally, an action for damages under either Article 20 or Article 21 would be proper. Corollarilly, Article 20 x x x speaks of the general sanctions of all other provisions of law which do not especially provide for its own sanction. When a right is exercised in a manner which does not conform to the

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c. Ardiente v. Spouses Pastorfide (G.R. No. 161921, July 17, 2013 | PERALTA, J.)

standards set forth in the said provision and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be responsible. Thus, if the provision does not provide a remedy for its violation, an action for damages under either Article 20 or Article 21 of the Civil Code would be proper. d. Pe vs. Pe (G.R. No. L-17396 May 30, 1962| BAUTISTA ANGELO, J.) The claim of plaintiffs for damages is based on the fact that defendant, being a married man, carried on a love affair with Lolita Pe thereby causing plaintiffs injury in a manner contrary to morals, good customs and public policy.The circumstances under which defendant tried to win Lolita's affection cannot lead, to any other conclusion than that it was he who, thru an ingenious scheme or trickery, seduced the latter to the extent of making her fall in love with him x x x defendant not only deliberately, but through a clever strategy, succeeded in winning the affection and love of Lolita to the extent of having illicit relations with her x x x he has committed an injury to Lolita's family in a manner contrary to morals, good customs and public policy as contemplated in Article 21. e. Velayo vs. Shell Company [G.R. No. L-7817. October 31, 1956. | FELIX, J.] Defendant — taking advantage of his knowledge that insolvency proceedings were to be instituted by CALI if the creditors did not come to an understanding as to the manner of distribution of the insolvent asset among them, and believing it most probable that they would not arrive at such understanding as it was really the case — schemed and effected the transfer of its sister corporation in the United States, where CALI’s plane C-54 was by that swift and unsuspected operation efficaciously disposed of said insolvent’s property depriving the latter and the Assignee that was latter appointed, of the opportunity to recover said plane. 5. * Art. 40. Birth determines personality; but the conceived child shall be considered born for all purposes that are favorable to it, provided it be born later with the conditions specified in the following article. (29a)

a. Continental Steel Mfg Corp v. Voluntary Arbitrator Montaño [G.R. NO. 182836 : October 13, 2009 | CHICO-NAZARIO, J.] Article 40 provides that a conceived child acquires personality only when it is born, and Article 41 defines when a child is considered born. Article 42 plainly states that civil personality is extinguished by death.The rights to bereavement leave and other death benefits in the instant case pertain directly to the parents of the unborn child upon the latter's death x x x while the Civil Code expressly provides that civil personality may be extinguished by death, it does not explicitly state that only those who have acquired juridical personality could die.

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Art. 41. For civil purposes, the fetus is considered born if it is alive at the time it is completely delivered from the mother's womb. However, if the fetus had an intra-uterine life of less than seven months, it is not deemed born if it dies within twenty-four hours after its complete delivery from the maternal womb. (30a)

Death has been defined as the cessation of life. Life is not synonymous with civil personality. One need not acquire civil personality first before he/she could die. Even a child inside the womb already has life. No less than the Constitution recognizes the life of the unborn from conception, that the State must protect equally with the life of the mother. If the unborn already has life, then the cessation thereof even prior to the child being delivered, qualifies as death x x x the unborn child can be considered a dependent under the CBA. As Continental Steel itself defines a dependent as "one who relies on another for support; one not able to exist or sustain oneself without the power or aid of someone else." The CBA did not provide a qualification for the child dependent, such that the child must have been born or must have acquired civil personality, as Continental Steel avers. Without such qualification, then child shall be understood in its more general sense, which includes the unborn fetus in the mother's womb. FAMILY CODE 6. *** Art. 2. No marriage shall be valid, unless these essential requisites are present: (1) Legal capacity of the contracting parties who must be a male and a female; and (2) Consent freely given in the presence of the solemnizing officer. (53a) Art. 3. The formal requisites of marriage are: (1) Authority of the solemnizing officer; (2) A valid marriage license except in the cases provided for in Chapter 2 of this Title; and (3) A marriage ceremony which takes place with the appearance of the contracting parties before the solemnizing officer and their personal declaration that they take each other as husband and wife in the presence of not less than two witnesses of legal age. (53a, 55a) Art. 4. The absence of any of the essential or formal requisites shall render the marriage void ab initio, except as stated in Article 35 (2).

Art. 5. Any male or female of the age of eighteen years or upwards not under any of the impediments mentioned in Articles 37 and 38, may contract marriage. (54a) Art. 7. Marriage may be solemnized by: (1) Any incumbent member of the judiciary within the court's jurisdiction; (2) Any priest, rabbi, imam, or minister of any church or religious sect duly authorized by his church or religious sect and registered with the civil registrar general, acting within the limits of the written authority granted by his church or religious sect and provided that at least one of the contracting parties belongs to the solemnizing officer's church or religious sect; (3) Any ship captain or airplane chief only in the case mentioned in Article 31; (4) Any military commander of a unit to which a chaplain is assigned, in the

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

absence of the latter, during a military operation, likewise only in the cases mentioned in Article 32; (5) Any consul-general, consul or vice-consul in the case provided in Article 10. (56a) Art. 68. The husband and wife are obliged to live together, observe mutual love, respect and fidelity, and render mutual help and support. (109a) Art. 26. (supra) Art. 39. The action or defense for the declaration of absolute nullity of a marriage shall not prescribe. Art. 40. The absolute nullity of a previous marriage may be invoked for purposes of remarriage on the basis solely of a final judgment declaring such previous marriage void. (n) a. Niñal v. Bayadog [G.R. No. 133778. March 14, 2000. | YNARESSANTIAGO, J.]

However there are several instances recognized by the Civil Code wherein a marriage license is dispensed with, one of which referring to the marriage of a man and a woman who have lived together and exclusively with each other as husband and wife for a continuous and unbroken period of at least five years before the marriage. The rationale why no license is required in such case is to avoid exposing the parties to humiliation, shame and embarrassment concomitant with the scandalous cohabitation of persons outside a valid marriage due to the publication of every applicant’s name for a marriage license. The publicity attending the marriage license may discourage such persons from legitimizing their status. To preserve peace in the family, avoid the peeping and suspicious eye of public exposure and contain the source of gossip arising from the publication of their names, the law deemed it wise to preserve their privacy and exempt them from that requirement. x x x what nature of cohabitation is contemplated x x x to warrant the counting of the five year period in order to exempt the future spouses from securing a marriage license x x x that five-year period should be computed on the basis of a cohabitation as "husband and wife" where the only missing factor is the special contract of marriage to validate the union. In other words, the five-year common-law cohabitation period, which is counted back from the date of celebration of marriage, should be a period of legal union had it not been for the absence of the marriage. This 5-year period should be the years immediately before the day of the marriage and it should be a

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The requirement and issuance of marriage license is the State’s demonstration of its involvement and participation in every marriage, in the maintenance of which the general public is interested. This interest proceeds from the constitutional mandate that the State recognizes the sanctity of family life and of affording protection to the family as a basic "autonomous social institution" Specifically, the Constitution considers marriage as an "inviolable social institution," and is the foundation of family life which shall be protected by the State. This is why the Family Code considers marriage as "a special contract of permanent union" and case law considers it not just an adventure but a lifetime commitment."

period of cohabitation characterized by exclusivity — meaning no third party was involved at any time within the 5 years and continuity — that is unbroken. Otherwise x x x the law would be sanctioning immorality and encouraging parties to have common law relationships and placing them on the same footing with those who lived faithfully with their spouse x x x It should be noted that a license is required in order to notify the public that two persons are about to be united in matrimony and that anyone who is aware or has knowledge of any impediment to the union of the two shall make it known to the local civil registrar. b. Tecson-Dayot v. Dayot [G.R. NO. 175581 : March 28, 2008 | CHICONAZARIO, J.] ISSUE: Is the falsity of an affidavit of marital cohabitation, where the parties have in truth fallen short of the minimum five-year requirement, effectively renders the marriage void ab initio for lack of a marriage license? YES. x x x the contracting parties shall state the requisite facts in an affidavit before any person authorized by law to administer oaths; and that the official x x x who solemnized the marriage shall also state in an affidavit that he took steps to ascertain the ages and other qualifications of the contracting parties and that he found no legal impediment to the marriage.

x x x the falsity of the allegation in the sworn affidavit relating to the period of Jose and Felisa's cohabitation, which would have qualified their marriage as an exception to the requirement for a marriage license, cannot be a mere irregularity, for it refers to a quintessential fact that the law precisely required to be deposed and attested to by the parties under oath. If the essential matter in the sworn affidavit is a lie, then it is but a mere scrap of paper, without force and effect. Hence, it is as if there was no affidavit at all. c. *** Republic v. Albios (G.R. No. 198780, October 16, 2013 | MENDOZA, J.) ISSUE: Is a marriage, contracted for the sole purpose of acquiring American citizenship in consideration of $2,000 void ab initio on the ground of lack of consent? NO. “LIMITED PURPOSE” MARRIAGES are marriages where a couple marries only to achieve a particular purpose or acquire specific benefits.

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The Republic admitted that Jose and Felisa started living together barely five months before the celebration of their marriage. The falsity of the affidavit executed by Jose and Felisa to exempt them from the requirement of a marriage license, is beyond question x x x it cannot be denied that the marriage between Jose and Felisa was celebrated without the formal requisite of a marriage license. To permit a false affidavit to take the place of a marriage license is to allow an abject circumvention of the law. If this Court is to protect the fabric of the institution of marriage, we must be wary of deceptive schemes that violate the legal measures set forth in our laws.

A common limited purpose marriage is one entered into solely for the legitimization of a child. Another is for immigration purposes. The CA’s assailed decision was grounded on the parties’ supposed lack of consent. Under Article 2 of the Family Code, consent is an essential requisite of marriage. Article 4 of the same Code provides that the absence of any essential requisite shall render a marriage void ab initio. A MARRIAGE IN JEST is a pretended marriage, legal in form but entered into as a joke, with no real intention of entering into the actual marriage status, and with a clear understanding that the parties would not be bound. Marriages in jest are void ab initio for a complete absence of consent. Albios and Fringer had an undeniable intention to be bound in order to create the very bond necessary to allow the respondent to acquire American citizenship. Only a genuine consent to be married would allow them to further their objective, considering that only a valid marriage can properly support an application for citizenship. There was, thus, an apparent intention to enter into the actual marriage status and to create a legal tie, albeit for a limited purpose. Genuine consent was, therefore, clearly present. The possibility that the parties in a marriage might have no real intention to establish a life together is, however, insufficient to nullify a marriage freely entered into in accordance with law. There is no law that declares a marriage void if it is entered into for purposes other than what the Constitution or law declares, such as the acquisition of foreign citizenship. Therefore, so long as all the essential and formal requisites precribed by law are present, and it is not void or voidable under the grounds provided by law, it shall be declared valid. Hence, though the respondent’s marriage may be considered a sham or fraudulent for the purposes of immigration, it is not void ab initio and continues to be valid and subsisting. d. Corpuz vs. Sto. Tomas [supra] e. Go-Bangayan v. Bangayan, Jr (G.R. No. 201061, July 03, 2013 | CARPIO, J.)

Under Article 35 of the Family Code, a marriage solemnized without a license, except those covered by Article 34 where no license is necessary, “shall be void from the beginning.” In this case, the marriage x x x was solemnized without a license. It was duly established that no marriage license was issued to them and that the purported Marriage License did not match the marriage license numbers issued by the local civil registrar. The case clearly falls under x x x marriage void ab initio. The marriage was also non-existent. Applying the general rules on void or inexistent contracts (Article 1409, contracts which are absolutely simulated or fictitious are “inexistent and void from the

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ISSUE: May a marriage be declared null and void ab initio and nonexistent at the same time? YES.

beginning.” Thus, herein marriage is null and void ab initio and nonexistent. f. Garcia v. Recio (G.R. No. 138322. October 2, 2001 | PANGANIBAN, J.) Respondent presented a decree nisi or an interlocutory decree -- a conditional or provisional judgment of divorce. It is in effect the same as a separation from bed and board, although an absolute divorce may follow after the lapse of the prescribed period during which no reconciliation is effected. Even after the divorce becomes absolute, the court may under some foreign statutes and practices, still restrict remarriage. Under some other jurisdictions, remarriage may be limited by statute; thus, the guilty party in a divorce which was granted on the ground of adultery may be prohibited from marrying again. The court may allow a remarriage only after proof of good behavior. On its face, the herein Australian divorce decree contains a restriction that reads: “A party to a marriage who marries again before this decree becomes absolute (unless the other party has died) commits the offence of bigamy.” x x x the divorce obtained by respondent may have been restricted x x x Hence x x x no basis for the ruling of the trial court, which erroneously assumed that the Australian divorce ipso facto restored respondents capacity to remarry despite the paucity of evidence on this matter. g. Fujiki v. Marinay (G.R. No. 196049, June 26, 2013 | CARPIO, J.)

A petition to recognize a foreign judgment declaring a marriage void does not require relitigation under a Philippine court of the case as if it were a new petition for declaration of nullity of marriage. Philippine courts cannot presume to know the foreign laws under which the foreign judgment was rendered. They cannot substitute their judgment on the status, condition and legal capacity of the foreign citizen who is under the jurisdiction of another state. Thus, Philippine courts can only recognize the foreign judgment as a fact according to the rules of evidence. 7. **** Art. 41. A marriage contracted by any person during subsistence of a previous marriage shall be null and void, unless before the celebration of the subsequent marriage, the prior spouse had been absent for four consecutive years and the spouse present has a well-founded belief that the absent spouse was already

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A foreign judgment relating to the status of a marriage affects the civil status, condition and legal capacity of its parties. However, the effect of a foreign judgment is not automatic. To extend the effect of a foreign judgment in the Philippines, Philippine courts must determine if the foreign judgment is consistent with domestic public policy and other mandatory laws. Article 15 of the Civil Code provides that “[l]aws relating to family rights and duties, or to the status, condition and legal capacity of persons are binding upon citizens of the Philippines, even though living abroad.” This is the rule of lex nationalii in private international law. Thus, the Philippine State may require, for effectivity in the Philippines, recognition by Philippine courts of a foreign judgment affecting its citizen, over whom it exercises personal jurisdiction relating to the status, condition and legal capacity of such citizen.

dead. In case of disappearance where there is danger of death under the circumstances set forth in the provisions of Article 391 of the Civil Code, an absence of only two years shall be sufficient. For the purpose of contracting the subsequent marriage under the preceding paragraph the spouse present must institute a summary proceeding as provided in this Code for the declaration of presumptive death of the absentee, without prejudice to the effect of reappearance of the absent spouse. (83a) a. Republic v. Cantor (G.R. No. 184621, December 10, 2013 | BRION, J.) ISSUE: Is there a well–founded belief that respondent's husband is already dead? Under Article 41 of the Family Code, there are (4) essential requisites for the declaration of presumptive death:  That the absent spouse has been missing for four consecutive years, or two consecutive years if the disappearance occurred where there is danger of death under the circumstances laid down in Article 391, Civil Code;  That the present spouse wishes to remarry;  That the present spouse has a well–founded belief that the absentee is dead; and  That the present spouse files a summary proceeding for the declaration of presumptive death of the absentee.

8. * Art. 56. The petition for legal separation shall be denied on any of the following grounds: (1) Where the aggrieved party has condoned the offense or act complained of; (2) Where the aggrieved party has consented to the commission of the offense or act complained of; (3) Where there is connivance between the parties in the commission of the offense or act constituting the ground for legal separation; (4) Where both parties have given ground for legal separation; (5) Where there is collusion between the parties to obtain decree of legal separation; or (6) Where the action is barred by prescription.

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x x x the present spouse must prove that his/her belief was the result of diligent and reasonable efforts and inquiries to locate the absent spouse and that based on these efforts and inquiries, he/she believes that under the circumstances, the absent spouse is already dead. It requires exertion of active effort (not a mere passive one) x x x criteria for determining the existence of a “well–founded belief” under Article 41 x x x respondent merely engaged in a “passive search” where she relied on uncorroborated inquiries from her in–laws, neighbors and friends. She failed to conduct a diligent search because her alleged efforts are insufficient to form a well–founded belief that her husband was already dead x x x whether or not the spouse present acted on a well–founded belief of death of the absent spouse depends upon the inquiries to be drawn from a great many circumstances occurring before and after the disappearance of the absent spouse and the nature and extent of the inquiries made by the present spouse.

Art. 63. The decree of legal separation shall have the following effects: (1) The spouses shall be entitled to live separately from each other, but the marriage bonds shall not be severed; (2) The absolute community or the conjugal partnership shall be dissolved and liquidated but the offending spouse shall have no right to any share of the net profits earned by the absolute community or the conjugal partnership, which shall be forfeited in accordance with the provisions of Article 43(2); (3) The custody of the minor children shall be awarded to the innocent spouse, subject to the provisions of Article 213 of this Code; and (4) The offending spouse shall be disqualified from inheriting from the innocent spouse by intestate succession. Moreover, provisions in favor of the offending spouse made in the will of the innocent spouse shall be revoked by operation of law. Art. 213. In case of separation of the parents, parental authority shall be exercised by the parent designated by the Court. The Court shall take into account all relevant considerations, especially the choice of the child over seven years of age, unless the parent chosen is unfit. 9. ** Art. 76. In order that any modification in the marriage settlements may be valid, it must be made before the celebration of the marriage, subject to the provisions of Articles 66, 67, 128, 135 and 136. Art. 134. In the absence of an express declaration in the marriage settlements, the separation of property between spouses during the marriage shall not take place except by judicial order. Such judicial separation of property may either be voluntary or for sufficient cause. (190a)

In the cases provided for in Numbers (1), (2) and (3), the presentation of the final judgment against the guilty or absent spouse shall be enough basis for the grant of the decree of judicial separation of property. (191a) Art. 136. The spouses may jointly file a verified petition with the court for the voluntary dissolution of the absolute community or the conjugal partnership of gains, and for the separation of their common properties. All creditors of the absolute community or of the conjugal partnership of gains, as well as the personal creditors of the spouse, shall be listed in the petition and notified of the filing thereof. The court shall take measures to protect the creditors and other persons with pecuniary interest. (191a) a. Partosa- Jo v. CA [G.R. No. 82606. December 18, 1992. | CRUZ, J.]

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Art. 135. Any of the following shall be considered sufficient cause for judicial separation of property: (1) That the spouse of the petitioner has been sentenced to a penalty which carries with it civil interdiction; (2) That the spouse of the petitioner has been judicially declared an absentee; (3) That loss of parental authority of the spouse of petitioner has been decreed by the court; (4) That the spouse of the petitioner has abandoned the latter or failed to comply with his or her obligations to the family as provided for in Article 101; (5) That the spouse granted the power of administration in the marriage settlements has abused that power; and (6) That at the time of the petition, the spouses have been separated in fact for at least one year and reconciliation is highly improbable.

Article 128 of the Family Code provides that the aggrieved spouse may petition for judicial separation on either of these grounds: 1. Abandonment by a spouse of the other without just cause; and 2. Failure of one spouse to comply with his or her obligations to the family without just cause, even if said spouse does not leave the other spouse. Abandonment implies a departure by one spouse with the avowed intent never to return, followed by prolonged absence without just cause, and without in the meantime providing in the least for one’s family although able to do so. There must be absolute cessation of marital relations, duties and rights, with the intention of perpetual separation. The physical separation of the parties, coupled with the refusal by the private respondent to give support to the petitioner, sufficed to constitute abandonment as a ground for the judicial separation of their conjugal property. Their separation thus falls also squarely under Article 135 of the Family Code The order of judicial separation of the properties in question is based on the finding of both the trial and respondent courts that the private respondent is indeed their real owner. It is these properties that should now be divided between him and the petitioner, on the assumption that they were acquired during coverture and so belong to the spouses half and half. As the private respondent is a Chinese citizen, the division must include such properties properly belonging to the conjugal partnership as may have been registered in the name of other persons in violation of the Anti-Dummy Law. 10. ** Art. 87. Every donation or grant of gratuitous advantage, direct or indirect, between the spouses during the marriage shall be void, except moderate gifts which the spouses may give each other on the occasion of any family rejoicing. The prohibition shall also apply to persons living together as husband and wife without a valid marriage. (133a) a. Agapay v. Palang [G.R. No. 116668. July 28, 1997 | ROMERO, J.] Article 87 of the Family Code expressly provides that the prohibition against donations between spouses now applies to donations between persons living together as husband and wife without a valid marriage, for otherwise, the condition of those who incurred guilt would turn out to be better than those in legal union.

x x x cohabitation is the public assumption by a man and a woman of the marital relation, and dwelling together as man and wife, thereby holding themselves out to the public as such. Secret meetings or nights clandestinely spent together, even if often repeated, do not constitute such kind of cohabitation; they are merely meretricious. In this jurisdiction, this Court has considered as sufficient proof of commonlaw relationship the stipulations between the parties, a conviction of concubinage, or the existence of illegitimate children. x x x since Cirila gave Francisco therapeutic massage and Leticia said they slept in the same bedroom. At the very least, their public conduct indicated that theirs was not just a relationship of caregiver and

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b. Arcaba v. Tabancura Vda. De Batocael (G.R. No. 146683. November 22, 2001 | MENDOZA, J.)

patient, but that of exclusive partners akin to husband and wife. Respondents having proven by a preponderance of evidence that Cirila and Francisco lived together as husband and wife without a valid marriage, the inescapable conclusion is that the donation made by Francisco in favor of Cirila is void under Art. 87 of the Family Code. 11. ** Art. 94. The absolute community of property shall be liable for: (1) The support of the spouses, their common children, and legitimate children of either spouse; however, the support of illegitimate children shall be governed by the provisions of this Code on Support; (2) All debts and obligations contracted during the marriage by the designated administrator-spouse for the benefit of the community, or by both spouses, or by one spouse with the consent of the other; (3) Debts and obligations contracted by either spouse without the consent of the other to the extent that the family may have been benefited; (4) All taxes, liens, charges and expenses, including major or minor repairs, upon the community property; (5) All taxes and expenses for mere preservation made during marriage upon the separate property of either spouse used by the family; (6) Expenses to enable either spouse to commence or complete a professional or vocational course, or other activity for self-improvement; (7) Ante-nuptial debts of either spouse insofar as they have redounded to the benefit of the family; (8) The value of what is donated or promised by both spouses in favor of their common legitimate children for the exclusive purpose of commencing or completing a professional or vocational course or other activity for selfimprovement; (9) Ante-nuptial debts of either spouse other than those falling under paragraph (7) of this Article, the support of illegitimate children of either spouse, and liabilities incurred by either spouse by reason of a crime or a quasi-delict, in case of absence or insufficiency of the exclusive property of the debtor-spouse, the payment of which shall be considered as advances to be deducted from the share of the debtor-spouse upon liquidation of the community; and (10) Expenses of litigation between the spouses unless the suit is found to be groundless.

Art. 121. The conjugal partnership shall be liable for: (1) The support of the spouse, their common children, and the legitimate children of either spouse; however, the support of illegitimate children shall be governed by the provisions of this Code on Support; (2) All debts and obligations contracted during the marriage by the designated administrator-spouse for the benefit of the conjugal partnership of gains, or by both spouses or by one of them with the consent of the other; (3) Debts and obligations contracted by either spouse without the consent of the other to the extent that the family may have benefited; (4) All taxes, liens, charges, and expenses, including major or minor repairs upon the conjugal partnership property; (5) All taxes and expenses for mere preservation made during the marriage upon the separate property of either spouse; (6) Expenses to enable either spouse to commence or complete a professional, vocational, or other activity for self-improvement;

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If the community property is insufficient to cover the foregoing liabilities, except those falling under paragraph (9), the spouses shall be solidarily liable for the unpaid balance with their separate properties. (161a, 162a, 163a, 202a-205a)

(7) Ante-nuptial debts of either spouse insofar as they have redounded to the benefit of the family; (8) The value of what is donated or promised by both spouses in favor of their common legitimate children for the exclusive purpose of commencing or completing a professional or vocational course or other activity for selfimprovement; and (9) Expenses of litigation between the spouses unless the suit is found to groundless. If the conjugal partnership is insufficient to cover the foregoing liabilities, the spouses shall be solidarily liable for the unpaid balance with their separate properties. (161a) a. Ayala Investment & Development Corp vs. CA (G.R. No. 118305 February 12, 1998 | MARTINEZ, J.) ISSUE: Is a surety agreement or an accommodation contract entered into by the husband in favor of his employer redounds to the benefit of the conjugal partnership? NO. (A) where the husband contracts obligations on behalf of the family business, the law presumes, and rightly so, that such obligation will redound to the benefit of the conjugal partnership. (B) On the other hand, if the money or services are given to another person or entity, and the husband acted only as a surety or guarantor, that contract cannot, by itself, alone be categorized as falling within the context of "obligations for the benefit of the conjugal partnership." The contract of loan or services is clearly for the benefit of the principal debtor and not for the surety or his family. No presumption can be inferred that, when a husband enters into a contract of surety or accommodation agreement, it is "for the benefit of the conjugal partnership." Proof must be presented to establish benefit redounding to the conjugal partnership.

12. Art. 96. The administration and enjoyment of the community property shall belong to both spouses jointly. In case of disagreement, the husband's decision shall prevail, subject to recourse to the court by the wife for proper remedy, which must be availed of within five years from the date of the contract implementing such decision. In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the common properties, the other spouse may assume sole powers of administration. These powers do not include disposition or encumbrance without authority of the court or the written consent of the other

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The fact that on several occasions the lending institutions did not require the signature of the wife and the husband signed alone does not mean that being a surety became part of his profession. Neither could he be presumed to have acted for the conjugal partnership. Article 121, paragraph 3, of the Family Code is emphatic that the payment of personal debts contracted by the husband or the wife before or during the marriage shall not be charged to the conjugal partnership except to the extent that they redounded to the benefit of the family. Signing as a surety is certainly not an exercise of an industry or profession nor an act of administration for the benefit of the family.

spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. (206a) Art. 124. The administration and enjoyment of the conjugal partnership shall belong to both spouses jointly. In case of disagreement, the husband's decision shall prevail, subject to recourse to the court by the wife for proper remedy, which must be availed of within five years from the date of the contract implementing such decision. In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not include disposition or encumbrance without authority of the court or the written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. (165a) a. Flores vs. Lindo, Jr [G.R. No. 183984, April 13 : 2011 | CARPIO, J.] Both Article 96 and Article 127 of the Family Code provide that the powers do not include disposition or encumbrance without the written consent of the other spouse. Any disposition or encumbrance without the written consent shall be void. However, both provisions also state that "the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse x x x before the offer is withdrawn by either or both offerors."

Petitioner still has a remedy under the law x x x a mortgage-creditor may institute against the mortgage-debtor either a personal action for debt or a real action to foreclose the mortgage x x x the remedies are alternative and not cumulative. 13. ** Art. 152. The family home, constituted jointly by the husband and the wife or by an unmarried head of a family, is the dwelling house where they and their family reside, and the land on which it is situated. (223a) Art. 153. The family home is deemed constituted on a house and lot from the time it is occupied as a family residence. From the time of its constitution and so long as any of its beneficiaries actually resides therein, the family home continues to be such and is exempt from execution, forced sale or attachment

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In this case, the Promissory Note and the Deed of Real Estate Mortgage were executed October 1995. The Special Power of Attorney was executed November 1995. The execution of the SPA is the acceptance by the other spouse that perfected the continuing offer as a binding contract between the parties, making the Deed of Real Estate Mortgage a valid contract.

except as hereinafter provided and to the extent of the value allowed by law. (223a) Art. 154. The beneficiaries of a family home are: (1) The husband and wife, or an unmarried person who is the head of a family; and (2) Their parents, ascendants, descendants, brothers and sisters, whether the relationship be legitimate or illegitimate, who are living in the family home and who depend upon the head of the family for legal support. (226a) Art. 155. The family home shall be exempt from execution, forced sale or attachment except: (1) For nonpayment of taxes; (2) For debts incurred prior to the constitution of the family home; (3) For debts secured by mortgages on the premises before or after such constitution; and (4) For debts due to laborers, mechanics, architects, builders, materialmen and others who have rendered service or furnished material for the construction of the building. Art. 159. The family home shall continue despite the death of one or both spouses or of the unmarried head of the family for a period of ten years or for as long as there is a minor beneficiary, and the heirs cannot partition the same unless the court finds compelling reasons therefor. This rule shall apply regardless of whoever owns the property or constituted the family home. (238a) Art. 162. The provisions in this Chapter shall also govern existing family residences insofar as said provisions are applicable. (n) a. Spouses De Mesa vs. Spouses Acero [G.R. No. 185064 : January 16, 2012 | REYES, J.] The foregoing rules on constitution of family homes, for purposes of exemption from execution, could be summarized as follows: First, family residences constructed BEFORE the effectivity of the Family Code or before August 3, 1988 must be constituted as a family home either judicially or extrajudicially in accordance with the provisions of the Civil Code in order to be exempt from execution;

Third, family residences which were not judicially or extrajudicially constituted as a family home prior to the effectivity of the Family Code, but were existing thereafter, are considered as family homes by operation of law and are prospectively entitled to the benefits accorded to a family home under the Family Code. The family home’s exemption from execution must be set up and proved to the Sheriff before the sale of the property at public auction x x x petitioners should have asserted the subject property being a family home and its being exempted from execution at the time it was levied or within a reasonable time thereafter. For all intents and purposes, the petitioners’ negligence or omission to assert their right

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Second, family residences constructed AFTER the effectivity of the Family Code on August 3, 1988 are automatically deemed to be family homes and thus exempt from execution from the time it was constituted and lasts as long as any of its beneficiaries actually resides therein;

within a reasonable time gives rise to the presumption that they have abandoned, waived or declined to assert it. Since the exemption under Article 153 of the Family Code is a personal right, it is incumbent upon the petitioners to invoke and prove the same within the prescribed period and it is not the sheriff’s duty to presume or raise the status of the subject property as a family home. b. Manacop v. CA [G.R. No. 104875. November 13, 1992. | MELO, J.] ISSUE: Is the family home of petitioner exempt from execution of the money judgment aforecited? NO. The exemption provided in Article 155 is effective from the time of the constitution of the family home as such, and lasts so long as any of its beneficiaries actually resides therein. In the present case, the residential house and lot of petitioner was not constituted as a family home whether judicially or extrajudicially under the Civil Code. It became a family home by operation of law only under Article 153 of the Family Code. It is deemed constituted as a family home upon the effectivity of the Family Code. It does not mean that Articles 152 and 153 of said Code have a retroactive effect such that all existing family residences are deemed to have been constituted as family homes at the time of their occupation prior to the effectivity of the Family Code and are exempt from execution for the payment of obligations incurred before the effectivity of the Family Code. Article 162 simply means that all existing family residences at the time of the effectivity of the Family Code, are considered family homes and are prospectively entitled to the benefits accorded to a family home under the Family Code. Article 162 does not state that the provisions x x x have a retroactive effect. The debt or liability which was the basis of the judgment arose or was incurred at the time of the vehicular accident (1976) and the money judgment arising therefrom was rendered (January 1988). Both preceded the effectivity of the Family Code on August 3, 1988. This case does not fall under the exemptions from execution provided in the Family Code.

Articles 152 and 153 specifically extend the scope of the family home not just to the dwelling structure in which the family resides but also to the lot on which it stands. Thus, applying these concepts, the subject house as well as the specific portion of the subject land on which it stands are deemed constituted as a family home by the deceased and petitioner Vilma from the moment they began occupying the same as a family residence 20 years back. Article 159 imposes the proscription against the immediate partition of the family home regardless of its ownership. This signifies that even if the family home has passed by succession to the co-ownership of the heirs, or has been willed to any one of them, this fact alone cannot transform the family home into an ordinary property, much less dispel the protection cast upon it by the law. The rights of the individual coowner or owner of the family home cannot subjugate the rights granted under Article 159 to the beneficiaries of the family home. Set against

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c. Arriola v. Arriola [G.R. NO. 177703 - January 28, 2008 | AUSTRIAMARTINEZ, J.]

the foregoing rules, the family home - - consisting of the subject house and lot on which it stands - - cannot be partitioned at this time, even if it has passed to the co-ownership of his heirs, the parties herein. d. Joseph v Mendoza ??? 14. * Art. 166. Legitimacy of a child may be impugned only on the following grounds: (1) That it was physically impossible for the husband to have sexual intercourse with his wife within the first 120 days of the 300 days which immediately preceded the birth of the child because of: (a) the physical incapacity of the husband to have sexual intercourse with his wife; (b) the fact that the husband and wife were living separately in such a way that sexual intercourse was not possible; or (c) serious illness of the husband, which absolutely prevented sexual intercourse; (2) That it is proved that for biological or other scientific reasons, the child could not have been that of the husband, except in the instance provided in the second paragraph of Article 164; or (3) That in case of children conceived through artificial insemination, the written authorization or ratification of either parent was obtained through mistake, fraud, violence, intimidation, or undue influence. (255a) a. Concepcion v. CA [G.R. NO. 123450 : August 31, 2005 | CORONA, J.] The status and filiation of a child cannot be compromised. Article 164 of the Family Code is clear. A child who is conceived or born during the marriage of his parents is legitimate. Article 167 provides that the child shall be considered legitimate although the mother may have declared against its legitimacy or may have been sentenced as an adulteress. The law requires that every reasonable presumption be made in favor of legitimacy.

The presumption of legitimacy proceeds from the sexual union in marriage, particularly during the period of conception. To overthrow this presumption on the basis of Article 166 (1)(b) of the Family Code, it must be shown beyond reasonable doubt that there was no access that could have enabled the husband to father the child. Sexual intercourse is to be presumed where personal access is not disproved, unless such presumption is rebutted by evidence to the contrary. The presumption is quasi-conclusive and may be refuted only by the evidence of physical impossibility of coitus between husband and wife within the first 120 days of the 300 days which immediately preceded the birth of the child.

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Impugning the legitimacy of a child is a strictly personal right of the husband or, in exceptional cases, his heirs. Since the marriage of Gerardo and Ma. Theresa was void from the very beginning, he never became her husband and thus never acquired any right to impugn the legitimacy of her child.

The law, reason and common sense dictate that a legitimate status is more favorable to the child. In the eyes of the law, the legitimate child enjoys a preferred and superior status. He is entitled to bear the surnames of both his father and mother, full support and full inheritance. On the other hand, an illegitimate child is bound to use the surname and be under the parental authority only of his mother. He can claim support only from a more limited group and his legitime is only half of that of his legitimate counterpart. Moreover (without unwittingly exacerbating the discrimination against him), in the eyes of society, a 'bastard' is usually regarded as bearing a stigma or mark of dishonor. Needless to state, the legitimacy presumptively vested by law upon Jose Gerardo favors his interest. 15. ** Art. 172. The filiation of legitimate children is established by any of the following: (1) The record of birth appearing in the civil register or a final judgment; or (2) An admission of legitimate filiation in a public document or a private handwritten instrument and signed by the parent concerned. In the absence of the foregoing evidence, the legitimate filiation shall be proved by: (1) The open and continuous possession of the status of a legitimate child; or (2) Any other means allowed by the Rules of Court and special laws. Art. 175. Illegitimate children may establish their illegitimate filiation in the same way and on the same evidence as legitimate children. The action must be brought within the same period specified in Article 173, except when the action is based on the second paragraph of Article 172, in which case the action may be brought during the lifetime of the alleged parent. a. Roces v. The Local Civil Registrar Of Manila [G.R. No. L-10598. February 14, 1958. CONCEPCION, J.] Local Civil Registrar had no authority to make of record the paternity of an illegitimate child upon the information of a third person and the certificate of birth of an illegitimate child, when signed only by the mother of the latter, is incompetent evidence of fathership of said child.

x x x filiation of ligitimate children shall be proved by any other means allowed by the Rules of Court and special laws, in the absence of a record of birth or a parent's admission of such legitimate filiation in a public or private document duly signed by the parent. Such other proof of one's filiation may be a baptismal certificate, a judicial admission, a family Bible in which his name has been entered, common reputation respecting his pedigree, admission by silence, the testimonies of witnesses and other kinds of proof admissible under Rule 130 of the Rules of Court. By analogy, this method of proving filiation may also be utilized x x x The baptismal certificates presented in evidence by private respondents are public documents. Parish priests continue to be the legal custodians of the parish records and are authorized to issue true

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b. Heirs of Ignacio Conti vs. CA (G.R. No. 118464 December 21, 1998 | BELLOSILLO, J.)

copies, in the form of certificates, of the entries contained therein. It may be argued that baptismal certificates are evidence only of the administration of the sacrament, but in this case, there were (4) baptismal certificates which, when taken together, uniformly show that xxx had the same set of parents, as indicated therein. Corroborated by the undisputed testimony x x x such baptismal certificates have acquired evidentiary weight to prove filiation. c. Eceta v. Eceta [G.R. NO. 157037 : May 20, 2004 | YNARES-SANTIAGO, J.] The filiation of illegitimate children, like legitimate children, is established by (1) the record of birth appearing in the civil register or a final judgment; or (2) an admission of legitimate filiation in a public document or a private handwritten instrument and signed by the parent concerned.In the absence thereof, filiation shall be proved by (1) the open and continuous possession of the status of a legitimate child; or (2) any other means allowed by the Rules of Court and special laws. The due recognition of an illegitimate child in a record of birth, a will, a statement before a court of record, or in any authentic writing is, in itself, a consummated act of acknowledgement of the child, and no further court action is required. In fact, any authentic writing is treated not just a ground for compulsory recognition; it is in itself a voluntary recognition that does not require a separate action for judicial approval. d. Potenciano v Mercado ??? ~ Art 834, NCC 16. *** Art. 176. Illegitimate children shall use the surname and shall be under the parental authority of their mother, and shall be entitled to support in conformity with this Code. The legitime of each illegitimate child shall consist of one-half of the legitime of a legitimate child. Except for this modification, all other provisions in the Civil Code governing successional rights shall remain in force. (287a) a. Grande v. Antonio (G.R. No. 206248, February 18, 2014 | VELASCO JR., J.)

Art. 176 was later amended (2004) by RA 9255 which now reads x x x However, illegitimate children MAY use the surname of their father if their filiation has been expressly recognized by their father through the record of birth appearing in the civil register, or when an admission in a public document or private handwritten instrument is made by the father. Provided, the father has the right to institute an action before the regular courts to prove non–filiation during his lifetime x x x x x x the general rule is that an illegitimate child shall use the surname of his or her mother. The exception provided by RA 9255 is, in case his or her filiation is expressly recognized by the father through the record of birth appearing in the civil register or when an admission in a public document or private handwritten instrument is made by the father. In such a situation, the illegitimate child MAY use the surname of the father. Art. 176 gives illegitimate children the right to decide if they want to use the surname of their father or not. It is not the father

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ISSUE: Does a father, upon his recognition of their filiation, have the right to compel his illegitimate children the use his surname? NO.

(herein respondent) or the mother (herein petitioner) who is granted by law the right to dictate the surname of their illegitimate children. The use of the word “may” in the provision readily shows that an acknowledged illegitimate child is under no compulsion to use the surname of his illegitimate father. The word “may” is permissive and operates to confer discretion upon the illegitimate children. 17. * Art. 177. Children conceived and born outside of wedlock of parents who, at the time of conception of the former, were not disqualified by any impediment to marry each other, or were so disqualified only because either or both of them were below eighteen (18) years of age, may be legitimated. Art. 178. Legitimation shall take place by a subsequent valid marriage between parents. The annulment of a voidable marriage shall not affect the legitimation. As amended by : RA 9855 18. *** Art. 184. The following persons may not adopt: (1) The guardian with respect to the ward prior to the approval of the final accounts rendered upon the termination of their guardianship relation; (2) Any person who has been convicted of a crime involving moral turpitude; (3) An alien, except: (a) A former Filipino citizen who seeks to adopt a relative by consanguinity; (b) One who seeks to adopt the legitimate child of his or her Filipino spouse; or (c) One who is married to a Filipino citizen and seeks to adopt jointly with his or her spouse a relative by consanguinity of the latter. Aliens not included in the foregoing exceptions may adopt Filipino children in accordance with the rules on inter-country adoptions as may be provided by law. (28a, E. O. 91 and PD 603) Art. 185. Husband and wife must jointly adopt, except in the following cases: (1) When one spouse seeks to adopt his own illegitimate child; or (2) When one spouse seeks to adopt the legitimate child of the other. (29a, E. O. 91 and PD 603) RA 8552: Domestic Adoption Act of 1998.

x x x both husband and wife "shall" jointly adopt if one of them is an alien. It was so crafted to protect Filipino children who are put up for adoption. The Family Code reiterated the rule by requiring that husband and wife "must" jointly adopt, except in the cases provided for in Art 185. Under the said new law, joint adoption by husband and wife is mandatory. This is in consonance with the concept of joint parental authority over the child, which is the ideal situation. As the child to be adopted is elevated to the level of a legitimate child, it is but natural to require the spouses to adopt jointly. The rule also insures harmony between the spouses.

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a. Republic v. Toledano [G.R. No. 94147. June 8, 1994 | PUNO, J.]

19. ** REPUBLIC ACT NO. 9048 (2001) as amended by REPUBLIC ACT NO. 10172 (2012) SECTION 1. Authority to Correct Clerical or Typographical Error and Change of First Name or Nickname. – No entry in a civil register shall be changed or corrected without a judicial order, except for clerical or typographical errors and change of first name or nickname, the day and month in the date of birth or sex of a person where it is patently clear that there was a clerical or typographical error or mistake in the entry, which can be corrected or changed by the concerned city or municipal civil registrar or consul general in accordance with the provisions of this Act and its implementing rules and regulations. SEC. 2. Definition of Terms. – As used in this Act, the following terms shall mean: ‘Clerical or typographical error’ refers to a mistake committed in the performance of clerical work in writing, copying, transcribing or typing an entry in the civil register that is harmless and innocuous, such as misspelled name or misspelled place of birth, mistake in the entry of day and month in the date of birth or the sex of the person or the like, which is visible to the eyes or obvious to the understanding, and can be corrected or changed only by reference to other existing record or records: Provided, however, That no correction must involve the change of nationality, age, or status of the petitioner." Section 4. Grounds for Change of First Name or Nickname. – The petition for change of first name or nickname may be allowed in any of the following cases: (1) The petitioner finds the first name or nickname to be ridiculous, tainted with dishonor or extremely difficult to write or pronounce. (2) The new first name or nickname has been habitually and continuously used by the petitioner and he has been publicly known by that by that first name or nickname in the community: or (3) The change will avoid confusion.

ISSUE: May a person successfully petition for a change of name and sex appearing in the birth certificate to reflect the result of a sex reassignment surgery? NO. The State has an interest in the names borne by individuals and entities for purposes of identification. A change of name is a privilege, not a right. Petitions for change of name are controlled by statutes. RA 9048 now governs the change of first name.(NOTE: See amended provision above RA 10172 ). RA 9048 does not sanction a change of first name on the ground of sex reassignment. Rather than avoiding confusion, changing petitioner's first name for his declared purpose may only create grave complications in the civil registry and the public interest.

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a. Silverio v. Republic [G.R. NO. 174689 : October 22, 2007 | CORONA, J.]

Before a person can legally change his given name, he must present proper or reasonable cause or any compelling reason justifying such change. In addition, he must show that he will be prejudiced by the use of his true and official name. In this case, he failed to show, or even allege, any prejudice that he might suffer as a result of using his true and official name. No Law Allows The Change of Entry In The Birth Certificate As To Sex On the Ground of Sex Reassignment. Under RA 9048, a correction in the civil registry involving the change of sex is not a mere clerical or typographical error. It is a substantial change for which the applicable procedure is Rule 108 of the Rules of Court. There is no such special law in the Philippines governing sex reassignment and its effects. This is fatal to petitioner's cause. 20. Correction of Status a. Republic vs. Coseteng- Magpayo [G.R. No. 189476 : February 02, 2011 | CARPIO MORALES, J.] F: Claiming that his parents were never legally married, respondent filed a Petition to change his name. A person can effect a change of name under Rule 103 (CHANGE OF NAME) using valid and meritorious grounds including (a) when the name is ridiculous, dishonorable or extremely difficult to write or pronounce; (b) when the change results as a legal consequence such as legitimation; (c) when the change will avoid confusion; (d) when one has continuously used and been known since childhood by a Filipino name, and was unaware of alien parentage; (e) a sincere desire to adopt a Filipino name to erase signs of former alienage, all in good faith and without prejudicing anybody; and (f) when the surname causes embarrassment and there is no showing that the desired change of name was for a fraudulent purpose or that the change of name would prejudice public interest. Respondent's reason for changing his name cannot be considered as one of, or analogous to, recognized grounds, however.

x x x the mandatory directive under Section 3 of Rule 108 to implead the civil registrar and the parties who would naturally and legally be affected by the grant of a petition for correction or cancellation of entries. 21. *** Art. 218. The school, its administrators and teachers, or the individual, entity or institution engaged in child are shall have special parental authority and responsibility over the minor child while under their supervision, instruction or custody. Authority and responsibility shall apply to all authorized activities whether inside

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Rule 108 clearly directs that a petition which concerns one's civil status should be filed in the civil registry in which the entry is sought to be cancelled or corrected, and "all persons who have or claim any interest which would be affected thereby" should be made parties to the proceeding.

or outside the premises of the school, entity or institution. (349a) Art. 219. Those given the authority and responsibility under the preceding Article shall be principally and solidarily liable for damages caused by the acts or omissions of the unemancipated minor. The parents, judicial guardians or the persons exercising substitute parental authority over said minor shall be subsidiarily liable. The respective liabilities of those referred to in the preceding paragraph shall not apply if it is proved that they exercised the proper diligence required under the particular circumstances. All other cases not covered by this and the preceding articles shall be governed by the provisions of the Civil Code on quasi-delicts. (n) Art. 221. Parents and other persons exercising parental authority shall be civilly liable for the injuries and damages caused by the acts or omissions of their unemancipated children living in their company and under their parental authority subject to the appropriate defenses provided by law. Art. 234. Emancipation takes place by the attainment of majority. Unless otherwise provided, majority commences at the age of eighteen years. (As amended by RA No. 6809 ; December 13, 1989) a. Tamargo v. CA [G.R. No. 85044. June 3, 1992.| FELICIANO, J.]

The civil law assumes that when an unemancipated child living with its parents commits a tortious act, the parents were negligent in the performance of their legal and natural duty closely to supervise the child who is in their custody and control. Parental liability is, in other words, anchored upon parental authority coupled with presumed parental dereliction in the discharge of the duties accompanying such authority. No presumption of parental dereliction on the part of the adopting parents x x x could have arisen since [the minor] was not in fact subject to their control at the time the tort was committed. b. Libi v. IAC [G.R. No. 70890. September 18, 1992. | REGALADO, J.] The parents are and should be held primarily liable for the civil liability arising from criminal offenses committed by their minor children under their legal authority or control, or who live in their company, unless it is proven that the former acted with the diligence of a good father of a

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x x x the law imposes civil liability upon the father and, in case of his death or incapacity, the mother, for any damages that may be caused by a minor child who lives with them. This principle of parental liability is a species of what is frequently designated as vicarious liability, or the doctrine of "imputed negligence" x x x where a person is not only liable for torts committed by himself, but also for torts committed by others with whom he has a certain relationship and for whom he is responsible. Thus, parental liability is made a natural or logical consequence of the duties and responsibilities of parents — their parental authority — which includes the instructing, controlling and disciplining of the child. Article 221 of the Family Code has x x x insisted upon the requisite that the child, doer of the tortious act, shall have been in the actual custody of the parents sought to be held liable for the ensuing damage

family to prevent such damages. That primary liability is premised on the provisions of Article 101 of the Revised Penal Code with respect to damages ex delicto caused by their children 9 years of age or under, or over 9 but under 15 years of age who acted without discernment; and, with regard to their children over 9 but under 15 years of age who acted with discernment, or 15 years or over but under 21 years of age, such primary liability shall be imposed pursuant to Article 2180 of the Civil Code. Under said Article 2180, the enforcement of such liability shall be effected against the father and, in case of his death or incapacity, the mother. This was amplified by the Child and Youth Welfare Code which provides that the same shall devolve upon the father and, in case of his death or incapacity, upon the mother or, in case of her death or incapacity, upon the guardian, but the liability may also be voluntarily assumed by a relative or family friend of the youthful offender. However, under the Family Code, this civil liability is now, without such alternative qualification, the responsibility of the parents and those who exercise parental authority over the minor offender. For civil liability arising from quasi-delicts committed by minors, the same rules shall apply in accordance with Articles 2180 and 2182 of the Civil Code, as so modified.

Under Article 101 of the RPC, a father is civilly liable for the acts committed by his son only if the latter is an imbecile, an insane, under 9 years of age, who acts without discernment, unless it appears that there is no fault or negligence on his part. This is because a son who commits the act under any of those conditions is by law exempt from criminal liability (Article 12, subdivisions 1, 2 and 3, RPC). The idea is not to leave the act entirely unpunished but to attach certain civil liability to the person who has the delinquent minor under his legal authority and control. But a minor over 15 years who acts with discernment is not exempt from criminal liability, for which reason the Code is silent as to the subsidiary liability of his parents should he stand convicted. In that case resort should be had to the general law, the Civil Code, which, under Article 2180, provides that "The father and, in case of his death, or incapacity, the mother, are responsible for damages caused by the minor children who lived in their company." This provision covers not only obligations which arise from quasi-delicts but also those which arise from criminal offenses. To hold otherwise would result in the absurdity that while for an act where mere negligence intervenes the father or mother may stand subsidiarily liable for the damage caused by his or her son, no liability would attach if the damage is caused with criminal intent. Art. 63. The decree of legal separation shall have the following effects x x x (3) The custody of the minor children shall be awarded to the innocent spouse, subject to the provisions of Article 213 of this Code; and Art. 213. In case of separation of the parents, parental authority shall be exercised by the parent designated by the Court. The Court shall take into account all relevant considerations, especially the choice of the child over seven years of age, unless the parent chosen is unfit. d. Bagtas v. Santos [G.R. NO. 166682 : November 27, 2009 | CARPIO, J.]

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c. Salen v. Balce [G.R. No. L-14414. April 27, 1960. | BAUTISTA ANGELO, J.]

Article 214 states that in case of absence or unsuitability of the parents, substitute parental authority shall be exercised by the surviving grandparent. Article 216 states that in default of parents or a judicially appointed guardian, the surviving grandparent shall exercise substitute parental authority over the child. In determining who has the rightful custody over a child, the child's welfare is the most important consideration. The court is not bound by any legal right of a person over the child x x x the child's welfare is the supreme consideration. e. Salientes v. Abanilla QUISUMBING, J.]

[G.R. NO. 162734

: August 29, 2006

|

Habeas corpus may be resorted to in cases where rightful custody is withheld from a person entitled thereto x x x although the couple is separated de facto, the issue of custody has yet to be adjudicated by the court. In the absence of a judicial grant of custody to one parent, both parents are still entitled to the custody of their child. Moreover, Article 213 of the Family Code deals with the judicial adjudication of custody and serves as a guideline for the proper award of custody by the court. Petitioners can raise it as a counter argument for private respondent's petition for custody. But it is not a basis for preventing the father to see his own child. Nothing in the said provision disallows a father from seeing or visiting his child under seven years of age. f. David vs. CA (G.R. No. 111180 | November 16, 1995 | MENDOZA, J.)

The fact that private respondent has recognized the minor child may be a ground for ordering him to give support to the latter, but not for giving him custody of the child. Under Art. 213 of the Family Code, "no child under seven years of age shall be separated from the mother unless the court finds compelling reasons to order otherwise." Under Art. 213, courts must respect the "choice of the child over seven years of age, unless the parent chosen is unfit" and here it has not been shown that the mother is in any way unfit to have custody of her child. Indeed, if private respondent loves his child, he should not condition the

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x x x the determination of the right to the custody of minor children is relevant in cases where the parents, who are married to each other, are for some reason separated from each other. It does not follow, however, that it cannot arise in any other situation. In the case of Salvaña v. Gaela, it was held that the writ of habeas corpus is the proper remedy to enable parents to regain the custody of a minor daughter even though the latter be in the custody of a third person of her free will because the parents were compelling her to marry a man against her will. Rule 102 §1 makes no distinction between the case of a mother who is separated from her husband and is entitled to the custody of her child and that of a mother of an illegitimate child who, by law, is vested with sole parental authority, but is deprived of her rightful custody of her child.

grant of support for him on the award of his custody to him (private respondent). g. Silva vs. CA [G.R. No. 114742. July 17, 1997 | VITUG, J.:] The fears expressed by respondent to the effect that petitioner shall be able to corrupt and degrade their children once allowed to even temporarily associate with petitioner is but the product of respondent's unfounded imagination, for no man, bereft of all moral persuasions and goodness, would ever take the trouble and expense in instituting a legal action for the purpose of seeing his illegitimate children. It can just be imagined the deep sorrows of a father who is deprived of his children of tender ages. h. Beckett v. Judge Sarmiento, Jr. (A.M. No. RTJ-12-2326 : January 30, 2013 | VELASCO, JR., J.) The matter of custody is not permanent and unalterable. If the parent who was given custody suffers a future character change and becomes unfit, the matter of custody can always be re-examined and adjusted x x x. To be sure, the welfare, the best interests, the benefit, and the good of the child must be determined as of the time that either parent is chosen to be the custodian. x x x in Dacasin v. Dacasin, a custody agreement can never be regarded as "permanent and unbending," the simple reason being that the situation of the parents and even of the child can change, such that sticking to the agreed arrangement would no longer be to the latters best interest. In a very real sense, then, a judgment involving the custody of a minor child cannot be accorded the force and effect of res judicata.

x x x it is necessary that every effort should be made toward a compromise before a litigation is allowed to breed hate and passion in the family and it is known that a lawsuit between close relatives generates deeper bitterness than between strangers x x x these considerations do not weigh enough to make it imperative that such efforts to compromise should be a jurisdictional prerequisite for the maintenance of an action whenever a stranger to the family is a party thereto, whether as a necessary or indispensable one. It is neither practical nor fair that the determination of the rights of a stranger to the family Who just happened to have innocently acquired some kind of interest in any right or property disputed among its members should be made to depend on the way the latter would settle their differences among themselves. j. Kua v IAC ??? k. Siochi vs. Gozon [G.R. No. 169900 : March 18, 2010 | CARPIO, J.] x x x among the effects of the decree of legal separation is that the conjugal partnership is dissolved and liquidated and the offending spouse would have no right to any share of the net profits earned by the conjugal partnership x x x Article 102(4) of the Family Code provides that "[f]or purposes of computing the net profits subject to forfeiture in accordance with Article 43, No. (2) and 63, No. (2), the

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i. Magbaleta vs. Gonong (G.R. No. L-44903 April 22, 1977 | BARREDO, J.)

said profits shall be the increase in value between the market value of the community property at the time of the celebration of the marriage and the market value at the time of its dissolution." Clearly, what is forfeited x x x is the net profits of the conjugal partnership property. l. Grande v. Antonio (G.R. No. 206248, February 18, 2014 | VELASCO JR., J.) Parental authority over minor children is lodged by Art. 176 on the mother; hence, respondent’s prayer has no legal mooring. Since parental authority is given to the mother, then custody over the minor children also goes to the mother, unless she is shown to be unfit. Art. 56. The petition for legal separation shall be denied on any of the following grounds: (1) Where the aggrieved party has condoned the offense or act complained of; (2) Where the aggrieved party has consented to the commission of the offense or act complained of; (3) Where there is connivance between the parties in the commission of the offense or act constituting the ground for legal separation; (4) Where both parties have given ground for legal separation; (5) Where there is collusion between the parties to obtain decree of legal separation; or (6) Where the action is barred by prescription. m. Bugayong vs. Ginez [G.R. No. L-10033. December 28, 1956. | FELIX, J.]

Condonation is the forgiveness of a marital offense constituting a ground for legal separation or the “conditional forgiveness or remission, by a husband or wife of a matrimonial offense which the latter has committed”. ‘Condonation. Is the forgiveness of a marital offense constituting a ground for divorce and bars the right to a divorce. But it is on the condition, implied by the law when not express, that the wrongdoer shall not again commit the offense; also that he shall thereafter treat the other spouse with conjugal kindness. A breach of the condition will revive the original offense as a ground for divorce. Condonation may be express or implied’. The legal separation may be claimed only by the innocent spouse, provided there has been no condonation of or consent to the adultery or concubinage. Where both spouses are offenders, legal separation cannot be claimed by either of them. Collusion between the parties to obtain legal separation shall cause the dismissal of the petition. The act of x x x persuading her to come along with him, and the fact that she went with him and consented to be brought to the house of his cousin x x x and together they slept there as husband and wife for one day and one night, and the further fact that in the second night they again slept together in their house likewise as husband and wife — all these facts have no other meaning in the opinion of this court

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ISSUE: Do the husband’s attitude of sleeping with his wife for 2 nights despite his alleged belief that she was unfaithful to him, amount to a condonation of her previous and supposed adulterous acts?

than that a reconciliation between them was effected and that there was a condonation of the wife by the husband. This reconciliation occurred almost ten months after he came to know of the acts of infidelity amounting to adultery. “It has been held in a long line of decisions of the various supreme courts of the different states of the U. S. that a single voluntary act of sexual intercourse by the innocent spouse after discovery of the offense is ordinarily sufficient to constitute condonation, especially as against the husband. n. Brown v. Yambao [G.R. No. L-10699. October 18, 1957 | REYES, J. B. L., J.] Collusion in matrimonial cases is the act of married persons in procuring a divorce by mutual consent, whether by preconcerted commission by one of a matrimonial offense, or by failure, in pursuance of agreement, to defend divorce proceedings The policy of x x x calling for the intervention of the state attorneys in case of uncontested proceedings for legal separation (and of annulment of marriages) is to emphasize that marriage is more than a mere contact; that it is a social institution in which the state is vitally interested, so that its continuation or interruption cannot be made to depend upon the parties themselves. Action for legal separation cannot be filed except within one (1) year from and after the plaintiff became cognizant of the cause and within five years from and after the date when such cause occurred. (Note that this is a 1957 case)

In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been obtained by their joint efforts, work or industry, and shall be owned by them in equal shares. For purposes of this Article, a party who did not participate in the acquisition by the other party of any property shall be deemed to have contributed jointly in the acquisition thereof if the former's efforts consisted in the care and maintenance of the family and of the household. Neither party can encumber or dispose by acts inter vivos of his or her share in the property acquired during cohabitation and owned in common, without the consent of the other, until after the termination of their cohabitation. When only one of the parties to a void marriage is in good faith, the share of the party in bad faith in the co-ownership shall be forfeited in favor of their common children. In case of default of or waiver by any or all of the common children or their descendants, each vacant share shall belong to the respective surviving descendants. In the absence of descendants, such share shall belong to the innocent party. In all cases, the forfeiture shall take place upon termination of

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22. *** Art. 147. When a man and a woman who are capacitated to marry each other, live exclusively with each other as husband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall be owned by them in equal shares and the property acquired by both of them through their work or industry shall be governed by the rules on co-ownership.

the cohabitation. (144a) Art. 148. In cases of cohabitation not falling under the preceding Article, only the properties acquired by both of the parties through their actual joint contribution of money, property, or industry shall be owned by them in common in proportion to their respective contributions. In the absence of proof to the contrary, their contributions and corresponding shares are presumed to be equal. The same rule and presumption shall apply to joint deposits of money and evidences of credit. If one of the parties is validly married to another, his or her share in the coownership shall accrue to the absolute community or conjugal partnership existing in such valid marriage. If the party who acted in bad faith is not validly married to another, his or her shall be forfeited in the manner provided in the last paragraph of the preceding Article. The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith. (144a)

a. Go- Bangayan v. Bangayan, Jr. (G.R. No. 201061, July 03, 2013 | CARPIO, J.) x x x the words “married to” preceding the name of a spouse are merely descriptive of the civil status of the registered owner. Such words do not prove co-ownership. Without proof of actual contribution from either or both spouses, there can be no co-ownership under Article 148 of the Family Code. 23. * Art. 151. No suit between members of the same family shall prosper unless it should appear from the verified complaint or petition that earnest efforts toward a compromise have been made, but that the same have failed. If it is shown that no such efforts were in fact made, the same case must be dismissed. This rules shall not apply to cases which may not be the subject of compromise under the Civil Code. (222a)

Art 151 is applicable only to ordinary civil actions. This is clear from the term "SUIT" that it refers to an action by one person or persons against another or others in a court of justice in which the plaintiff pursues the remedy which the law affords him for the redress of an injury or the enforcement of a right, whether at law or in equity. A civil action is thus an action filed in a court of justice, whereby a party sues another for the enforcement of a right, or the prevention or redress of a wrong x x x excerpt from the Report of the Code Commission unmistakably reveals the intention of the Code Commission to make that legal provision applicable only to civil actions which are essentially adversarial and involve members of the same family.

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a. Vda. De Manalo v. CA [G.R. No. 129242. January 16, 2001. | DE LEON, JR., J.]

The Petition for Issuance of Letters of Administration is a special proceeding and, as such, it is a remedy whereby the petitioners therein seek to establish a status, a right, or a particular fact. b. Magbaleta vs. Gonong (supra) PROPERTY 24. *** Article 415. The following are immovable property: (1) Land, buildings, roads and constructions of all kinds adhered to the soil; (2) Trees, plants, and growing fruits, while they are attached to the land or form an integral part of an immovable; (3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking the material or deterioration of the object; (4) Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings or on lands by the owner of the immovable in such a manner that it reveals the intention to attach them permanently to the tenements; (5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works; (6) Animal houses, pigeon-houses, beehives, fish ponds or breeding places of similar nature, in case their owner has placed them or preserves them with the intention to have them permanently attached to the land, and forming a permanent part of it; the animals in these places are included; (7) Fertilizer actually used on a piece of land; (8) Mines, quarries, and slag dumps, while the matter thereof forms part of the bed, and waters either running or stagnant; (9) Docks and structures which, though floating, are intended by their nature and object to remain at a fixed place on a river, lake, or coast; (10) Contracts for public works, and servitudes and other real rights over immovable property. (334a)

In Consolidated Edison Company of New York, Inc., et al. v. The City of New York, et al., a power company brought an action to review property tax assessment. On the city’s motion to dismiss, the Supreme Court of New York held that the barges on which were mounted gas turbine power plants designated to generate electrical power, the fuel oil barges which supplied fuel oil to the power plant barges, and the accessory equipment mounted on the barges were subject to real property taxation. Moreover, Article 415 (9) of the New Civil Code provides that "[d]ocks and structures which, though floating, are intended by their nature and object to remain at a fixed place on a river, lake, or coast" are considered immovable property. Thus, power barges are categorized as immovable property by destination, being in the nature of machinery and other implements intended by the owner for an industry or work which may be carried on in a building or on a piece of land and which tend directly to meet the needs of said industry or work b. Davao Sawmills vs Castillo

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a. FELS Energy v The Province of Batangas

The machinery only becomes immobilized if placed in a plant by the owner of the property or plant. Immobilization cannot be made by a tenant, a usufructuary, or any person having only a temporary right. The tenant, usufructuary, or temporary possessor acted as agent of the owner of the premises; or he intended to permanently give away the property in favor of the owner. Therefore, the machinery should be considered as Personal Property, since it was not placed on the land by the owner of the said land. 25. Article 438. Hidden treasure belongs to the owner of the land, building, or other property on which it is found. Nevertheless, when the discovery is made on the property of another, or of the State or any of its subdivisions, and by chance, one-half thereof shall be allowed to the finder. If the finder is a trespasser, he shall not be entitled to any share of the treasure. If the things found be of interest to science or the arts, the State may acquire them at their just price, which shall be divided in conformity with the rule stated. (351a) Article 439. By treasure is understood, for legal purposes, any hidden and unknown deposit of money, jewelry, or other precious objects, the lawful ownership of which does not appear. (352)

Article 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof. (361a) Article 449. He who builds, plants or sows in bad faith on the land of another, loses what is built, planted or sown without right to indemnity. (362) Article 546. Necessary expenses shall be refunded to every possessor; but only the possessor in good faith may retain the thing until he has been reimbursed therefor. Useful expenses shall be refunded only to the possessor in good faith with the same right of retention, the person who has defeated him in the possession

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26. *** Article 447. The owner of the land who makes thereon, personally or through another, plantings, constructions or works with the materials of another, shall pay their value; and, if he acted in bad faith, he shall also be obliged to the reparation of damages. The owner of the materials shall have the right to remove them only in case he can do so without injury to the work constructed, or without the plantings, constructions or works being destroyed. However, if the landowner acted in bad faith, the owner of the materials may remove them in any event, with a right to be indemnified for damages. (360a)

having the option of refunding the amount of the expenses or of paying the increase in value which the thing may have acquired by reason thereof. (453a) Article 1678. If the lessee makes, in good faith, useful improvements which are suitable to the use for which the lease is intended, without altering the form or substance of the property leased, the lessor upon the termination of the lease shall pay the lessee one-half of the value of the improvements at that time. Should the lessor refuse to reimburse said amount, the lessee may remove the improvements, even though the principal thing may suffer damage thereby. He shall not, however, cause any more impairment upon the property leased than is necessary. With regard to ornamental expenses, the lessee shall not be entitled to any reimbursement, but he may remove the ornamental objects, provided no damage is caused to the principal thing, and the lessor does not choose to retain them by paying their value at the time the lease is extinguished. (n) a. Rosales vs Castelltort Under Art. 448, the landowner can choose between appropriating the building by paying the proper indemnity or obliging the builder to pay the price of the land, unless its value is considerably more than that of the structures, in which case the builder in good faith shall pay reasonable rent. If the parties cannot come to terms over the conditions of the lease, the court must fix the terms thereof. The choice belongs to the owner of the land, a rule that accords with the principle of accession, i.e., that the accessory follows the principal and not the other way around. Even as the option lies with the landowner, the grant to him, nevertheless, is preclusive. The landowner cannot refuse to exercise either option and compel instead the owner of the building to remove it from the land. Possession acquired in good faith does not lose this character except in the case and from the moment facts exist which show that the possessor is not unaware that he possesses the thing improperly or wrongfully. The good faith ceases or is legally interrupted from the moment defects in the title are made known to the possessor, by extraneous evidence or by suit for recovery of the property by the true owner.

Under Article 448, the landowner is given the option, either to appropriate the improvement as his own upon payment of the proper amount of indemnity or to sell the land to the possessor in good faith. Relatedly, Article 546 provides that a builder in good faith is entitled to full reimbursement for all the necessary and useful expenses incurred; it also gives him right of retention until full reimbursement is made. While the law aims to concentrate in one person the ownership of the land and the improvements thereon in view of the impracticability of creating a state of forced co-ownership, it guards against unjust enrichment insofar as the good-faith builder’s improvements are concerned. The right of retention is considered as one of the measures devised by the law for the protection of builders in good faith. Its object is to guarantee full and prompt reimbursement as it permits the actual possessor to remain in possession while he has not been reimbursed (by

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b. Nuguid v CA

the person who defeated him in the case for possession of the property) for those necessary expenses and useful improvements made by him on the thing possessed. Accordingly, a builder in good faith cannot be compelled to pay rentals during the period of retention nor be disturbed in his possession by ordering him to vacate. In addition, as in this case, the owner of the land is prohibited from offsetting or compensating the necessary and useful expenses with the fruits received by the builderpossessor in good faith. Otherwise, the security provided by law would be impaired. This is so because the right to the expenses and the right to the fruits both pertain to the possessor, making compensation juridically impossible; and one cannot be used to reduce the other. 27. * Article 485. The share of the co-owners, in the benefits as well as in the charges, shall be proportional to their respective interests. Any stipulation in a contract to the contrary shall be void. The portions belonging to the co-owners in the co-ownership shall be presumed equal, unless the contrary is proved. (393a) Article 487. Any one of the co-owners may bring an action in ejectment. (n) Article 495. Notwithstanding the provisions of the preceding article, the coowners cannot demand a physical division of the thing owned in common, when to do so would render it unserviceable for the use for which it is intended. But the co-ownership may be terminated in accordance with article 498. (401a) Article 491. None of the co-owners shall, without the consent of the others, make alterations in the thing owned in common, even though benefits for all would result therefrom. However, if the withholding of the consent by one or more of the co-owners is clearly prejudicial to the common interest, the courts may afford adequate relief. (397a) Article 484. There is co-ownership whenever the ownership of an undivided thing or right belongs to different persons. In default of contracts, or of special provisions, co-ownership shall be governed by the provisions of this Title.

One who validly renounces an inheritance is deemed never to have possessed the same. (440) Article 534. On who succeeds by hereditary title shall not suffer the consequences of the wrongful possession of the decedent, if it is not shown that he was aware of the flaws affecting it; but the effects of possession in good faith shall not benefit him except from the date of death of the decedent. (442) Article 1138. In the computation of time necessary for prescription the following rules shall be observed: (1) The present possessor may complete the period necessary for prescription by tacking his possession to that of his grantor or predecessor in interest;

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28. Article 533. The possession of hereditary property is deemed transmitted to the heir without interruption and from the moment of the death of the decedent, in case the inheritance is accepted.

(2) It is presumed that the present possessor who was also the possessor at a previous time, has continued to be in possession during the intervening time, unless there is proof to the contrary; (3) The first day shall be excluded and the last day included. (1960a) 29. ** Article 559. The possession of movable property acquired in good faith is equivalent to a title. Nevertheless, one who has lost any movable or has been unlawfully deprived thereof, may recover it from the person in possession of the same. If the possessor of a movable lost or which the owner has been unlawfully deprived, has acquired it in good faith at a public sale, the owner cannot obtain its return without reimbursing the price paid therefor. (464a) a. Ledesma v CA It is quite clear that a party who (a) has lost any movable or (b) has been unlawfully deprived thereof can recover the same from the present possessor even if the latter acquired it in good faith and has, therefore, title thereto for under the first sentence of Article 559, such manner of acquisition is equivalent to a title. There are three (3) requisites to make possession of movable property equivalent to title, namely: (a) the possession should be in good faith; (b) the owner voluntarily parted with the possession of the thing; and (c) the possession is in the concept of owner. Undoubtedly, one who has lost a movable or who has been unlawfully deprived of it cannot be said to have voluntarily parted with the possession thereof. This is the justification for the exceptions found under the second sentence of Article 559 of the Civil Code. b. EDCA v Santos

One may well imagine the adverse consequences if the phrase "unlawfully deprived" were to be interpreted in the manner suggested by the petitioner. A person relying on the seller's title who buys a movable property from him would have to surrender it to another person claiming to be the original owner who had not yet been paid the purchase price therefor. The buyer in the second sale would be left holding the bag, so to speak, and would be compelled to return the thing bought by him in good faith without even the right to reimbursement of the amount he had paid for it. c. Aznar v Yapdiangco The lower court was correct in applying Article 559 of the Civil Code to the case at bar, for under it, the rule is to the effect that if the owner has lost a thing, or if he has been unlawfully deprived of it, he has a right to recover it, not only from the finder, thief or robber, but also from third persons who may have acquired it in good faith from such finder, thief or

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Actual delivery of the books having been made, Cruz acquired ownership over the books which he could then validly transfer to the private respondents. The fact that he had not yet paid for them to EDCA was a matter between him and EDCA and did not impair the title acquired by the private respondents to the books.

robber. The said article establishes two exceptions to the general rule of irrevindicability, to wit, when the owner (1) has lost the thing, or (2) has been unlawfully deprived thereof. In these cases, the possessor cannot retain the thing as against the owner, who may recover it without paying any indemnity, except when the possessor acquired it in a public sale. Under Article 559 of the new Civil Code, a person illegally deprived of any movable may recover it from the person in possession of the same and the only defense the latter may have is if he has acquired it in good faith at a public sale, in which case, the owner cannot obtain its return without reimbursing the price paid therefor. In the present case, plaintiff has been illegally deprived of his car through the ingenious scheme of defendant B to enable the latter to dispose of it as if he were the owner thereof. Plaintiff, therefore, can still recover possession of the car even if it is in the possession of a third party who had acquired it in good faith from defendant B. The maxim that "no man can transfer to another a better title than he had himself" obtains in the civil as well as in the common law. 30. *** Article 603. Usufruct is extinguished: (1) By the death of the usufructuary, unless a contrary intention clearly appears; (2) By the expiration of the period for which it was constituted, or by the fulfillment of any resolutory condition provided in the title creating the usufruct; (3) By merger of the usufruct and ownership in the same person; (4) By renunciation of the usufructuary; (5) By the total loss of the thing in usufruct; (6) By the termination of the right of the person constituting the usufruct; (7) By prescription. (513a) Article 606. A usufruct granted for the time that may elapse before a third person attains a certain age, shall subsist for the number of years specified, even if the third person should die before the period expires, unless such usufruct has been expressly granted only in consideration of the existence of such person. (516) a. Moralidad v Pernes

The document executed by the petitioner dated July 21, 1986 constitutes the title creating, and sets forth the conditions of, the usufruct. Paragraph #3 thereof states "[T]hat anyone of my kins may enjoy the privilege to stay therein and may avail the use thereof. Provided, however, that the same is not inimical to the purpose thereof" (Emphasis supplied). What may be inimical to the purpose constituting the usufruct may be gleaned from the preceding paragraph wherein petitioner made it abundantly clear "that anybody of my kins who wishes to stay on the aforementioned property should maintain an atmosphere of cooperation, live in harmony and must avoid bickering with one another." That the maintenance of a peaceful and harmonious relations between and among

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We disagree with the CA’s conclusion of law on the matter. The term or period of the usufruct originally specified provides only one of the bases for the right of a usufructuary to hold and retain possession of the thing given in usufruct. There are other modes or instances whereby the usufruct shall be considered terminated or extinguished. For sure, the Civil Code enumerates such other modes of extinguishment:

kin constitutes an indispensable condition for the continuance of the usufruct is clearly deduced from the succeeding Paragraph #4 where petitioner stated "[T]hat anyone of my kins who cannot conform with the wishes of the undersigned may exercise the freedom to look for his own." In fine, the occurrence of any of the following: the loss of the atmosphere of cooperation, the bickering or the cessation of harmonious relationship between/among kin constitutes a resolutory condition which, by express wish of the petitioner, extinguishes the usufruct. From the pleadings submitted by the parties, it is indubitable that there were indeed facts and circumstances whereby the subject usufruct may be deemed terminated or extinguished by the occurrence of the resolutory conditions provided for in the title creating the usufruct, namely, the document adverted to which the petitioner executed on July 21, 1986. 31. *** Article 649. The owner, or any person who by virtue of a real right may cultivate or use any immovable, which is surrounded by other immovables pertaining to other persons and without adequate outlet to a public highway, is entitled to demand a right of way through the neighboring estates, after payment of the proper indemnity. Should this easement be established in such a manner that its use may be continuous for all the needs of the dominant estate, establishing a permanent passage, the indemnity shall consist of the value of the land occupied and the amount of the damage caused to the servient estate. In case the right of way is limited to the necessary passage for the cultivation of the estate surrounded by others and for the gathering of its crops through the servient estate without a permanent way, the indemnity shall consist in the payment of the damage caused by such encumbrance. This easement is not compulsory if the isolation of the immovable is due to the proprietor's own acts. (564a)

Article 624. The existence of an apparent sign of easement between two estates, established or maintained by the owner of both, shall be considered, should either of them be alienated, as a title in order that the easement may continue actively and passively, unless, at the time the ownership of the two estates is divided, the contrary should be provided in the title of conveyance of either of them, or the sign aforesaid should be removed before the execution of the deed. This provision shall also apply in case of the division of a thing owned in common by two or more persons. a. Bogo-medellin Milling Inc v CA An easement or servitude is a real right, constituted on the corporeal immovable property of another, by virtue of which the owner has to refrain from doing, or must allow someone to do, something on his property, for the benefit of another thing or person. It exists only when the servient and dominant estates belong to two different owners. It gives the holder of the easement an incorporeal interest on the land but

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Article 650. The easement of right of way shall be established at the point least prejudicial to the servient estate, and, insofar as consistent with this rule, where the distance from the dominant estate to a public highway may be the shortest. (565)

grants no title thereto. Therefore, an acknowledgment of the easement is an admission that the property belongs to another In the absence of an express grant by the owner, or conduct by petitioner sugar mill from which an adverse claim can be implied, its possession of the lot can only be presumed to have continued in the same character as when it was acquired (that is, it possessed the land only by virtue of the original grant of the easement of right of way),[28] or was by mere license or tolerance of the owners (respondent heirs).[29] It is a fundamental principle of law in this jurisdiction that acts of possessory character executed by virtue of license or tolerance of the owner, no matter how long, do not start the running of the period of prescription Under civil law and its jurisprudence, easements are either continuous or discontinuous according to the manner they are exercised, not according to the presence of apparent signs or physical indications of the existence of such easements. Thus, an easement is continuous if its use is, or may be, incessant without the intervention of any act of man, like the easement of drainage;[38] and it is discontinuous if it is used at intervals and depends on the act of man, like the easement of right of way.[39] The easement of right of way is considered discontinuous because it is exercised only if a person passes or sets foot on somebody else’s land. Like a road for the passage of vehicles or persons, an easement of right of way of railroad tracks is discontinuous because the right is exercised only if and when a train operated by a person passes over another's property. In other words, the very exercise of the servitude depends upon the act or intervention of man which is the very essence of discontinuous easements. The presence of more or less permanent railroad tracks does not in any way convert the nature of an easement of right of way to one that is continuous. It is not the presence of apparent signs or physical indications showing the existence of an easement, but rather the manner of exercise thereof, that categorizes such easement into continuous or discontinuous. The presence of physical or visual signs only classifies an easement into apparent or non-apparent. Thus, a road (which reveals a right of way) and a window (which evidences a right to light and view) are apparent easements, while an easement of not building beyond a certain height is non-apparent

Petitioners' assumption that an easement of right of way is continuous and apparent and may be acquired by prescription under Article 620 of the Civil Code, is erroneous. The use of a footpath or road may be apparent but it isnot a continuous easement because its use is at intervals and depends upon the acts of man. It can be exercised only if a man passes or puts his feet over somebody else's land (4 Manresa 597; Haffman vs. Shoemaker, 71 SE 198, both cited on p. 454, Vol. 2, 6th Ed., Paras, Civil Code of the Philippines). Hence, a right of way is not acquirable by prescription (Cuaycong, et al, vs Benedicto, et al., 37 Phil. 781; Ronquillo, et al. vs. Roco, et al., 103 Phil. 84; Ayala de Roxas vs. Case, 8 Phil. 197). c. Positive and Negative

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b. Abellana v CA

d. Cristobal v CA To be entitled to a compulsory easement of right of way, the preconditions provided under Arts. 649 and 650 of the Civil Code must be established. These are: (1) that the dominant estate is surrounded by other immovables and has no adequate outlet to a public highway; (2) that proper indemnity has been paid; (3) that the isolation was not due to acts of the proprietor of the dominant estate; (4) that the right of way claimed is at a point least prejudicial to the servient estate and, in so far as consistent with this rule, where the distance from the dominant estate to a public highway may be the shortest.[9] The burden of proving the existence of these prerequisites lies on the owner of the dominant estate. e. S????????? vs CA – WIDTH f. Ramos v Gatchalian The petitioner's position is not impressed with merit. We find no reason to disturb the appellate court's finding of fact that the petitioner failed to prove the non-existence of an adequate outlet to the Sucat Road except through the Gatchalian Avenue. As borne out by the records of the case, there is a road right of way provided by the Sabrina Rodriguez Lombos Subdivision indicated as Lot 4133-G-12 in its subdivision plan for the buyers of its lots. The fact that said lot is still undeveloped and causes inconvenience to the petitioner when he uses it to reach the public highway does not bring him within the ambit of the legal requisite. We agree with the appellate court's observation that the petitioner should have, first and foremost, demanded from the Sabrina Rodriguez Lombos Subdivision the improvement and maintenance of Lot 4133-G-12 as his road right of way because it was from said subdivision that he acquired his lot and not either from the Gatchalian Realty or the respondents Asprec. To allow the petitioner access to Sucat Road through Gatchalian Avenue inspite of a road right of way provided by the petitioner's subdivision for its buyers simply because Gatchalian Avenue allows petitioner a much greater ease in going to and coming from the main thoroughfare is to completely ignore what jurisprudence has consistently maintained through the years regarding an easement of a right of way, that "mere convenience for the dominant estate is not enough to serve as its basis. To justify the imposition of this servitude, there must be a real, not a fictitious or artificial, necessity for it."

As defined, an easement is a real right on another’s property, corporeal and immovable, whereby the owner of the latter must refrain from doing or allowing somebody else to do or something to be done on his property, for the benefit of another person or tenement. Easements are established either by law or by the will of the owner. The former are called legal, and the latter, voluntary easements Neither can petitioner claim that the easement is personal only to Hidalgo since the annotation merely mentioned Sandico and Hidalgo without equally binding their heirs or assigns. That the heirs or assigns of the parties were not mentioned in the annotation does not mean that it is not binding on them. Again, a voluntary easement of right of way is

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g. Unisource Commercial Corp v Chung

like any other contract. As such, it is generally effective between the parties, their heirs and assigns, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law.[25] Petitioner cites City of Manila v. Entote[26] in justifying that the easement should bind only the parties mentioned therein and exclude those not so mentioned. However, that case is inapplicable since the issue therein was whether the easement was intended not only for the benefit of the owners of the dominant estate but of the community and the public at large.[27] In interpreting the easement, the Court ruled that the clause “any and all other persons whomsoever” in the easement embraces only “those who are privy to the owners of the dominant estate, Lots 1 and 2 Plan Pcs2672” and excludes “the indiscriminate public from the enjoyment of the right-of-way easement.” PRESCRIPTION 32. * Periods a. A???? vs D???? Void Title; Imprescriptible 33. Cases; Inter vivos/ Mortis Causa 34. Article 719. Whoever finds a movable, which is not treasure, must return it to its previous possessor. If the latter is unknown, the finder shall immediately deposit it with the mayor of the city or municipality where the finding has taken place. The finding shall be publicly announced by the mayor for two consecutive weeks in the way he deems best. If the movable cannot be kept without deterioration, or without expenses which considerably diminish its value, it shall be sold at public auction eight days after the publication.

Article 720. If the owner should appear in time, he shall be obliged to pay, as a reward to the finder, one-tenth of the sum or of the price of the thing found. (616a) Article 2171. The rights and obligations of the finder of lost personal property shall be governed by articles 719 and 720. a. Finders Keepers; DONATIONS 35. Article 725. Donation is an act of liberality whereby a person disposes

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Six months from the publication having elapsed without the owner having appeared, the thing found, or its value, shall be awarded to the finder. The finder and the owner shall be obliged, as the case may be, to reimburse the expenses. (615a)

gratuitously of a thing or right in favor of another, who accepts it. Article 728. Donations which are to take effect upon the death of the donor partake of the nature of testamentary provisions, and shall be governed by the rules established in the Title on Succession. (620) Article 729. When the donor intends that the donation shall take effect during the lifetime of the donor, though the property shall not be delivered till after the donor's death, this shall be a donation inter vivos. The fruits of the property from the time of the acceptance of the donation, shall pertain to the donee, unless the donor provides otherwise. 36. *** Article 734. The donation is perfected from the moment the donor knows of the acceptance by the donee. (623) Article 737. The donor's capacity shall be determined as of the time of the making of the donation. (n) a. When donation perfected 37. *** Article 748. The donation of a movable may be made orally or in writing. An oral donation requires the simultaneous delivery of the thing or of the document representing the right donated. If the value of the personal property donated exceeds five thousand pesos, the donation and the acceptance shall be made in writing. Otherwise, the donation shall be void. (632a) Article 749. In order that the donation of an immovable may be valid, it must be made in a public document, specifying therein the property donated and the value of the charges which the donee must satisfy. The acceptance may be made in the same deed of donation or in a separate public document, but it shall not take effect unless it is done during the lifetime of the donor.

Article 1356. Contracts shall be obligatory, in whatever form they may have been entered into, provided all the essential requisites for their validity are present. However, when the law requires that a contract be in some form in order that it may be valid or enforceable, or that a contract be proved in a certain way, that requirement is absolute and indispensable. In such cases, the right of the parties stated in the following article cannot be exercised. (1278a) Article 745. The donee must accept the donation personally, or through an authorized person with a special power for the purpose, or with a general and sufficient power; otherwise, the donation shall be void. (630) Article 746. Acceptance must be made during the lifetime of the donor and of the donee. (n) a. Republic vs S?????

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If the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic form, and this step shall be noted in both instruments. (633)

b. Lagazo vs CA In the words of the esteemed Mr. Justice Jose C. Vitug, 14 "Like any other contract, an agreement of the parties is essential. The donation, following the theory of cognition (Article 1319, Civil Code), is perfected only upon the moment the donor knows of the acceptance by the donee." Furthermore, "[i]f the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic form, and this step shall be noted in both instruments." 15 Acceptance of the donation by the donee is, therefore, indispensable; its absence makes the donation null and void.16 The perfection and the validity of a donation are well explained by former Sen. Arturo M. Tolentino in this wise: . . Title to immovable property does not pass from the donor to the donee by virtue of a deed of donation until and unless it has been accepted in a public instrument and the donor duly notified thereof. The acceptance may be made in the very same instrument of donation. If the acceptance does not appear in the same document, it must be made in another. Solemn words are not necessary; it is sufficient if it shows the intention to accept. But in this case it is necessary that formal notice thereof be given to the donor, and the fact that due notice has been given must be noted in both instruments (that containing the offer to donate and that showing the acceptance). Then and only then is the donation perfected. If the instrument of donation has been recorded in the registry of property, the instrument that shows the acceptance should also be recorded. Where the deed of donation fails to show the acceptance, or where the formal notice of the acceptance, made in a separate instrument, is either not given to the donor or else not noted in the deed of donation and in the separate acceptance, the donation is null and void.

We find it difficult to sustain that the defendant-appellants have complied with the condition of donation. It is not amiss to state that other than the bare allegation of the defendant-appellants, there is nothing in the records that could concretely prove that the condition of donation has been complied with by the defendant-appellants. In the same breadth, the planting ofpalay on the land donated can hardly be considered and could not have been the “school purposes” referred to and intended by the donors when they had donated the land in question. Also, the posture of the defendant-appellants that the land donated is being used as technology and home economics laboratory of the Rizal National High School is far from being the truth considering that not only is the said school located two kilometers away from the land donated but also there was not even a single classroom built on the land donated that would reasonably indicate that, indeed, classes have been conducted therein. These observations, together with the unrebutted ocular inspection report made by the trial court which revealed that the land donated remains idle and without any improvement thereon for more than a decade since the time of the donation, give Us no other alternative but to conclude that the defendant-appellants have, indeed, failed to comply with what is incumbent upon them in the deed of donation

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c. Secretary Of Education vs Heirs Of Dulay

Anent the second issue, we reject the contention of the OSG that respondents’ cause of action is already barred by prescription under Article 764 of the New Civil Code, or four years from the non-compliance with the condition in the deed of donation. Since such failure to comply with the condition of utilizing the property for school purposes became manifest sometime in 1988 when the DECS utilized another property for the construction of the school building, the four-year prescriptive period did not commence on such date. Petitioner was given more than enough time to comply with the condition, and it cannot be allowed to use this fact to its advantage. It must be stressed that the donation is onerous because the DECS, as donee, was burdened with the obligation to utilize the land donated for school purposes. Under Article 733 of the New Civil Code, a donation with an onerous cause is essentially a contract and is thus governed by the rules on contract 38. ** Article 764. The donation shall be revoked at the instance of the donor, when the donee fails to comply with any of the conditions which the former imposed upon the latter. In this case, the property donated shall be returned to the donor, the alienations made by the donee and the mortgages imposed thereon by him being void, with the limitations established, with regard to third persons, by the Mortgage Law and the Land Registration laws. This action shall prescribe after four years from the noncompliance with the condition, may be transmitted to the heirs of the donor, and may be exercised against the donee's heirs. (647a) a. Central Philippine University v CA

This general rule however cannot be applied considering the different set of circumstances existing in the instant case. More than a reasonable period of fifty (50) years has already been allowed petitioner to avail of the opportunity to comply with the condition even if it be burdensome, to make the donation in its favor forever valid. But, unfortunately, it failed to do so. Hence, there is no more need to fix the duration of a term of the obligation when such procedure would be a mere technicality and formality and would serve no purpose than to delay or lead to an unnecessary and expensive multiplication of suits. 9 Moreover, under Art. 1191 of the Civil Code, when one of the obligors cannot comply with what is incumbent upon him, the obligee may seek rescission and the court shall decree the same unless there is just cause authorizing the fixing of a period. In the absence of any just cause for the court to determine the period of the compliance, there is no more obstacle for the court to decree the rescission claimed. Finally, since the questioned deed of donation herein is basically a gratuitous one, doubts referring to incidental circumstances of a

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Thus, when the obligation does not fix a period but from its nature and circumstances it can be inferred that a period was intended, the general rule provided in Art. 1197 of the Civil Code applies, which provides that the courts may fix the duration thereof because the fulfillment of the obligation itself cannot be demanded until after the court has fixed the period for compliance therewith and such period has arrived. 8

gratuitous contract should be resolved in favor of the least transmission of rights and interests. b. * Article 751. Donations cannot comprehend future property. By future property is understood anything which the donor cannot dispose of at the time of the donation. (635) Article 1459. The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered. (n) Article 744. Donations of the same thing to two or more different donees shall be governed by the provisions concerning the sale of the same thing to two or more different persons. (n) c. Double Donation; governed by rules on double sale PARTNERSHIP

79. 1789;1808* 80. 1801 – 1803** 81. 1804** 82. 1816; 1823 – 1824* 83. 1828; 1829; 1830*** ORTEGA VS CA The birth and life of a partnership at will is predicated on the mutual desire and consent of the partners. The right to choose with whom a person wishes to associate himself is the very foundation and essence of that partnership. Its continued existence is, in turn, dependent on the constancy of that mutual resolve, along with each partner's capability to give it, and the absence of a cause for dissolution provided by the law itself. Verily, any one of the partners may, at his sole pleasure, dictate a dissolution of the partnership at will. He must, however, act in good faith, not that the attendance of bad faith can prevent the dissolution of the partnership but that it can result in a liability for damages. In passing, neither would the presence of a period for its specific duration or the statement of a particular purpose for its creation prevent the dissolution of any partnership by an act or will of a partner. Among partners, mutual agency arises and the doctrine

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78. 1767** SY VS CA Article 1767 of the Civil Code states that in a contract of partnership two or more persons bind themselves to contribute money, property or industry to a common fund, with the intention of dividing the profits among themselves.[ Not one of these circumstances is present in this case. No written agreement exists to prove the partnership between the parties. Private respondent did not contribute money, property or industry for the purpose of engaging in the supposed business. There is no proof that he was receiving a share in the profits as a matter of course, during the period when the trucking business was under operation. Neither is there any proof that he had actively participated in the management, administration and adoption of policies of the business.

of delectus personae allows them to have the power, although not necessarily the right, to dissolve the partnership. An unjustified dissolution by the partner can subject him to a possible action for damages. The dissolution of a partnership is the change in the relation of the parties caused by any partner ceasing to be associated in the carrying on, as might be distinguished from the winding up of, the business. Upon its dissolution, the partnership continues and its legal personality is retained until the complete winding up of its business culminating in its termination. The liquidation of the assets of the partnership following its dissolution is governed by various provisions of the Civil Code; however, an agreement of the partners, like any other contract, is binding among them and normally takes precedence to the extent applicable over the Code's general provisions. * 1797 AGENCY

[U]nder the doctrine of apparent authority a hospital can be held vicariously liable for the negligent acts of a physician providing care at the hospital, regardless of whether the physician is an independent contractor, unless the patient knows, or should have known, that the physician is an independent contractor. The elements of the action have been set out as follows: “For a hospital to be liable under the doctrine of apparent authority, a plaintiff must show that: (1) the hospital, or its agent, acted in a manner that would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital; (2) where the acts of the agent create the appearance of authority, the plaintiff must

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84. 1869** PROF. SERVICES INC VS AGANA In this case, PSI publicly displays in the lobby of the Medical City Hospital the names and specializations of the physicians associated or accredited by it, including those of Dr. Ampil and Dr. Fuentes. We concur with the Court of Appeals’ conclusion that it “is now estopped from passing all the blame to the physicians whose names it proudly paraded in the public directory leading the public to believe that it vouched for their skill and competence.” Indeed, PSI’s act is tantamount to holding out to the public that Medical City Hospital, through its accredited physicians, offers quality health care services. By accrediting Dr. Ampil and Dr. Fuentes and publicly advertising their qualifications, the hospital created the impression that they were its agents, authorized to perform medical or surgical services for its patients. As expected, these patients, Natividad being one of them, accepted the services on the reasonable belief that such were being rendered by the hospital or its employees, agents, or servants. QC CAPITAL MEDICAL CENTER VS NOGALES In general, a hospital is not liable for the negligence of an independent contractor-physician. There is, however, an exception to this principle. The hospital may be liable if the physician is the “ostensible” agent of the hospital. This exception is also known as the “doctrine of apparent authority.”

also prove that the hospital had knowledge of and acquiesced in them; and (3) the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with ordinary care and prudence.” 85. 1874; 1315; 1356* PINEDA VS CA The Civil Code provides that in a sale of a parcel of land or any interest therein made through an agent, a special power of attorney is essential. This authority must be in writing, otherwise the sale shall be void. In his testimony, petitioner Adeodato Duque confirmed that at the time he “purchased” respondents’ property from Pineda, the latter had no Special Power of Authority to sell the property. A special power of attorney is necessary to enter into any contract by which the ownership of an immovable is transmitted or acquired for a valuable consideration. Without an authority in writing, petitioner Pineda could not validly sell the subject property to petitioners Duque. Hence, any “sale” in favor of petitioners Duque is void

87. 1924; 1875*** SANCHEZ VS MEDICARD For the purpose of equity, an agent who is not the efficient procuring cause is nonetheless entitled to his commission, where said agent, notwithstanding the expiration of his authority, nonetheless, took diligent steps to bring back together the parties, such that a sale was finalized and consummated between them. In order not to prejudice its personnel, Unilab, through respondent Ejercito, negotiated with respondent Dr. Montoya of Medicard, in order to find mutually beneficial ways of continuing the Health Care Program. The negotiations resulted in a new contract wherein Unilab shall pay Medicard the hospitalization expenses actually incurred by each employees, plus a service fee. Under the "cost plus" system which replaced the premium scheme, petitioner was not given a commission. It is clear that since petitioner refused to reduce his commission, Medicard directly negotiated with Unilab, thus revoking its agency contract with petitioner. We hold that such revocation is authorized by Article 1924 of the Civil Code. MEDRANO VS CA The letter of authority must be read as a whole and not in its truncated parts. Certainly, it was not the intention of Medrano to expect the respondents to do just that (to negotiate) when he issued

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86. 1317; 1403 (1); 1881; 1882; 1883; 1898; 1909; 1910; 1911*** BICOL SAVINGS BANK VS CA The sale proscribed by a special power to mortgage under Article 1879 is a voluntary and independent contract, and not an auction sale resulting from extrajudicial foreclosure, which is precipitated by the default of a mortgagor. Absent that default, no foreclosure results. The stipulation granting an authority to extrajudicially foreclose a mortgage is an ancillary stipulation supported by the same cause or consideration for the mortgage and forms an essential or inseparable part of that bilateral agreement. The power to foreclose is not an ordinary agency that contemplates exclusively the representation of the principal by the agent but is primarily an authority conferred upon the mortgagee for the latter's own protection. That power survives the death of the mortgagor

88. 1919; 1927; 1930; 1800* SEVILLA VS CA It is the Court's considered opinion, that when the petitioner, Lina Sevilla, agreed to (wo)man the private respondent, Tourist World Service, Inc.'s Ermita office, she must have done so pursuant to a contract of agency. It is the essence of this contract that the agent renders services "in representation or on behalf of another. In the case at bar, Sevilla solicited airline fares, but she did so for and on behalf of her principal, Tourist World Service, Inc. As compensation, she received 4% of the proceeds in the concept of commissions. And as we said, Sevilla herself based on her letter of November 28, 1961, preassumed her principal's authority as owner of the business undertaking. We are convinced, considering the circumstances and from the respondent Court's recital of facts, that the ties had contemplated a principal agent relationship, rather than a joint managament or a partnership. But unlike simple grants of a power of attorney, the agency that we hereby declare to be compatible with the intent of the parties, cannot be revoked at will. The reason is that it is one coupled with an interest, the agency having been created for mutual interest, of the agent and the principal. It appears that Lina

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the letter of authority. The clear intention is to reward the respondents for procuring a buyer for the property. Before negotiating a sale, a broker must first and foremost bring in a prospective buyer. It has been held that a broker earns his pay merely by bringing the buyer and the seller together, even if no sale is eventually made. The essential feature of a broker’s conventional employment is merely to procure a purchaser for a property ready, able, and willing to buy at the price and on the terms mutually agreed upon by the owner and the purchaser. And it is not a prerequisite to the right to compensation that the broker conduct the negotiations between the parties after they have been brought into contact with each other through his efforts. The case of Macondray v. Sellner is quite instructive: The business of a real estate broker or agent, generally, is only to find a purchaser, and the settled rule as stated by the courts is that, in the absence of an express contract between the broker and his principal, the implication generally is that the broker becomes entitled to the usual commissions whenever he brings to his principal a party who is able and willing to take the property and enter into a valid contract upon the terms then named by the principal, although the particulars may be arranged and the matter negotiated and completed between the principal and the purchaser directly. Notably, there are cases where the right of the brokers to recover commissions were upheld where they actually took no part in the negotiations, never saw the customer, and even some in which they did nothing except advertise the property, as long as it can be shown that they were the efficient cause of the sale.In the case at bar, the role of the respondents in the transaction is undisputed. Whether or not they participated in the negotiations of the sale is of no moment. Armed with an authority to procure a purchaser and with a license to act as broker, we see no reason why the respondents can not recover compensation for their efforts when, in fact, they are the procuring cause of the sale

Sevilla is a bona fide travel agent herself, and as such, she had acquired an interest in the business entrusted to her. Moreover, she had assumed a personal obligation for the operation thereof, holding herself solidarily liable for the payment of rentals. She continued the business, using her own name, after Tourist World had stopped further operations. Her interest, obviously, is not to the commissions she earned as a result of her business transactions, but one that extends to the very subject matter of the power of management delegated to her. It is an agency that, as we said, cannot be revoked at the pleasure of the principal. Accordingly, the revocation complained of should entitle the petitioner, Lina Sevilla, to damages. LIM VS SABAN Under Article 1927 of the Civil Code, an agency cannot be revoked if a bilateral contract depends upon it, or if it is the means of fulfilling an obligation already contracted, or if a partner is appointed manager of a partnership in the contract of partnership and his removal from the management is unjustifiable. Stated differently, an agency is deemed as one coupled with an interest where it is established for the mutual benefit of the principal and of the agent, or for the interest of the principal and of third persons, and it cannot be revoked by the principal so long as the interest of the agent or of a third person subsists. In an agency coupled with an interest, the agent’s interest must be in the subject matter of the power conferred and not merely an interest in the exercise of the power because it entitles him to compensation. When an agent’s interest is confined to earning his agreed compensation, the agency is not one coupled with an interest, since an agent’s interest in obtaining his compensation as such agent is an ordinary incident of the agency relationship. Guaranty and Surety

It is clear that excussion may only be invoked after legal remedies against the principal debtor have been expanded. Thus, it was held that the creditor must first obtain a judgment against the principal debtor before assuming to run after the alleged guarantor, “for obviously the ‘exhaustion of the principal’s property’ cannot even begin to take place before judgment has been obtained.” [37] The law imposes conditions precedent for the invocation of the defense. Thus, in order that the guarantor may make use of the benefit of excussion, he must set it up against the creditor upon the latter’s demand for payment and point out to the creditor available property of the debtor within the Philippines sufficient to cover the amount of the debt. [38]

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89. Distinctions** 90. 2056; 2058; 2059 *** JN DEV. CORP VS PHIL GUARANTEE Under a contract of guarantee, the guarantor binds himself to the creditor to fulfill the obligation of the principal debtor in case the latter should fail to do so. [34] The guarantor who pays for a debtor, in turn, must be indemnified by the latter. [35] However, the guarantor cannot be compelled to pay the creditor unless the latter has exhausted all the property of the debtor and resorted to all the legal remedies against the debtor. [36] This is what is otherwise known as the benefit of excussion.

While a guarantor enjoys the benefit of excussion, nothing prevents him from paying the obligation once demand is made on him. Excussion, after all, is a right granted to him by law and as such he may opt to make use of it or waive it. PhilGuarantee’s waiver of the right of excussion cannot prevent it from demanding reimbursement from petitioners. The law clearly requires the debtor to indemnify the guarantor what the latter has paid. The benefit of excussion, as well as the requirement of consent to extensions of payment, is a protective device pertaining to and conferred on the guarantor. These may be invoked by the guarantor against the creditor as defenses to bar the unwarranted enforcement of the guarantee. However, PhilGuarantee did not avail of these defenses when it paid its obligation according to the tenor of the guarantee once demand was made on it. LOANS

EASTERN SHIPPING CASE – NO LONGER RULE IMPERIAL VS JAUCIAN The records show that there was a written agreement between the parties for the payment of interest on the subject loans at the rate of 16 percent per month. As decreed by the lower courts, this rate must be equitably reduced for being iniquitous, unconscionable and exorbitant. “While the Usury Law ceiling on interest rates was lifted by C.B. Circular No. 905, nothing in the said circular grants lenders carte blanche authority to raise interest rates to levels which will either enslave their borrowers or lead to a hemorrhaging of their assets.”[13] In Medel v. CA,[14] the Court found the stipulated interest rate of 5.5 percent per month, or 66 percent per annum, unconscionable. In the present case, the rate is even more iniquitous and unconscionable, as it amounts to 192 percent per annum. When the agreed rate is iniquitous or unconscionable, it is considered “contrary to morals, if not against the law. [Such] stipulation is void.”[15] Since the stipulation on the interest rate is void, it is as if there were no express contract thereon. [16] Hence, courts may reduce the interest rate as reason and equity demand. We find no

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91. 1956 *** CB Circular No. 905 as amended by CB Circular 796 NACER VS GALLERY FRAMES Thus, from the foregoing, in the absence of an express stipulation as to the rate of interest that would govern the parties, the rate of legal interest for loans or forbearance of any money, goods or credits and the rate allowed in judgments shall no longer be twelve percent (12%) per annum - as reflected in the case of Eastern Shipping Lines 40and Subsection X305.1 of the Manual of Regulations for Banks and Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual of Regulations for Non-Bank Financial Institutions, before its amendment by BSP-MB Circular No. 799 - but will now be six percent (6%) per annum effective July 1, 2013. It should be noted, nonetheless, that the new rate could only be applied prospectively and not retroactively. Consequently, the twelve percent (12%) per annum legal interest shall apply only until June 30, 2013. Come July 1, 2013 the new rate of six percent (6%) per annum shall be the prevailing rate of interest when applicable.

justification to reverse or modify the rate imposed by the two lower courts. ANGEL JOSE WAREHOUSING VS CHELDA ENTERPRISES In simple loan with stipulation of usurious interest, the prestation of the debtor to pay the principal debt, which is the cause of the contract (Article 1350, Civil Code), is not illegal. The illegality lies only as to the prestation to pay the stipulated interest; hence, being separable, the latter only should be deemed void, since it is the only one that is illegal. The principal debt remaining without stipulation for payment of interest can thus be recovered by judicial action. And in case of such demand, and the debtor incurs in delay, the debt earns interest from the date of the demand (in this case from the filing of the complaint). Such interest is not due to stipulation, for there was none, the same being void. Rather, it is due to the general provision of law that in obligations to pay money, where the debtor incurs in delay, he has to pay interest by way of damages (Art. 2209, Civil Code). L**** vs O*********** DEPOSIT

Article 1962, in relation to Article 1998, of the Civil Code defines a contract of deposit and a necessary deposit made by persons in hotels or inns. Plainly, from the facts found by the lower courts, the insured See deposited his vehicle for safekeeping with petitioner, through the latter’s employee, Justimbaste. In turn, Justimbaste issued a claim stub to See. Thus, the contract of deposit was perfected from See’s delivery, when he handed over to Justimbaste the keys to his vehicle, which Justimbaste received with the obligation of safely keeping and returning it. Ultimately, petitioner is liable for the loss of See’s vehicle. MAMARIL VS BSP Anent Sps. Mamaril's claim that the exculpatory clause: "Management shall not be responsible for loss of vehicle or any of its accessories or article left therein"31 contained in the BSP issued parking ticket was void for being a contract of adhesion and against public policy, suffice it to state that contracts of adhesion are not void per se. It is binding as any other ordinary contract and a party who enters into it is free to reject the stipulations in its entirety. If the terms thereof are accepted without objection, as in this case, where plaintiffs-appellants have been leasing BSP's parking space for more or less 20 years, 32 then the

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92. 1998 – 2004; 1754 ** DURBAN APARTMENTS CORP VS PIONEER INSURANCE [The] records also reveal that upon arrival at the City Garden Hotel, See gave notice to the doorman and parking attendant of the said hotel, x x x Justimbaste, about his Vitara when he entrusted its ignition key to the latter. x x x Justimbaste issued a valet parking customer claim stub to See, parked the Vitara at the Equitable PCI Bank parking area, and placed the ignition key inside a safety key box while See proceeded to the hotel lobby to check in. The Equitable PCI Bank parking area became an annex of City Garden Hotel when the management of the said bank allowed the parking of the vehicles of hotel guests thereat in the evening after banking hours.

contract serves as the law between them. 33 Besides, the parking fee of P300.00 per month or P10.00 a day for each unit is too minimal an amount to even create an inference that BSP undertook to be an insurer of the safety of plaintiffs-appellants' vehicles. YHT REALTY CORP VS CA Article 2003 was incorporated in the New Civil Code as an expression of public policy precisely to apply to situations such as that presented in this case. The hotel business like the common carrier’s business is imbued with public interest. Catering to the public, hotelkeepers are bound to provide not only lodging for hotel guests and security to their persons and belongings. The twin duty constitutes the essence of the business. The law in turn does not allow such duty to the public to be negated or diluted by any contrary stipulation in so-called “undertakings” that ordinarily appear in prepared forms imposed by hotel keepers on guests for their signature. Paragraphs (2) and (4) of the “undertaking” manifestly contravene Article 2003 of the New Civil Code for they allow Tropicana to be released from liability arising from any loss in the contents and/or use of the safety deposit box for any cause whatsoever.[40] Evidently, the undertaking was intended to bar any claim against Tropicana for any loss of the contents of the safety deposit box whether or not negligence was incurred by Tropicana or its employees. The New Civil Code is explicit that the responsibility of the hotel-keeper shall extend to loss of, or injury to, the personal property of the guests even if caused by servants or employees of the keepers of hotels or inns as well as by strangers, except as it may proceed from any force majeure.[41] It is the loss through force majeure that may spare the hotel-keeper from liability. In the case at bar, there is no showing that the act of the thief or robber was done with the use of arms or through an irresistible force to qualify the same as force majeure.

93. 2085 94. 2087; 2115 *** CHU VS CA A pacto commissorio is a provision for the automatic appropriation of the pledged or mortgaged property by the creditor in payment of the loan upon its maturity. The prohibition against a pacto commissorio is intended to protect the obligor, pledgor, or mortgagor against being overreached by his creditor who holds a pledge or mortgage over property whose value is much more than the debt. Where, as in this case, the security for the debt is also money deposited in a bank, the amount of which is even less than the debt, it was not illegal for the creditor to encash the time deposit certificates to pay the debtors' overdue obligation, with the latter's consent. VASQUEZ VS CA The Court of Appeals pronounced in its Decision that the contract between the parties is an equitable mortgage. Since the contract is characterized as a mortgage, the provisions of the Civil Code governing mortgages apply. Article 2088 of the Civil Code states:

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PLEDGES AND MORTGAGES

The creditor cannot appropriate the things given by way of pledge or mortgage, or dispose of them. Any stipulation to the contrary is null and void. This Court has interpreted this provision in the following manner: The essence of pacto commissorio, which is prohibited by Article 2088 of the Civil Code, is that ownership of the security will pass to the creditor by the mere default of the debtor … The only right of a mortgagee in case of non-payment of a debt secured by mortgage would be to foreclose the mortgage and have the encumbered property sold to satisfy the outstanding indebtedness. The mortgagor’s default does not operate to vest in the mortgagee the ownership of the encumbered property, for any such effect is against public policy, as enunciated by the Civil Code …

95. 2088; 2112 ** 96. 2089 *** YAP VS DY From the foregoing, it is apparent that what the law proscribes is the foreclosure of only a portion of the property or a number of the several properties mortgaged corresponding to the unpaid portion of the debt where before foreclosure proceedings partial payment was made by the debtor on his total outstanding loan or obligation. This also means that the debtor cannot ask for the release of any portion of the mortgaged property or of one or some of the several lots mortgaged unless and until the loan thus, secured has been fully paid, notwithstanding the fact that there has been a partial fulfillment of the obligation. Hence, it is provided that the debtor who has paid a part of the debt cannot ask for the proportionate extinguishment of the mortgage as long as the debt is not completely satisfied. That the situation obtaining in the case at bar is not within the purview of the aforesaid rule on indivisibility is obvious since the aggregate number of the lots which comprise the collaterals for the mortgage had already been foreclosed and sold at public auction. There is no partial payment nor partial extinguishment of the obligation to speak of. The aforesaid doctrine, which is actually intended for the protection of the mortgagee, specifically refers to the

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Applying the principle of pactum commissorium specifically to equitable mortgages, in Montevergin v. CA,[27] the Court enunciated that the consolidation of ownership in the person of the mortgagee in equity, merely upon failure of the mortgagor in equity to pay the obligation, would amount to a pactum commissorium. The Court further articulated that an action for consolidation of ownership is an inappropriate remedy on the part of the mortgagee in equity. The only proper remedy is to cause the foreclosure of the mortgage in equity. And if the mortgagee in equity desires to obtain title to the mortgaged property, the mortgagee in equity may buy it at the foreclosure sale. The private respondents do not appear to have caused the foreclosure of the mortgage much less have they purchased the property at a foreclosure sale. Petitioner, therefore, retains ownership of the subject property. The right of ownership necessarily includes the right to possess, particularly where, as in this case, there appears to have been no availment of the remedy of foreclosure of the mortgage on the ground of default or non-payment of the obligation in question.

release of the mortgage which secures the satisfaction of the indebtedness and naturally presupposes that the mortgage is existing. Once the mortgage is extinguished by a complete foreclosure thereof, said doctrine of indivisibility ceases to apply since, with the full payment of the debt, there is nothing more to secure. Nothing in the law prohibits the piecemeal redemption of properties sold at one foreclosure proceeding. In fact, in several early cases decided by this Court, the right of the mortgagor or redemptioner to redeem one or some of the foreclosed properties was recognized. 97. 2176; 2177; 2179; 2194 *** 98. 2180; Family Code – 218; 219; 221 Vicarious Liability Balce – Deep Pocket Principle “Parents are held vicariously liable because they are the persons who are financially capable of satisfying any judgment obligation”

We now correlate par. 5 of Art. 2180 with Art. 2184 of the same Code which provides: "In motor vehicle mishap, the owner is solidarily liable with his driver, if the former, who was in the vehicle, could have by the use of due diligence, prevented the misfortune x x x x If the owner was not in the motor vehicle, the provisions of article 2180 are applicable." Obviously, this provision of Art. 2184 is neither applicable because of the absence of master-driver relationship between respondent FILCAR and Dahl-Jensen. Clearly, petitioner has no cause of action against respondent FILCAR on the basis of quasidelict; logically, its claim against respondent FORTUNE can neither prosper. CASTILLEX VS VASQUEZ Petitioner’s interpretation of the fifth paragraph is not accurate. The phrase “even though the former are not engaged in any business or industry” found in the fifth paragraph should be interpreted to mean that it is not necessary for the employer to be engaged in any business or industry to be liable for the negligence of his employee who is acting within the scope of his assigned task. [5] A distinction must be made between the two provisions to determine what is applicable. Both provisions apply to employers: the fourth

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FGU INSURANCE VS CA The liability imposed by Art. 2180 arises by virtue of a presumption juris tantum of negligence on the part of the persons made responsible thereunder, derived from their failure to exercise due care and vigilance over the acts of subordinates to prevent them from causing damage.[7] Yet, as correctly observed by respondent court, Art. 2180 is hardly applicable because none of the circumstances mentioned therein obtains in the case under consider ation. Respondent FILCAR being engaged in a rent-a-car business was only the owner of the car leased to Dahl-Jensen. As such, there was no vinculum juris between them as employer and employee. Respondent FILCAR cannot in any way be responsible for the negligent act of Dahl-Jensen, the former not being an employer of the latter.

VILLANUEVA VS DOMINGO This Court has consistently ruled that regardless of who the actual owner is of a motor vehicle might be, the registered owner is the operator of the same with respect to the public and third persons, and as such, directly and primarily responsible for the consequences of its operation. In contemplation of law, the owner/operator of record is the employer of the driver, the actual operator and employer being considered merely as his agent. ‘We believe that it is immaterial whether or not the driver was actually employed by the operator of record. It is even not necessary to prove who the actual owner of the vehicle and the employer of the driver is. Granting that, in this case, the father of the driver is the actual owner and that he is the actual employer, following the well-settled principle that the operator of record continues to be the operator of the vehicle in contemplation of law, as regards the public and third person, and as such is responsible for the consequences incident to its operation, we must hold and consider such owner-operator of record as the employer, in contemplation of law, of the driver. And, to give effect to this policy of law as enunciated in the above cited decisions of this Court, we must now extend the same and consider the actual operator and employer as the agent of the operator of record. 99. 2183 * AFIALDA VS HISOLE This opinion, however, appears to have been rendered in a case where an animal caused injury to a stranger or third person. It is therefore no authority for a case like the present where the person injured was the caretaker of the animal. The distinction is important. For the statute names the possessor or user of the animal as the person liable for "any damages it may cause," and this for the obvious reason that the possessor or user has the custody and control of the animal and is therefore the one in a position to prevent it from causing damage.

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paragraph, to owners and managers of an establishment or enterprise; and the fifth paragraph, to employers in general, whether or not engaged in any business or industry. The fourth paragraph covers negligent acts of employees committed either in the service of the branches or on the occasion of their functions, while the fifth paragraph encompasses negligent acts of employees acting within the scope of their assigned task. The latter is an expansion of the former in both employer coverage and acts included. Negligent acts of employees, whether or not the employer is engaged in a business or industry, are covered so long as they were acting within the scope of their assigned task, even though committed neither in the service of the branches nor on the occasion of their functions. For, admittedly, employees oftentimes wear different hats. They perform functions which are beyond their office, title or designation but which, nevertheless, are still within the call of duty. Under the fifth paragraph of Article 2180, whether or not engaged in any business or industry, an employer is liable for the torts committed by employees within the scope of his assigned tasks. But it is necessary to establish the employer-employee relationship; once this is done, the plaintiff must show, to hold the employer liable, that the employee was acting within the scope of his assigned task when the tort complained of was committed. It is only then that the employer may find it necessary to interpose the defense of due diligence in the selection and supervision of the employee

In the present case, the animal was in custody and under the control of the caretaker, who was paid for his work as such. Obviously, it was the caretaker's business to try to prevent the animal from causing injury or damage to anyone, including himself. And being injured by the animal under those circumstances, was one of the risks of the occupation which he had voluntarily assumed and for which he must take the consequences. 100. 2185 *** FILIPINAS SYNTHETIC CORP VS DELOS SANTOS Under the New Civil Code, 9 unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if at the time of the mishap, he was violating any traffic regulation. Apparently, in the present case, Mejia's violation of the traffic rules does not erase the presumption that he was the one negligent at the time of the collision. Even apart from statutory regulations as to speed, a motorist is nevertheless expected to exercise ordinary care and drive at a reasonable rate of speed commensurate with all the conditions encountered10 which will enable him to keep the vehicle under control and, whenever necessary, to put the vehicle to a full stop to avoid injury to others using the highway DAMAGES

The actual damages awarded by the trial court reduced by the Court of Appeals should be further reduced. In People v. Duban,[51] it was held that only substantiated and proven expenses or those that appear to have been genuinely incurred in connection with the death, wake or burial of the victim will be recognized. A list of expenses (Exhibit “J”), [52] and the contract/receipt for the construction of the tomb (Exhibit “F”)[53] in this case, cannot be considered competent proof and cannot replace the official receipts necessary to justify the award. Hence, actual damages should be further reduced to P78,160.00, [54] which was the amount supported by official receipts. MERCURY DRUG VS HUANG With regard to actual damages, Art. 2199 of the Civil Code provides that “[E]xcept as provided by law or by stipulation one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved x x x.” In the instant case, we uphold the finding that the actual damages claimed by respondents were

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101. Actual and Compensatory * VICTORY LINER VS GAMMAD The award of compensatory damages for the loss of the deceased’s earning capacity should be deleted for lack of basis. As a rule, documentary evidence should be presented to substantiate the claim for damages for loss of earning capacity. By way of exception, damages for loss of earning capacity may be awarded despite the absence of documentary evidence when (1) the deceased is selfemployed earning less than the minimum wage under current labor laws, and judicial notice may be taken of the fact that in the deceased’s line of work no documentary evidence is available; or (2) the deceased is employed as a daily wage worker earning less than the minimum wage under current labor laws.

supported by receipts. The amount of P2,973,000.00 represented cost of hospital expenses, medicines, medical services and supplies, and nursing care services provided respondent Stephen from December 20, 1996, the day of the accident, until December 1998.

102. Moral Damages * MERALCO VS CA petitioner's act in 'disconnecting respondent Ongsip's gas service without prior notice constitutes breach of contract amounting to an independent tort. The prematurity of the action is indicative of an intent to cause additional mental and moral suffering to private respondent. This is a clear violation of Article 21 of the Civil Code which provides that any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for damages. This is reiterated by paragraph 10 of Article 2219 of the Code. Moreover, the award of moral damages is sanctioned by Article 2220 which provides

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Petitioners are also liable for all damages which are the natural and probable consequences of the act or omission complained of. [16] The doctors who attended to respondent Stephen are one in their prognosis that his chances of walking again and performing basic body functions are nil. For the rest of his life, he will need continuous rehabilitation and therapy to prevent further complications such as pneumonia, bladder and rectum infection, renal failure, sepsis and severe bed sores, osteoporosis and fractures, and other spinal cord injury-related conditions. He will be completely dependent on the care and support of his family. We thus affirm the award of P23,461,062.00 for the life care cost of respondent Stephen Huang, based on his average monthly expense and the actuarial computation of the remaining years that he is expected to live; and the conservative amount of P10,000,000.00, as reduced by the trial court, for the loss or impairment of his earning capacity, [17] considering his age, probable life expectancy, the state of his health, and his mental and physical condition before the accident. He was only seventeen years old, nearly six feet tall and weighed 175 pounds. He was in fourth year high school, and a member of the school varsity basketball team. He was also class president and editor-in-chief of the school annual. He had shown very good leadership qualities. He was looking forward to his college life, having just passed the entrance examinations of the University of the Philippines, De La Salle University, and the University of Asia and the Pacific. The University of Sto. Tomas even offered him a chance to obtain an athletic scholarship, but the accident prevented him from attending the basketball try-outs. Without doubt, he was an exceptional student. He excelled both in his academics and extracurricular undertakings. He is intelligent and motivated, a go-getter, as testified by Francisco Lopez, respondent Stephen Huang’s godfather and a bank executive.[18] Had the accident not happened, he had a rosy future ahead of him. He wanted to embark on a banking career, get married and raise children. Taking into account his outstanding abilities, he would have enjoyed a successful professional career in banking. But, as Mr. Lopez stated, it is highly unlikely for someone like respondent to ever secure a job in a bank. To his knowledge, no bank has ever hired a person suffering with the kind of disability as Stephen Huang’s.

that wilfull injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith. LBC VS CA Moral damages are granted in recompense for physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. 7 A corporation, being an artificial person and having existence only in legal contemplation, has no feelings, no emotions, no senses; therefore, it cannot experience physical suffering and mental anguish. 8 Mental suffering can be experienced only by one having a nervous system and it flows from real ills, sorrows, and griefs of life 9 — all of which cannot be suffered by respondent bank as an artificial person. We can neither sustain the award of moral damages in favor of the private respondents. The right to recover moral damages is based on equity. Moral damages are recoverable only if the case falls under Article 2219 of the Civil Code in relation to Article 21. 10 Part of conventional wisdom is that he who comes to court to demand equity, must come with clean hands. FILIPINAS BROADCASTING NETWORK VS AGO MEDICAL CENTER A juridical person is generally not entitled to moral damages because, unlike a natural person, it cannot experience physical suffering or such sentiments as wounded feelings, serious anxiety, mental anguish or moral shock.[40] The Court of Appeals cites Mambulao Lumber Co. v. PNB, et al.[41] to justify the award of moral damages. However, the Court’s statement inMambulao that “a corporation may have a good reputation which, if besmirched, may also be a ground for the award of moral damages” is an obiter dictum.[42]

Moreover, where the broadcast is libelous per se, the law implies damages.[45] In such a case, evidence of an honest mistake or the want of character or reputation of the party libeled goes only in mitigation of damages.[46] Neither in such a case is the plaintiff required to introduce evidence of actual damages as a condition precedent to the recovery of some damages.[47] In this case, the broadcasts are libelous per se. Thus, AMEC is entitled to moral damages. 103. 104.

Exemplary Damages * Special Laws *

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Nevertheless, AMEC’s claim for moral damages falls under item 7 of Article 2219[43] of the Civil Code. This provision expressly authorizes the recovery of moral damages in cases of libel, slander or any other form of defamation. Article 2219(7) does not qualify whether the plaintiff is a natural or juridical person. Therefore, a juridical person such as a corporation can validly complain for libel or any other form of defamation and claim for moral damages.[44]

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SUCCESSION 1. Article 777; Article 905; Article 1347; Article 1080; Article 870 Art. 777. The rights to the succession are transmitted from the moment of the death of the decedent. (657a) Art. 905. Every renunciation or compromise as regards a future legitime between the person owing it and his compulsory heirs is void, and the latter may claim the same upon the death of the former; but they must bring to collation whatever they may have received by virtue of the renunciation or compromise. (816) Art. 1347. All things which are not outside the commerce of men, including future things, may be the object of a contract. All rights which are not intransmissible may also be the object of contracts. No contract may be entered into upon future inheritance except in cases expressly authorized by law. All services which are not contrary to law, morals, good customs, public order or public policy may likewise be the object of a contract. (1271a) Art. 1080. Should a person make partition of his estate by an act inter vivos, or by will, such partition shall be respected, insofar as it does not prejudice the legitime of the compulsory heirs. A parent who, in the interest of his or her family, desires to keep any agricultural, industrial, or manufacturing enterprise intact, may avail himself of the right granted him in this article, by ordering that the legitime of the other children to whom the property is not assigned, be paid in cash. (1056a) Art. 870. The dispositions of the testator declaring all or part of the estate inalienable for more than twenty years are void. (n) 2. 804-806

Art. 804. Every will must be in writing and executed in a language or dialect known to the testator. (n) Art. 805. Every will, other than a holographic will, must be subscribed at the end thereof by the testator himself or by the testator's name written by some other person in his presence, and by his express direction, and attested and subscribed by three or more credible witnesses in the presence of the testator and of one another. The testator or the person requested by him to write his name and the instrumental witnesses of the will, shall also sign, as aforesaid, each and every page thereof, except the last, on the left margin, and all the pages shall be numbered correlatively in letters placed on the upper part of each page. The attestation shall state the number of pages used upon which the

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SUBSECTION 3. - Forms of Wills

will is written, and the fact that the testator signed the will and every page thereof, or caused some other person to write his name, under his express direction, in the presence of the instrumental witnesses, and that the latter witnessed and signed the will and all the pages thereof in the presence of the testator and of one another. If the attestation clause is in a language not known to the witnesses, it shall be interpreted to them. (n)

a. AZUELA vs. COURT OF APPEALS|G.R. No. 122880, 12 April 2006 | 487 SCRA 119  JURAT vs. ACKNOWLEDGMENT: The case highlights the fundamental difference between a jurat and an acknowledgment and based on the distinction, the Court held that a notarial will that is not acknowledged before a notary public is void, even if it was sworn to before a notary public.  ISSUE IN THE CASE: Of note is the decision of the RTC which admitted the will to probate notwithstanding the defects thereof (no signature of witnesses at the bottom of the attestation clause, no signature of the testator on the left margin of the second page of the will, the failure of the attestation clause to state the number of pages used upon which the will was written, and the lack of acknowledgment). b. REYES vs. VDA. DE VIDAL | No. L-2867, 21 April 1952  Every will must be executed in a language known to the testator. While this requirement is mandatory and, as a rule, must be proved during probate proceedings, a failure to introduce evidence in this respect DOES NOT necessarily justify the denial of probate. Under certain conditions, knowledge of the language in which the will was written may be presumed.  ISSUE IN THE CASE: the probative value of the testimony of the instrumental witnesses must be noted, particularly when such testimony is sought to be controverted by the testimony of an expert witness.  [Comment: The case included in the Outline is Sy vs. Reyes, but I can’t find the case related to articles 805-806.] c. ICASIANO vs. ICASIANO | No. L-18979, 30 June 1964  Article 805 requires that each of the subscribing witnesses should sign each and every page of the will on the left margin. This requirement is, as a rule, mandatory and a failure to comply therewith is a fatal defect.  Icasiano holds that the failure of a witness to sign one of the pages of the will through inadvertence or oversight (there being no bad faith or fraudulent intent) can be cured by the presentation of a carbon duplicate of the will which contains all the required signatures. This ruling is based on the principle of liberal interpretation of the statutory requirements for the formal validity of the will, provided that the need to safeguard the genuineness and authenticity of the will is not compromised. It is important, for the proper understanding of this case, to differentiate a duplicate copy of a document from a duplicate-original thereof. d. ORTEGA vs. VALMONTE | G.R. No. 157451, 16 December 2005

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Art. 806. Every will must be acknowledged before a notary public by the testator and the witnesses. The notary public shall not be required to retain a copy of the will, or file another with the Office of the Clerk of Court. (n)

 CORE ISSUES: (i) how to prove the fact of fraud in the making of the will; and (ii) what constitutes a sound and disposing mind.  FRAUD: Fraud “is a trick, secret device, false statement, or pretence, by which the subject of it is cheated. It may be of such character that the testator is misled or deceived as to the nature or contents of the document which he executed, or it may relate to some extrinsic fact, in consequence of the deception regarding which the testator is led to make a certain will which, but for the fraud, he would not have made.  The party challenging the will bears the burden of proving the existence of fraud at the time of its execution. The burden to show otherwise shifts to the proponent of the will only upon a showing of credible evidence of fraud. Unfortunately in this case, other than the self-serving allegations of petitioners, no evidence of fraud was ever presented.  The omission of some relatives does not affect the due execution of a will.  WHAT CONSTITUTE SOUND AND DISPOSING MIND: The three things that the testator must have the ability to know to be considered of sound mind are as follows: (1) the nature of the estate to be disposed of; (2) the proper objects of the testator’s bounty; and (3) the character of the testamentary act. Applying this test to the present case, we find that the appellate court was correct in holding that Placido had testamentary capacity at the time of the execution of his will.  It must be noted that despite his advanced age, he was still able to identify accurately the kinds of property he owned, the extent of his shares in them, and even their locations. As regards the proper objects of his bounty, it was sufficient that he identified his wife as sole beneficiary. As we have stated earlier, the omission of some relatives from the will did not affect its formal validity. There being no showing of fraud in its execution, intent in its disposition becomes irrelevant. 3. 808

a. ALVARADO vs. GAVIOLA, JR. | G.R. No. 74695, 14 September 1993  MEANING OF “BLIND TESTATOR”: A person unable to read the draft of his will, either because of poor, defective or blurred eyesight must be considered blind for the purpose of compliance with the additional formalities prescribed in Article 808.  Inability to read by reason of illiteracy is included within the broader concept of "blindness" for the purpose of the same article.  NOTA BENE: Alvarado makes a landmark exception to the rule of strict compliance when it affirmed the probate order despite non-compliance with the double reading requirement. How this decision will affect the court’s interpretation of the other formal requirements of the law remains to be seen. 4. 810-811 Art. 810. A person may execute a holographic will which must be entirely written, dated, and signed by the hand of the testator himself. It is

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Art. 808. If the testator is blind, the will shall be read to him twice; once, by one of the subscribing witnesses, and again, by the notary public before whom the will is acknowledged. (n)

subject to no other form, and may be made in or out of the Philippines, and need not be witnessed. (678, 688a) Art. 811. In the probate of a holographic will, it shall be necessary that at least one witness who knows the handwriting and signature of the testator explicitly declare that the will and the signature are in the handwriting of the testator. If the will is contested, at least three of such witnesses shall be required. In the absence of any competent witness referred to in the preceding paragraph, and if the court deem it necessary, expert testimony may be resorted to. (619a) a. ROXAS vs. DE JESUS, JR. | No. L-38338, 28 January 1985  GENERAL RULE: Article 810 of the Civil Code requires, among others, that a HOLOGRAPHIC WILL BE DATED.  EXCEPTION: While a complete date is generally required, an incomplete date which sets forth only the month and the year of execution, is not a fatal defect if it can be shown that there was no bad faith, fraud, and undue and improper influence and pressure. Probate is further justified if the genuineness of the handwriting of the testator is proved, or otherwise admitted by the parties, and the only ground for opposing probate is the technicality resulting from an incomplete date. 5. 830 & 834 in relation to 172 Art. 830. No will shall be revoked except in the following cases: (1) By implication of law; or (2) By some will, codicil, or other writing executed as provided in case of wills; or

Art. 834. The recognition of an illegitimate child does not lose its legal effect, even though the will wherein it was made should be revoked. (714) Art. 172. The wife cannot bind the conjugal partnership without the husband's consent except in cases provided by law. (1416a) 6. 854 Art. 854. The preterition or omission of one, some, or all of the compulsory heirs in the direct line, whether living at the time of the execution of the will or born after the death of the testator, shall annul the institution of heir; but the devises and legacies shall be valid

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(3) By burning, tearing, cancelling, or obliterating the will with the intention of revoking it, by the testator himself, or by some other person in his presence, and by his express direction. If burned, torn, cancelled, or obliterated by some other person, without the express direction of the testator, the will may still be established, and the estate distributed in accordance therewith, if its contents, and due execution, and the fact of its unauthorized destruction, cancellation, or obliteration are established according to the Rules of Court. (n)

insofar as they are not inofficious. If the omitted compulsory heirs should die before the testator, the institution shall be effectual, without prejudice to the right of representation. (814a) a. ACAIN vs. IAC | No. L-72706, 27 October 1987  SURVIVING SPOUSE COULD NOT BE PRETERITED: Even if the surviving spouse is a compulsory heir there is no preterition even if she is omitted from the inheritance for she is not in the direct line.  PRETERITION OF THE ADOPTED CHILD: Adoption gives to the adopted person the same rights and duties as if he were a legitimate child of the adopted and makes the adopted person a legal heir of the adopter. It cannot be denied that she was totally omitted and preterited in the will of the testator and that both adopted child and the widow were deprived of at least their legitime. Neither can it be denied that they were not expressly disinherited. Hence, this is a clear case of preterition of the legally adopted child. b. ROSALES vs. ROSALES | No. L-40789, 27 February 1987  A daughter-in-law is not a compulsory heir of her mother-in-law. This is because of the absence of blood relationship between the two. The surviving spouse is considered a third person as regards the estate of the parent-in-law. c. VENT*** vs. COURT OF APPEALS – Sister 7. 863

a. NUGUID vs. NUGUID | No. L-23445, 23 June 1966  GENERAL RULE: The area of inquiry of a probate court is limited to the TESTAMENTARY CAPACITY of the testator and the DUE EXECUTION OF THE WILL.  EXCEPTION: If it should appear on the face of the will that the sole disposition is intrinsically invalidity, and that nothing is gained from an inquiry into extrinsic validity, then a probe into the testamentary disposition and the consequential invalidation thereof is justified for practical considerations. While Article 854 annuls merely the institution of heir, the court is justified in declaring the entire will void if the only testamentary disposition in the questioned will is the institution of the universal heir. In such a case, the effect of the nullification of the testamentary disposition would be the same as the nullification of the will itself. b. DY SEANGIO vs. REYES | G.R. No. 140372-72, 27 November 2006  ISSUES RESOLVED IN THE CASE:  Where the sole disposition of a purported will is the disinheritance of a compulsory heir, the disinheritance is considered a property disposition. Therefore, the document is must be considered a will because it conveys property.

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Art. 863. A fideicommissary substitution by virtue of which the fiduciary or first heir instituted is entrusted with the obligation to preserve and to transmit to a second heir the whole or part of the inheritance, shall be valid and shall take effect, provided such substitution does not go beyond one degree from the heir originally instituted, and provided further, that the fiduciary or first heir and the second heir are living at the time of the death of the testator. (781a)

 The failure of the testator to institute an heir or to even mention by name any of the compulsory heir, per se, does not constitute preterition.  SUMMARY OF THE CASE: Segundo’s document, although it may initially come across as a mere disinheritance instrument, conforms to the formalities of a holographic will prescribed by law. It is written, dated and signed by the hand of Segundo himself. An intent to dispose mortis causa can be clearly deduced from the terms of the instrument, and while it does not make an affirmative disposition of the latter’s property, the disinheritance of Alfredo, nonetheless, is an act of disposition in itself. In other words, the disinheritance results in the disposition of the property of the testator Segundo in favor of those who would succeed him in the absence of Alfredo. c. ARANAS vs. ARANAS | G.R. No. L-56249 May 29, 1987  The Last Will and Testament shows that it was the intention and desire of the testator to reward his nephew Vicente Aranas for his faithful and unselfish services by allowing him to enjoy one-half of the fruits of the testator's third group of properties until Vicente's death and/or refusal to act as administrator in which case, the administration shall pass to anyone chosen by Carmelo Aranas among his sons and upon Carmelo's death, his sons will have the power to select one among themselves.  As a USUFRUCTUARY HAS THE RIGHT TO ENJOY the property of his uncle with all the benefits which result from the normal enjoyment (or exploitation) of another's property, WITH THE OBLIGATION TO RETURN, at the designated time, either the same thing, or in special cases its equivalent. This right of Vicente to enjoy the fruits of the properties is temporary and therefore not perpetual as there is a limitation namely his death or his refusal. 8. 891

a. SUMAYA vs. IAC | G.R. Nos. 68843-44, 2 September 1991  The reversionary rights of the reservees may be lost to an innocent purchaser of the reservable property. For the protection of the said reservees, it is important that the reservable character of the property must be properly annotated at the back of the title thereto. However, even absent such annotation, if it can be shown that the third party purchaser had actual or constructive notice of the reservable character of the property, then the reversionary rights of the reservees shall be upheld. b. MENDOZA vs. DELOS SANTOS | G.R. NO. 176422 : March 20, 2013  TRANSMISSION: There are three lines of transmission in reserva troncal. The first transmission is by gratuitous title, whether by inheritance or donation, from an ascendant/brother/sister to a descendant called the prepositus. The second transmission is by operation of law from the prepositus to the other ascendant or reservor, also called the reservista. The third and last transmission is from the

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Art. 891. The ascendant who inherits from his descendant any property which the latter may have acquired by gratuitous title from another ascendant, or a brother or sister, is obliged to reserve such property as he may have acquired by operation of law for the benefit of relatives who are within the third degree and who belong to the line from which said property came. (871)

reservista to the reservees or reservatarios who must be relatives within the third degree from which the property came.  The lineal character of the reservable property is reckoned from the ascendant from whom the prepositus received the property by gratuitous title. Based on the circumstances of the present case, Article 891 on reserva troncal is not applicable.  LIMITATION – 3RD DEGREE: The petitioners are not relatives within the third degree of Gregoria from whom the properties came. The person from whom the degree should be reckoned is the descendant/prepositus, the one at the end of the line from which the property came and upon whom the property last revolved by descent. It is Gregoria in this case. Petitioners are Gregoria's fourth degree relatives, being her first cousins. First cousins of the prepositus are fourth degree relatives and are not reservees or reservatarios.  They CANNOT even claim representation of their predecessors Antonio and Valentin as Article 891 grants a personal right of reservation only to the relatives up to the third degree from whom the reservable properties came. The only recognized exemption is in the case of nephews and nieces of the prepositus, who have the right to represent their ascendants (fathers and mothers) who are the brothers/sisters of the prepositus and relatives within the third degree. 9. 902; 992 Art. 902. The rights of illegitimate children set forth in the preceding articles are transmitted upon their death to their descendants, whether legitimate or illegitimate. (843a)

a. MADARCOS vs. DE LA MERCED | G.R. No. 39975, 30 June 1989  LEGAL HEIRS: The restrictive meaning refers to heirs called upon to inherit by intestacy. However, the more liberal interpretation would include any person called to succeed, either by virtue of a will, or by intestacy.  CORE ISSUE IN THE CASE: Proper construction of the term "legal heirs" as used in §119 of the Public Land Act which provides: Every conveyance of land acquired under the free patent or homestead provisions, when proper, shall be subject to repurchase by the applicant, his widow, or legal heirs, within a period of five years from the date of conveyance.  The term "legal heirs" is used in §119 in a generic sense. It is broad enough to cover any person who is called to the succession either by provision of a will or by operation of law. Thus, legal heirs include both testate and intestate heirs depending upon whether succession is by the will of the testator or by law. Legal heirs are not necessarily compulsory heirs but they maybe so if the law reserves a legitime for them.  RESOLUTION OF THE CASE: Petitioners are legal heirs. Having been decreed under the rules of intestacy as entitled to succeed to the entire estate of the Catain spouses due to the absence of compulsory heirs, they now step into the shoes of the decedents. They should be

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Art. 992. An illegitimate child has no right to inherit ab intestato from the legitimate children and relatives of his father or mother; nor shall such children or relatives inherit in the same manner from the illegitimate child. (943a)

considered as among the legal heirs contemplated by §119 as entitled to redeem the homestead. 10. 494; 870; 1083 – Will provides indivision of estate Art. 494. No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time the partition of the thing owned in common, insofar as his share is concerned. Nevertheless, an agreement to keep the thing undivided for a certain period of time, not exceeding ten years, shall be valid. This term may be extended by a new agreement. A donor or testator may prohibit partition for a period which shall not exceed twenty years. Neither shall there be any partition when it is prohibited by law. No prescription shall run in favor of a co-owner or co-heir against his coowners or co-heirs so long as he expressly or impliedly recognizes the coownership. (400a) Art. 870. The dispositions of the testator declaring all or part of the estate inalienable for more than twenty years are void. (n) Art. 1083. Every co-heir has a right to demand the division of the estate unless the testator should have expressly forbidden its partition, in which case the period of indivision shall not exceed twenty years as provided in article 494. This power of the testator to prohibit division applies to the legitime.

a. SANTIAGO vs. SANTIAGO | G.R. No. 179859 August 9, 2010  INDIVISION IS SUBJECT TO STATUTORY LIMITATION: It is clear from testator’s will that he intended the house and lot in Manila to be transferred in petitioners’ names for administration purposes only, and that the property be owned by the heirs in common. But the condition set by the decedent on the property’s indivisibility is subject to a statutory limitation, particularly Articles 494, 870, and 1083 of the Civil Code, which provide that the prohibition to divide a property in a co-ownership can only last for twenty (20) years.  Although the Civil Code is silent as to the effect of the indivision of a property for more than 20 years, it would be contrary to public policy to sanction co-ownership beyond the period expressly mandated by the Civil Code. OBLIGATIONS AND CONTRACTS 1. 1174 (1942; 1979; 2147; 2148) Art. 1174. Except in cases expressly specified by the law, or when it is

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Even though forbidden by the testator, the co-ownership terminates when any of the causes for which partnership is dissolved takes place, or when the court finds for compelling reasons that division should be ordered, upon petition of one of the co-heirs. (1051a)

otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or which, though foreseen, were inevitable. (1105a) Art. 1942. The bailee is liable for the loss of the thing, even if it should be through a fortuitous event: (1) If he devotes the thing to any purpose different from that for which it has been loaned; (2) If he keeps it longer than the period stipulated, or after the accomplishment of the use for which the commodatum has been constituted; (3) If the thing loaned has been delivered with appraisal of its value, unless there is a stipulation exemption the bailee from responsibility in case of a fortuitous event; (4) If he lends or leases the thing to a third person, who is not a member of his household; (5) If, being able to save either the thing borrowed or his own thing, he chose to save the latter. (1744a and 1745) Art. 1979. The depositary is liable for the loss of the thing through a fortuitous event: (1) If it is so stipulated; (2) If he uses the thing without the depositor's permission; (3) If he delays its return; (4) If he allows others to use it, even though he himself may have been authorized to use the same. (n) Art. 2147. The officious manager shall be liable for any fortuitous event: (1) If he undertakes risky accustomed to embark upon;

operations

which

the

owner

was

not

(3) If he fails to return the property or business after demand by the owner; (4) If he assumed the management in bad faith. (1891a) Art. 2148. Except when the management was assumed to save property or business from imminent danger, the officious manager shall be liable for fortuitous events: (1) If he is manifestly unfit to carry on the management; (2) If by his intervention he prevented a more competent person from taking up the management. (n)

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(2) If he has preferred his own interest to that of the owner;

a. FILESTATE vs. COURT OF APPEALS |G.R. No. 185798 January 13, 2014  The Asian financial crisis is not a fortuitous event that would excuse petitioners from performing their contractual obligation; second, as a result of the breach committed by petitioners, respondents are entitled to rescind the contract and to be refunded the amount of amortizations paid including interest and damages; and third, petitioners are likewise obligated to pay attorney’s fees and the administrative fine.  The Court did not generalize that the Asian financial crisis in 1997 was unforeseeable and beyond the control of a business corporation. It is unfortunate that petitioner apparently met with considerable difficulty e.g. increase cost of materials and labor, even before the scheduled commencement of its real estate project as early as 1995. However, a REAL ESTATE ENTERPRISE engaged in the pre-selling of condominium units is concededly a master in projections on commodities and currency movements and business risks. The fluctuating movement of the Philippine peso in the foreign exchange market is an everyday occurrence and fluctuations in currency exchange rates happen everyday, thus, not an instance of caso fortuito. 2. 1182 (1197) Art. 1182. When the fulfillment of the condition depends upon the sole will of the debtor, the conditional obligation shall be void. If it depends upon chance or upon the will of a third person, the obligation shall take effect in conformity with the provisions of this Code. (1115) Art. 1197. If the obligation does not fix a period, but from its nature and the circumstances it can be inferred that a period was intended, the courts may fix the duration thereof. The courts shall also fix the duration of the period when it depends upon the will of the debtor.

a. CATUNGAL vs. RODRIGUEZ | G.R. No. 146839 March 23, 2011  EFFECT OF NON-PERFORMANCE OF CONDITION: The Court has distinguished between a condition imposed on the perfection of a contract and a condition imposed merely on the performance of an obligation. While failure to comply with the first condition results in the failure of a contract, failure to comply with the second merely gives the other party the option to either refuse to proceed with the sale or to waive the condition.  PERIOD OF PERFORMANCE: Pursuant to Art. 1197, If the obligation does not fix a period, but from its nature and the circumstances it can be inferred that a period was intended, the courts may fix the duration thereof. The courts shall also fix the duration of the period when it depends upon the will of the debtor. The courts shall determine such period as may under the circumstances have been probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by them.

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In every case, the courts shall determine such period as may under the circumstances have been probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by them. (1128a)

3. 1191; 1381; 1383; 1385 Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him. The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible. The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period. This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with Articles 1385 and 1388 and the Mortgage Law. (1124) Art. 1381. 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. (1291a)

Art. 1385. Rescission creates the obligation to return the things which were the object of the contract, together with their fruits, and the price with its interest; consequently, it can be carried out only when he who demands rescission can return whatever he may be obliged to restore. Neither shall rescission take place when the things which are the object of the contract are legally in the possession of third persons who did not act in bad faith. In this case, indemnity for damages may be demanded from the person causing the loss. (1295) a. U.P. vs. DELOS ANGELES | G.R. No. L-28602. September 29, 1970  BREACH OF CONTRACT – RESCISSION UNDER 1191: Where UP and ALUMCO had expressly stipulated in the "Acknowledgment of

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Art. 1383. The action for rescission is subsidiary; it cannot be instituted except when the party suffering damage has no other legal means to obtain reparation for the same. (1294)

Debt and Proposed Manner of Payments" that, upon default by the debtor LUMCO, the creditor (UP) has "the right and the power to consider the Logging Agreement as rescinded without the necessity of any judicial suit," respondent Alumco’s contention that it is only after a final court decree declaring the contract rescinded for violation of its terms that UP could disregard ALUMCO’s rights under the contract and treat the agreement as breached and of no force or effect is untenable. In connection with Article 1191, it is NOT always necessary for the injured party to resort to court for rescission of the contract.  The act of a party in treating a contract as cancelled or resolved on account of infractions by the other contracting party must be made known to the other and is always provisional, subject to review by the proper Court. If the other party denies that rescission is justified, it is free to resort to judicial action in its own behalf, and bring the matter to court. Then, should the court, after due hearing, decide that the resolution of the contract was not warranted, the responsible party will be sentenced to damages; in the contrary case, the resolution will be affirmed, and the consequent indemnity awarded to the party prejudiced.  WHEN JUDICIAL ACTION NECESSARY: Where the extrajudicial resolution is contested, only the final award of the court of competent jurisdiction can conclusively settle whether the resolution was proper or not, unless attack thereon should become barred by acquiescence, estoppel or prescription.  EFFECT OF UNILATERAL RESCISSION: In the case of abuse or error by the rescinder, the other party is not barred from questioning in court such abuse or error, the practical effect of the stipulation being merely to transfer to the defaulter the initiative of instituting suit, instead of the rescinder. 4. 1207; 1208 – REP. GLASS vs. Q***

Art. 1208. If from the law, or the nature or the wording of the obligations to which the preceding article refers the contrary does not appear, the credit or debt shall be presumed to be divided into as many shares as there are creditors or debtors, the credits or debts being considered distinct from one another, subject to the Rules of Court governing the multiplicity of suits. (1138a) 5. 1245: PHILIPPINE LAWIN BUS LINES vs. CA | G. R. No. 130972. January 23, 2002 Art. 1245. Dation in payment, whereby property is alienated to the creditor in satisfaction of a debt in money, shall be governed by the law of sales. (n)

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Art. 1207. The concurrence of two or more creditors or of two or more debtors in one and the same obligation does not imply that each one of the former has a right to demand, or that each one of the latter is bound to render, entire compliance with the prestation. There is a solidary liability only when the obligation expressly so states, or when the law or the nature of the obligation requires solidarity. (1137a)

a. DACION EN PAGO: Property is alienated to the creditor in satisfaction of a debt in money. It is the delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation. It extinguishes the obligation to the extent of the value of the thing delivered, either as agreed upon by the parties or as may be proved, unless the parties by agreement, express or implied, or by their silence, consider the thing as equivalent to the obligation, in which case the obligation is totally extinguished.  Article 1245 of the Civil Code provides that the law on sales shall govern an agreement of dacion en pago. A contract of sale is perfected at the moment there is a meeting of the minds of the parties thereto upon the thing which is the object of the contract and upon the price. b. In this case, there was no meeting of the minds between the parties on whether the loan of the petitioners would be extinguished by dacion en pago. The Court cited the ruling in PNB v. Pineda that, where machinery and equipment were repossessed to secure the payment of a loan obligation and not for the purpose of transferring ownership thereof to the creditor in satisfaction of said loan, no dacion en pago was ever accomplished. 6. 1278; 1279 – DBP vs. UNION BANK | G.R. No. 191555 2014

January 20,

Art. 1278. Compensation shall take place when two persons, in their own right, are creditors and debtors of each other. (1195) Art. 1279. In order that compensation may be proper, it is necessary: (1) That each one of the obligors be bound principally, and that he be at the same time a principal creditor of the other; (2) That both debts consist in a sum of money, or if the things due are consumable, they be of the same kind, and also of the same quality if the latter has been stated; (3) That the two debts be due; (4) That they be liquidated and demandable;

a. LEGAL COMPENSATION: Compensation is defined as a mode of extinguishing obligations whereby two persons in their capacity as principals are mutual debtors and creditors of each other with respect to equally liquidated and demandable obligations to which no retention or controversy has been timely commenced and communicated by third parties. b. REQUISITES ARE PROVIDED UNDER ARTICLE 1279: 1) That each one of the obligors be bound principally, and that he be at the same time a principal creditor of the other; 2) That both debts consist in a sum of money, or if the things due are consumable, they be of the same kind, and also of the same quality if the latter has been stated; 3) That the two debts be due;

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(5) That over neither of them there be any retention or controversy, commenced by third persons and communicated in due time to the debtor. (1196)

4) That they be liquidated and demandable; 5) That over neither of them there be any retention or controversy, commenced by third persons and communicated in due time to the debtor. c. RULE UNDER 1290 – BY OPERATION OF LAW: When all the requisites mentioned in Article 1279 are present, compensation takes effect by operation of law, and extinguishes both debts to the concurrent amount, even though the creditors and debtors are not aware of the compensation. 7. 1291; 1292 – AJAX MARKETING vs. COURT OF APPEALS | G.R. No. 118585. September 14, 1995 Art. 1291. Obligations may be modified by: (1) Changing their object or principal conditions; (2) Substituting the person of the debtor; (3) Subrogating a third person in the rights of the creditor. (1203)

a. NOVATION AS A MODE OF EXTINGUISHMENT: Extinguishment of an obligation by the substitution or change of the obligation by a subsequent one which extinguishes or modifies the first, either by changing the object or principal conditions, or by substituting another in place of the debtor, or by subrogating a third person in the rights of the creditor.  Novation is a juridical act with a DUAL FUNCTION: it extinguishes an obligation and creates a new one in lieu of the old. It can be objective, subjective, or mixed.  OBJECTIVE NOVATION occurs when there is a change of the object or principal conditions of an existing obligation while SUBJECTIVE NOVATION occurs when there is a change of either the person of the debtor, or of the creditor in an existing obligation.  When the change of the object or principal conditions of an obligation occurs at the same time with the change of either in the person of the debtor or creditor a mixed novation occurs. b. NOVATION WILL NOT BE ALLOWED UNLESS IT IS CLEARLY SHOWN BY EXPRESS AGREEMENT, OR BY ACTS OF EQUAL IMPORT: Novation is never presumed and it will not be allowed unless it is clearly shown by express agreement, or by acts of equal import.  To effect an objective novation: The new obligation expressly declare that the old obligation is extinguished, or that the new obligation be on every point incompatible with the new one.  To effect a subjective novation by a change in the person of the debtor: The old debtor be released expressly from the obligation and the third person or new debtor assumes his place in the relation. There is no novation without such release as the third person who has assumed the debtor’s obligation becomes merely a co-debtor or surety. 8. 1315; 1316; 1318; 1319 Art. 1315. Contracts are perfected by mere consent, and from that moment the parties are bound not only to the fulfillment of what has

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Art. 1292. In order that an obligation may be extinguished by another which substitute the same, it is imperative that it be so declared in unequivocal terms, or that the old and the new obligations be on every point incompatible with each other. (1204)

been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. (1258) Art. 1316. Real contracts, such as deposit, pledge and Commodatum, are not perfected until the delivery of the object of the obligation. (n) Art. 1318. There is no contract unless the following requisites concur: (1) Consent of the contracting parties; (2) Object certain which is the subject matter of the contract; (3) Cause of the obligation which is established. (1261) Art. 1319. Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. The offer must be certain and the acceptance absolute. A qualified acceptance constitutes a counter-offer.

a. ABS-CBN vs. COURT OF APPEALS | G.R. No. 128690. January 21, 1999  A CONTRACT UNDERGOES THREE STAGES: (a) preparation, conception, or generation, which is the period of negotiation and bargaining, ending at the moment of agreement of the parties; (b) perfection or birth of the contract, which is the moment when the parties come to agree on the terms of the contract; and (c) consummation or death, which is the fulfillment or performance of the terms agreed upon in the contract.  Contracts that are consensual in nature are perfected upon mere meeting of the minds. Once there is concurrence between the offer and the acceptance upon the subject matter, consideration, and terms of payment a contract is produced. The offer must be certain. To convert the offer into a contract, the acceptance must be absolute and must not qualify the terms of the offer; it must be plain, unequivocal, unconditional, and without variance of any sort from the proposal.  A qualified acceptance, or one that involves a new proposal, constitutes a counter-offer and is a rejection of the original offer. Consequently, when something is desired which is not exactly what is proposed in the offer, such acceptance is not sufficient to generate consent because any modification or variation from the terms of the offer annuls the offer.  CASE AT BAR: ABS-CBN made no unqualified acceptance of VIVA’s offer. Hence, they underwent a period of bargaining. ABS-CBN then formalized its counter-proposals or counter-offer in a draft contract. VIVA through its Board of Directors, rejected such counter-offer. Even if it be conceded arguendo that Del Rosario had accepted the counter-offer, the acceptance did not bind VIVA, as there was no proof whatsoever that Del Rosario had the specific authority to do so. b. SORIANO vs. SORIANO [Comment: Apologies… I can’t find the case.]

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Acceptance made by letter or telegram does not bind the offerer except from the time it came to his knowledge. The contract, in such a case, is presumed to have been entered into in the place where the offer was made. (1262a)

9. 1314: Any third person who induces another to violate his contract shall be liable for damages to the other contracting party. Art. 1314. Any third person who induces another to violate his contract shall be liable for damages to the other contracting party. (n) a. SO PING BUN vs. CA | G.R. No. 120554 September 21, 1999  There is tort interference when during the existence of a valid contract, a third person, to whom the existence of such contract is known, interferes without legal justification or excuse. The elements of tort interference are: (1) existence of a valid contract; (2) knowledge on the part of the third person of the existence of contract; and (3) interference of the third person is without legal justification or excuse. Petitioner’s Trendsetter Marketing asked DCCSI to execute lease contracts in its favor, and as a result petitioner deprived respondent corporation of the latter’s property right. Clearly, as correctly viewed by the appellate court, these elements are present in the instant case. 10. 1324; 1479 Art. 1324. When the offerer has allowed the offeree a certain period to accept, the offer may be withdrawn at any time before acceptance by communicating such withdrawal, except when the option is founded upon a consideration, as something paid or promised. (n) Art. 1479. A promise to buy and sell a determinate thing for a price certain is reciprocally demandable.

b. EQUATORIAL REALTY vs. MAYFAIR THEATER | G.R. No. 106063. November 21, 1996  ART. 1324 speaks of an ‘offer’ made by an offeror which the offeree may or may not accept within a certain period.  The offer may be withdrawn by the offeror before the expiration of the period and while the offeree has not yet accepted the offer. The offer cannot be withdrawn by the offeror within the period if a consideration has been promised or given by the offeree in exchange for the privilege of being given that period within which to accept the offer.  The consideration is distinct from the price which is part of the offer. The contract that arises is known as OPTION (option contract).  ART. 1479, second paragraph: Contemplates of an ‘accepted unilateral promise to buy or to sell a determinate thing for a price within (which) is binding upon the promisee if the promise is supported by a consideration distinct from the price.’ That ‘unilateral promise to buy or to sell a determinate thing for a price certain’ is called an offer.  OFFER: A proposal to enter into a contract. To constitute a legal offer, the proposal must be certain as to the object, the price and other essential terms of the contract (Art. 1319). c. BIBLE BAPTIST CHURCH vs. COURT OF APPEALS | G.R. No. 126454. November 26, 2004  OPTION CONTRACT IS AN ONEROUS CONTRACT: The Court defined consideration as “the why of the contracts, the essential reason

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An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the promissor if the promise is supported by a consideration distinct from the price. (1451a)

11. 1356: Art. 1356. Contracts shall be obligatory, in whatever form they may have been entered into, provided all the essential requisites for their validity are present. However, when the law requires that a contract be in some

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which moves the contracting parties to enter into the contract.” The definition illustrates that the consideration contemplated to support an option contract need not be monetary. Actual cash need not be exchanged for the option. However, by the very nature of an option contract (Art. 1479), the same is an onerous contract for which the consideration must be something of value, although its kind may vary.  RULE: An option contract needs to be supported by a separate consideration. The consideration need not be monetary but could consist of other things or undertakings. However, if the consideration is not monetary, these must be things or undertakings of value, in view of the onerous nature of the contract of option. Furthermore, when a consideration for an option contract is not monetary, said consideration must be clearly specified as such in the option contract or clause. d. SANCHEZ vs. RIGOS | G.R. No. L-25494. June 14, 1972  If the option is given without a consideration, it is a mere offer of a contract of sale which is not binding until accepted. If, however, acceptance is made before a withdrawal, it constitutes a binding contract of sale even though the option was not supported by sufficient consideration. e. SERRA vs. COURT OF APPEALS | G.R. No. 103338. January 4, 1994  A promise to buy and sell a determinate thing for a price certain is reciprocally demandable. An accepted unilateral promise to buy and sell a determinate thing for a price certain is binding upon the promisor if the promise is supported by a consideration distinct from the price (Article 1479). The first is the mutual promise and each has the right to demand from the other the fulfillment of the obligation. While the second is merely an offer of one to another, which if accepted, would create an obligation to the offeror to make good his promise, provided the acceptance is supported by a consideration distinct from the price. f. VDA. DE QUIRINO vs. PALARCA | G.R. No. L-28269. August 15, 1969  In reciprocal contracts, the obligation or promise of each party is the consideration for that of the other. As a consequence, the power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.  Article 1324 provides that when an offeror has allowed the offeree a certain period to accept, the offer maybe withdrawn at anytime before acceptance by communicating such withdrawal, except when the option is founded upon consideration, as something paid or promised. On the other hand, Article 1479 provides that an accepted unilateral promise to buy and sell a determinate thing for a price certain is binding upon the promisor if the promise is supported by a consideration distinct from the price.  In a unilateral promise to sell, where the debtor fails to withdraw the promise before the acceptance by the creditor, the transaction becomes a bilateral contract to sell and to buy, because upon acceptance by the creditor of the offer to sell by the debtor, there is already a meeting of the minds of the parties as to the thing which is determinate and the price which is certain. In which case, the parties may then reciprocally demand performance. G. E*ILO** vs. A**EL*

form in order that it may be valid or enforceable, or that a contract be proved in a certain way, that requirement is absolute and indispensable. In such cases, the right of the parties stated in the following article cannot be exercised. (1278a)

12. 1390; 1397 – KILOSBAYAN vs. MORATO | G.R. No. 118910. July 17, 1995 Art. 1390. 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 intimidation, undue influence or fraud.

by

mistake,

violence,

These contracts are binding, unless they are annulled by a proper action

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a. U.P. vs. PHILAB INDUSTRIES | G.R. NO. 152411. September 29, 2004  IMPLIED-IN-FACT CONTRACT: A contract implied in fact is one implied from facts and circumstances showing a mutual intention to contract. It arises where the intention of the parties is not expressed, but an agreement in fact creating an obligation. It is a contract, the existence and terms of which are manifested by conduct and not by direct or explicit words between parties but is to be deduced from conduct of the parties, language used, or things done by them, or other pertinent circumstances attending the transaction.  TO CREATE CONTRACTS IMPLIED IN FACT, circumstances must warrant inference that one expected compensation and the other to pay. An implied-in-fact contract requires the parties' intent to enter into a contract; it is a true contract. The conduct of the parties is to be viewed as a reasonable man would view it, to determine the existence or not of an implied-in-fact contract. The totality of the acts/conducts of the parties must be considered to determine their intention. An implied-infact contract will not arise unless the meeting of minds is indicated by some intelligent conduct, act or sign. b. VDA. DE REYES vs. COURT OF APPEALS | G.R. No. 92436. July 26, 1991  VALIDITY OF ORAL PARTITION: Partition among heirs or renunciation of an inheritance by some of them is not exactly a conveyance of real property for the reason that it does not involve transfer of property from one to the other, but rather a confirmation or ratification of title or right of property by the heir renouncing in favor of another heir accepting and receiving the inheritance.  There is no law that requires partition among heirs to be in writing to be valid. The requirement that a partition be put in a public document and registered has for its purpose the protection of creditors and at the same time the protection of the heirs themselves against tardy claims. The object of registration is to serve as constructive notice to others.  The intrinsic validity of partition not executed with the prescribed formalities does not come into play when there are no creditors or the rights of creditors are not affected. Where no such rights are involved, it is competent for the heirs of an estate to enter into an agreement for distribution in a manner and upon a plan different from those provided by law.

in court. They are susceptible of ratification. (n) Art. 1397. The action for the annulment of contracts may be instituted by all who are thereby obliged principally or subsidiarily. However, persons who are capable cannot allege the incapacity of those with whom they contracted; nor can those who exerted intimidation, violence, or undue influence, or employed fraud, or caused mistake base their action upon these flaws of the contract. (1302a) a. LEASE CONTRACT: A contract of lease may call for some form of collaboration or association between the parties since lease is a "consensual, bilateral, onerous and commutative contract by which one person binds himself to grant temporarily the use of a thing or the rendering of some service to another who undertakes to pay some rent, compensation or price. b. PCSO MAY ENTER INTO EQUIPMENT LEASE CONTRACT WITHOUT PUBLIC BIDDING: The question is whether the ELA is subject to public bidding. In justifying the award of the contract to the PGMC without public bidding, the PCSO invokes E.O. No. 301. E.O. No. 301, Sec. 1 applies only to contracts for the purchase of supplies, materials and equipment. It does not refer to contracts of lease of equipment like the ELA. The provisions on lease are found in §6 and §7 but they refer to the lease of privately-owned buildings or spaces for government use, or of government-owned buildings or spaces for private use, and these provisions do not require public bidding. It is thus difficult to see how E.O. No. 301 can be applied to the ELA when the only feature of the ELA that may thought of as close to a contract of purchase and sale is the option to buy given to the PCSO. An option to buy is not of course a contract of purchase and sale. 13. 1403 – MCIAA vs. LOZADA | February 9, 2011 Art. 1403. 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;

(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

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(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:

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 of 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.

14. 1409; 1410 – URETA vs. URETA | G.R. No. 165748. September 14, 2011 Art. 1409. The following contracts are inexistent and void from the beginning: (1) Those whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy; (2) Those which are absolutely simulated or fictitious; (3) Those whose cause or object did not exist at the time of the transaction;

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a. GENERAL RULE: Under the rule on the Statute of Frauds, a contract for the sale or acquisition of real property shall be unenforceable unless the same or some note of the contract be in writing and subscribed by the party charged. Subject to defined exceptions, evidence of the agreement cannot be received without the writing, or secondary evidence of its contents. b. APPLICATION: The statute applies only to executory and not to completed, executed, or partially consummated contracts.  RATIO: In executory contracts there is a wide field for fraud because unless they may be in writing there is no palpable evidence of the intention of the contracting parties. The statute has been precisely been enacted to prevent fraud. However, if a contract has been totally or partially performed, the exclusion of parol evidence would promote fraud or bad faith, for it would enable the defendant to keep the benefits already derived by him from the transaction in litigation, and at the same time, evade the obligations, responsibilities or liabilities assumed or contracted by him thereby. c. CASE AT BAR: The agreement package between the government and the private lot owners was already partially performed by the government through the acquisition of the lots for the expansion of the Lahug airport. However, the parties failed to accomplish the condition, the expansion of the Lahug Airport. Be that as it may, the two groups of landowners can, in an action to compel MCIAA to make good its oral undertaking to allow repurchase, adduce parol evidence to prove the transaction. At any rate, the objection on the admissibility of evidence on the basis of the Statute of Frauds may be waived if not timely raised. Records tend to support the conclusion that MCIAA did not, as the Ouanos and the Inocians posit, object to the introduction of parol evidence to prove its commitment to allow the former landowners to repurchase their respective properties upon the occurrence of certain events.

(4) Those whose object is outside the commerce of men; (5) Those which contemplate an impossible service; (6) Those where the intention of the parties relative to the principal object of the contract cannot be ascertained; (7) Those expressly prohibited or declared void by law. These contracts cannot be ratified. Neither can the right to set up the defense of illegality be waived. Art. 1410. The action or defense for the declaration of the inexistence of a contract does not prescribe. a. CHARACTERISTICS OF VOID OR INEXISTENT CONTRACTS: 1) They produce no legal effects whatsoever in accordance with the principle "quod nullum est nullum producit effectum." 2) They are not susceptible of ratification. 3) The right to set up the defense of inexistence or absolute nullity cannot be waived or renounced. 4) The action or defense for the declaration of their inexistence or absolute nullity is imprescriptible. 5) The inexistence or absolute nullity of a contract cannot be invoked by a person whose interests are not directly affected. b. IMPRESCRIPTIBLE: As the Deed of Sale is a void contract, the action for the declaration of its nullity, even if filed 21 years after its execution, cannot be barred by prescription for it is imprescriptible. Furthermore, the right to set up the defense of inexistence or absolute nullity cannot be waived or renounced. Therefore, the Heirs of Alfonso cannot be precluded from setting up the defense of its inexistence. c. Article 1412 is not applicable to fictitious or simulated contracts, because they refer to contracts with an illegal cause or subject-matter. The article presupposes the existence of a cause, it cannot refer to fictitious or simulated contracts which are in reality non-existent. As it has been determined that the Deed of Sale is a simulated contract, the provision cannot apply to it. 15. 1412 – BANCO FILIPINO

(1) When the fault is on the part of both contracting parties, neither may recover what he has given by virtue of the contract, or demand the performance of the other's undertaking; (2) When only one of the contracting parties is at fault, he cannot recover what he has given by reason of the contract, or ask for the fulfillment of what has been promised him. The other, who is not at fault, may demand the return of what he has given without any obligation to comply his promise. (1306)

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Art. 1412. If the act in which the unlawful or forbidden cause consists does not constitute a criminal offense, the following rules shall be observed:

d. Article 1412 of the Civil Code provides in part: If the act in which the unlawful or forbidden cause consists does not constitute a criminal offense, the following rules shall be observed:(1) When the fault is on the part of both contracting parties, neither may recover what he has given by virtue of the contract, or demand the performance of the other's undertaking. e. CASE AT BAR: Banco Filipino cannot demand the reconveyance of the subject properties in the present cases; neither can any affirmative relief be accorded to one party against the other since they have been found to have acted in pari delicto. As admitted by the Bank, it "warehoused" its branch site holdings to Tala to enable it to pursue its expansion program and purchase new branch sites including its main branch in Makati, and at the same time avoid the real property holdings limit under §25(a)and §34 of the General Banking Act which it had already reached. f. The Bank cannot use the defense of nor seek enforcement of its alleged implied trust with Tala since its purpose was contrary to law. An implied trust could not have been formed because the purchase is made in violation of an existing statute and in evasion of its express provision, no trust can result in favor of the party who is guilty of the fraud. ESTOPPEL Art. 1431. Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon.

PASION vs. MELEGRITO | G.R. No. 166558 | March 28, 2007  PRINCIPLES OF EQUITABLE ESTOPPEL sometimes called estoppel in pais are part of our law by Art. 1432 of the Civil Code. Coming under this class is estoppel by silence –  Estoppel by silence arises where a person, who by force of circumstances is under a duty to another to speak, refrains from doing so and thereby leads the other to believe in the existence of a state of facts in reliance on which he acts to his prejudice. Silence may support an estoppel whether the failure to speak is intentional or negligent.  Inaction or silence may under some circumstances amount to a misrepresentation and concealment of facts, so as to raise an equitable estoppel. When the silence is of such a character and under such circumstances that it would become a fraud on the other party to permit the party who has kept silent to deny what his silence has induced the other to believe and act on, it will operate as an estoppel.  CASE AT BAR: Petitioner had, by her silence, induced respondent to believe that she did not have any interest on respondent’s property other than being his tenant. Thus, respondent rightfully acted on this belief and filed the forcible entry case only against petitioner’s sisters whom he thought were the owners of the structure constructed on his land. Verily, to permit petitioner to deny the fact that she does not own the structure would work to prejudice the rights of respondent as the winning litigant in Civil Case No. 1243-99. Indeed, petitioner is conclusively estopped from interposing her claim of ownership against the writ of demolition issued to execute the decision in said case. ILANO vs. COURT OF APPEALS | G.R. No. 104376 | February 23, 1994

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Art. 1432. The principles of estoppel are hereby adopted insofar as they are not in conflict with the provisions of this Code, the Code of Commerce, the Rules of Court and special laws.

 The Court sustained the appellate court’s finding that private respondent’s evidence to establish her filiation with and paternity of petitioner was overwhelming, particularly the latter’s public acknowledgment of his amorous relationship with private respondent’s mother, and private respondent as his own child through acts and words, her testimonial evidence to that effect was fully supported by documentary evidence. The Court thus ruled that respondent had adduced sufficient proof of continuous possession of status of a spurious child.  Article 172 of the Family Code is an adaptation of Article 283 of the Civil Code. The legal provision provides that the father is obliged to recognize the child as his natural child “when the child has in his favor any evidence or proof that the defendant is his father.”  The last paragraph of Article 283 contains a blanket provision that practically covers all the other cases in the preceding paragraphs. ‘Any other evidence or proof’ that the defendant is the father is broad enough to render unnecessary the other paragraphs of this article. When the evidence submitted in the action for compulsory recognition is not sufficient to meet [the] requirements of the first three paragraphs, it may still be enough under the last paragraph. This paragraph permits hearsay and reputation evidence, as provided in the Rules of Court, with respect to illegitimate filiation.

MENDOZA vs. COURT OF APPEALS | G.R. No. L-31618 | August 17, 1983  Article 1437 of the Civil Code on ESTOPPEL INVOLVING IMMOVABLE PROPERTY provides: When in a contract between third persons concerning immovable property, one of them is misled by a person with respect to the ownership or real right over the real estate, the latter is precluded from asserting his legal title or interest therein, provided all these requisites are present: (1) There must be fraudulent representation or wrongful concealment of facts known to the party estopped; (2) The party precluded must intend that the other should act upon the facts as misrepresented; (3) The party misled must have been unaware of the true facts; and (4) The party defrauded must have acted in accordance with the representation.  The principle of estoppel rests on the rule that whenever a party has, by his declaration, act or omission, intentionally and deliberately led the other to believe a particular thing true and to act, upon such belief he cannot, in any litigation arising out of such declaration, act or omission, be permitted to falsify it.  WHO CAN INVOKE: Estoppel can only be invoked between the person making the misrepresentation and the person to whom it was addressed. It is essential that the latter shall have relied upon the misrepresentation and had been influenced and misled thereby. Art. 1436. A lessee or a bailee is estopped from asserting title to the thing leased or received, as against the lessor or bailor. SANTOS vs. NSO | G.R. No. 171129 | April 6, 2011  CONCLUSIVE PRESUMPTIONS – §2(b), Rule 131, ROC: What a tenant is estopped from denying is the title of his landlord at the time of the

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[Comment: There are several cases that cited the ruling in Ilano vs. CA, but it is mainly a PFR case. I found a case citing Ilano regarding estoppel involving movable property.]

commencement of the landlord-tenant relation. If the title asserted is one that is alleged to have been acquired subsequent to the commencement of that relation, the presumption will not apply. Hence, the tenant may show that the landlord’s title has expired or been conveyed to another or himself; and he is not estopped to deny a claim for rent, if he has been ousted or evicted by title paramount.  EXCEPTIONS: It does not apply if the landlord’s title has: (a) expired or (b) been conveyed to another or (c) been defeated by a title paramount, subsequent to the commencement of lessor-lessee relationship. If there was a change in the nature of the title of the landlord during the subsistence of the lease, then the presumption does not apply.  CASE AT BAR: While petitioner appears to have already lost ownership of the property at the time of the commencement of the tenant-landlord relationship between him and respondent, the change in the nature of petitioner’s title, as far as respondent is concerned, came only after the commencement of such relationship or during the subsistence of the lease. This is precisely because at the time of the execution of the second and third contracts of lease, respondent was still not aware of the transfer of ownership of the leased property to China Bank. It was only in November 2003 or less than two months before the expiration of said contracts when respondent came to know of the same after it was notified by said bank. Thus, there was a change in the nature of petitioner’s title during the subsistence of the lease that the rule on estoppel against tenants does not apply in this case. Petitioner’s reliance on said conclusive presumption must, therefore, necessarily fail since there was no error on the part of the CA when it entertained respondent’s assertion of a title adverse to petitioner. Art. 1434. When a person who is not the owner of a thing sells or alienates and delivers it, and later the seller or grantor acquires title thereto, such title passes by operation of law to the buyer or grantee. *MARTIN vs. REYES TRUST

**EMILIA O'LACO vs. VALENTIN CO CHO CHIT | G.R. No. 58010| March 31, 1993  CASE AT BAR: A resulting trust was intended by the parties under Art. 1448 of the Civil Code. As stipulated by the parties, the document of sale, the owner's duplicate copy of the certificate of title, insurance policies, receipt of initial premium of insurance coverage and real estate tax receipts were all in the possession of respondent-spouses which they offered in evidence. As asserted by respondent O Lay Kia, the reason why these documents of ownership remained with her is that the land in question belonged to her. Indeed, there can be no persuasive rationalization for the possession of these documents of ownership by respondent-spouses for 17 years after the Oroquieta property was purchased in 1943 than that of precluding its possible

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Art. 1448. There is an implied trust when property is sold, and the legal estate is granted to one party but the price is paid by another for the purpose of having the beneficial interest of the property. The former is the trustee, while the latter is the beneficiary. However, if the person to whom the title is conveyed is a child, legitimate or illegitimate, of the one paying the price of the sale, no trust is implied by law, it being disputably presumed that there is a gift in favor of the child.

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sale, alienation or conveyance by Emilia O'Laco, absent any machination or fraud. This continued possession of the documents, together with other corroborating evidence spread on record, strongly suggests that Emilia O'Laco merely held the Oroquieta property in trust for respondent-spouses. TRUST: Trust relations between parties may either be express or implied. Express trusts are those which are created by the direct and positive acts of the parties, by some writing or deed, or will, or by words evincing an intention to create a trust. Implied trusts are those which, without being express, are deducible from the nature of the transaction as matters of intent, or which are superinduced on the transaction by operation of law as matters of equity, independently of the particular intention of the parties. IMPLIED TRUSTS – RESULTING and CONSTRUCTIVE:  Implied trust may either be resulting or constructive trusts, both coming into being by operation of law.  Resulting trusts arise from the nature or circumstances of the consideration involved in a transaction whereby one person thereby becomes invested with legal title but is obligated in equity to hold his legal title for the benefit of another.  Constructive trusts are created by the construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. They arise contrary to intention against one who, by fraud, duress or abuse of confidence, obtains or holds the legal right to property which he ought not, in equity and good conscience, to hold. EXPRESS vs. IMPLIED TRUSTS CONCERNING IMMOVABLES: Unlike express trusts concerning immovables or any interest therein which cannot be proved by parol evidence, implied trusts may be established by oral evidence. However, in order to establish an implied trust in real property by parol evidence, the proof should be as fully convincing as if the acts giving rise to the trust obligation were proven by an authentic document. It cannot be established upon vague and inconclusive proof. CONSTRUCTIVE TRUST SUBJECT TO PRESCRIPTION: Once the resulting trust is repudiated, it is converted into a constructive trust and is subject to prescription.  A resulting trust is repudiated if the following requisites concur: (a) the trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui qui trust; (b) such positive acts of repudiation have been made known to the cestui qui trust; and, (c) the evidence thereon is clear and convincing.

***IGLESIA FILIPINA INDEPENDIENTE vs. TAEZA | G.R. No. 179597 | February 3, 2014  CASE AT BAR: Respondents' predecessor-in-interest, Bernardino Taeza, had already obtained a transfer certificate of title in his name over the property in question. Since the person supposedly transferring ownership was not authorized to do so, the property had evidently been acquired by mistake. The applicable provision of law in such cases is Article 1456 of the Civil Code.  IMPLIED TRUST: Those which, without being expressed, are deducible from the nature of the transaction as matters of intent or which are superinduced on the transaction by operation of law as matters of equity, independently of the particular intention of the parties. In turn, implied trusts are either resulting or constructive trusts. These two are differentiated from each other as follows:

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Art. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes.

CAÑEZO vs. ROJAS | G.R. No. 148788| November 23, 2007  CASE AT BAR: An intention to create a trust cannot be inferred from the petitioner’s testimony and the attendant facts and circumstances. The petitioner testified only to the effect that her agreement with her father was that she will be given a share in the produce of the property. This allegation, standing alone as it does, is inadequate to establish the existence of a trust because profit-sharing per se, does not necessarily translate to a trust relation. It could also be present in other relations, such as in deposit.  In EXPRESS TRUSTS AND RESULTING TRUSTS, a trustee cannot acquire by prescription a property entrusted to him unless he repudiates the trust.  A trustee cannot acquire by prescription the ownership of property entrusted to him, or that an action to compel a trustee to convey property registered in his name in trust for the benefit of the cestui que trust does not prescribe, or that the defense of prescription cannot be set up in an action to recover property held by a person in trust for the benefit of another, or that property held in trust can be recovered by the beneficiary regardless of the lapse of time.  The rule applies squarely to express trusts. The basis of the rule is that the possession of a trustee is not adverse. Not being adverse, he does not acquire by prescription the property held in trust.  The rule of imprescriptibility of the action to recover property held in trust may possibly apply to resulting trusts as long as the trustee has not repudiated the trust.  BURDEN OF PROOF; EXISTENCE OF TRUST; PROOF: Party asserting its existence and such proof must be clear and satisfactorily show the existence of the trust and its elements. The presence of the following elements must be proved: 1) a trustor or settlor who executes the instrument creating the trust 2) a trustee, who is the person expressly designated to carry out the trust 3) the trust res, consisting of duly identified and definite real properties 4) the cestui que trust, or beneficiaries whose identity must be clear  The existence of express trusts concerning real property may not be established by parol evidence. It must be proven by some writing or deed. Art. 1454. If an absolute conveyance of property is made in order to secure the performance of an obligation of the grantor toward the grantee, a trust by virtue of law is established. If the fulfillment of the obligation is offered by the grantor when it becomes due, he may demand the reconveyance of the property to him.

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 Resulting trusts are based on the equitable doctrine that valuable consideration and not legal title determines the equitable title or interest and are presumed always to have been contemplated by the parties.  Constructive trusts are created by the construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. They arise contrary to intention against one who, by fraud, duress or abuse of confidence, obtains or holds the legal right to property which he ought not, in equity and good conscience, to hold. Unlike in express trusts and resulting implied trusts, in constructive implied trusts, the trustee may acquire the property through prescription even if he does not repudiate the relationship. It is then incumbent upon the beneficiary to bring an action for reconveyance before prescription bars the same.  ACTION FOR RECONVEYANCE based on an implied or constructive trust prescribes in ten years from the issuance of the Torrens title over the property. The ten-year prescriptive period begins to run from the date of registration of the deed or the date of the issuance of the certificate of title over the property.

*MCIAA vs. LOZADA | G.R. No. 168770, 168812 | February 9, 2011  CONSTRUCTIVE TRUST: The right to repurchase in this case is referred to as constructive trust, one that is akin to the implied trust expressed in Art. 1454 of the Civil Code, the purpose of which is to prevent unjust enrichment. Constructive trusts are fictions of equity that courts use as devices to remedy any situation in which the holder of the legal title, MCIAA in this case, may not retain the beneficial interest. However, the party seeking the aid of equity––the landowners in this instance, in establishing the trust––must himself do equity in a manner as the court may deem just and reasonable.  CASE AT BAR: The Ouanos and the Inocians parted with their respective lots in favor of the MCIAA, the latter obliging itself to use the realties for the expansion of Lahug Airport; failing to keep its end of the bargain, MCIAA can be compelled by the former landowners to reconvey the parcels of land to them, otherwise, they would be denied the use of their properties upon a state of affairs that was not conceived nor contemplated when the expropriation was authorized. In effect, the government merely held the properties condemned in trust until the proposed public use or purpose for which the lots were condemned was actually consummated by the government. Since the government failed to perform the obligation that is the basis of the transfer of the property, then the lot owners Ouanos and Inocians can demand the reconveyance of their old properties after the payment of the condemnation price. SALES **Art. 1459. The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered. (n) **Art. 751. Donations cannot comprehend future property. By future property is understood anything which the donor cannot dispose of at the time of the donation. (635)

**Art. 1534. An unpaid seller having the right of lien or having stopped the goods in transitu, may rescind the transfer of title and resume the ownership in the goods, where he expressly reserved the right to do so in case the buyer should make default, or where the buyer has been in default in the payment of the price for an unreasonable time. The seller shall not thereafter be liable to the buyer upon the contract of sale, but may recover from the buyer damages for any loss occasioned by the breach of the contract. The transfer of title shall not be held to have been rescinded by an unpaid seller until he has manifested by notice to the buyer or by some other overt act an intention to rescind. It is not necessary that such overt act should be communicated to the buyer, but the giving or failure to give notice to the buyer of the intention to rescind shall be relevant in any issue involving the question whether the buyer had been in default for an unreasonable time before the right of rescission was asserted. (n) **Art. 1592. 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

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Contract to Sell vs. Contract of Sale

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. (1504a)

NAGUIT vs. COURT OF APPEALS | G.R. No. 137675| December 5, 2000  COMMENT: The case is a CivPro case which provides remedies under §16, Rule 39 of the Rules of Court – (1) terceria to determine whether the sheriff has rightly or wrongly taken hold of the property not belonging to the judgment debtor or obligor and (2) an independent "separate action" to vindicate their claim of ownership and/or possession over the foreclosed property.  A THIRD-PARTY CLAIMANT OR A STRANGER to the foreclosure suit, like respondents herein, can opt to file a remedy known as terceria against the sheriff or officer effecting the writ by serving on him an affidavit of his title and a copy thereof upon the judgment creditor. By the terceria, the officer shall not be bound to keep the property and could be answerable for damages. A third-party claimant may also resort to an independent "separate action," the object of which is the recovery of ownership or possession of the property seized by the sheriff, as well as damages arising from wrongful seizure and detention of the property despite the third-party claim. If a "separate action" is the recourse, the third-party claimant must institute in a forum of competent jurisdiction an action, distinct and separate from the action in which the judgment is being enforced, even before or without need of filing a claim in the court that issued the writ. Both remedies are cumulative and may be availed of independently of or separately from the other. Availment of the terceria is not a condition sine qua non to the institution of a "separate action." **Art. 1484. 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:

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LAFORTEZA vs. MACHUCA | G.R. No. 137552| June 16, 2000  CASE AT BAR: There was already a perfected contract. The condition was imposed only on the performance of the obligations contained therein. Considering however that the title was eventually "reconstituted" and that the petitioners admit their ability to execute the extrajudicial settlement of their father’s estate, the respondent had a right to demand fulfillment of the petitioners’ obligation to deliver and transfer ownership of the house and lot.  CONTRACT OF SALE: A contract of sale is a consensual contract and 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. From that moment the parties may reciprocally demand performance subject to the provisions of the law governing the form of contracts. The ELEMENTS OF A VALID CONTRACT OF SALE under Article 1458 of the Civil Code are – (1) consent or meeting of the minds; (2) determinate subject matter and (3) price certain in money or its equivalent.  CONDITION IMPOSED UPON THE PERFECTION OF CONTRACT vs. PERFORMANCE OF OBLIGATION: Failure to comply with the first condition results in the failure of a contract, while the failure to comply with the second condition only gives the other party the option either to refuse to proceed with the sale or to waive the condition. Thus, Article 1545 of the Civil Code states: Where the obligation of either party to a contract of sale is subject to any condition which is not performed, such party may refuse to proceed with the contract or he may waive performance of the condition. If the other party has promised that the condition should happen or be performed, such first mentioned party may also treat the nonperformance of the condition as a breach of warranty.

(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. (1454A-a) MAGNA FINANCIAL SERVICES vs. COLARINA| G.R. No. 158635| December 9, 2005  CASE AT BAR: Based on the Complaint, petitioner preferred to avail of the first and third remedies under Article 1484, at the same time suing for replevin. The Court of Appeals justifiably set aside the decision of the RTC. Perusing the Complaint, the petitioner, under its prayer number 1, sought for the payment of the unpaid amortizations which is a remedy that is provided under Article 1484(1) of the Civil Code, allowing an unpaid vendee to exact fulfillment of the obligation. At the same time, petitioner prayed that Colarina be ordered to surrender possession of the vehicle so that it may ultimately be sold at public auction, which remedy is contained under Article 1484(3). Such a scheme is not only irregular but is a flagrant circumvention of the prohibition of the law. By praying for the foreclosure of the chattel, Magna Financial Services Group, Inc. renounced whatever claim it may have under the promissory note.  ARTICLE 1484(3) provides that if the vendor has availed himself of the right to foreclose the chattel mortgage, “he shall have no further action against the purchaser to recover any unpaid balance of the purchase price. Any agreement to the contrary shall be void.” In all proceedings for the foreclosure of chattel mortgages executed on chattels which have been sold on the installment plan, the mortgagee is limited to the property included in the mortgage.

BEATINGO vs. GASIS| G.R. No. 179641 | February 9, 2011  GENERAL RULE: The execution of a public instrument shall be equivalent to the delivery of the thing that is the object of the contract. However, the execution of a public instrument gives rise only to a prima facie presumption of delivery. It is deemed negated by the failure of the vendee to take actual possession of the land sold.  CASE AT BAR: Though the sale was evidenced by a notarized deed of sale, petitioner admitted that she refused to make full payment on the subject property and take actual possession thereof because of the presence of tenants on the subject property. Clearly, petitioner had not taken possession of the subject property or exercised acts of dominion over it despite her assertion that she was the lawful owner thereof. ***Art. 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:

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**Art. 1498. When the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred. With regard to movable property, its delivery may also be made by the delivery of the keys of the place or depository where it is stored or kept. (1463a)

(1) Where delivery of the goods has been made to the buyer or to a bailee for the buyer, in pursuance of the contract and the ownership in the goods has been retained by the seller merely to secure performance by the buyer of his obligations under the contract, the goods are at the buyer's risk from the time of such delivery; (2) Where actual delivery has been delayed through the fault of either the buyer or seller the goods are at the risk of the party in fault. (n) RES PERIT DOMINO  DEFINITION: The thing is lost to the owner. This phrase is used to express that when a thing is lost or destroyed, it is lost to the person who was the owner of it at the time. Ownership is the basis for consideration of who bears the risk of loss.

RADIOWEALTH FINANCE vs. PALILEO| G.R. No. 83432| May 20, 1991  DOUBLE SALE: In case of double sale of an immovable property, ownership shall be transferred: (1) to the person acquiring it who in good faith first recorded it in the Registry of Property; (2) in default thereof, to the person who in good faith was first in possession; and (3) in default thereof, to the person who presents the oldest title, provided there is good faith.  LANDS REGISTERED UNDER THE TORRENS SYSTEM: §51 of P.D. No. 1529 provides that the act of registration is the operative act to convey or affect registered lands insofar as third persons are concerned. Thus, a person dealing with registered land is not required to go behind the register to determine the condition of the property. He is only charged with notice of the burdens on the property which are noted on the face of the register or certificate of title. Following this principle, the Court has time and again held that a purchaser in good faith of registered land (covered by a Torrens Title) acquires a good title as against all the transferees thereof whose right is not recorded in the registry of deeds at the time of the sale.  LAND REGISTRATION – MEANING OF PHRASE "WITHOUT PREJUDICE TO A THIRD PARTY WITH A BETTER RIGHT": Under Act No. 3344, registration of instruments affecting unregistered lands is "without prejudice to a third party with a better right." The phrase means that the mere registration of a sale in one’s favor does not give him any light over the land if the vendor was not anymore the owner of the land having previously sold the same to somebody else even if the earlier sale was unrecorded.  Article 1644 of the Civil Code has no application to land not registered under Act No. 496. Like in the case at bar, Carumba dealt with a double sale of the same unregistered land. The first sale was made by the original owners and was unrecorded while the second was an execution sale against the said original owners. The Court held that Article 1544 of the Civil Code cannot be invoked to benefit the purchaser at the execution sale though the latter was a buyer in good faith and even if this second sale was registered. It was explained that this is because the purchaser of unregistered land at a sheriff s execution sale only steps into

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**Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property. Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith. (1473)

the shoes of the judgment debtor, and merely acquires the latter’s interest in the property sold as of the time the property was levied upon. MIRROR DOCTRINE: LUCENA vs. COURT OF APPEALS | G.R. No. 77468 | August 25, 1999  GENERAL RULE: A purchaser may be considered a purchaser in good faith when he has examined the latest certificate of title.  EXCEPTION: When there exist important facts that would create suspicion in an otherwise reasonable man to go beyond the present title and to investigate those that preceded it. Thus, it has been said that a person who deliberately ignores a significant fact which would create suspicion in an otherwise reasonable man is not an innocent purchaser for value. If the buyer fails to take the ordinary precautions which a prudent man would have taken under the circumstances, specially in buying a piece of land in the actual, visible and public possession of another person, other than the vendor, constitutes gross negligence amounting to bad faith.  Where, the land sold is in the possession of a person other than the vendor, the purchaser is required to go beyond the certificate of title to make inquiries concerning the rights of the actual possessor. Failure to do so would make him purchaser in bad faith. LEASE **Art. 1649. The lessee cannot assign the lease without the consent of the lessor, unless there is a stipulation to the contrary. (n)

BANGAYAN vs. COURT OF APPEALS| G.R. No. 123581| August 29, 1997  CASE AT BAR: Article 1311 of the Civil Code provides that "contracts take effect only between the parties, their assigns and heirs, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law. Paragraphs 4 and 5 of the lease contract reveal the intent of the parties to limit their lease relationship to themselves alone. Paragraph 4 provides that "the leased premises shall be used exclusively by her," referring to the late Teofista Ocampo. Paragraph 5 prohibits Ocampo from directly or indirectly assigning, transferring or conveying her right of lease over the leased premises or any portion thereof under any circumstances whatsoever.  Ocampo's right of first option to buy the leased property in case of its sale is but part of the right to lease said property from Lingat. The option was given to Ocampo because she was the lessee of the subject property. It was a component of the consideration of the lease. The option was by no means an independent right which can be exercised by Ocampo. If Ocampo is barred by the contract from assigning her right to lease the subject property to any other party, she is similarly barred from assigning her first option to buy the leased property. *Art. 1652. The sublessee is subsidiarily liable to the lessor for any rent due from the lessee. However, the sublessee shall not be responsible beyond the amount of rent due from him, in accordance with the terms of the sublease, at the time of the extrajudicial demand by the lessor.

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**Art. 1650. When in the contract of lease of things there is no express prohibition, the lessee may sublet the thing leased, in whole or in part, without prejudice to his responsibility for the performance of the contract toward the lessor. (1550)

Payments of rent in advance by the sublessee shall be deemed not to have been made, so far as the lessor's claim is concerned, unless said payments were effected in virtue of the custom of the place. (1552a) WHEELERS CLUB vs. BONIFACIO| G.R. No. 139540| June 29, 2005  The sub-lessee is not liable to the lessor upon mere demand by the lessor on the sub-lessee. The sub-lessee is primarily liable to his sub-lessor and only a court order can extinguish or modify this primary liability if the sub-lessor contests the pre-termination of the principal lease by the lessor.  Article 1652 of the Civil Code permits the lessor to proceed against the sublessee for rent due from the lessee. However, this is only on a subsidiary liability basis. There must be a judgment cancelling the lessee’s principal lease contract or ousting the lessee from the premises before the sub-lessee becomes subsidiarily liable. **Art. 1654. The lessor is obliged: (1) To deliver the thing which is the object of the contract in such a condition as to render it fit for the use intended; (2) To make on the same during the lease all the necessary repairs in order to keep it suitable for the use to which it has been devoted, unless there is a stipulation to the contrary; (3) To maintain the lessee in the peaceful and adequate enjoyment of the lease for the entire duration of the contract. (1554a) **Art. 1673. The lessor may judicially eject the lessee for any of the following causes: (1) When the period agreed upon, or that which is fixed for the duration of leases under Articles 1682 and 1687, has expired; (2) Lack of payment of the price stipulated; (3) Violation of any of the conditions agreed upon in the contract; (4) When the lessee devotes the thing leased to any use or service not stipulated which causes the deterioration thereof; or if he does not observe the requirement in No. 2 of Article 1657, as regards the use thereof. The ejectment of tenants of agricultural lands is governed by special laws. (1569a)

MAMARIL vs. BSP| G.R. No. 179382| January 14, 2013  CONTRACT OF LEASE: The owners parked their 6 passenger jeepneys inside the BSP compound for a monthly fee of P300.00 for each unit and took the keys home with them. Hence, a lessor-lessee relationship indubitably existed between them and BSP.  LESSOR’S OBLIGATION IN RELATION TO ARTICLE 1644: The obligation of the lessor is provided in Article 1654. In relation thereto, Article 1664 provides that the lessor is not obliged to answer for a mere act of trespass which a third person may cause on the use of the thing leased; but the lessee shall have a direct action against the intruder.  CASE AT BAR: BSP was not remiss in its obligation to provide Sps. Mamaril a suitable parking space for their jeepneys as it even hired security guards to

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**Art. 1657. The lessee is obliged: (1) To pay the price of the lease according to the terms stipulated; (2) To use the thing leased as a diligent father of a family, devoting it to the use stipulated; and in the absence of stipulation, to that which may be inferred from the nature of the thing leased, according to the custom of the place; (3) To pay expenses for the deed of lease. (1555)

secure the premises; hence, it should not be held liable for the loss suffered by Sps. Mamaril. ***Art. 1670. If at the end of the contract the lessee should continue enjoying the thing leased for fifteen days with the acquiescence of the lessor, and unless a notice to the contrary by either party has previously been given, it is understood that there is an implied new lease, not for the period of the original contract, but for the time established in Articles 1682 and 1687. The other terms of the original contract shall be revived. (1566a)

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CHUA vs. COURT OF APPEALS | G.R. No. 106573| March 27, 1995 CASE AT BAR: The contract provides that if "no written notice is received from LESSEE of its intention to renew the contract," the contract terminates at the end of the lease period. It is also stipulated therein that upon termination of the period of lease and "unless LESSEE has indicated its intention to renew the contract," the lessee has to surrender the leased premises to the lessor. The notice must be given 30 days before the expiration of the lease period, which was on August 30, 1989. The notice to renew dated August 18, 1989 sent by petitioner and received by the lessor on August 22, 1989. There is a difference between a waiver of the right to enforce a condition stipulated in the contract and a waiver of the stipulation itself. The renewals of the lease contract, in spite of the lack of or tardiness in giving the written notices, were mere acts of tolerance on the part of the lessor. NOTICE TO VACATE: Assuming that the provision Article 1670 is applicable to petitioner's case, still that law does not require that the notice to vacate be given before the lease expires. The notice required under said provision is the one given after the expiration of the lease period for the purpose of aborting an implied renewal of the lease. PAROL EVIDENCE INADMISSIBLE: There being no ambiguity in the applicable provision of the lease contract, there is no basis to allow oral testimony whether under the Statute of Frauds or the Parol Evidence Rule, to prove that petitioner was given verbal assurance of a renewal of the lease and "first priority to buy in case of sale of the leased premises.”

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SAMELO vs. MANOTOK SERVICES | G.R. No. 170509| June 27, 2012 IMPLIED NEW LEASE: An implied new lease or tacita reconduccion will set in when the following requisites are found to exist: a) the term of the original contract of lease has expired; b) the lessor has not given the lessee a notice to vacate; and c) the lessee continued enjoying the thing leased for fifteen days with the acquiescence of the lessor. NOTICE TO VACATE: Constitutes an express act on the part of the lessor that it no longer consents to the continued occupation by the lessee of its property. After such notice, the lessee’s right to continue in possession ceases and her possession becomes one of detainer. ARTICLE 1687 provides: If the period for the lease has not been fixed, it is understood to be from year to year, if the rent agreed upon is annual; from month to month, if it is monthly; from week to week, if the rent is weekly; and from day to day, if the rent is to be paid daily. CASE AT BAR: Since the rent was paid on a monthly basis, the period of lease is considered to be from month to month. A lease from month to month is considered to be one with a definite period which expires at the end of each month upon a demand to vacate by the lessor. When the respondent sent a notice to vacate to the petitioner, the tacita reconduccion was aborted, and the contract is deemed to have expired at the end of that month.

DIZON vs. MAGSAYSAY | G.R. No. L-23399| May 31, 1974  CASE AT BAR: The two-year term of the lease contract expired on April 1, 1951 without the parties' having expressly renewed their agreement. Bernardo Dizon, however, continued to occupy the leased premises, paying the same monthly rental of P100.00, which Ambrosio Magsaysay accepted.  MEANING OF "the other terms of the original contract" UNDER ART. 1670: "The other terms of the original contract" which are revived in the implied new lease under Article 1670 are only those terms which are germane to the lessee's right of continued enjoyment of the property leased. Necessarily, if the presumed will of the parties refers to the enjoyment of possession the presumption covers the other terms of the contract related to such possession, such as the amount of rental, the date when it must be paid, the care of the property, the responsibility for repairs. However, no presumption may be indulged in with respect to special agreements which by nature are foreign to the right of occupancy or enjoyment inherent in a contract of lease.

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DIZON vs. MAGSAYSAY | G.R. No. 70360| March 11, 1987  APPLICATION OF Article 1670: Article 1670 applies only where, before the expiration of the lease, no negotiations are held between the lessor and the lessee resulting in its renewal. Where no such talks take place and the lessee is not asked to vacate before the lapse of fifteen days from the end of the lease, the implication is that the lessor is amenable to its renewal.  FORMAL NOTICE TO VACATE: Where the lessor is unwilling in any event to renew the lease for whatever reason, it will be necessary for him to serve on the lessee a formal notice to vacate. As no talks have been held between the lessor and the lessee concerning the renewal of the lease, there can be no inference that the former, by his inaction, intends to discontinue it. In such a case, no less than an express notice to vacate must be made within the statutory 15-day period.  CASE AT BAR: Weeks before the deadline for the notice to vacate, the petitioner had already communicated to the respondent its intention to increase the rental. This increase had to be accepted by the respondent if he wanted the lease to be renewed. In its letter to the respondent, the petitioner again rejected the latter’s counter-proposal and declared that the increased rental was "no longer negotiable." Since this was a reply to the respondent’s letter of September 14, 1979, 14 it is obvious that the increase in rental was notified to the respondent on an earlier date, and before the expiration of the original lease. As of that date, the respondent was already being informed that he would have to vacate the leased premises on August 31, 1979, unless he was willing to pay the increased rental demanded by the lessor.