Civil Law Reviewer [Part 1]

PERSONS & FAMILY RELATIONS

Persons and Personality ..... 10

Effect and Application of Laws ........................................ 2

CAPACITY TO ACT .............................................. 10 CIVIL PERSONALITY ................................................. 10 RESTRICTIONS ON CAPACITY TO ACT ........................... 10

WHEN LAWS TAKE EFFECT ................................. 2

DOMICILE AND RESIDENCE OF PERSON ........... 13 FOR NATURAL PERSONS .......................................... 13 FOR JURIDICAL PERSONS ......................................... 13 DOMICILE VS. RESIDENCE ......................................... 13 REQUISITES OF DOMICILE ......................................... 13 KINDS OF DOMICILE ................................................ 13

IGNORANCE OF THE LAW .................................. 2 RETROACTIVITY OF LAWS .................................. 2 ACTS CONTRARY TO LAW ................................... 2 WAIVER OF RIGHTS ............................................ 2

Family Code ..........................13

REPEAL OF LAWS ............................................... 2 TWO KINDS OF REPEAL OF LAW ................................... 2

Marriage ...............................13

JUDICIAL DECISIONS .......................................... 2 DUTY TO RENDER JUDGMENT ............................ 3 PRESUMPTION AND APPLICABILITY OF CUSTOM ............................... 3 LEGAL PERIODS .................................................. 3 POLICY ON LAST DAY BEING A LEGAL HOLIDAY/SUNDAY ... 3 APPLICABILITY OF PENAL LAWS ........................ 3 EXEMPTIONS UNDER INTERNATIONAL LAW (THEORY OF EXTRATERRITORIALITY) ............................................ 3 CONFLICT OF LAWS ............................................ 3 CONFLICT OF LAWS/ PRIVATE INTERNATIONAL LAW ........ 3 SOURCES ............................................................... 3 EXAMPLES OF CONFLICT OF LAW RULES IN THE PHILIPPINES......................................... 3 RULE ON PROPERTY ................................................. 4 RULE ON SUCCESSION............................................... 4 RULE ON EXTRINSIC VALIDITY OF CONTRACTS ................ 5

SPECIAL CONFLICT OF LAW RULES .................... 5 MARRIAGE ............................................................. 6 DIVORCE AND SEPARATION ........................................ 8 ANNULMENT AND DECLARATION OF NULLITY ................. 8

Human Relations .................. 8 ABUSE OF RIGHT ................................................ 8 ACTS CONTRARY TO LAW ................................... 9 ACTS CONTRA BONUS MORES ........................... 9 PRINCIPLE OF UNJUST ENRICHMENT................. 9

REQUISITES ....................................................... 13 NATURE OF MARRIAGE ............................................ 13 KINDS OF REQUISITES ............................................. 13 EFFECT OF ABSENCE OF REQUISITES ........................... 13 ESSENTIAL REQUISITES ............................................ 13 EFFECT OF MARRIAGES CELEBRATED ABROAD AND FOREIGN DIVORCE ..................... 16 MARRIAGES CELEBRATED ABROAD ............................. 16 PROOF OF FOREIGN MARRIAGE.................................. 16 FOREIGN DIVORCES ................................................ 16 VOID AND VOIDABLE MARRIAGES .................... 16 PRESUMPTION OF MARRIAGE .................................... 16 VOID MARRIAGES ................................................... 17 ACTION OR DEFENSE OF NULLITY .............................. 20 ANNULLABLE MARRIAGE .......................................... 21 EFFECT OF PENDING ACTIONS/DECREE ...................... 24 EFFECTS OF NULLITY .............................................. 24

Legal Separation .................24 GROUNDS FOR LEGAL SEPARATION................ 24 ACTS OF VIOLENCE ACCORDING TO RA 9262 ............... 25 DEFENSES ........................................................ 26 GROUNDS FOR DENYING LEGAL SEPARATION .............. 26 COOLING-OFF PERIOD AND RECONCILIATION EFFORTS...................... 26 CONFESSION OF JUDGMENT ............................ 26 EFFECTS OF FILING PETITION .......................... 26 EFFECTS OF PENDENCY ................................... 26 EFFECTS OF LEGAL SEPARATION..................... 26

RECONCILIATION ............................................. 27 HOW DONE ........................................................... 27 EFFECTS OF RECONCILIATION ................................... 27 ANNEX TO VOID AND VOIDABLE MARRIAGES AND LEGAL SEPARATION ............ 27 GROUNDS ............................................................ 27 EFFECTS OF FILING / PENDING DECREE ....................... 27 EFFECTS OF AFFIDAVIT OF REAPPEARANCE, JUDICIAL DECLARATION OF NULLITY, ANNULMENT AND LEGAL SEPARATION ........................................................ 28

Rights and Obligations between Husband and Wife .............. 28

ESSENTIAL OBLIGATIONS ................................ 28 FAMILY DOMICILE ............................................ 28 SUPPORT .......................................................... 29 MANAGEMENT OF HOUSEHOLD ....................... 29 EFFECT OF NEGLECT OF DUTY .......................... 29

THE FAMILY AS AN INSTITUTION ..................... 40 ASPECTS OF FAMILY RELATIONS ............................... 40 FAMILY RELATIONS INCLUDE ................................... 40 EXCEPTIONS TO THE GENERAL RULE – CANNOT BE SUBJECT OF COMPROMISE ................................................... 40 THE FAMILY HOME .......................................... 40 CONSTITUTED BY .................................................. 40 INCLUDES ............................................................ 41 GUIDELINES .......................................................... 41 BENEFICIARIES OF THE FAMILY HOME ......................... 41 REQUISITES TO BE A BENEFICIARY .............................. 41 REQUIREMENTS FOR THE SALE, ALIENATION, DONATION, ASSIGNMENT, OR ENCUMBRANCE OF THE FAMILY HOME . 41 REQUISITES FOR CREDITOR TO AVAIL OF THE RIGHT UNDER ARTICLE 160 ......................................................... 41

Paternity and Filiation .........42 KINDS OF FILIATION ........................................ 42 LEGITIMATE CHILDREN .................................... 42 WHO ARE LEGITIMATE CHILDREN .............................. 42 WHO ARE ILLEGITIMATE CHILDREN ............................ 42 IMPUGNING LEGITIMACY ......................................... 42 ACTION FOR IMPUGNING LEGITIMACY ........................ 43

EXERCISE OF PROFESSION ............................... 29

PROOF OF FILIATION........................................ 43 ACTION FOR CLAIMING FILIATION .............................. 44 RIGHTS OF LEGITIMATE CHILDREN ............................ 44

Property Relations of the Spouses ................................29

ILLEGITIMATE CHILDREN ................................. 44 ACTION FOR CLAIMING FILIATION .............................. 44 RIGHTS OF ILLEGITIMATE CHILD ................................ 45

MARRIAGE SETTLEMENTS ............................... 29 MARRIAGE SETTLEMENT RULES ................................ 29 DONATIONS BY REASON OF MARRIAGE .......... 30 DISTINGUISHED FROM ORDINARY DONATIONS .............. 31 ABSOLUTE COMMUNITY OF PROPERTY AND CONJUGAL PARTNERSHIP OF GAINS ........ 31 COMPARISON OF ACP AND CPG .................................. 31 SEPARATION OF PROPERTY OF THE SPOUSES AND ADMINISTRATION OF COMMON PROPERTY BY ONE SPOUSE DURING THE MARRIAGE ........ 38 JUDICIAL SEPARATION OF PROPERTY MAY EITHER BE VOLUNTARY OR FOR SUFFICIENT CAUSE ..................... 38

PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE ....................................... 39

The Family........................... 40

LEGITIMATED CHILDREN.................................. 45 TO BE CAPABLE OF LEGITIMATION ............................. 45 PROCEDURE ........................................................ 45 GROUNDS FOR IMPUGNING LEGITIMATION ................. 45 RIGHTS ............................................................... 45 IMPUGNING LEGITIMATION ...................................... 45

Adoption.............................. 46 RA 8552 – DOMESTIC ADOPTION LAW ............. 46 WHO CAN ADOPT ................................................... 46 WHO CAN BE ADOPTED ........................................... 46 PRE-ADOPTION PROCEDURES .................................. 47 ADOPTION PROCEDURES......................................... 47 WHO MAY NOT ADOPT/ BE ADOPTED ......................... 48 RIGHTS OF AN ADOPTED CHILD ................................. 48 RESCISSION OF ADOPTION ....................................... 48 RECTIFICATION OF SIMULATED BIRTH......................... 49

RA 8043 – THE LAW ON INTER-COUNTRY ADOPTION ........................................................ 49 INTER-COUNTRY ADOPTION ..................................... 49 WHO CAN ADOPT ................................................... 49 WHO CAN BE ADOPTED ........................................... 50

Support ............................... 50 WHAT IT COMPRISES ....................................... 50

EFFECT OF PARENTAL AUTHORITY UPON THE PERSONS OF THE CHILDREN............................ 54 RIGHTS OF PARENTS UPON THE PERSON OF THE CHILDREN ................................ 54 DUTIES OF PARENTS UPON THE PERSON OF THE CHILDREN ................................ 54 SUBSTITUTE REPRESENTATION ................................ 54 COURT ASSISTANCE IN THE DISCIPLINE OF THE CHILD .... 54

WHO ARE OBLIGED ........................................... 50 TO SUPPORT EACH OTHER ....................................... 50 PROPERTIES ANSWERABLE FOR SUPPORT ....................51 ORDER OF SUPPORT ................................................51 STRANGER GIVES SUPPORT.......................................51 PERSON OBLIGED REFUSES OR FAILS TO GIVE SUPPORT ..51 CONTRACTUAL SUPPORT OR THAT GIVEN BY WILL ..........51

EFFECTS OF PARENTAL AUTHORITY UPON THE PROPERTY OF THE CHILDREN.......................... 54 PROCEDURE IN THE APPROVAL OF THE PARENT’S BOND 54 OWNERSHIP OF CHILD’S ACQUISITIONS ...................... 55 PARENT’S USUFRUCT ............................................ 55

SUPPORT DURING MARRIAGE LITIGATION ......51

SUSPENSION OR TERMINATION OF PARENTAL AUTHORITY ...................................................... 55

AMOUNT .......................................................... 52 WHEN DEMANDABLE ....................................... 52 OPTIONS .......................................................... 52 ATTACHMENT .................................................. 52

Parental Authority ...............52 GENERAL PROVISIONS ..................................... 52 PARENTAL AUTHORITY INCLUDES ............................. 52 PARENTAL AUTHORITY AND RESPONSIBILITY MAY NOT BE RENOUNCED OR TRANSFERRED EXCEPT IN THE CASES AUTHORIZED BY LAW .............................................. 52 CASES WHEN PARENTAL AUTHORITY AND RESPONSIBILITY MAY BE TRANSFERRED OR RENOUNCED...................... 52 RULES AS TO THE EXERCISE OF PARENTAL AUTHORITY ... 52 CHARACTERISTICS OF PARENTAL AUTHORITY............... 52 PARENTAL PREFERENCE RULE .................................. 52 WHO EXERCISES AUTHORITY IN CASES OF DEATH, ABSENCE, UNSUITABILITY, REMARRIAGE, OR SEPARATION OF PARENTS ......................................................... 52 DESCENDANT’S PRIVILEGE OF REFUSAL TO TESTIFY ....... 53 TENDER YEARS PRESUMPTION ................................. 53

SUBSTITUTE AND SPECIAL PARENTAL AUTHORITY ...................................................... 53 PERSONS EXERCISING SUBSTITUTE PARENTAL AUTHORITY IN DEFAULT OF PARENTS OR JUDICIALLY APPOINTED GUARDIAN ........................................................... 53 SUBSTITUTE PARENTAL AUTHORITY OVER DISADVANTAGED CHILDREN ............................................................ 53 PERSONS EXERCISING SPECIAL PARENTAL AUTHORITY ... 53 LIABILITY OF THOSE EXERCISING SPECIAL PARENTAL AUTHORITY OVER THE CHILD ................................... 53

WHEN PARENTS ENTRUST THE MANAGEMENT OF THEIR PROPERTIES TO A CHILD ......................................... 55

RA 7610 – CHILD ABUSE LAW ........................... 55 PARENTAL AUTHORITY PERMANENTLY TERMINATES ..... 55 TERMINATION OF PARENTAL AUTHORITY WHICH CAN BE REVIVED BY FINAL JUDGMENT .................................. 55 GROUNDS FOR SUSPENSION OF PARENTAL AUTHORITY . 55 SCOPE OF SUBSTITUTE AND SPECIAL PARENTAL AUTHORITY ................................ 55 RA 7610 – CHILD ABUSE LAW .................................. 55

Emancipation, as amended by RA 6809 ......................... 55 Summary Judicial Proceedings in the Family Law ...................................... 56 PROCEDURAL RULES PROVIDED FOR IN THIS TITLE SHALL APPLY TO ........................ 56 SEPARATION IN FACT ...................................... 56 SEPARATE CLAIM FOR DAMAGES............................... 56 JURISDICTION ....................................................... 56 NOTIFICATION TO OTHER SPOUSE ............................. 56 PROCEDURE ......................................................... 56 WHEN APPEARANCE OF SPOUSES REQUIRED ............... 56 NATURE OF JUDGMENT ........................................... 56 RULES APPLICABLE FOR ADMINISTERING OR ENCUMBERING SEPARATE PROPERTY OF SPOUSE .... 56

INCIDENTS INVOLVING PARENTAL AUTHORITY .................................... 57

PROCEDURE ......................................................... 57

PROPERTY

Retroactive Effect ................ 57

Characteristics .................... 66

INVALIDITY OF OTHER PROVISIONS ................. 57

Classification ....................... 66

RETROACTIVE EFFECT ...................................... 57

Funeral ................................. 57

NATURE OF FUNERAL ............................................. 57 GUIDELINES IN MAKING FUNERAL ARRANGEMENTS ....... 58

Use of Surnames ................ 58

SURNAMES OF CHILDREN ................................ 58 WIFE AFTER AND DURING MARRIAGE ............. 58 CONFUSION AND CHANGE OF NAMES ............. 58

Absence ............................... 59 PROVISIONAL MEASURES IN CASE OF ABSENCE ....................................... 59 PRESUMPTION IN THE RULES OF COURT ...................... 59 REQUISITES ......................................................... 60 WHO MAY BE APPOINTED AS REPRESENTATIVE ............. 60 DECLARATION OF ABSENCE ............................. 60 WHEN MAY A DECLARATION OF ABSENCE BE DECLARED . 60 WHO MAY ASK FOR A DECLARATION OF ABSENCE ......... 60 ADMINISTRATION OF THE PROPERTY OF THE ABSENTEE.......................... 60 WHO MAY ADMINISTER THE PROPERTY ...................... 60 WHEN WILL THE ADMINISTRATION OF PROPERTY CEASE ..61 PRESUMPTION OF DEATH .................................61 EXTRAORDINARY ABSENCE .......................................61

Civil Registrar....................... 61 RA 9048 AS AMENDED BY RA 10172 ................. 62 GROUNDS ............................................................ 63

HIDDEN TREASURE .......................................... 66 BASED ON MOBILITY – IMMOVABLE OR MOVABLE ............................... 66 REAL OR IMMOVABLE PROPERTY .............................. 66 PERSONAL OR MOVABLE ........................................ 68 IMPORTANCE AND SIGNIFICANCE OF CLASSIFICATION UNDER THE CIVIL CODE ........................................... 68

BASED ON OWNERSHIP ................................... 69 PUBLIC DOMINION ................................................. 69 PRIVATE OWNERSHIP ............................................. 70 BASED ON CONSUMABILITY............................. 70 CONSUMABLE ....................................................... 70 NON-CONSUMABLE ............................................... 70 SUSCEPTIBILITY TO SUBSTITUTION ................. 70 FUNGIBLES .......................................................... 70 NON-FUNGIBLES .................................................. 70 BASED ON THE CONSTITUTION ......................... 71 OTHER CLASSIFICATIONS ................................. 71 BY THEIR PHYSICAL EXISTENCE .................................. 71 BY THEIR AUTONOMY OR DEPENDENCE ....................... 71 BY SUSCEPTIBILITY TO DETERIORATION ....................... 71 BY REASON OF THEIR SUSCEPTIBILITY TO DIVISION......... 71 BY REASON OF DESIGNATION .................................... 71 EXISTENCE IN POINT OF TIME .................................... 71

Ownership ............................. 71 DEFINITION ....................................................... 71

RULE 108, RULES OF COURT ............................ 63

RIGHT IN GENERAL ........................................... 71 RIGHTS INCLUDED IN OWNERSHIP .............................. 71 BUNDLE OF RIGHTS ................................................. 71

CANCELLATION OR CORRECTION OF ENTRIES IN THE CIVIL REGISTRY .................................... 63 WHO MAY FILE PETITION ......................................... 64 ENTRIES SUBJECT TO CANCELLATION ......................... 64

PROTECTING PROPERTY ................................... 71 BASIC DISTINCTIONS ............................................... 71 REMEDIES.............................................................72 RIGHT TO RECOVER POSSESSION................................72 LIMITATIONS ON OWNERSHIP ..........................72 LIMITATIONS ON THE RIGHTS OF OWNERSHIP PROVIDED BY LAW .................................................72

Accession ............................. 74 CLASSIFICATION OF ACCESSION ...................... 74 WITH RESPECT TO IMMOVABLES ................................ 74 WITH RESPECT TO MOVABLE PROPERTY ...................... 79

Quieting of Title or Interest in and Removal or Prevention of Cloud over Title to or Interest in Real Property .................. 81 IN GENERAL...................................................... 81 PURPOSE .......................................................... 81 NATURE: QUASI IN REM ................................... 81 JUSTIFICATIONS FOR QUIETING OF TITLE ........ 81 THE ACTION TO QUIET TITLE DOES NOT APPLY ......................... 81 REQUIREMENT ................................................. 81 REQUISITES OF AN ACTION TO QUIET TITLE .................. 81 THERE IS A CLOUD ON TITLE TO REAL PROPERTY OR ANY INTEREST TO REAL PROPERTY .................................. 81 THE PLAINTIFF MUST HAVE LEGAL OR EQUITABLE TITLE TO, OR INTEREST IN THE REAL PROPERTY ......................... 82 PLAINTIFF MUST RETURN THE BENEFITS RECEIVED FROM THE DEFENDANT ................................................... 82

QUIETING OF TITLE V. REMOVAL OF CLOUD..... 82 REQUISITES OF AN ACTION TO PREVENT A CLOUD ......... 82

LAW ................................................................... 83 CONTRACTS ......................................................... 83 SUCCESSION......................................................... 84 TESTAMENTARY DISPOSITION OR DONATION INTER VIVOS ..................................... 84 BY FORTUITOUS EVENT OR BY CHANCE ....................... 84 BY OCCUPANCY ..................................................... 84 BY ASSOCIATIONS AND SOCIETIES WITH SECRET ARTICLES ............................ 84

RIGHT OF CO-OWNERS..................................... 84 RIGHT TO THE SHARE IN THE BENEFITS AS WELL AS CHARGES ............................................ 84 RIGHT TO USE THE THING OWNED IN COMMON ............. 84 RIGHT TO BRING AN ACTION IN EJECTMENT ................. 84 RIGHT TO COMPEL OTHER CO-OWNERS TO CONTRIBUTE TO THE EXPENSES OF PRESERVATION AND TO THE TAXES ....................... 84 RIGHT TO REPAIR .................................................. 84 RIGHT TO OPPOSE ALTERATIONS............................... 84 RIGHT TO FULL OWNERSHIP OF HIS PART AND OF THE FRUITS AND BENEFITS PERTAINING THERETO ............................................ 85 RIGHT TO PARTITION ............................................. 85 RIGHT TO REDEMPTION........................................... 85 RULES................................................................. 85

TERMINATION/EXTINGUISHMENT ................... 85 TOTAL DESTRUCTION OF THING OR LOSS OF THE PROPERTY CO-OWNED .......................... 85 MERGER OF ALL INTERESTS IN ONE PERSON ................ 85 ACQUISITIVE PRESCRIPTION..................................... 85 PARTITION OR DIVISION .......................................... 86

Possession........................... 86 DEFINITION ...................................................... 86 CONCEPT OF POSSESSION ............................... 86

PRESCRIPTION/NON-PRESCRIPTION OF ACTION ........................................................ 82 PRESCRIPTION OF ACTION ....................................... 82

Co-ownership ..................... 82 DEFINITION ...................................................... 82 REQUISITES ...................................................... 82 WHAT GOVERNS CO-OWNERSHIP .................... 82 CHARACTERISTICS OF CO-OWNERSHIP ........... 82 THERE ARE IDEAL SHARES DEFINED BUT NOT PHYSICALLY IDENTIFIED .............................. 83

SOURCES OF CO-OWNERSHIP .......................... 83

CHARACTERISTICS ........................................... 86 ESSENTIAL REQUISITES OF POSSESSION ..................... 86 DEGREES OF POSSESSION........................................ 86 CASES OF POSSESSION ........................................... 87 ACQUISITION OF POSSESSION ......................... 88 WAYS OF ACQUIRING POSSESSION............................. 88 BY WHOM MAY POSSESSION BE ACQUIRED .................. 89 WHAT DO NOT AFFECT POSSESSION .......................... 89 RULES TO SOLVE CONFLICTS OF POSSESSION ............... 89 EFFECTS OF POSSESSION ................................ 90 RIGHT TO BE PROTECTED IN HIS POSSESSION ............... 90 ENTITLEMENT TO FRUITS – POSSESSOR IN GOOD FAITH/BAD FAITH...................... 90 REIMBURSEMENT FOR EXPENSES—

POSSESSOR IN GOOD FAITH/BAD FAITH .......................91

LOSS OR UNLAWFUL DEPRIVATION OF A MOVABLE ................................................. 93 POSSESSION OF MOVABLE ACQUIRED IN GOOD FAITH (IN CONCEPT OF OWNER) IS EQUIVALENT TO TITLE .......................................... 93 PERIOD TO RECOVER .............................................. 93 FINDER OF LOST MOVABLE ....................................... 93 DISTINGUISHED FROM VOIDABLE TITLE ....................... 93

EFFECTS OF POSSESSION................................. 93 EFFECTS OF POSSESSION IN THE CONCEPT OF OWNER .... 93 RIGHTS OF POSSESSOR.................................... 94 PRESUMPTION IN FAVOR OF THE POSSESSOR— FOR ACQUISITIVE PRESCRIPTION ............................... 94 LOSS/TERMINATION OF POSSESSION..................................................... 94 ABANDONMENT .................................................... 94 ASSIGNMENT, EITHER ONEROUS OR GRATUITOUS ......... 94 POSSESSION BY ANOTHER; IF POSSESSION HAS LASTED LONGER THAN ONE YEAR; REAL RIGHT OF POSSESSION NOT LOST AFTER 10 YEARS ..................................... 94 RULES FOR LOSS OF MOVABLES ................................ 95

Usufruct............................... 95 CONCEPT .......................................................... 95 OBJECTS OF USUFRUCT.................................... 95 CHARACTERISTICS ........................................... 95 NATURAL CHARACTERISTICS .................................... 95 CLASSIFICATION ............................................... 95 BY ORIGIN ............................................................ 95 BY PERSON ENJOYING RIGHT OF USUFRUCT ................. 96 BY OBJECT OF USUFRUCT ......................................... 96 BY THE EXTENT OF THE USUFRUCT ............................. 96 BY THE TERMS OF THE USUFRUCT .............................. 96

USUFRUCT OVER FRUIT BEARING TREES AND SPROUT AND WOODLANDS .............................. 101 USUFRUCT ON A RIGHT OF ACTION ........................... 101 USUFRUCT ON MORTGAGED PROPERTY ..................... 101 USUFRUCT OVER AN ENTIRE PATRIMONY ................... 101 USUFRUCT OVER DETERIORABLE PROPERTY ............... 101 USUFRUCT OVER CONSUMABLE PROPERTY ................ 101

RIGHTS OF THE OWNER .................................. 101 EXTINGUISHMENT/TERMINATION.................. 102 DEATH OF USUFRUCTUARY ..................................... 102 EXPIRATION OF PERIOD OR FULFILLMENT OF RESOLUTORY CONDITION IMPOSED ON USUFRUCT BY PERSON CONSTITUTING THE USUFRUCT ................................ 102 MERGER OF RIGHTS OF USUFRUCT AND NAKED OWNERSHIP IN ONE PERSON .................. 102 RENUNCIATION OF USUFRUCT ................................. 102 EXTINCTION OR LOSS OF PROPERTY.......................... 102 TERMINATION OF RIGHT OF PERSON CONSTITUTING THE USUFRUCT ............................... 103 PRESCRIPTION ..................................................... 103

CONDITIONS NOT AFFECTING USUFRUCT ...... 103 EXPROPRIATION OF THING IN USUFRUCT ................... 103 BAD USE OF THING IN USUFRUCT ............................. 103

Easement ........................... 103 CHARACTERISTICS .......................................... 103 ESSENTIAL FEATURES............................................ 103 CLASSIFICATION .............................................104 AS TO RECIPIENT OF BENEFITS................................. 104 AS TO CAUSE OR ORIGIN......................................... 104 AS TO ITS EXERCISE............................................... 104 AS INDICATION OF ITS EXISTENCE ............................. 105 BY THE OBJECT OR OBLIGATION IMPOSED................... 105 GENERAL RULES .................................................. 105 RELEVANCE OF CLASSIFICATIONS .................. 105

SPECIAL CASES OF USUFRUCT ....................... 100

DETERMINES WHAT EASEMENTS CAN BE ACQUIRED BY PRESCRIPTION ........................ 105 DETERMINES WHAT EASEMENTS CAN BE ACQUIRED BY TITLE .................................... 105 DETERMINES HOW TO COMPUTE THE PRESCRIPTIVE PERIOD ..................................... 105 DETERMINES HOW EASEMENT IS LOST BY PRESCRIPTION ...................................... 105

USUFRUCT OVER A PENSION OR PERIODICAL INCOME ........................................ 100 USUFRUCT OF PROPERTY OWNED IN COMMON ........... 100 USUFRUCT CONSTITUTED ON A FLOCK OR HERD OF LIVESTOCK ......................................... 101

CREATION ....................................................... 105 BY TITLE ............................................................. 105 BY LAW (LEGAL EASEMENTS) .................................. 106 BY WILL OF THE OWNERS (VOLUNTARY EASEMENTS) .... 106

RIGHTS AND OBLIGATIONS OF USUFRUCTUARY ......................................... 97 RIGHTS................................................................ 97 OBLIGATIONS........................................................ 98

BY PRESCRIPTION ................................................ 106

LEGAL EASEMENTS ........................................ 106 LAW GOVERNING LEGAL EASEMENTS ....................... 106 VOLUNTARY EASEMENTS............................... 106 RIGHTS AND OBLIGATIONS OF OWNERS OF DOMINANT AND SERVIENT ESTATES ............. 106 RIGHT OF DOMINANT ESTATE OWNER ....................... 106 OBLIGATIONS OF DOMINANT ESTATE OWNER ............. 106 RIGHT OF SERVIENT ESTATE OWNER ......................... 107 OBLIGATIONS OF SERVIENT ESTATE OWNER ................ 107 KINDS OF LEGAL EASEMENTS .........................107 NATURAL DRAINAGE ............................................. 107 RIPARIAN BANKS .................................................. 107 DRAINAGE OF BUILDINGS ....................................... 107 DAM .................................................................. 107 DRAWING WATER ................................................ 108 AQUEDUCT ......................................................... 108 SLUICE GATE....................................................... 108 RIGHT OF WAY..................................................... 108 PARTY WALL ....................................................... 109 LIGHT AND VIEW .................................................... 111 INTERMEDIATE DISTANCES ..................................... 112 NUISANCE ........................................................... 112 LATERAL AND SUBJACENT SUPPORT ......................... 112 MODES OF ACQUIRING EASEMENT ................. 112 BY TITLE ............................................................. 112 BY PRESCRIPTION ................................................. 112 EXTINGUISHMENT OF EASEMENTS ................. 112 MERGER ............................................................. 113 BY NON-USER FOR 10 YEARS................................... 113 EXTINGUISHMENT BY IMPOSSIBILITY OF USE ............... 113 EXPIRATION OF THE TERM OR FULFILLMENT OF RESOLUTORY CONDITION ................ 113 RENUNCIATION OF THE OWNER OF THE DOMINANT ESTATE..................................... 113 REDEMPTION AGREED UPON BETWEEN THE OWNERS.......................................... 113 OTHER CAUSES NOT MENTIONED IN NCC 631 .............. 113

Nuisance.............................. 114

NUISANCE V. TRESPASS .................................. 114 NUISANCE V. NEGLIGENCE .............................. 114 CLASSES .......................................................... 114 ACCORDING TO NATURE ......................................... 114 ACCORDING TO SCOPE OF INJURIOUS EFFECTS ............ 114 DOCTRINE OF ATTRACTIVE NUISANCE............ 115

LIABILITY IN CASE OF NUISANCE .................... 115 WHO ARE LIABLE .................................................. 115 LIABILITY OF CREATOR OF NUISANCE ........................ 115 LIABILITY OF TRANSFEREES .................................... 115 NATURE OF LIABILITY ............................................ 115 RIGHT TO RECOVER DAMAGES ................................. 115 NO PRESCRIPTION ................................................ 115 REGULATION OF NUISANCES .......................... 115 PUBLIC NUISANCE ................................................ 115 PRIVATE NUISANCE ............................................... 116

Modes of Acquiring Ownership .......................... 116 MODES OF ACQUIRING OWNERSHIP............... 116 OCCUPATION.................................................... 117 REQUISITES.......................................................... 117 KINDS ................................................................. 117 SPECIAL RULES ..................................................... 117 DONATION ...................................................... 118 OTHER INSTANCES CONSIDERED AS DONATION ........... 118 NATURE ............................................................. 118 WHAT MAY BE DONATED ........................................ 118 WHAT MAY NOT BE DONATED .................................. 118 KINDS OF DONATIONS ........................................... 118 FORMALITIES REQUIRED ........................................ 120 QUALIFICATIONS OF DONOR, DONEE......................... 120 EFFECTS OF DONATION/LIMITATIONS ........................121 VOID DONATIONS ................................................. 122 REVOCATION AND REDUCTION ................................ 122 TRADITION ...................................................... 127 CONCEPT ............................................................ 127 REQUISITES......................................................... 127 PURPOSE............................................................ 127 KINDS ................................................................ 127

Prescription .........................127

DEFINITION ..................................................... 127 RATIONALE ..................................................... 127 KINDS OF PRESCRIPTION................................ 127 ACQUISITIVE PRESCRIPTION.................................... 127 EXTINCTIVE PRESCRIPTION ..................................... 128 NO PRESCRIPTION APPLICABLE ..................... 128 BY OFFENDER ...................................................... 128 REGISTERED LANDS - PD 1529 ............................... 128 RIGHTS NOT EXTINGUISHED BY PRESCRIPTION ............ 128 ACTION TO QUIET TITLE IF PLAINTIFF IS IN POSSESSION . 128

VOID CONTRACTS .................................................128 ACTION TO DEMAND PARTITION ...............................128 PROPERTY OF PUBLIC DOMINION..............................128

PRESCRIPTION DISTINGUISHED FROM LACHES .................................................128 PRESCRIPTION OR LIMITATION OF ACTIONS ..129 TO RECOVER MOVABLES .........................................129 TO RECOVER IMMOVABLES......................................129 OTHER ACTIONS ...................................................129 OBLIGATIONS & CONTRACTS

[Obligations] ...................... 132 Definition ............................ 132 Elements of an Obligation .................... 132

ELEMENTS OF AN OBLIGATION ....................... 132

Different Kinds of Prestations .................... 132 Classification of Obligations ................... 132 FROM THE VIEWPOINT OF “SANCTION” .......... 132 FROM THE VIEWPOINT OF SUBJECT MATTER.. 132 FROM THE AFFIRMATIVENESS OR NEGATIVENESS OF THE OBLIGATION .............. 132 FROM THE VIEWPOINT OF PERSONS OBLIGED.......................................... 132

Sources of Obligations ...... 132

SINGLE ACT OR OMISSION CAN GIVE RISE TO DIFFERENT CAUSES OF ACTION ...................... 132 NATURAL OBLIGATIONS ................................. 132 EXTRA-CONTRACTUAL OBLIGATIONS ............. 133 QUASI-CONTRACTS ............................................... 133 OTHER QUASI-CONTRACTS ..................................... 135 QUASI-DELICTS .................................................... 136

Nature and Effect of Obligations.......................... 137

OBLIGATION TO GIVE ...................................... 137 A DETERMINATE OR SPECIFIC THING ......................... 137 AN INDETERMINATE OR GENERIC THING .................... 137 OBLIGATION TO DO OR NOT TO DO................. 138 BREACH OF OBLIGATIONS .............................. 138 COMPLETE FAILURE TO PERFORM ............................ 138 DEFAULT, DELAY, OR MORA.................................... 138 FRAUD (DOLO) IN THE PERFORMANCE OF OBLIGATION .............................. 139 NEGLIGENCE (CULPA) IN THE PERFORMANCE OF OBLIGATION ............................... 140 DILIGENCE NORMALLY REQUIRED IS ORDINARY DILIGENCE OR DILIGENCE OF A GOOD FATHER OF A FAMILY; EXCEPTIONS ....................................................... 140 EXTENT OF DAMAGES TO BE AWARDED ..................... 140 CONTRAVENTION OF THE TENOR OF OBLIGATION ......... 141 LEGAL EXCUSE FOR BREACH OF OBLIGATION – FORTUITOUS EVENT; REQUISITES ............................. 141

REMEDIES AVAILABLE TO CREDITOR IN CASE OF BREACH ........................................ 141 SPECIFIC PERFORMANCE ........................................ 141 SUBSTITUTED PERFORMANCE BY A THIRD PERSON OF ANOTHER’S OBLIGATION TO DELIVER A GENERIC THING OR OF AN OBLIGATION TO DO, UNLESS IT IS PURELY PERSONAL ACT ........................ 141 RESCISSION (RESOLUTION IN RECIPROCAL OBLIGATIONS) .................................... 141 DAMAGES, IN ANY EVENT ....................................... 141 SUBSIDIARY REMEDIES OF CREDITORS ...................... 142 ACCION SUBROGATORIA ........................................ 142 ACCION PAULIANA ............................................... 142 ACCION DIRECTA ................................................. 142

Kinds of Civil Obligations .. 143

PURE ............................................................... 143 CONDITIONAL ................................................. 143 SUSPENSIVE CONDITION ........................................ 143 RESOLUTORY CONDITION ....................................... 143 POTESTIVE – CASUAL OR MIXED............................... 143 OBLIGATIONS SUBJECT TO POTESTATIVE SUSPENSIVE CONDITIONS ARE VOID .......................................... 143 EFFECT OF THE HAPPENING OF SUSPENSIVE CONDITION; RESOLUTORY CONDITION ...................................... 144 EFFECT OF LOSS OF SPECIFIC THING, OR DETERIORATION OR IMPROVEMENT OF SPECIFIC THING BEFORE FULFILLMENT

OF SUSPENSIVE CONDITION; OR IN CASE OF ARESOLUTORY CONDITION IN AN OBLIGATION TO DO OR NOT TO DO ..................

145

LOSS OF DETERMINATE THING DUE OR IMPOSSIBILITY OR DIFFICULTY OF PERFORMANCE ...................... 155

OBLIGATIONS WITH A PERIOD OR TERM........ 145 SUSPENSIVE PERIOD ............................................ 146 RESOLUTORY PERIOD ........................................... 146 DEFINITE OR INDEFINITE PERIOD ............................. 146

CONDONATION OR REMISSION OF DEBT ........ 156 EXPRESS – FORMALITY OF DONATION ....................... 156 IMPLIED ............................................................. 156

ALTERNATIVE OR FACULTATIVE ..................... 147

CONFUSION..................................................... 156

DIFFERENCE BETWEEN ALTERNATIVE AND FACULTATIVE OBLIGATIONS .............................. 147 EFFECT OF LOSS OF SPECIFIC THINGS OR IMPOSSIBILITY OF PERFORMANCE OF ALTERNATIVE, THROUGH FAULT OF DEBTOR/CREDITOR OR THROUGH FORTUITOUS EVENTS ............................... 147

Joint and Solidary Obligation ........... 148 JOINT (DIVISIBLE) OBLIGATION ...................... 148 PRESUMPTION OF JOINT OBLIGATION ....................... 148 PRESUMPTION OF EQUAL DIVISION .......................... 148 EFFECT OF INSOLVENCY OF A JOINT DEBTOR .............. 148 JOINT (INDIVISIBLE) OBLIGATION................... 149 OBLIGATION CANNOT BE PERFORMED IN PARTS BUT DEBTORS ARE BOUND JOINTLY ............................... 149 IN CASE OF FAILURE OF ONE OF THE JOINT DEBTORS TO PERFORM HIS PART (SHARE), THERE IS DEFAULT BUT ONLY THE GUILTY DEBTOR SHALL BE LIABLE FOR DAMAGES....................................... 149

SOLIDARY OBLIGATION .................................. 149 ANYONE OF THE SOLIDARY CREDITORS MAY COLLECT OR DEMAND PAYMENT OF WHOLE OBLIGATION; THERE IS MUTUAL AGENCY AMONG SOLIDARY DEBTORS ........... 149 ANY OF THE SOLIDARY DEBTORS MAY BE REQUIRED TO PAY THE WHOLE OBLIGATION; THERE IS MUTUAL GUARANTY AMONG SOLIDARY DEBTORS .................................. 149

DIVISIBLE AND INDIVISIBLE............................. 151

COMPENSATION ............................................. 156 KINDS ............................................................... 157 OBLIGATIONS NOT COMPENSABLE ............................ 158 NOVATION....................................................... 158

[Contracts] ......................... 160 Essential Requisites ......... 160 CONSENT ........................................................ 160 CONCURRENCE OF OFFER AND ACCEPTANCE .............. 160 ACCEPTANCE ....................................................... 160 LEGAL CAPACITY .................................................. 160 VICES OF CONSENT ............................................... 161 OBJECT ............................................................ 162 DEFINITION ......................................................... 162 REQUISITES......................................................... 162 CAUSE ............................................................. 162 DEFINITION ........................................................ 162 REQUISITES......................................................... 162 CAUSE IN ............................................................ 162

Kinds of Contracts ............ 163 CONSENSUAL .................................................. 163 REAL ............................................................... 163

OBLIGATIONS WITH A PENAL CLAUSE ............ 151 FORMAL OR SOLEMN ...................................... 163 DONATIONS ........................................................ 163

Extinguishment of Obligations......................... 153 PAYMENT ........................................................ 153 DATION IN PAYMENT ............................................. 153 FORM OF PAYMENT .............................................. 153 EXTRAORDINARY INFLATION OR DEFLATION .............. 153 APPLICATION OF PAYMENT ..................................... 153 TENDER OF PAYMENT AND CONSIGNATION ................. 153

PARTNERSHIP WHERE REAL PROPERTY IS CONTRIBUTED ................................... 163 ANTICHRESIS ...................................................... 164 AGENCY TO SELL REAL PROPERTY OR AN INTEREST THEREIN ............................................................ 164 STIPULATION TO CHANGE INTEREST ......................... 164 STIPULATION LIMITING COMMON CARRIER’S DUTY OF EXTRAORDINARY DILIGENCE TO ORDINARY DILIGENCE ....................................... 164 CHATTEL MORTGAGE............................................. 164

SALE OF LARGE CATTLE .........................................

164

CONTRACT OF SALE/CONTRACT TO SELL ...... 172

Formality ........................... 164

Parties to a Contract of Sale ..................172

STATUTORY BASIS ......................................... 164

Defective Contracts .......... 165 FOUR KINDS OF DEFECTIVE CONTRACTS ........165 RESCISSIBLE CONTRACTS ...............................165 DIFFERENCE FROM RESCISSION (RESOLUTION) UNDER ART. 1191 ...........................................................166 VOIDABLE CONTRACTS ...................................166 UNENFORCEABLE CONTRACTS .......................166 VOID CONTRACTS ............................................ 167

Effects of Contracts ........... 169 STATUTORY BASIS ..........................................169

CAPACITY OF PARTIES ................................... 172 KINDS OF INCAPACITY ........................................... 172 ABSOLUTE INCAPACITY ................................. 172 RELATIVE INCAPACITY: MARRIED PERSONS .. 173 HUSBAND AND WIFE ............................................ 173 ALIENAGE .......................................................... 173 TRUSTEESHIP ..................................................... 173 SPECIAL DISQUALIFICATIONS ........................ 173 SPECIFIC INCAPACITY/ SPECIAL DISQUALIFICATIONS ... 173 EFFECTS OF INCAPACITY ................................ 173

Subject Matter ....................174 REQUISITES OF A VALID SUBJECT MATTER ... 174 MUST BE LICIT .................................................... 174 EXISTING, FUTURE, CONTINGENT ............................ 174 DETERMINATE OR DETERMINABLE ........................... 175

SALES

PARTICULAR KINDS ....................................... 175

Introduction ....................... 171

Obligations of the Seller to Transfer Ownership ............175

DEFINITION OF SALES .................................... 171 ESSENTIAL REQUISITES OF A CONTRACT OF SALE .................................... 171 ESSENTIAL ELEMENTS OF A VALID CONTRACT OF SALE .. 171 STAGES OF CONTRACT OF SALE ..................... 171 PHASES OF A SALE CONTRACT ................................. 171 OBLIGATIONS CREATED ................................. 171 NATURE OF OBLIGATIONS CREATED PER DEFINITION IN ART.1458 .................................

171

CHARACTERISTICS OF A CONTRACT OF SALE 171 SALE IS TITLE AND NOT MODE ....................... 171 SALE DISTINGUISHED FROM OTHER CONTRACTS ........................................................................ 171 DONATION .......................................................... 171 BARTER ............................................................. 172 CONTRACT FOR A PIECE OF WORK ............................ 172 DACION EN PAGO ................................................. 172

SALE BY A PERSON NOT THE OWNER AT TIME OF

DELIVERY ........................................................ 175 SALE BY A PERSON HAVING A VOIDABLE TITLE ............................ 176

Price ....................................176 MEANING OF PRICE ....................................... 176 REQUISITES FOR A VALID PRICE .................... 176 HOW PRICE IS DETERMINED .......................... 176 INADEQUACY OF PRICE ................................. 176 WHEN NO PRICE AGREED .............................. 177 MANNER OF PAYMENT MUST BE AGREED UPON ................................ 177 EARNEST MONEY VS. OPTION MONEY .......... 177

Formation of Contract of Sale ................. 177 PREPARATORY .............................................. 177 OFFER ............................................................... 177 OPTION CONTRACT .............................................. 177 RIGHT OF FIRST REFUSAL ....................................... 178 MUTUAL PROMISE TO BUY AND SELL ........................ 178 PERFECTION .................................................. 178 WHEN PERFECTED ................................................ 178 EFFECT OF PERFECTION ......................................... 178 FORM AND OFFER ................................................ 178 FORMALITIES OF THE CONTRACT .................. 178

WHEN OWNERSHIP IS TRANSFERRED .......... 183 WHEN OWNERSHIP IS TRANSFERRED TO THE BUYER, THE GOODS ARE AT THE BUYER’S RISK ............................ 183

Documents of Title ............ 183 DEFINITION .................................................... 183 PURPOSE OF DOCUMENTS OF TITLE .............. 183 NEGOTIABLE DOCUMENTS OF TITLE .............. 183 WHO MAY NEGOTIATE IT? ...................................... 183 A PERSON TO WHOM A DOCUMENT HAS BEEN NEGOTIATED ACQUIRES .......................................................... 183

NON-NEGOTIABLE DOCUMENTS OF TITLE ..... 183

Transfer of Ownership ...... 179 MANNER OF TRANSFER ................................. 179 GENERAL CONCEPTS ............................................. 179 WHEN DELIVERY DOES NOT TRANSFER TITLE 179 SALE ON APPROVAL, TRIAL, OR SATISFACTION ........... 179 WHEN SALE NOT VALID ......................................... 180 WHEN SELLER IS NOT THE OWNER ........................... 180 SALE BY PERSON HAVING A VOIDABLE TITLE .............. 180 KINDS OF DELIVERY ....................................... 180 ACTUAL DELIVERY ............................................... 180 CONSTRUCTIVE DELIVERY ..................................... 180 DOUBLE SALES .............................................. 181 RULES GOVERNING SALE OF MOVABLES, IMMOVABLES AND UNREGISTERED LANDS .......................................... 181 PROPERTY REGISTRATION DECREE ...............182 REQUISITES FOR REGISTRATION OF DEED OF SALE IN GOOD FAITH .................................................................182 ACCOMPANIED BY VENDORS DUPLICATE CERTIFICATE OF TITLE,PAYMENT OF CAPITAL GAINS TAX, AND DOCUMENTARY TAX REGISTRATION FEES ...................182

WARRANTIES OF SELLER OF DOCUMENTS OF TITLE .............................................................. 184 A PERSON WHO NEGOTIATES A DOCUMENT OF TITLE WARRANTS ........................................................ 184 HE DOES NOT WARRANT THAT ................................ 184 GOODS IN THE HANDS OF THE CARRIER COVERED BY A NEGOTIABLE DOCUMENT CANNOT BE ATTACHED OR LEVIED UPON, UNLESS .................................................... 184

RULES ON LEVY/GARNISHMENT OF GOODS . 184

Remedies of an Unpaid Seller ..................... 184 DEFINITION OF UNPAID SELLER .................... 184 REMEDIES OF UNPAID SELLER ....................... 184 JUDICIAL REMEDIES OF AN UNPAID SELLER ................ 184 ALTERNATIVE REMEDIES OF THE UNPAID SELLER UNDER RECTO LAW ........................................................ 185

Performance of Contract .. 185

GENERAL RULE ..............................................182

DELIVERY OF THING SOLD .............................. 185 SALE OF MOVABLES .............................................. 185 SALE OF IMMOVABLES .......................................... 186 INSPECTIONS AND ACCEPTANCE.............................. 186

WHEN LOSS OCCURRED BEFORE PERFECTION .....................................182

PAYMENT OF PRICE ........................................ 186 PAY THE PRICE OF THE THING SOLD ......................... 186

Risk of Loss ....................... 182

WHEN LOSS OCCURRED AT TIME OF PERFECTION ..................................................182 WHEN LOSS OCCURRED AFTER PERFECTION BUT BEFORE DELIVERY ...................................182

Warranties .......................... 187 CONDITION V. WARRANTY .............................. 187

EXPRESS WARRANTIES .................................. 187 EXPRESS WARRANTY DISTINGUISHED FROM FALSE REPRESENTATION ................................................ 187

IMPLIED WARRANTIES ................................. 188 IMPLIED WARRANTY OF TITLE ................................ 188 IMPLIED WARRANTY AGAINST ENCUMBRANCE/NONAPPARENT SERVITUDES ....................................... 188 IMPLIED WARRANTY AGAINST HIDDEN DEFECTS ......... 188 IMPLIED WARRANTY AS TO MERCHANTABLE QUALITY AND FITNESS OF GOODS .............................................. 188 IMPLIED WARRANTY AGAINST REDHIBITORY DEFECT IN THE SALE OF ANIMALS ............................................... 189

EFFECTS OF WARRANTIES ............................. 189 EFFECTS OF WAIVERS .................................... 189 BUYER’S OPTIONS IN CASE OF BREACH OF WARRANTY ................................................... 189 EXPRESS WARRANTY ........................................... 189 IMPLIED WARRANTY AGAINST EVICTION .................. 189 IMPLIED WARRANTY AGAINST ENCUMBRANCES ......... 190 IMPLIED WARRANTY AGAINST HIDDEN DEFECTS ........ 190 IMPLIED WARRANTY AGAINST REDHIBITORY DEFECTS OF ANIMALS ........................................................... 190 WARRANTY IN SALE OF CONSUMER GOODS .............. 190

Breach of Contract ............ 190 REMEDIES OF THE SELLER ............................. 191 SALE OF MOVABLES .............................................. 191 RECTO LAW: SALE OF MOVABLES ON INSTALLMENT ................................................192 SALE OF IMMOVABLES ........................................... 193

REMEDIES OF THE BUYER ............................... 193 SALE OF MOVABLE ................................................ 193 SALE OF IMMOVABLES .......................................... 194

Extinguishment of Sale..... 194 CAUSES ......................................................... 194 CONVENTIONAL REDEMPTION ..................... 195 DEFINITION ........................................................ 195 PERIOD ............................................................. 195 BY WHOM EXERCISED ........................................... 195 FROM WHOM TO REDEEM ...................................... 195 HOW EXERCISED ................................................. 195 EFFECT OF REDEMPTION ....................................... 195 EFFECT OF NON-REDEMPTION ............................... 195 RIGHT TO REDEEM VS. OPTION TO PURCHASE ........... 195

EQUITABLE MORTGAGE ................................. 196 DISTINGUISHED FROM OPTION TO BUY ........ 196 PRESUMPTION THAT A CONTRACT IS AN EQUITABLE MORTGAGE ARISES WHEN ..................................... 196 FOR THE PRESUMPTION OF AN EQUITABLE MORTGAGE TO ARISE UNDER ART. 1602, 2 REQUISITES MUST CONCUR ................................. 196 RATIONALE BEHIND PROVISION ON EQUITABLE MORTGAGE ..................... 196 REMEDIES OF APPARENT VENDOR ........................... 196

PERIOD OF REDEMPTION ............................... 196 EXERCISE OF THE RIGHT TO REDEEM ............ 197 LEGAL REDEMPTION ..................................... 197 DEFINITION ........................................................ 197 MANNER ............................................................ 197 PERIOD TO REDEEM .............................................. 197 INSTANCES OF LEGAL REDEMPTION ......................... 198 AGE REDEMPTION ......................................... 199

The Law on Sale of Subdivision and Condominium (PD 957) ... 200 DEFINITIONS ................................................. 200 DEFINITION OF "SALE" OR "SELL" .......................... 200 DEFINITION OF "BUY" OR "PURCHASE" ................... 200 REQUIREMENTS FOR OWNERS AND DEVELOPERS ...... 200

The Condominium Act (RA 4726) ................................. 202

DEFINITION OF A CONDOMINIUM ................ 202 OTHER DEFINITIONS ..................................... 203 TRANSFERS OR CONVEYANCES OF A UNIT OR AN APARTMENT, OFFICE OR STORE, OR OTHER SPACE THEREIN ............................................ 203 RIGHTS OF A CONDOMINIUM UNIT OWNER (ASIDE FROM RIGHTS ARISING FROM OWNERSHIP) ................................................ 203 PARTITION BY SALE ...................................... 203 DECLARATION OF RESTRICTIONS BY OWNER OF PROJECT – PRECONDITION TO CONVEYANCE ................ 203

ASSESSMENT IN ACCORDANCE WITH DECLARATION OF RESTRICTIONS ................. 204 HOW LIEN ENFORCED AFTER NON-PAYMENT OF ASSESSED FEES ............................................ 204 CONTENTS OF A DECLARATION OF RESTRICTIONS .............................................. 204 INVOLUNTARY DISSOLUTION OF THE CONDOMINIUM CORPORATION .................... 204 POWER OF ATTORNEY HELD BY CORPORATION IN CASE OF VOLUNTARY DISSOLUTION OF CONDOMINIUM CORPORATION .................... 204 SALE, EXCHANGE, LEASE, OR DISPOSITION BY CORPORATION OF THE COMMON AREAS ..... 204 STOCKHOLDER/MEMBER DEMANDING PAYMENT FOR SHARES OR INTEREST AKA APPRAISAL RIGHT ........................................ 204 REQUIREMENTS FOR REGISTRATION OF CONVEYANCE WITH THE REGISTER OF DEEDS .............................. 204 REALTY TAX ON CONDOMINIUMS ................. 204 SUCCESSION

General Provisions ............ 206 DEFINITION & TRANSMISSION ....................... 206 SUCCESSION OCCURS AT THE MOMENT OF DEATH ........................................................... 206 KINDS ............................................................ 206 KINDS OF SUCCESSION ......................................... 206 KINDS OF SUCCESSORS ......................................... 206 KINDS OF HEIRS .................................................. 206

Testamentary Succession ........................ 206 WILLS ............................................................. 206 IN GENERAL ....................................................... 206 TESTAMENTARY CAPACITY AND INTENT .................... 207 FORM................................................................ 208 WITNESSES ........................................................ 210 CODICILS ............................................................ 211 INCORPORATION BY REFERENCE .............................. 211 REVOCATION ....................................................... 211

REPUBLICATION AND REVIVAL ................................ 212 ALLOWANCE AND DISALLOWANCE OF WILLS .............. 212

INSTITUTION OF HEIRS .................................. 213 EXTENT OF GRANT .............................................. 213 EFFECT OF PREDECEASE OF HEIR ............................ 213 IDENTIFICATION OF HEIRS, MANNER OF INSTITUTION .. 213 FALSE CAUSE ..................................................... 213 PRETERITION ...................................................... 213 COMPULSORY HEIRS IN THE DIRECT LINE ................... 214 PRETERITION V. DISPOSITION LESS THAN LEGITIME ...... 214 DISTINGUISHED FROM DISINHERITANCE .................... 214 EFFECTS OF PRETERITION ..................................... 214 SUBSTITUTION OF HEIRS ............................... 214 DEFINITION ........................................................ 214 KINDS ............................................................... 214 TESTAMENTARY DISPOSITIONS WITH A CONDITION, A TERM, AND A MODE ............... 215 3 KINDS OF TESTAMENTARY DISPOSITIONS ................ 215 CONDITIONS ....................................................... 215 LEGITIME ....................................................... 216 DEFINITION ........................................................ 216 COMPULSORY HEIRS AND VARIOUS COMBINATIONS ..... 216 RESERVA TRONCAL .............................................. 218 DISINHERITANCE .................................................. 219

Legal or Intestate Succession ........ 224

GENERAL PROVISIONS................................... 224 INSTANCES WHEN LEGAL OR INTESTATE SUCCESSION OPERATES ......................................................... 224 THE INTESTATE OR LEGAL HEIRS ............................. 224 FUNDAMENTAL PRINCIPLES IN INTESTATE SUCCESSION........................................ 224

RELATIONSHIP ............................................... 225 BASIC CONCEPTS IN RELATIONSHIP ......................... 225 INCAPACITY ....................................................... 225 REPUDIATION .................................................... 225 ADOPTION ......................................................... 225 RIGHT OF REPRESENTATION ......................... 225 EFFECT OF REPRESENTATION ................................. 225 WHEN IT OCCURS................................................. 226 REPRESENTATION IN THE DIRECT DESCENDING LINE ... 226 REPRESENTATION IN COLLATERAL LINE ................... 226 PER STIRPES ...................................................... 226 THE DOUBLE HEIRSHIP TEST .................................. 226 REPRESENTATION IN ADOPTION ............................. 226 ORDER OF CONCURRENCE IN THE CASE OF AN ADOPTED CHILD .............................................................. 226

ORDER OF INTESTATE SUCCESSION .............. 227 RULES OF EXCLUSION AND CONCURRENCE IN INTESTATE SHARES ............................................................ 227 OUTLINE OF INTESTATE SHARES ............................. 227

OBJECT OF THE CONTRACT ............................ 237 OBJECT OF UNIVERSAL PARTNERSHIP ....................... 237 OBJECT OF PARTICULAR PARTNERSHIP ..................... 237

Provisions Common to Testate and Intestate Succession ........................ 228

FORM OF THE CONTRACT ............................... 237

RIGHT OF ACCRETION ................................... 228 DEFINITION AND REQUISITES ................................. 228 EFFECT OF PREDECEASE, INCAPACITY, DISINHERITANCE OR REPUDIATION IN TESTAMENTARY AND INTESTATE SUCCESSION ...................................................... 229

CAPACITY TO SUCCEED BY WILL OR INTESTACY ................................. 229 PERSONS INCAPABLE OF SUCCEEDING ..................... 229 ACCEPTANCE AND REPUDIATION OF THE INHERITANCE ................................................ 230 CHARACTERISTICS .............................................. 230 REQUISITES ....................................................... 230 ACCEPTANCE VS. REPUDIATION .............................. 230

DURATION OF THE CONTRACT ....................... 237 COMMENCEMENT ................................................. 237 TERM ................................................................ 237 EXTENSION ........................................................ 237 RULES TO DETERMINE EXISTENCE ................ 238 RELATIONS CREATED .................................... 238 KINDS OF PARTNERSHIP ............................... 238 AS TO LEGALITY OF EXISTENCE ............................... 238 AS TO OBJECT .................................................... 238 AS TO DURATION ................................................ 238 AS TO LIABILITY OF PARTNERS ............................... 238 AS TO PUBLICITY ................................................. 238 AS TO PURPOSE .................................................. 238 KINDS OF PARTNERS .................................... 238 DISTINGUISHED FROM OTHER CONTRACTS . 239

COLLATION ..................................................... 231 CONCEPT OF COLLATION ....................................... 231 OPERATIONS RELATED TO COLLATION ...................... 231 PERSONS OBLIGED TO COLLATE ............................... 231 WHAT TO COLLATE ............................................... 231 PROPERTIES NOT SUBJECT TO COLLATION ................. 231 PARTITION AND DISTRIBUTION OF ESTATE .. 232 PARTITION ........................................................ 232 PARTITION INTER VIVOS ........................................ 232 EFFECTS OF PARTITION ......................................... 233 NULLIFICATION OF PARTITION ................................ 233 AGENCY & PARTNERSHIP

Contract of Partnership .. 236 DEFINITION .................................................... 236 ELEMENTS ..................................................... 236 ESSENTIAL FEATURES ................................... 236 EFFECT OF UNLAWFUL OBJECT ............................... 236 ASSOCIATIONS WITHOUT LEGAL PERSONALITY .......... 236 CHARACTERISTICS ........................................ 236 PARTIES TO THE CONTRACT .......................... 236

Rights and obligations of the partnership ........................ 241 RIGHT TO CONTRIBUTION, IN GENERAL ........ 241 OBLIGATION OF PARTNERS TO THE PARTNERSHIP WITH RESPECT TO CONTRIBUTION OF MONEY OR PROPERTY .... 241 AMOUNT OF CONTRIBUTION ................................... 241 DETERMINING VALUE OF CONTRIBUTION IN GOODS ..... 241 ADDITIONAL CAPITAL CONTRIBUTION ....................... 241 PROHIBITION AGAINST ENGAGING IN BUSINESS .......... 241 RISK OF LOSS OF THINGS CONTRIBUTED .................... 241 REMEDY IN CASE OF NON-COMPLIANCE ................... 242 OBLIGATION OF PARTNERS TO THE PARTNERSHIP WITH RESPECT TO CONTRIBUTION OF INDUSTRY ...................... 242 PROHIBITION AGAINST ENGAGING IN BUSINESS ......... 242 RIGHT TO APPLY PAYMENT TO PARTNERSHIP CREDIT .......................................................... 242 RIGHT TO RETURN OF CREDIT RECEIVED ...... 242 RIGHT TO INDEMNITY FOR DAMAGES ........... 242 COMPENSATION OF LIABILITY ................................ 242

SUIT FOR DAMAGES

............................................. 243

RESPONSIBILITY OF THE PARTNERSHIP TO PARTNERS ..................................................... 243

Rights and obligations of partners inter se ............... 243

RIGHT TO ASSOCIATE ANOTHER IN SHARE ... 243 SUBPARTNERSHIP ............................................... 243 RIGHT TO ACCESS PARTNERSHIP BOOKS ..... 243 BASIS OF RIGHT .................................................. 243 REASONABLE HOUR ............................................. 243 RIGHT TO A FORMAL ACCOUNT ..................... 243 ACCRUAL OF RIGHT ............................................. 243 PERSON OBLIGED ................................................ 243 PRESCRIPTION OF ACTION ..................................... 243 NATURE OF ACTION ............................................. 244 PROPERTY RIGHTS OF PARTNERS ................ 244 IN GENERAL ....................................................... 244 PARTNERSHIP PROPERTY AND PARTNERSHIP CAPITAL 244 OWNERSHIP OF CERTAIN PROPERTY ........................ 244 RIGHTS IN SPECIFIC PROPERTY ............................... 244 INTEREST IN THE PARTNERSHIP ............................. 244 RIGHTS OF ASSIGNEE ........................................... 244

REVOCATION OF POWER OF MANAGING PARTNER ...... 246 MANAGEMENT BY TWO OR MORE PARTNERS ............. 246 STIPULATION ON UNANIMITY OF MANAGING PARTNERS

....................................................................... 246 MANAGEMENT WHEN MANNER NOT AGREED UPON .... 246 INSTANCES OF MUTUAL AGENCY ............................ 246

Obligations of partnership/partners to third persons ..............................247 LIABILITY OF PARTNERS FOR PARTNERSHIP CONTRACTS .................................................. 247 NATURE OF INDIVIDUAL LIABILITY ........................... 247 LIABILITY OF INDUSTRIAL PARTNER ........................ 247 STIPULATION AGAINST INDIVIDUAL LIABILITY ............ 247 LIABILITY OF PARTNERS FOR PARTNERSHIP CONTRACTS .................................................. 247 ACTS APPARENTLY FOR THE CARRYING ON OF USUAL BUSINESS ......................................................... 247 ACTS NOT APPARENTLY FOR CARRYING ON OF THE USUAL BUSINESS ......................................................... 247 ACTS OF STRICT DOMINION ................................... 247 ACTS IN CONTRAVENTION OF RESTRICTION ............... 248

CHARGING OF PARTNERSHIP INTEREST BY PERSONAL CREDITOR OF PARTNERS ...................................... 244 CHARGING ORDER ............................................... 245

CONVEYANCE OF REAL PROPERTY OF PARTNERSHIP ............................................... 248 TITLE IN THE PARTNERSHIP NAME .......................... 248 TITLE IN THE NAME OF ONE OR MORE (NOT ALL) OF THE

RIGHT TO PROFITS AND OBLIGATION FOR LOSSES .......................................................... 245 RULES FOR DISTRIBUTION OF PROFITS AND LOSSES .... 245 DESIGNATION OF SHARE BY THIRD PERSONS ............. 245 EXCLUSION OF PARTNER FROM SHARE .................... 245

PARTNERS AND THE RECORD DOES NOT DISCLOSE THE RIGHT OF THE PARTNERSHIP ................................. 248 TITLE IN THE NAME OF ONE OR MORE OR ALL THE PARTNERS, OR IN A THIRD PERSON IN TRUST FOR THE PARTNERSHIP .................................................... 248 TITLE IN THE NAMES OF ALL THE PARTNERS .............. 248

OBLIGATION TO RENDER INFORMATION ...... 245 BASIS OF OBLIGATION .......................................... 245 OBLIGATION TO ACCOUNT AND ACT AS TRUSTEE ........................................................ 245 BASIS OF OBLIGATION .......................................... 245

Operation of the Partnership ................ 246 FIRM NAME .................................................... 246 RIGHT TO CHOOSE FIRM NAME ............................... 246 MANAGEMENT OF THE PARTNERSHIP .......... 246 POWERS OF A MANAGING PARTNER ........................ 246

LIABILITY OF PARTNERSHIP FOR ADMISSION BY PARTNER ....................................................... 248 LIABILITY OF PARTNERSHIP FOR WRONGFUL ACTS OF PARTNER ........................................ 248 LIABILITY OF THE PARTNERSHIP FOR MISAPPLICATION OF MONEY OR PROPERTY RECEIVED ...................................................... 248 LIABILITY OF OTHER PARTNERS FOR WRONGFUL ACTS OR MISAPPLICATION ....... 248 LIABILITY IN CASE OF PARTNERSHIP BY ESTOPPEL ...................................................... 248 LIABILITY OF PARTNER BY ESTOPPEL ....................... 248

NATURE OF LIABILITY ........................................... 249 EFFECTS OF ACTS OF PARTNER BY ESTOPPEL ............. 249 ESTABLISHING LIABILITY ....................................... 249

LIABILITY OF INCOMING PARTNER ................ 249 NOTICE TO OR KNOWLEDGE OF THE PARTNERSHIP ............................................... 249 PREFERENCE OF PARTNERSHIP CREDITORS 249

Dissolution and winding up ................. 250 CONCEPTS ...................................................... 250 EFFECT OF DISSOLUTION ON EXISTENCE OF PARTNERSHIP ................................................ 250 CAUSES OF DISSOLUTION .............................. 250 WITHOUT VIOLATION OF THE AGREEMENT ................. 250 IN CONTRAVENTION OF THE AGREEMENT .................. 250 BY OPERATION OF LAW ......................................... 250 BY DECREE OF COURT ............................................ 251 OTHER CAUSES .................................................... 251

RIGHTS OF PARTNERS IN CASE OF RESCISSION ................................. 253 SETTLING OF ACCOUNTS BETWEEN PARTNERS..................................... 253 COMPOSITION OF PARTNERSHIP ASSETS .................. 253 AMOUNT OF CONTRIBUTION FOR LIABILITIES ............. 253 ENFORCEMENT OF CONTRIBUTION .......................... 253 ORDER OF APPLICATION OF ASSETS ......................... 254 DOCTRINE OF MARSHALING OF ASSETS .................... 254 DISTRIBUTION OF PROPERTY OF INSOLVENT PARTNER. 254 RIGHTS OF CREDITORS OF DISSOLVED PARTNERSHIP ................................................ 254 CREDITORS OF DISSOLVED PARTNERSHIPAS CREDITORS OF NEW PARTNERSHIP.............................................. 254 LIABILITY OF A NEW PARTNER ................................ 254 PRIORITY OF CREDITORS OF DISSOLVED PARTNERSHIP 254 EFFECT OF CONTINUING USE OF PARTNERSHIP NAME .. 254

RETIRED OR REPRESENTATIVE OF DECEASED PARTNER ....................................................... 254 RIGHT TO AN ACCOUNT ................................. 254 EXISTENCE OF RIGHT ............................................ 255 NEED FOR LIQUIDATION ........................................ 255

EFFECT OF DISSOLUTION ON AUTHORITY OF PARTNERS.......................................................251 WITH RESPECT TO PARTNERS .................................. 251 WITH RESPECT TO THIRD PERSONS ........................... 251

Limited partnership .......... 255

LIABILITY OF PARTNERS IN TRANSACTIONS AFTER DISSOLUTION....................................................... 251

CHARACTERISTICS ......................................... 255

DEFINITION .................................................... 255

CASES WHERE PARTNERSHIP IS NOT BOUND........................ 252 PARTNERSHIP BY ESTOPPEL AFTER DISSOLUTION ....... 252

ADVANTAGES OF LIMITED PARTNERSHIP ..... 255

CONTRACTS AFTER DISSOLUTION BY SPECIFIC CAUSES........................................................... 252

GENERAL AND LIMITED PARTNERSHIP DISTINGUISHED ............................................. 256

EFFECT OF DISSOLUTION ON EXISTING LIABILITY OF PARTNERS ................................................ 252 WINDING UP PARTNERS ........................................ 252 WHO MAY WIND UP .............................................. 252 MANNER OF WINDING UP ...................................... 252 NATURE OF JUDICIAL LIQUIDATION .......................... 252 POWERS OF WINDING UP PARTNER .......................... 252

FORMATION OF LIMITED PARTNERSHIP ....... 256 PURPOSE OF FILING ............................................. 256 NO SUBSTANTIAL COMPLIANCE .............................. 256 FIRM NAME ........................................................ 256 FALSE STATEMENT IN THE CERTIFICATE .................... 256 ADMISSION OF ADDITIONAL LIMITED PARTNERS ......... 257 GENERAL AND LIMITED PARTNER AT THE SAME TIME ... 257

RIGHTS OF PARTNERS IN CASE OF DISSOLUTION ................................... 252

MANAGEMENT OF LIMITED PARTNERSHIP.... 257 MANAGEMENT BY GENERAL PARTNERS .................... 257

DISSOLUTION WITHOUT VIOLATION OF THE AGREEMENT .............................. 252 DISSOLUTION IN CONTRAVENTION OF THE AGREEMENT ............................................. 253

GENERAL AND LIMITED PARTNER DISTINGUISHED ............................................. 255

LIABILITY OF LIMITED PARTNER FOR PARTICIPATING IN CONTROL .......................................................... POWERS OF GENERAL PARTNER .............................

257 257

OBLIGATIONS OF A LIMITED PARTNER .......... 257 OBLIGATIONS RELATED TO CONTRIBUTION ................ 257 LIABILITY TO PARTNERSHIP CREDITORS .................... 258 LIABILITY TO SEPARATE CREDITORS ......................... 258 RIGHTS OF A LIMITED PARTNER .................... 258 RIGHTS OF LIMITED PARTNER, IN GENERAL ............... 258 RIGHT TO TRANSACT BUSINESS WITH PARTNERSHIP .... 258 RIGHT TO SHARE IN PROFITS .................................. 258 RIGHT TO RETURN OF CONTRIBUTION....................... 259 PREFERENCE OF LIMITED PARTNERS ........................ 259 RIGHT TO ASSIGN INTEREST ................................... 259 RIGHT TO ASK FOR DISSOLUTION............................. 259 CAUSES OF DISSOLUTION OF LIMITED PARTNERSHIP ................................................ 259 SETTLEMENT OF ACCOUNTS .......................... 260 ORDER OF PAYMENT............................................. 260 SHARE IN THE PARTNERSHIP ASSETS ....................... 260 AMENDMENT OR CANCELLATION OF CERTIFICATE................................................... 260 WHEN CERTIFICATE IS CANCELLED ........................... 260 WHEN CERTIFICATE IS AMENDED ............................. 260 REQUIREMENTS FOR AMENDMENT OR CANCELLATION . 260

Contract of agency ........... 260

KINDS OF AGENCY, IN GENERAL .................... 264 AS TO MANNER OF ITS CREATION ............................ 264 AS TO CAUSE OR CONSIDERATION ........................... 264 AS TO EXTENT OF BUSINESS COVERED ...................... 265 AS TO AUTHORITY CONFERRED ............................... 265 AS TO ITS NATURE AND EFFECTS ............................. 265 AS TO KINDS OF PRINCIPAL .................................... 265 KINDS OF AGENCY AS TO MANNER OF CREATION ...................................................... 265 EXPRESS AGENCY ................................................ 265 IMPLIED AGENCY ................................................. 265 KINDS OF AGENCY AS TO EXTENT OF BUSINESS COVERED........................................................ 265 UNIVERSAL AGENCY ............................................. 265 GENERAL AGENCY ............................................... 265 SPECIAL AGENCY ................................................. 265 KINDS OF AGENCY AS TO AUTHORITY CONFERRED ................................................... 265 COUCHED IN GENERAL TERMS ................................ 265 COUCHED IN SPECIFIC TERMS ................................. 265 SPECIAL KINDS OF AGENCY ........................... 266 AGENCY BY ESTOPPEL........................................... 266 AGENCY WITH UNDISCLOSED PRINCIPAL ....................267 AGENCY BY OPERATION OF LAW ...............................267 IRREVOCABLE AGENCY...........................................267

DEFINITION .................................................... 260 CHARACTERISTICS ..........................................261 CONSTITUTION OF AGENCY.............................261 ESSENTIAL ELEMENTS............................................ 261 PARTIES ............................................................. 261 CAPACITY OF PARTIES ............................................ 261 INTENTION OF PARTIES .......................................... 261 CONSENT OF PARTIES ............................................ 261 POWER OF ATTORNEY ........................................... 262 FORM OF CONTRACT............................................. 262 DESIGNATION BY THE PARTIES ................................ 262 ACTS DELEGATED ................................................ 262 PRESUMPTION OF EXISTENCE ................................. 262 COMMUNICATION OF EXISTENCE OF AGENCY .............. 262 DUTY OF THIRD PERSON ........................................ 262 EFFECT ........................................................... 262 EXTENSION OF PERSONALITY ................................. 262 THEORY OF IMPUTED KNOWLEDGE .......................... 262 DISTINGUISHED FROM OTHER CONTRACTS .. 263

Kinds of agency................. 264

KINDS OF AGENTS...........................................267 AS TO NATURE AND EXTENT OF AUTHORITY ................267 SPECIAL TYPES OF AGENTS .................................... 268

Powers of the agent ......... 268 AUTHORITY OF AN AGENT ............................. 268 KINDS OF AUTHORITY .................................... 268 SCOPE OF AUTHORITY ................................... 268 POWER TO BIND THE PRINCIPAL ................... 269 EFFECTS OF ACTS OF AN AGENT .................... 269

Obligations of the agent .. 269

OBLIGATIONS, IN GENERAL ........................... 269 GOOD FAITH AND LOYALTY TO HIS TRUST .................. 269 OBEDIENCE TO PRINCIPAL'S INSTRUCTIONS .............. 269 EXERCISE OF REASONABLE CARE ............................ 269 OBLIGATION TO CARRY OUT AGENCY ............ 269

OBLIGATION IN CASE HE DECLINES AGENCY ......................................... 269 OBLIGATION TO ADVANCE NECESSARY FUNDS ....................... 270 OBLIGATION TO ACT IN ACCORDANCE WITH INSTRUCTIONS ............................................... 270 OBLIGATION TO PREFER INTEREST OF PRINCIPAL ...................................................... 270 BASIS OF THE RULE .............................................. 270 APPLICATION ...................................................... 270 OBLIGATION TO ACCOUNT AND TO DELIVER THINGS RECEIVED ......................................... 270 WHAT TO DELIVER................................................. 271 LIABILITY FOR CONVERSION .................................... 271 EXEMPTING STIPULATION ....................................... 271 WHEN OBLIGATION NOT APPLICABLE......................... 271 RESPONSIBILITY FOR ACTS OF SUBSTITUTE ... 271 SUB-AGENCY ....................................................... 271 POWER TO APPOINT .............................................. 271 RELATIONS AMONG THE PARTIES ............................. 271 EFFECTS OF SUBSTITUTION ..................................... 271 RESPONSIBILITY OF TWO OR MORE AGENTS .. 271 OBLIGATION FOR SUMS APPLIED TO HIS OWN USE ................................................................. 272 OBLIGATIONS TO THIRD PERSONS ................ 272 LIABILITY OF AGENT FOR OBLIGATIONS CONTRACTED .. 272 VOID CONTRACTS ................................................ 272 PRESENTATION OF POWER OF ATTORNEY.................. 272 RATIFICATION BY PRINCIPAL .................................. 272 IGNORANCE OF AGENT .......................................... 272 OBLIGATIONS OF COMMISSION AGENT.......... 273 FACTOR OR COMMISSION AGENT ............................. 273 RESPONSIBILITY FOR GOODS RECEIVED .................... 273 SALE OF GOODS ON CREDIT WITHOUT AUTHORITY ....... 273 SALE OF GOODS ON CREDIT WITH AUTHORITY ............ 273 RESPONSIBILITY FOR FRAUD AND NEGLIGENCE........................................... 273

Obligations of the principal .......................274 OBLIGATIONS, IN GENERAL ........................... 274 OBLIGATION TO COMPLY WITH OBLIGATIONS CONTRACTED ................................................. 274

RATIFICATION ..................................................... SEPARATE CONTRACTS WITH PRINCIPAL AND AGENT... WHEN PRINCIPAL NOT LIABLE, IN SUMMARY..............

274 274 274

OBLIGATION FOR COMPENSATION OF AGENT ........................... 274 AMOUNT OF COMPENSATION ................................. 275 COMPENSATION OF BROKER .................................. 275 LIABILITY FOR EXPENSES AND DAMAGES ..... 275 NECESSARY FUNDS .............................................. 275 WHEN PRINCIPAL NOT LIABLE FOR EXPENSES ............ 275 DAMAGES .......................................................... 275 RIGHT OF RETENTION BY AGENT ............................. 275 MULTIPLE PRINCIPALS .......................................... 275 LIABILITY FOR QUASI-DELICT BY AGENT .................... 275

Extinguishment of agency ............................276 MODES OF EXTINGUISHING AGENCY, IN GENERAL.........................................................276 REVOCATION BY PRINCIPAL ...........................276 MULTIPLE PRINCIPALS ...........................................276 MANNER OF REVOCATION ......................................276 EFFECT OF REVOCATION IN RELATION TO THIRD PARTIES...............................276

WITHDRAWAL BY AGENT ................................ 277 LIABILITY FOR DAMAGES ........................................ 277 OBLIGATION TO CONTINUE AGENCY .......................... 277 DEATH, CIVIL INTERDICTION, INSANITY OR INSOLVENCY ................................................... 277 DEATH OF PRINCIPAL ............................................ 277 DEATH OF AGENT ................................................. 277 ACCOMPLISHMENT OF OBJECT OR PURPOSE . 277 DISSOLUTION OF FIRM OR CORPORATION ..... 277 EXPIRATION OF TERM ..................................... 277

CREDIT TRANSACTIONS

Credit Transactions ..........279 MEANING AND SCOPE OF CREDIT TRANSACTIONS ............................................. 279 TWO TYPES OF CREDIT TRANSACTIONS/CONTRACTS OF SECURITY . 279

Loan ...................................279

APPLICABLE LAW

................................................ 283

CHARACTERISTICS OF A LOAN ...................... 279 COMMODATUM V. MUTUUM .......................... 279 OBLIGATIONS OF BAILOR AND BAILEE .......... 279 WHO MAY BE A BAILOR IN COMMODATUM? ............... 279 WHAT ARE THE TWO (2) KINDS OF COMMODATUM? .... 280 OBLIGATIONS OF A BAILOR IN COMMODATUM ....................................................................... 280 OBLIGATIONS OF A BAILEE IN COMMODATUM ....................................................................... 280 INTEREST AND SUSPENSION OF USURY LAW 281 KINDS OF INTEREST ..............................................281 WHEN IS COMPOUND INTEREST ALLOWED? ...............281 REQUISITES FOR INTEREST TO BE CHARGEABLE ..........281 EXCEPTIONS TO REQUISITE OF EXPRESS STIPULATION ..281 RULES FOR AWARD OF INTEREST IN THE CONCEPT OF ACTUAL AND COMPENSATORY DAMAGES ...................281 ELEMENTS OF USURY ...........................................281

Deposit ............................. 282

Guaranty and Suretyship 283

GUARANTY DISTINGUISHED FROM SURETYSHIP ....................................... 284 NATURE AND EXTENT OF GUARANTY ........... 284 NATURE AND EXTENT OF GUARANTY ....................... 284 NATURE AND EXTENT OF SURETYSHIP ......... 286 EFFECT OF GUARANTY ................................... 287 EFFECTS OF GUARANTY BETWEEN THE GUARANTOR AND THE CREDITOR ................................................... 287 EFFECTS OF GUARANTY BETWEEN THE DEBTOR AND THE GUARANTOR ...................................................... 288 EFFECTS OF GUARANTY AS BETWEEN CO-GUARANTORS

....................................................................... 289 EXTINGUISHMENT OF GUARANTY ................. 289 LEGAL AND JUDICIAL BONDS ........................ 289 QUALIFICATIONS OF PERSONAL BONDSMAN ............. 289 PLEDGE OR MORTGAGE IN LIEU OF BOND ................. 290 BONDSMAN NOT ENTITLED TO EXCUSSION ............... 290

CHARACTERISTICS ........................................ 282 CONTRACT OF DEPOSIT IS GENERALLY GRATUITOUS .................................................. 282 ONLY MOVABLE THINGS MAY BE THE OBJECT OF A DEPOSIT ...................................................... 282 OBLIGATIONS OF DEPOSITOR ....................... 282 EXTINGUISHMENT OF DEPOSIT ..................... 282

Pledge .............................. 290

DEFINITION ................................................... 290 PROVISIONS APPLICABLE ONLY TO PLEDGE . 290 KINDS ............................................................ 290 ESSENTIAL REQUIREMENTS ......................... 290 ESSENTIAL REQUISITES COMMON TO PLEDGE AND MORTGAGE ....................................................... 290

EFFECT OF DEATH OF DEPOSITOR OR DEPOSITARY .................................................. 282

OBLIGATION OF PLEDGEE ............................. 290

KINDS OF DEPOSIT ........................................ 282

RIGHTS OF PLEDGOR .................................... 290

VOLUNTARY DEPOSIT .................................... 282

PERFECTION .................................................. 291 REQUISITES FOR PERFECTION ................................. 291

NECESSARY DEPOSIT .................................... 282 KINDS OF NECESSARY DEPOSITS ............................. 283 DEPOSITS BY TRAVELERS IN HOTELS AND INNS........... 283 EXTENT OF LIABILITY UNDER ART.1998 ................... 283 WHEN HOTEL-KEEPER LIABLE ................................ 283 WHEN HOTEL-KEEPER NOT LIABLE .......................... 283 HOTEL-KEEPER’S RIGHT TO RETENTION ................... 283 JUDICIAL DEPOSIT ......................................... 283 NATURE AND PURPOSE ........................................ 283 DEPOSITARY OF SEQUESTERED PROPERTY ................ 283

FORECLOSURE .............................................. 291 REQUIREMENTS IN SALE OF THE THING PLEDGED BY A CREDITOR, IF CREDIT IS NOT PAID ON TIME ............... 291 EFFECT OF THE SALE OF THE THING PLEDGED ............. 291

PLEDGE BY OPERATION OF LAW ................... 291 LEGAL PLEDGES/PLEDGE BY OPERATION OF LAW ........ 291 DISTINGUISHED FROM CHATTEL MORTGAGE ........................................................................ 291

Real Mortgage ................. 292 DEFINITION AND CHARACTERISTICS ............. 292 OBJECTS OF REAL MORTGAGE ................................ 292 CHARACTERISTICS ............................................... 292 KINDS ............................................................... 292 PRINCIPLE OF INDIVISIBILITY OF PLEDGE/MORTGAGE . 293 ESSENTIAL REQUISITES ................................. 293 ESSENTIAL REQUISITES COMMON TO PLEDGE AND MORTGAGE ........................................................ 293

FORECLOSURE ............................................... 293 FORECLOSURE OF MORTGAGE ................................ 293 KINDS OF FORECLOSURE ....................................... 293 JUDICIAL FORECLOSURE ....................................... 293 EXTRAJUDICIAL FORECLOSURE ............................... 293

Antichresis ........................ 295

DEFINITION AND CHARACTERISTICS ............. 295 CHARACTERISTICS ............................................... 295 SPECIAL REQUISITES ............................................ 295 OBLIGATIONS OF ANTICHRETIC CREDITOR ... 295 REMEDIES OF CREDITOR IN CASE OF NON-PAYMENT OF DEBT ................................................................ 295

Chattel Mortgage ............ 296

OBLIGATIONS OF A GESTOR ................................... 298 OBLIGATIONS OF THE OWNER OF THE PROPERTY OR BUSINESS ......................................................... 298 EFFECT OF RATIFICATION ...................................... 298 EXTINGUISHMENT OF MANAGEMENT ....................... 298

SOLUTIO INDEBITI (UNDUE PAYMENT) ........ 299 WHEN DEBT NOT YET DUE ..................................... 299 RESPONSIBILITY OF TWO OR MORE PAYEES ............... 299 WHEN MONEY OR THING DELIVERED IS OWNED BY THIRD PERSON ............................................................ 299 LIABILITY OF PAYEE ............................................ 299 EXEMPTION FROM THE OBLIGATION TO RESTORE THE PAYMENT UNDULY MADE ...................................... 299 PRESUMPTION OF PAYMENT BY MISTAKE, DEFENSE .... 299

OTHER QUASI-CONTRACTS ........................... 299

Concurrence and Preference of Credits .......................... 300 MEANING OF CONCURRENCE AND PREFERENCE ................ 300 PREFERRED CREDITS ON SPECIFIC MOVABLES ....................................................................... 300 PREFERRED CREDITS ON SPECIFIC IMMOVABLES AND REAL RIGHTS .......................................... 301

DEFINITION AND CHARACTERISTICS ............. 296 CHARACTERISTICS ............................................... 296

PREFERRED CREDITS ON OTHER PROPERTY, REAL AND PERSONAL .................................... 301

REGISTRATION .............................................. 296

EXEMPT PROPERTY ....................................... 302

PERIOD WITHIN WHICH REGISTRATION SHOULD BE MADE

....................................................................... 296 EFFECT OF REGISTRATION ..................................... 296 REGISTRATION OF ASSIGNMENT OF MORTGAGE NOT REQUIRED ......................................................... 296 VENUE OF REGISTRATION ...................................... 296

VALIDITY OF CHATTEL MORTGAGE ................ 296 FORMAL REQUISITES .................................... 296 DESCRIPTION OF PROPERTY .................................. 297 PROPERTY COVERED BY CM ................................... 297 DISPOSITION OF PROCEEDS .......................... 297

Quasi-Contracts ...............297 NEGOTIORUM GESTIO (UNAUTHORIZED

MANAGEMENT) ............................................. 298 THE OBLIGATION DOES NOT ARISE .......................... 298

CLASSIFICATION OF CREDITS ........................ 302 ORDER OF PREFERENCE OF CREDITS ........... 302 LAND TITLES & DEEDS

Torrens System ................. 304 THE TORRENS SYSTEM .................................. 304 PURPOSE........................................................... 304 ADVANTAGES ..................................................... 304 BACKGROUND .................................................... 304 CERTIFICATE OF TITLE ................................... 304 ORIGINAL CERTIFICATE OF TITLE OR OCT ................... 304 TRANSFER CERTIFICATE OF TITLE OR TCT .................. 304 PATENTS .......................................................... 304

Regalian Doctrine............. 305

EFFECTS ......................................................... 305

CONCEPT OF NATIVE TITLE, TIME IMMEMORIAL POSSESSION................................................... 305

Citizenship Doctrine ......... 305 INDIVIDUALS AND CORPORATIONS ............... 305 CONSTITUTIONAL REQUIREMENTS AND LIMITATIONS... 305 KRIVENKO DOCTRINE............................................ 305

REGISTRATION OF VOLUNTARY INSTRUMENTS IN GENERAL .................................... 317 REGISTRATION OF DEEDS OF SALE AND TRANSFERS ..... 318 MORTGAGES AND LEASES ...................................... 318 POWERS OF ATTORNEY; TRUSTS .............................. 318

Original Registration ........ 306

INVOLUNTARY DEALINGS ............................... 319 ATTACHMENT ...................................................... 319 EXECUTION AND TAX DELINQUENCY SALES ................ 320 NOTICE OF LIS PENDENS ....................................... 320 ADVERSE CLAIM .................................................. 320

WHO MAY APPLY ............................................ 306 UNDER PD 1529 .................................................. 306 UNDER CA 141 .................................................... 307 UNDER RA 8371 .................................................. 307

Non-registrable Properties ............................................ 321

REGISTRATION PROCESS AND REQUIREMENTS ..................................... 309 WHAT LANDS ARE REGISTRABLE ............................. 309 SURVEY ..............................................................310 APPLICATION .......................................................310 INITIAL HEARING ..................................................310 PUBLICATION .......................................................310 OPPOSITION ........................................................ 311 HEARING ............................................................ 311 JUDGMENT .......................................................... 311 ISSUANCE OF DECREE ............................................ 311 REMEDIES........................................................ 311 GROUND FOR REOPENING AND REVIEWING THE DECREE OF REGISTRATION ..................................................... 311 PERIODS ............................................................. 311 PROHIBITIONS ..................................................... 311

IMPRESCRIPTIBLE ........................................... 312 NOT SUBJECT TO COLLATERAL ATTACK ......... 312 JUDICIAL CONFIRMATION OF IMPERFECT OR INCOMPLETE TITLES ................................................................ 313

CADASTRAL REGISTRATION ...........................314 STEPS IN CADASTRAL REGION PROCEEDINGS .............. 315

Subsequent Registration .. 315 TWO TYPES OF DEALINGS ............................... 315 VOLUNTARY DEALINGS .......................................... 315 INVOLUNTARY DEALINGS........................................ 315

NON-REGISTRABLE LANDS ............................. 321

Dealings with Unregistered Lands ................................. 322 TORTS & DAMAGES

Principles of Torts ............. 324 ABUSE OF RIGHT ............................................ 324 ELEMENTS ......................................................... 324 ACTS CONTRARY TO LAW .............................. 324 REQUISITES........................................................ 324 ACTS CONTRARY TO MORALS ........................ 324 ELEMENTS ......................................................... 324 EXAMPLES ......................................................... 324 BREACH OF PROMISE TO MARRY, SEDUCTION AND SEXUAL ASSAULT ........................................................... 324 MALICIOUS PROSECUTION ..................................... 325 ELEMENTS ......................................................... 325 PUBLIC HUMILIATION ........................................... 325 UNJUSTIFIED DISMISSAL ....................................... 325 UNJUST ENRICHMENT ................................... 325 LIABILITY WITHOUT FAULT ..................................... 325 BASIS OF LIABILITY .............................................. 326 SCOPE OF LIABILITY ............................................. 326

NECESSITY AND EFFECTS OF REGISTRATION . 315

Classification of Torts ....... 326

WHEN SHOULD A PURCHASER INVESTIGATE? ........................................................................ 316

ACCORDING TO MANNER OF COMMISSION ... 326

VOLUNTARY DEALINGS ................................... 317

ACCORDING TO MANNER OF SCOPE ............. 326 GENERAL ........................................................... 326

SPECIFIC ............................................................ 326

The Tortfeasor .................. 326 THE DIRECT TORTFEASOR.............................. 326 PERSONS MADE LIABLE FOR OTHERS ........... 326 PRINCIPLE OF VICARIOUS LIABILITY; DEFINITION ......... 326 BASIS OF VICARIOUS LIABILITY ................................ 326 LIABILITY OF THE ACTUAL TORTFEASOR .................... 327 2 REQUISITES ACCORDING TO CHIRONI ..................... 327 PRESUMPTION OF NEGLIGENCE ON PERSONS INDIRECTLY RESPONSIBLE ..................................................... 327 NATURE OF LIABILITY ........................................... 327

PERSONS VICARIOUSLY LIABLE ..................... 327 WHO ARE LIABLE FOR MINORS ................................ 327 PARENTS AND ADOPTERS ............................. 327 BASIS OF LIABILITY ............................................... 327 WHEN RESPONSIBILITY CEASES............................... 327 MEANING OF “MINORITY” ..................................... 327 ADOPTED CHILDREN ............................................. 327 ILLEGITIMATE CHILDREN ....................................... 327 REASON FOR VICARIOUS LIABILITY........................... 327 REQUISITES FOR LIABILITY TO ATTACH...................... 328 PARENTAL AUTHORITY OVER FOUNDLINGS, ABANDONED, NEGLECTED OR ABUSED AND OTHER SIMILARLY SITUATED CHILDREN .......................................................... 328

GUARDIANS.................................................... 328 LIABILITY OF GUARDIANS....................................... 328 SCHOOL, TEACHERS AND ADMINISTRATORS 328 OWNERS AND MANAGERS OF ESTABLISHMENTS AND ENTERPRISES ......................................... 329 EMPLOYERS (IN GENERAL)............................. 329 MEANING OF EMPLOYER ........................................ 329 INDEPENDENT CONTRACTOR.................................. 330 REQUISITES ........................................................ 330 EMPLOYER NEED NOT BE ENGAGED IN BUSINESS OR INDUSTRY .......................................................... 330 DEFENSE OF DILIGENCE IN SELECTION AND SUPERVISION

Acts of Omission and its Modalities ........................... 333 Proximate Cause ............... 333 CONCEPT OF PROXIMATE CAUSE.................... 333 DEFINITION ..................................................... 333 PROXIMATE CAUSE ............................................... 333 PROXIMATE LEGAL CAUSE ...................................... 333 DIFFERENTIATED FROM ................................. 333 REMOTE CAUSE .................................................... 333 INTERVENING CAUSE ............................................. 333 EFFICIENT INTERVENING CAUSE .............................. 334 TESTS TO DETERMINE PROXIMATE CAUSE .... 334 CAUSE IN FACT .................................................... 334 EFFECTIVENESS OF THE CAUSE; “BUT FOR” RULE ....... 334 SUBSTANTIAL FACTOR TEST ................................... 334 FORESEEABILITY TEST .......................................... 334 NATURAL AND PROBABLE CONSEQUENCE TEST .......... 334 ORDINARY AND NATURAL OR DIRECT CONSEQUENCE TEST .................................. HINDSIGHT TEST ................................................. ORBIT OF THE RISK TEST .......................................

334 334 334

CAUSE V. CONDITION ..................................... 334 LEGAL CAUSE ................................................. 334 NATURAL AND PROBABLE CONSEQUENCES ............... 334 FORESEEABILITY ................................................. 334 DOCTRINE OF LAST CLEAR CHANCE .............. 335 ELEMENTS ......................................................... 335 COVERS SUCCESSIVE ACTS OF NEGLIGENCE ............... 335 INAPPLICABLE TO JOINT TORTFEASORS .................... 335 CONTRIBUTORY NEGLIGENCE........................ 335 WHEN IS IT A BAR TO RECOVERY.............................. 335

........................................................................ 331

Legal Injury........................ 336

THE STATE ...................................................... 332

ELEMENTS ..................................................... 336

INSTANCES WHERE THE STATE GIVES ITS CONSENT TO BE SUED ................................................................ 332

JOINT TORTFEASORS ..................................... 332 DEFINITION OF “JOINT TORTFEASORS”..................... 332 APPLICABILITY OF THE PROVISION ........................... 332 NATURE OF LIABILITY ........................................... 332

CLASSES OF INJURY ....................................... 336 INJURY TO PERSONS ............................................ 336 INJURY TO PROPERTY ........................................... 336 INJURY TO RELATIONS .......................................... 336

Intentional Torts ............... 336

CONCEPT ........................................................ 336 VIOLATIONS OF A PERSON’S SECURITY AND PHYSICAL INJURIES ....................................... 337 BATTERY (PHYSICAL INJURY) .................................. 337 INTERESTS PROTECTED BY LAW .............................. 337 ASSAULT (GRAVE THREAT)..................................... 337 FALSE IMPRISONMENT (ILLEGAL DETENTION) ............ 337 INTERFERENCE WITH PERSONAL PROPERTY 337 TRESPASS TO LAND .............................................. 337 TRESPASS TO CHATTELS........................................ 337 CONVERSION ...................................................... 337 INTENTIONAL NON-PHYSICAL HARMS....................... 337 VIOLATION OF PERSONAL DIGNITY ........................... 338 INFLICTION OF EMOTIONAL DISTRESS ....................... 338 VIOLATION OF PRIVACY ......................................... 338 DISTURBANCE OF PEACE OF MIND ........................... 339 MALICIOUS PROSECUTION ..................................... 339 DEFAMATION, FRAUD AND PHYSICAL INJURIES ................................ 340 DEFAMATION ...................................................... 340 DEFENSES ......................................................... 340 FRAUD OR MISREPRESENTATION (FORMERLY DECEIT) . 340 SEDUCTION ........................................................ 340 UNJUST DISMISSAL .............................................. 340 INTERFERENCE WITH RELATIONS ...................341 KINDS ................................................................ 341 FAMILY RELATIONS .........................................341 ALIENATION OF AFFECTION ..................................... 341 LIABILITY OF PARENTS, GUARDIANS OR KIN ................ 341 LOSS OF CONSORTIUM .......................................... 342 CRIMINAL CONVERSATION (ADULTERY) .................... 342 SOCIAL RELATIONS ........................................ 342 MEDDLING WITH OR DISTURBING FAMILY RELATIONS .. 342 INTRIGUING TO CAUSE ANOTHER TO BE ALIENATED FROM HIS FRIENDS ....................................................... 342

ECONOMIC RELATIONS .................................. 343 INTERFERENCE WITH CONTRACTUAL RELATIONS ........ 343 UNFAIR COMPETITION .......................................... 343 POLITICAL RELATIONS ................................... 343 VIOLATION OF RIGHT TO SUFFRAGE.......................... 343 VIOLATION OF OTHER POLITICAL RIGHTS (FREEDOM OF SPEECH, PRESS, ASSEMBLY AND PETITION, ETC.) ....... 344

Negligence ........................ 344

ELEMENTS ...................................................... 344 TEST OF NEGLIGENCE..................................... 344

GOOD FATHER OF A FAMILY (BONUS PATER FAMILIAS)....................................................... 345 WHAT CONSTITUTES THE CONDUCT OF A PRUDENT MAN IN A GIVEN SITUATION ............................................. 345

STANDARD OF CARE ...................................... 345 STANDARD OF CARE REQUIRED OF BANKS ................ 345 STANDARD OF CARE OF CHILDREN .......................... 345 STANDARD OF CARE OF EXPERTS/PROFESSIONALS .... 345 IN CASE OF INSANE PERSONS ................................. 346 EMERGENCY RULE OR SUDDEN PERIL DOCTRINE......... 346 UNREASONABLE RISK OR HARM ............................. 346 EVIDENCE ....................................................... 346 QUANTUM OF PROOF IN QUASI-DELICT VS. QUANTUM OF PROOF IN BREACH OF CONTRACT ........................... 346 PRESUMPTION OF NEGLIGENCE .................... 346 PRESUMED NEGLIGENCE OR NEGLIGENCE PER SE ........347 RES IPSA LOQUITUR ..............................................347 DEFENSES .......................................................347 DUE DILIGENCE ....................................................347 ACTS OF PUBLIC OFFICERS ......................................347 ACCIDENT OR FORTUITOUS EVENT ............................347 DAMNUM ABSQUE INJURIA .................................... 348 AUTHORITY OF LAW ............................................. 348 ASSUMPTION OF RISK (VOLENTI NON FIT INJURA) ....... 348 LAST CLEAR CHANCE ............................................ 349 PRESCRIPTION ................................................... 349 WAIVER ............................................................. 349 DOUBLE RECOVERY ............................................. 349 ACTIONS AVAILABLE TO VICTIMS OF NEGLIGENCE........ 350 EFFECT OF ACQUITTAL OF THE ACCUSED ON HIS CIVIL LIABILITY ........................................................... 350 NO RESERVATION IS REQUIRED IN THE CRIMINAL CASE FOR THE FILING OF CIVIL ACTION ARISING FROM QUASI-DELICT

....................................................................... 350

Special Liability in Particular Cases ................................. 350 PRODUCTS LIABILITY ...................................... 351 REQUISITES OF LIABILITY........................................ 351 BURDEN OF PROOF ............................................... 351 WHO MAY RECOVER .............................................. 351 CONSUMER ACT ................................................... 351 NUISANCE ...................................................... 354 LIABILITY FOR NEGLIGENCE VS. LIABILITY FOR NUISANCE ....................................................................... 354 NUISANCE PER SE ................................................ 354 NUISANCE PER ACCIDENCE .................................... 355

PUBLIC NUISANCE ................................................ 355 PRIVATE NUISANCE .............................................. 355 ATTRACTIVE NUISANCE ......................................... 355

THE DAMAGES MUST BE PROVEN BY COMPETENT EVIDENCE (ADMISSIBLE OR PROBATIVE) ................................................... 362

VIOLATION OF CONSTITUTIONAL RIGHTS ...... 356 VIOLATION OF CIVIL LIBERTIES ................................ 356

DEGREE OF CERTAINTY REQUIRED AS TO: FACT, CAUSE AND AMOUNT OF DAMAGES .............. 363

VIOLATIONS OF RIGHTS COMMITTED BY PUBLIC OFFICERS

....................................................................... 356 PROVINCES, CITIES, AND MUNICIPALITIES ................. 357 OWNERS OF MOTOR VEHICLES ................................ 357 PROPRIETOR OF BUILDING OR STRUCTURE ................ 358 HEAD OF FAMILY.................................................. 359

NOT SPECULATIVE ......................................... 363

Strict Liability .................... 359

ATTORNEY’S FEES AND EXPENSES OF LITIGATION..................................................... 363

POSSESSOR AND USER OF AN ANIMAL ......... 359 APPLICABILITY OF PROVISION ................................. 359 BASIS ................................................................ 359 POSSIBLE DEFENSES AGAINST THIS LIABILITY ............. 359 SCOPE OF PROVISION ........................................... 359

INTEREST ....................................................... 364 INTEREST ACCRUES WHEN ..................................... 364 COMPOUNDING OF INTEREST ................................. 364 DETERMINATION OF LEGAL INTEREST ...................... 364

COMPONENTS ................................................ 363 VALUE OF LOSS; UNREALIZED PROFIT .......... 363

START OF DELAY ............................................ 365 NUISANCE ...................................................... 359 CLASSES ............................................................ 359 EASEMENT AGAINST NUISANCE............................... 360 PRODUCTS LIABILITY .................................... 360

EXTENT OR SCOPE OF ACTUAL DAMAGES ..... 365 IN CONTRACTS AND QUASI-CONTRACTS....... 365 IN CRIMES AND QUASI-DELICTS .................... 366

CONSUMER ACT ............................................. 360

Damages ........................... 362

DEFINITION .................................................... 362

Moral Damages ................ 366 WHEN AWARDED ............................................367

DAMAGES VS. INJURY..................................... 362

REQUISITES FOR AWARDING MORAL DAMAGES........................367

ELEMENTS FOR RECOVERY OF DAMAGES ...... 362

GENERAL PRINCIPLES OF RECOVERY .............367

CLASSIFICATION ............................................. 362 ACCORDING TO PURPOSE ...................................... 362 ACCORDING TO MANNER OF DETERMINATION ............ 362 SPECIAL AND ORDINARY........................................ 362

WHEN RECOVERABLE .................................... 368 IN SEDUCTION, ABDUCTION, RAPE AND OTHER LASCIVIOUS ACTS ................................................................ 368 IN ACTS REFERRED TO IN ARTS. 21, 26, 27, 28, 29, 32, 34 &35, NCC ..................................................... 368 IN CASES OF MALICIOUS PROSECUTION .................... 370

Actual and Compensatory Damages ........................... 362 REQUISITES .................................................... 362 WHEN IS A PERSON ENTITLED ...................... 362 ALLEGED AND PROVED WITH CERTAINTY...... 362

Nominal Damages ............370 REQUISITES AND CHARACTERISTICS............. 370 WHEN AWARDED ........................................... 370

Temperate Damages ........370 REQUISITES ..................................................... 371

Liquidated Damages.......... 371 REQUISITES AND CHARACTERISTICS .............. 371 RULES GOVERNING BREACH OF CONTRACT ... 371

Exemplary Or Corrective Damages ............................. 371 WHEN RECOVERABLE..................................... 372 IN CRIMINAL OFFENSES ........................................ 372 IN QUASI-DELICTS................................................ 372 IN CONTRACTS AND QUASI-CONTRACTS.................... 372 REQUISITES ........................................................ 372 DAMAGES IN CASE OF DEATH RE. CRIMES AND QUASIDELICTS............................................................. 373

Graduation of Damages ... 373 DUTY OF THE INJURED PARTY........................ 373 BURDEN OF PROOF ........................................ 374 RULES ............................................................. 374 IN CRIMES .......................................................... 374 IN QUASI-DELICTS................................................ 374 CONTRIBUTORY NEGLIGENCE ................................. 374 PLAINTIFF’S NEGLIGENCE ...................................... 374 IN CONTRACTS, QUASI-CONTRACTS AND QUASI-DELICTS ....................................................................... 374 INSTANCES OF GROUNDS FOR MITIGATION OF DAMAGES

....................................................................... 374 RULE WHEN CONTRACTING PARTIES ARE IN PARI DELICTO

....................................................................... 375 LIQUIDATED DAMAGES .................................. 375 COMPROMISE ................................................. 375

Miscellaneous Rules ......... 375 DAMAGES THAT CANNOT CO-EXIST ............... 375 NOMINAL WITH OTHER DAMAGES ............................ 375 ACTUAL AND LIQUIDATED ...................................... 375 DAMAGES THAT MUST CO-EXIST ................... 375

EXEMPLARY WITH MORAL, TEMPERATE, LIQUIDATED OR COMPENSATORY ..................................................375

DAMAGES THAT MUST STAND ALONE ............375 NOMINAL DAMAGES ..............................................376

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Effect and Application of Laws

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(b) Impairment of contract (2) In case of remedial statutes (3) In case of curative statutes (4) In case of laws interpreting others (5) In case of laws creating new rights [Bona v. Briones (1918)] (6) Penal Laws favorable to the accused

The Civil Code took effect on August 30, 1950 WHEN LAWS TAKE EFFECT Art. 2. Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided. This Code shall take effect one year after such publication. (1a)

ACTS CONTRARY TO LAW Art. 5. Acts executed against the provisions of mandatory or prohibitory laws shall be void, except when the law itself authorizes their validity. (4a) WAIVER OF RIGHTS

Tañada v. Tuvera (1986): (a) The clause "unless it is otherwise provided" refers to the date of effectivity and not to the requirement of publication itself, which cannot in any event be omitted. (b) Publication is indispensable in every case, but the legislature may in its discretion provide that the usual fifteen-day period shall be shortened or extended. (c) EXCEPTION: interpretative regulations and those internal in nature

Art. 6. Rights may be waived, unless the waiver is contrary to law, public order, public policy, morals, or good customs, or prejudicial to a third person with a right recognized by law. (4a) Waiver – the relinquishment of a known right with both knowledge of its existence and an intention to relinquish it. [Portland v. Spillman] Exceptions: (1) If the waiver is contrary to law, public order, public policy, morals or good customs (2) If the waiver prejudices a third person (3) If the alleged rights do not yet exist (4) If the right is a natural right

IGNORANCE OF THE LAW Art. 3. Ignorance of the law excuses no one from compliance therewith. (2) (a) Conclusive Presumption – That everyone knows the law, even if they have no actual knowledge of the law (b) Mistake of Fact & Difficult Questions of Law These may excuse a party from the legal consequences of his conduct; but not ignorance of law. (c) In specific instances provided by law, mistake as to difficult legal questions has been given the same effect as a mistake of fact. (Tolentino) (d) The laws referred to by this article are those of the Philippines. There is no conclusive presumption of knowledge of foreign laws. (Tolentino)

REPEAL OF LAWS Art. 7. Laws are repealed only by subsequent ones, and their violation or non-observance shall not be excused by disuse, or custom or practice to the contrary. When the courts declared a law to be inconsistent with the Constitution, the former shall be void and the latter shall govern. Administrative or executive acts, orders and regulations shall be valid only when they are not contrary to the laws or the Constitution. (5a)

RETROACTIVITY OF LAWS Art. 4. Laws shall have no retroactive effect, unless the contrary is provided. (3)

TWO KINDS OF REPEAL OF LAW [Tolentino]

(1) Express or Declared – contained in a special provision of a subsequent law (2) Implied or Tacit – takes place when the provisions of the subsequent law are incompatible or inconsistent with those of an earlier law.

General Rule: All statutes are to be construed as having only prospective operation

JUDICIAL DECISIONS

Exceptions (1) When the law itself expressly provides Exceptions to Exception: (a) Ex post facto law

Art. 8. Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system of the Philippines. (n)

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(a) Jurisprudence cannot be considered as an independent source of law; it cannot create law. (1 Camus 38 as cited in Tolentino) (b) But the Court’s interpretation of a statute constitutes part of the law as of the date it was originally passed since the Court’s construction merely establishes contemporaneous legislative intent that the interpreted law carried into effect. [Senarillos v. Hermosisima (1956)]

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APPLICABILITY OF PENAL LAWS Art. 14. Penal laws and those of public security and safety shall be obligatory upon all who live or sojourn in the Philippine territory, subject to the principles of public international law and to treaty stipulations. (8a) EXEMPTIONS UNDER INTERNATIONAL LAW (THEORY OF EXTRATERRITORIALITY):

(1) When the offense is committed by a foreign sovereign while in Philippine territory (2) When the offense is committed by diplomatic representatives (3) When the offense is committed in a public or armed vessel of a foreign country.

DUTY TO RENDER JUDGMENT Art. 9. No judge or court shall decline to render judgment by reason of the silence, obscurity or insufficiency of the laws. (6) Exception: This article does not apply to criminal prosecutions because where there is no law punishing an act, the case must be dismissed. [Tolentino]

CONFLICT OF LAWS CONFLICT OF LAWS/ PRIVATE INTERNATIONAL LAW (a) It is a branch or part of Philippine Law which regulates the application of foreign law within Philippine jurisdiction in the resolution of cases involving foreign elements. (b) It is that part of municipal law which governs cases involving a foreign element. (c) Private International Law is more commonly known in other jurisdictions as conflict of laws

PRESUMPTION AND APPLICABILITY OF CUSTOM Art. 10. In case of doubt in the interpretation or application of laws, it is presumed that the lawmaking body intended right and justice to prevail. (n) Art. 11. Customs which are contrary to law, public order or public policy shall not be countenanced. (n)

SOURCES

(1) Codes and statutes (2) Treaties and international conventions (3) Treatises, commentaries, and studies of learned societies (4) Judicial decisions

Art. 12. A custom must be proved as a fact, according to the rules of evidence. (n) LEGAL PERIODS Art. 13. When the laws speak of years, months, days or nights, it shall be understood that years are of three hundred sixty-five days each; months, of thirty days; days, of twenty-four hours; and nights from sunset to sunrise.

EXAMPLES OF CONFLICT OF LAW RULES IN THE PHILIPPINES

(1) Art. 15 CC: Lex Patriae (2) Art. 1251 (par. 3) CC: Lex Domicili (3) Art. 16 CC: Lex Situs/ Lex Rei Sitae (4) Art. 17 (par. 1) CC: Lex Loci Contractus (5) Art. 71 CC: Lex Loci Celebrationis (6) Art. 26 (par. 1) FC: Lex Loci Celebrationis (7) Art. 1306 CC: Lex Loci Intentionis

If months are designated by their name, they shall be computed by the number of days which they respectively have.

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)

In computing a period, the first day shall be excluded, and the last day included. (7a) POLICY ON LAST DAY BEING A LEGAL HOLIDAY/SUNDAY

(a) If the period arises by statute or orders by the government, the last day will automatically be considered the next working day (b) If the period arises from a contractual relationship, the act will still be due on that Legal Holiday/Sunday

Most civil law countries such as the Philippines follow the National Law Theory: It is the nationality or citizenship of the individual, which regulates the following: (a) Civil status (b) Capacity (c) Condition (d) Family rights and duties

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(e) Laws on Succession (f) Capacity to succeed

itself, governing law is the law of the state which has real interest

According to the Supreme Court, it is a conflict of laws theory by virtue of which jurisdiction over the particular subject matter affecting a person is determined by the latter’s nationality. [Ellis vs. Republic (1963)]

RULE ON SUCCESSION

Filipino Testator

Extrinsic Validity [Arts. 17, 815-817, CC] Place of Applicable law execution

RULE ON PROPERTY

Controlling Law — Lex Situs/Lex Rei Sitae General Rule: Real and Personal Property is subject to the law of the country where it is situated (Art. 16) Application of the Doctrine of Lex Situs/Lex Rei Sitae (1) The capacity to transfer or acquire property is governed by Lex Situs.

Alien Testator

Note: Transfer of property to a foreigner who subsequently became a Filipino citizen shall be recognized [Llantino v Co Liong Chong] (2) The formalities of a contract to convey property are governed by Lex Situs Exceptions to Lex Situs (1) Transactions Not Affecting Transfer of Title or Ownership of Land: Lex Intentionis or Lex Voluntatis (2) Contracts where Real Property Offered as Security: The principal contract is the loan while the mortgage of the land is only an accessory (a) Mortgage - Lex Situs (b) Loan Contract - Rules on ordinary contracts

Philippines

Philippine Law

Foreign Country

(1) Law of the place where he may be (lex loci celebrationis) [Art 815] (2) Philippine law [see III Tolentino 117]

Philippines

(1) Philippine Law (Art. 17) (2) Law of the country in which he is a citizen or subject (lex nationali) [Art. 817]

Foreign Country (Arts. 816, 17)

(1) Law of the place in which he resides (lex domicilii) (2) Law of his country (lex nationali) (3) Philippine law (4) Law of the place where they were executed (lex loci celebrationis)

Note: Rule re: Joint Wills (1) Joint wills prohibited under Art. 818 executed by Filipinos in a foreign country shall not be valid in the Philippines even though authorized by the laws of the country where they were executed. (Art. 819) (2) Civil Code is silent as to the validity of a joint will executed by an alien in the Philippines. It is suggested that it should not be probated if it would affect the heirs in the Philippines.

(3) Intestate and Testamentary Succession: Intestate and testamentary successions shall be regulated by the national law of the decedent, with respect to the following [Art. 16(2); Art. 1039] (a) Order of succession (b) Amount of succession rights (c) Intrinsic validity of the testamentary provisions (d) Capacity to succeed

Intrinsic Validity Intestate and testamentary successions shall be regulated by the national law of the decedent, with respect to the following (Art. 16(2); Art. 1039) (1) Order of succession (2) Amount of successional rights (3) Intrinsic validity of the testamentary provisions (4) Capacity to succeed

(4) Under a Policy-centered Approach: Forum court is not bound to look to the law of the situs when the situs of the movable property is insignificant or accidental (a) Questions relating to the validity and effect of the transfer of the movable property are governed by the law of the place of principal use (b) Where the issue involves considerations other than the validity and effect of the transfer

Interpretation of Wills Governed by the National Law of the decedent.

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Revocation

Will is revoked in a Foreign Country

Will is revoked in the Philippines

Testator

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.

Applicable Law

Philippine Domiciliary

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.

Philippine Law Non-domiciliary [Art. 829] Philippine Domiciliary

Non-domiciliary [Art. 829]

(1) Philippine Law (2) Law of the place of revocation (lex loci actus) (1) law of the place where the will was made (2) law of the place in which the testator had his domicile at the time of the revocation

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) RULE ON EXTRINSIC VALIDITY OF CONTRACTS

General Rule: Lex Loci Celebrationis The forms and solemnities of contracts xxx shall be governed by the laws of the country in which they are executed [Art. 17]

Probate of wills Controlling Law: The probate of a will being essentially procedural in character, the law of the forum (lex fori) governs.

Note: (1) Contracts Before Diplomatic/ Consular Officials: The solemnities established by Philippine laws shall be observed with respect to contracts executed before diplomatic or consular officials of the Republic of the Philippines in a foreign country [Art. 17(2), FC] (2) Contracts entered Into by Letter/ Cablegram, etc.: A contract accepted by letter or cablegram is presumed to have been entered into the place where the offer was made. [Art. 1319(2)]

Wills Proved and Allowed in a Foreign Country (1) A will proved and allowed in a foreign country in accordance with the laws of that country may be allowed, filed, and recorded in the proper Regional Trial Court in the Philippines (RULES OF COURT, Rule 77, Sec.1) (2) Requisites for Reprobate [Vda de Perez v Tolete, 232 SCRA 722] The following must be proved by competent evidence: (a) due execution of the will in accordance with the foreign laws (b) the testator had his domicile in the foreign country and not in the Philippines (c) the will has been admitted to probate in such country (d) the laws of the foreign country on procedure and allowance of wills

Three possible laws: (1) Lex Loci Contractus (Asked in 95, 02 BAR EXAMINATIONS) (a) Law of the place where the contract is made (b) Merits (i) Relative ease in establishing (ii) Certainty and stability (c) Demerit - Unjust results when place of making entirely incidental Note: To determine where the contract is made, we look to the place where the last act is done which is necessary to bring the binding agreement into being so far as the acts of the parties are concerned.

Administration of Estates Territorial: governed by the law of the place where the administration takes place, and that is the law of the country from which the administrator derives his authority.

(2) Lex Loci Solutionis (a) Law of the place of performance governs (b) Merit - Always connected to the contract in a significant way

Trusts Extrinsic validity: Rule governing wills apply intrinsic validity: lex situs since a trust involves property cf Art. 17

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(c) Demerit - Not helpful when the contract is performed in 2 or more states with conflicting laws

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(2) Determination of Extrinsic Validity Art. 26, FC. 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. Xxx

(3) Lex Loci Intentionis (a) Law intended by the parties (b) Basis: The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy [Art. 1306] (c) May be express or implied (i) Express - when the parties stipulate that the contract be governed by a specific law, such law will be recognized unless there are cogent reasons for not doing so. (ii) Implied (a) Based on the contemporaneous and subsequent acts of the parties (b) Often upheld with reference to the rule of validity of contracts which presumes that the parties contemplate to enter into a valid contract

Art. 2, Hague Convention. Formal requirements for marriage are governed by the law of the state of celebration. General Rule: Lex Loci Celebrationis Exceptions: The following marriages are void even if valid in the country where celebrated [Art. 26, FC]: (a) Those contracted by any party below 18 years of age even with the consent of parents or guardians [Art. 35(1), FC] (b) Bigamous or polygamous marriages not falling under Art. 41, FC [Art. 35 (4), FC] (c) Those contracted thru mistake of one contracting party as to the identity of the other [Art. 35(5), FC] (d) Those subsequent marriage without recording in the civil registry the judgment of annulment or declaration of nullity, partition and distribution of properties and the delivery of the children’s presumptive legitimes [Art. 35(6), FC] (e) A marriage contracted by any party who, at the time of the celebration, was psychologically incapacitated to comply with the essential marital obligations of marriage, even if such incapacity becomes manifest only after solemnization [Art. 36, FC] (f) Incestuous marriages [Art. 37, FC] (i) Marriages between ascendants and ascendants of any degree, whether legitimate or illegitimate; and (ii) Marriages between brothers and sisters, whether of the full or half-blood (g) Void marriages for reasons of public policy (Art. 38, FC) (i) Marriages between collateral blood relatives, whether legitimate or illegitimate, up to the th 4 civil degree (ii) Marriages between step-parents and stepchildren. (iii) Marriages between the adopting parent and adopted child (iv) Marriages between the surviving spouse of the adopting parent and the adopted child (v) Marriages between the surviving spouse of the adopted child and the adopter (vi) Marriages between an adopted child and a legitimate child of the adopter (vii) Marriages between adopted children of the same adopter

Art. 18. In matters which are governed by the Code of Commerce and special laws, their deficiency shall be supplied by the provisions of this Code. SPECIAL CONFLICT OF LAW RULES MARRIAGE

Definition: Art. 1, FC. Marriage is a special contract of permanent union between a man and a woman entered into in accordance with law for the establishment of conjugal and family life. It is the foundation of the family and an inviolable social institution whose nature, consequences, and incidents are governed by law and not subject to stipulation, except that marriage settlements may fix the property relations during the marriage within the limits provided by this Code. Extrinsic Validity of Marriage (1) Formal Requisites of Marriage under Philippine Law [Art. 3, FC] (a) Authority of the solemnizing officer (b) Valid marriage license except in the cases provided for in Chapter 2 of Title I (c) 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.

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(viii) Marriages between parties where one, with the intention to marry the other, killed that other person's spouse, or his or her own spouse.

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(2) Consular Marriages Marriages between Filipino citizens abroad may be solemnized by a consul-general, consul or vice consul of the Republic of the Philippines [Art. 10, FC].

Note: These exceptions put into issue the capacity of the parties to enter into the marriage and therefore relate to the substantive requirement for marriage and is governed by lex nationalii.

Effects of Marriage (1) Personal relations between the spouses (a) Governed by the national law of the parties

Intrinsic Validity of Marriage (refers to capacity of a person to marry) (1) Intrinsic validity is determined by the parties’ personal law, which may be their domiciliary or national law.

NOTE: If the spouses have different nationalities, generally the national law of the husband may prevail as long as it is not contrary to law, customs and good morals of the forum. (b) Under Philippine law, personal relations between the spouses include [Arts. 68, 70-71, FC] (i) mutual fidelity (ii) respect (iii) cohabitation (iv) support (v) right of the wife to use the husband’s family name

Note: (a) Laws relating to Family rights and duties, Status, Condition or Legal capacity of persons are binding on citizens of the Philippines, even though living abroad [Art. 15] (b) When either or both of the contracting parties are citizens of a foreign country, it shall be necessary for them before a marriage license can be obtained to submit a certificate of legal capacity to contract marriage, issued by their respective diplomatic or consular officials [Art. 21, FC] (c) Marriages enumerated under Art. 26(2), FC are void even if valid in the country where celebrated.

(2) Property relations (a) The Hague Convention declares that the governing law on matrimonial property is: (i) The internal law designated by the spouses before the marriage (ii) In the absence thereof, the internal law of the state in which the spouses fix their habitual residence (b) Rule under Philippine law [Art. 80, FC] (i) In the absence of a contrary stipulation in the marriage settlements, the property relations of the spouses shall be governed by Philippine laws, regardless of the place of the celebration of the marriage and their residence.

(2) Intrinsic requirements of marriage under Philippine Law [Art. 2, FC] (3) The Hague Convention on Validity of Marriages allows a contracting state to refuse recognition of 3 the marriage in the ff. Cases (CR-M ): (a) One of the parties did not freely Consent (b) Spouses were Related, by blood or adoption (c) One of the parties did not have the Mental capacity to consent (d) One of the spouses was already Married (e) One of the parties has not attained the Minimum age, nor acquired the necessary dispensation

(ii) Rule is inapplicable: (1) If both spouses are aliens (2) With respect to the extrinsic validity of the contracts affecting property not situated in the Philippines and executed in the country where the property is located (3) With respect to the extrinsic validity of contracts entered into in the Philippines but affecting property situated in a foreign country whose laws require different formalities for its extrinsic validity.

Note: (1) Rule on Proxy Marriages: (a) Proxy marriages, where permitted by the law of the place where the proxy participates in the marriage ceremony, are entitled to recognition in countries adhering to the lex loci celebrationis rule, at least insofar as formal validity is concerned (b) Internal Philippine law, however, does not sanction proxy marriages.

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(c) Doctrine of Immutability of Matrimonial Property Regime: The change of nationality on the part of the husband or wife does not affect the original property regime EXCEPT when the law of the original nationality itself changes the marital regime, hence, the property regime has to change accordingly.

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Republic v. Orbecido (2005): Paragraph 2 of Article 26 should be interpreted to include cases involving parties who, at the time of the celebration of the marriage were Filipino citizens, but later on, one of them becomes naturalized as a foreign citizen and obtains a divorce decree. The Filipino spouse should likewise be allowed to remarry as if the other party were a foreigner at the time of the solemnization of the marriage. The reckoning point is not the citizenship of the parties at the time of the celebration of the marriage, but their citizenship at the time a valid divorce is obtained abroad by the alien spouse capacitating the latter to remarry.

DIVORCE AND SEPARATION

Rule under the Hague Convention The granting of divorce or separation must comply with the national law of the spouses and lex fori (law of the place where the application for divorce is made).

Validity of Foreign Divorce Between Foreigners (1) A foreign divorce will be recognized in all contracting states if, at the date of the institution of the proceedings (Hague Convention on the Recognition of Divorce and Legal Separation): (a) either spouse had his habitual residence there; (b) both spouses were nationals of that state; or (c) if only the petitioner was a national, he should have his habitual residence there

Divorce Decrees Obtained by Filipinos General Rule: Decrees of absolute divorce obtained by Filipinos abroad have no validity and are not recognized in Philippine Jurisdiction. Note: Statutory Bases (a) 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 [Art. 15, CC] (b) 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, or by determinations or conventions agreed upon in a foreign country. [Art. 17(3), CC]

(2) While there is no provision of law requiring Philippine courts to recognize a foreign divorce decree between non-Filipinos such will be recognized under the principle of international comity, provided that it does not violate a strongly held policy of the Philippines. ANNULMENT AND DECLARATION OF NULLITY

Jurisdiction to Annul (1) Vested in the court of the domicile of the parties (2) Jurisdiction over the non-resident defendant is not essential

Exception: Art. 26(2), FC 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

Governing Law (1) Lex loci celebrationis —determines the consequences of any defect as to form (2) In general, the same applies with reference to substantive or intrinsic validity. But with regard to capacity of the parties to marry, national law is determinative.

Van Dorn v. Romillo, Jr. (1985): Owing to the Nationality Principle, only Philippine nationals are covered by the policy against absolute divorces, the same being considered contrary to our concept of public policy and morality. However, aliens may obtain divorces abroad, provided they are valid according to their national law.

Human Relations ABUSE OF RIGHT

Llorente v. Court of Appeals (2000): Divorce obtained by Petitioner from his first wife, after he was admitted to US citizenship, is valid and recognized in our jurisdiction as a matter of comity.

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.

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ACTS CONTRARY TO LAW Art. 20. Every person who, contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same. ACTS CONTRA BONUS MORES 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. Breach of promise to marry is not an actionable wrong. [De Jesus vs. Syquia, 58 Phil., 866] BUT damages may be recoverable Wassmer v. Velez (1964): Mere breach of promise to marry is not an actionable wrong. But to formally set a wedding and go through all the above-described preparation and publicity, only to walk out of it when the matrimony is about to be solemnized, is quite different. This is palpably and unjustifiably contrary to good customs for which defendant must be held answerable in damages in accordance with Article 21 aforesaid. Baksh vs. Court of Appeals (1993): Article 21 may also be applied in a breach of promise to marry where the woman is a victim of moral seduction. Award of damages pursuant to Article 21 is justified not because of such promise to marry but because of the fraud and deceit behind it and the willful injury to her honor and reputation which followed thereafter. Tanjanco v. Court of Appeals (1966): The conduct of a woman of adult age, maintaining intimate sexual relations with appellant, with repeated acts of intercourse is incompatible with the idea of seduction. PRINCIPLE OF UNJUST ENRICHMENT Art. 22. Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him. Art. 22 (Accion in Rem Verso) Not necessarily a mistake in payment

Art. 2154 (Solutio Indebiti) Payment should be made by mistake

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Persons and Personality

General rule: Incapacitated persons are not exempt from certain obligations arising from his acts or property relations.

CAPACITY TO ACT CIVIL PERSONALITY

Minority RA 6809 (1989): An act lowering the age of majority from twenty-one to eighteen years.

Art. 37. Juridical capacity, which is the fitness to be the subject of legal relations, is inherent in every natural person and is lost only through death. Capacity to act, which is the power to do acts with legal effect, is acquired and may be lost. Juridical Capacity

Capacity to Act

Fitness of man to be the subject of legal relations Passive Aptitude for the Holding and Enjoyment of rights Inherent in every natural person Lost upon death

Power to do acts with legal effect Active Aptitude for the Exercise of rights Must be acquired

Can exist without capacity to act Cannot be limited or restricted

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Effects on Contracts (1) They cannot give consent to a contract [Art. 1327 (1)] (2) A contract where one of the parties is a minor is voidable [Art. 1390(1)] (3) A contract is unenforceable when both of the parties are minors (incapable of giving consent) [Art. 1403(3)] (4) Minority cannot be asserted by the other party in an action for annulment [Art. 1397] (5) Not obliged to make restitution except insofar as he has been benefited [Art. 1399] (6) Minor has no right to demand the thing/price voluntarily returned by him [Art. 1426] (7) Minor has no right to recover voluntarily paid sum or delivered thing, if consumed in good faith [Art. 1427] (8) Must pay reasonable amount for necessaries delivered to him [Art. 1489]

Lost through death and other causes Must exist with juridical capacity May be restricted or limited

Mercado v. Espiritu, (1918): Estoppel works against minors who misrepresent their ages in a contract and are compelled to comply with its terms. (active misrepresentation done by minors).

Note: Juridical capacity can exist even without capacity to act; the existence of the latter implies that of the former. RESTRICTIONS ON CAPACITY TO ACT

Bambalan v. Maramba, (1928): When a minor made no active misrepresentation as to his minority and such minority is known to the other party, the contract is voidable (Art. 1403) as to the minor.

Art. 38. Minority, insanity or imbecility, the state of being a deaf-mute, prodigality and civil interdiction are mere restrictions on capacity to act, and do not exempt the incapacitated person from certain obligations, as when the latter arise from his acts or from property relations, such as easements.

Braganza v. Villa Abrille, (1959): Minors are obliged to make restitution insofar as they have been benefited (Art. 1399).

Art. 39. The following circumstances, among others, modify or limit capacity to act: age, insanity, imbecility, the state of being a deaf-mute, penalty, prodigality, family relations, alienage, absence, insolvency and trusteeship. The consequences of these circumstances are governed in this Code, other codes, the Rules of Court, and in special laws.

Effects on Marriage (1) May not yet contract marriage [Art. 5, FC]. (2) Marriages, where one of the parties is below 18, even with the consent of parents/guardians, are VOID [Art. 35, FC]

Capacity to act is not limited on account of religious belief or political opinion.

Insanity Insanity includes many forms of mental disease, either inherited or acquired. A person may not be insane but only mentally deficient (idiocy, imbecility, feeble-mindedness).

A married woman, twenty-one years of age or over, is qualified for all acts of civil life, except in cases specified by law.

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Effect on Contracts (1) Incapacity to give consent to a contract [Art. 1327(2)] (2) Contracts entered into during lucid intervals are valid [Art. 1328] (3) Restitution of benefits [Art. 1399] (4) Voidable if one of the parties is insane [Art. 1390] (5) Unenforceable if both of the parties are insane (Art. 1403 (3))

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Civil interdiction (1) It is an accessory penalty imposed upon persons who are sentenced to a principal penalty not lower than reclusion temporal (Art. 41, RPC). (2) Offender is deprived of rights of parental authority, or guardianship, of marital authority, of the right to manage his property and of the right to dispose of such (Art. 34, RPC) (3) For the validity of marriage settlements, the participation of the guardian shall be indispensable (Art. 123)

Effect on Crimes (1) General rule: EXEMPTED from criminal liability (2) Exception: Acted during lucid interval

Family relations (1) Justifying circumstance if acted in defense of person/rights of spouse, ascendants, descendants, brothers/sisters, and other relatives th up to the 4 civil degree [Art. 11(2), RPC] (2) Mitigating circumstance if acted in the immediate vindication of a grave offense/felony committed against his spouse, ascendants or relatives of the same civil degree [Art. 13(5), RPC] (3) Incestuous and void marriages: (a) Between ascendants and descendants of any degree; (b) Between brothers and sisters, whether full or half-blood. [Art. 37, FC] (4) Donations/grants of gratuitous advantage between spouses during the marriage shall be VOID, except moderate gifts during family occasions [Art. 87, FC] (5) Descendants cannot be compelled to testify in a criminal case, against his parents and grandparents (a) UNLESS: crime was against the descendant OR by one parent against the other [Art. 215, FC] (6) Spouses cannot sell property to each other, except: (a) Absolute separation is agreed upon in the marriage settlements (b) Judicial separation of property [Art. 1490]

Effect on Marriage (1) May be annulled if either party was of unsound mind unless the such party after coming to reason, freely cohabited with the other [Art. 45(2), FC] (2) Action for annulment of marriage must be filed by the sane spouse who had no knowledge of the other’s insanity, or by any relative/guardian of the insane before the death of either party; or by the insane spouse during a lucid interval or after regaining sanity [Art. 47(2), FC] State of Being Deaf-Mute (1) Cannot give consent to a contract if he/she also does not know how to write (Art. 1327(2), CC) (2) Can make a valid WILL, provided: he must personally read the will. The contents of the same have either been read personally by him or otherwise communicated to him by 2 persons (Art. 807, CC) (3) Cannot be a witness to the execution of a will (Art. 820, CC) (4) Voidable if one of the parties is deaf-mute and does not know how to write (5) Unenforceable if both of the parties are deafmutes and does not know how to write Prodigality Martinez v. Martinez, (1902): A spendthrift or a prodigal is “a person, who, by excessive drinking, gambling, idleness or debauchery of any kind shall so spend, waste or lessen his estate as to expose himself or his family to want or suffering.” The acts of prodigality must show a morbid state of mind.

Absence Art. 390. After an absence of seven years, it being unknown whether or not the absentee still lives, he shall be presumed dead for all purposes, except for those of succession. The absentee shall not be presumed dead for the purpose of opening his succession till after an absence of ten years. If he disappeared after the age of seventy-five years, an absence of five years shall be sufficient in order that his succession may be opened. (n)

Note: It is not the circumstance of prodigality, but the fact of being under guardianship that restricts capacity to act.

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Period of Conception = the first 120 days of the 300 days preceding the birth of the child.

Art. 391. The following shall be presumed dead for all purposes, including the division of the estate among the heirs:

A conceived child can acquire rights while still in the mother’s womb. It can inherit by will or by intestacy.

1. A person on board a vessel lost during a sea voyage, or an aeroplane which is missing, who has not been heard of for four years since the loss of the vessel or aeroplane;

Geluz v CA, (1961): An aborted fetus had conditional personality but never acquired legal rights/civil personality because it was not alive at the time of delivery from the mother’s womb. No damages can be claimed in behalf of the unborn child.

2. A person in the armed forces who has taken part in war, and has been missing for four years; 3. A person who has been in danger of death under other circumstances and his existence has not been known for four years.

Complete respiration = test/sign of independent life Death Art. 42. Civil personality is extinguished by death. The effect of death upon the rights and obligations of the deceased is determined by law, by contract and by will

Article 124, FC: (1) Administration and enjoyment of the CPG shall belong to both spouses jointly. (2) In case of disagreement, husband’s decision shall prevail, subject to recourse to the court by the wife for proper remedy (within 5 years from date of contract implementing such decision) (3) If one spouse is incapacitated/unable to administer, sole powers of administration may be assumed by the other spouse. (4) General Rule: This power does not include disposition/encumbrance.

Criminal liability ends with death BUT civil liability may be charged against the estate [People v. Tirol, (1981)]. Art. 43. If there is a doubt, as between two or more persons who are called to succeed each other, as to which of them died first, whoever alleges the death of one prior to the other, shall prove the same; in the absence of proof, it is presumed that they died at the same time and there shall be no transmission of rights from one to the other.

Exception: Judicial authority or written consent of other spouse. Birth General Rule: Birth determines personality [Art. 40]. Death extinguishes civil personality [Art. 42].

Note: Article 43 provides a statutory presumption when there is doubt on the order of death between persons who are called to succeed each other (only).

Exception: A “conceived child shall be considered born for all purposes that are FAVORABLE to it, provided it be born later” [Art. 40, 2nd clause] with the following circumstances: Intra-Uterine Life 7 months or more Less than 7 months

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The statutory presumption of Article 43 was not applied due to the presence of a credible eyewitness as to who died first [Joaquin v. Navarro, (1948)] Compare Art. 43 with Rule 131, Sec. 3 (jj), presumption of Survivorship.

When Considered Born Alive upon delivery Alive only after completion of 24 hours from delivery

Art. 43

Rule 131, Sec. 3 (jj)

Only use the presumptions when there are no facts to get inferences from Only use for succession Cannot be used for purposes succession purposes In any circumstance Only during death in calamities, wreck, battle or conflagration

Birth = complete removal of the fetus from the mother’s womb; before birth, a fetus is merely part of the mother’s internal organs. Personality of Conceived Child (1) Limited = only for purposes FAVORABLE to it. (2) Conditional = it depends upon the child being born alive later. PAGE 12

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Presumption of Survivorship in the Rules of Court (Rule 131, sec. 3, (jj.) Age

The Family Code took effect on August 3, 1988.

Marriage

Presumed Survivor

Both under 15 Both above 60 One under 15, the other above 60 Both over 15 and under 60; different sexes

Older Younger One under 15

Both over 15 and under 60; same sex One under 15 or over 60, the other between those ages

Older

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REQUISITES NATURE OF MARRIAGE, ART. 1

Art. 1, FC. Marriage is a special contract of permanent union between a man and a woman entered into in accordance with law for the establishment of conjugal and family life. It is the foundation of the family and an inviolable social institution whose nature, consequences, and incidents are governed by law and not subject to stipulation, except that marriage settlements may fix the property relations during the marriage within the limits provided by this Code.

Male

One between 15 and 60

DOMICILE AND RESIDENCE OF PERSON FOR NATURAL PERSONS: The place of their habitual residence [Art. 50]

KINDS OF REQUISITES

(1) Essential Requisites (Art. 2) (a) Legal Capacity of the contracting parties, who must be a male and a female (b) Consent (of the parties) freely given in the presence of a solemnizing officer.

FOR JURIDICAL PERSONS:

The place where their legal representation is established, or where they exercise their primary functions, unless there is a law or other provision that fixes the domicile [Art. 51]

(2) Formal Requisites (Art. 3) (a) Authority of solemnizing officer (b) A valid marriage license (c) Except: Marriages in articulo mortis or when one or both parties are at the point of death (d) Marriage Ceremony: (i) Appearance of contracting parties in the presence of a solemnizing officer (ii) Personal declaration that they take each other as husband and wife in the presence of not less than 2 witnesses

DOMICILE VS. RESIDENCE

While domicile is permanent (there is intent to remain), residence is temporary and may be changed anytime (there is no necessary intent to remain). REQUISITES OF DOMICILE [Callejo v. Vera]

(1) Physical Presence in a fixed place (2) Intent to remain permanently (animus manendi) KINDS OF DOMICILE

(1) Domicile of Origin - domicile of parents of a person at the time he was born. (2) Domicile of Choice (a) Domicile chosen by a person, changing his domicile of origin. (b) A 3rd requisite is necessary – intention not to return to one’s domicile as his permanent place. (3) Domicile by Operation of Law (i.e., Article 69, domicile of minor) (a) A married woman does not lose her domicile to her husband. (Romualdez-Marcos vs. Comelec (1995))

EFFECT OF ABSENCE OF REQUISITES

Absence

Defect or Irregularity Effect

Void

Voidable

ESSENTIAL REQUISITES

Age Legal Capacity [Art. 5] Male or female 18 years old and above, not under any impediments mentioned in Art. 37 (incestuous marriage) & Art. 38 (marriage against public policy), may contract marriage.

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Note: In a marriage in articulo mortis, when one or both parties are unable to sign the marriage certificate, it shall be sufficient for one of the witnesses to write the name of said party, which shall be attested by the solemnizing officer. (Art. 6, par. 2)

Must be male and female Jones v Hallahan, (1973): Application for marriage license was denied since marriage is defined by law as a contract entered into between a man and a woman. Goodridge v. Dept. of Public Health, (2003): Same-sex couples should not be denied the same benefits as heterosexual couples; the right to marry includes the right to choose who to marry.

Places where marriage SHALL be publicly solemnized: (CCO) (1) Chambers of the judge or in open court (2) Church, chapel, or temple (3) Office of the consul-general, consul, or viceconsul [Art. 8]

Silverio v Republic, (2007): Changing of gender in one’s birth certificate was denied; otherwise, it would result in confusion and would allow marriage between persons of the same sex which is in defiance of the law, as marriage is a union between a man and a woman.

Exceptions: (1) Marriages performed in articulo mortis or in remote places. [Art. 29] (2) Where both parties request in writing that marriage be solemnized at a place designated by them.

Note: The best source for citing the requirement (of male/female) is still statutory, as provided explicitly in the Family Code.

Non-compliance with this requirement does not invalidate the marriage (premise: more witnesses = more people can notify officer of impediments to marriage).

Consent freely given People v. Santiago, (1927): A marriage entered into by a person whose real intent is to avoid prosecution for rape is void for total lack of consent. The accused did not intend to be married. He merely used such marriage to escape criminal liability.

Who may solemnize marriages Who may solemnize marriage: (JC-SPAMM) (1) Incumbent member of the Judiciary within his jurisdiction. [Art. 7] (2) Priest, Rabbi, Imam or Minister of any Church or Religious Sect. Must be: (a) Duly authorized by his church or religious sect (b) Registered with the civil registrar general (c) Acting within the limits of the written authority granted to him by his church or religious sect. (d) At least one of the contracting parties belongs to the solemnizing officer’s church or religious sect. [Art. 7] (3) Ship Captain or Airplane Chief may solemnize a marriage in articulo mortis between passengers or crew members [Art. 7, 31] (4) A Military commander of a unit may solemnize marriages in articulo mortis between persons within the zone of military operation. (Art. 7, 32) (5) Consul-general, consul or vice-consul may solemnize marriages between Filipino citizens abroad. (Art. 7, 10) (6) Municipal and City Mayors (LGC sec. 444 and 455)

Eigenmann v. Guerra (1964): There was no reasonable and well-grounded fear of an imminent and grave evil upon him or his property, father-in-law’s words were merely an admonition typical of concerned parents. Ceremony Marriage Ceremony No prescribed form or religious rite for the solemnization of marriage is required. (Art. 6) The couple's written agreement where they declare themselves as husband and wife, signed by them before a judge and two capable witnesses, even though it was independently made by them, still counts as a valid ceremony. [Martinez v Tan, (1909)] Minimum requirements prescribed by law: (AP-PMS) (1) Appearance of contracting parties personally before the solemnizing officer [Art. 3] (2) Personal declaration that they take each other as husband and wife. [Art. 3] (3) Presence of at least two witnesses of legal age. [Art. 3] (4) The declaration shall be contained in the Marriage certificate. [Art. 6] (5) Marriage certificate shall be Signed by the contracting parties and their witnesses and attested by the solemnizing officer. [Art. 6]

Exceptions – Art. 35 (1) Marriage is void when solemnized by any person not legally authorized to perform marriages unless either or both parties believed in good faith that the solemnizing officer had legal authority to do so. [Art. 35 (2)]

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(2) Absence & Irregularity of Authority of a solemnizing officer

marry each other. [Art. 34, Ninal vs. Badayog (2000)]

Lack of valid notification of both parties desiring a ceremony in a remote place was held to be only a mere IRREGULARITY [Navarro vs. Domagtoy (1996)]

Requisites for the 5-year cohabitation to be valid for the exemption from acquiring a marriage license (1) The man and woman must have been living together as husband and wife for at least five years before the marriage; (2) The parties must have no legal impediment to marry each other; (3) The fact of absence of legal impediment between the parties must be present at the time of marriage; (4) The parties must execute an affidavit stating that they have lived together for at least five years [and are without legal impediment to marry each other]; and (5) The solemnizing officer must execute a sworn statement that he had ascertained the qualifications of the parties and that he had found no legal impediment to their marriage. [Borja-Manzano vs. Judge Sanchez (2001)]

Respondent judge was faulted for solemnizing a marriage outside his territorial jurisdiction. Also, presentation of the marriage license subsequent to the solemnization of marriage will not cure the defect. [Arañes v. Occiano (2002)] License required General Rule: License required Article 9 - Issued by local registrar of city or municipality where either contracting party habitually resides Article 11 - Each contracting party should file separately. Article 20 - License valid in any part of the Philippines for 120 days from date of issue, automatically cancelled at the expiration of such period.

Marriage certificate Absence and irregularity of marriage license and contract Republic v. CA and Castro (1994): Issuance of the Civil Registrar of a Certificate of Due Search and Inability to Find the application of a marriage license certifies the license’s inexistence, thus rendering the marriage VOID.

Foreign National When either or both parties are foreign nationals: Certificate of legal capacity to contract marriage, issued by a diplomatic or consular official, shall be submitted before a marriage license can be obtained [Art. 21]

Moreno v. Bernabe (1995): Before a marriage can be solemnized, a valid marriage license must be presented first, otherwise, the marriage is VOID.

Stateless persons or refugees from other countries: affidavit stating circumstances showing capacity to contract marriage, instead of cert. of legal capacity [Art. 21]

People v. Borromeo (1984): Non-existence of a marriage contract does not invalidate the marriage as long as all the requisites for its validity are properly complied with.

Exceptions (1) Marriage in articulo mortis [Art. 27] (a) The marriage may be solemnized without the necessity of a marriage license. (b) It remains valid even if ailing party survives. (2) Between passengers or crew members in a ship or airplane [Art. 31] (3) Persons within a military zone [Art. 32] (4) Marriage in Remote and inaccessible places [Art. 28] (5) Marriages by Muslims and Ethnic cultural minorities provided they are solemnized in accordance with their customs, rites or practices. [Art. 33] (6) Marriage by parties who have Cohabited for at least 5 years without any legal impediment to

Things to do at the local civil registrar: (1) File an application of marriage license at the proper local civil registrar. [Art. 11] (2) Present birth or baptismal certificate for proof of age. [Art. 12] (3) If aged 18-21 years, present parental consent. [Art. 14] (4) If aged 21-25, present parental advice. [Art. 15] (5) If aged 18-25, present certificate of marriage counseling from your priest. [Art. 16] (6) (PD 965) Attend family planning seminar or get a brochure regarding family planning (7) Pay the required fees. [Art 19]

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(8) If foreigner, present certificate of legal capacity issued by diplomat or consular officials. (Art. 21) Marriage Certificate Where parties declare that they take each other as husband and wife; contains the ff: (1) Full name, sex, age of party (2) Citizenship, religion, habitual residence (3) Date and precise time of celebration of marriage (4) That marriage license was properly issued (except in marriages exempt from ML req’t) (5) That parental consent was secured, when required (6) That requirement as to parental advice was complied with, when required (7) That parties have entered into marriage settlements, if any [Art. 22]

Van Dorn v. Romillo (1985): A divorce obtained by the foreign spouse in accordance with the said spouse’s national law is recognized in the Philippines and releases Filipino spouse from their marriage.

General Rule: Marriages solemnized abroad in accordance with the laws in force in that country shall be valid in the Philippines. [Art 26]

Quita v. Dandan (1998): The citizenship of the spouses at the time of the divorce determines their capacity to obtain a valid divorce. Since the divorce and the naturalization of W occurred within the same year, the case was remanded to determine which occurred first.

Exceptions: (1) Marriage between persons below 18 years old [Art. 35(1)] (2) Bigamous or polygamous marriage [Art. 35(4)] (3) Mistake in identity [Art. 35 (5)] (4) Marriages void under Article 53 [Art. 35 (6)] (5) Psychological incapacity [Art. 36] (6) Incestuous marriages [Art. 37] (7) Marriage void for reasons of public policy [Art. 38]

Lex Nationalii – Laws relating to family rights and duties, or to the status, condition, and legal capacity of persons are binding upon Phil citizens even though living

(Art. 26, CC) Foreign marriages may be void under Phil law due to absence of a formal requisite under foreign laws.

(1) Those obtained by Filipino citizens are void under Philippine law. (2) If the foreign spouse obtains a valid foreign divorce, the Filipino spouse shall have capacity to remarry under Philippine law. (Art. 26)

MARRIAGES CELEBRATED ABROAD

Requirements independent of the parties Lex loci celebrationis- if valid where celebrated, then valid everywhere; forms of contracting marriage are to be regulated by the law where it is celebrated.

abroad (Art 15, CC) Foreign marriages void under Phil law due to lack of an essential requisite, even if valid under foreign laws, will not be recognized

FOREIGN DIVORCES

EFFECT OF MARRIAGES CELEBRATED ABROAD AND FOREIGN DIVORCE

Inherent in the parties, carried everywhere

Formal requisites

in order that it may be upheld: (1) Provisions of the foreign law (2) Celebration of the marriage in accordance with said provisions

Best evidence that a marriage does exist. [Tenebro v. CA (2004)]

Formal requisites

Essential requisites

PROOF OF FOREIGN MARRIAGE

Note: Not an essential or formal requisite without which the marriage will be void [Madridejo v. de Leon (1930)]

Essential requisites

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Llorente v. CA (2000): Citizenship at the time the divorce is obtained determines its validity. Since H was no longer a Filipino citizen when he divorced W, the nationality principle did not apply to him anymore and the divorce is valid. Garcia v. Recio (2001): A divorce decree obtained by the foreign spouse is recognized under Phil law if it is executed in accordance with the foreigner’s national law. The party must prove divorce as a fact and that said divorce is obtained in conformity with the law allowing it, before the Philippine courts can take judicial notice. VOID AND VOIDABLE MARRIAGES PRESUMPTION OF MARRIAGE

(1) Presumption in favor of a valid marriage [Art 220, CC]

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(2) The presumption that a man and a woman deporting themselves as husband and wife have entered into a lawful contract of marriage is satisfactory if uncontradicted. [Sec. 3 (aa), Rule 131, ROC] (3) In marriages of exceptional character, the existence of the marriage is presumed, even in the TOTAL ABSENCE of a marriage license. [Vda. De Jacob v CA (1999)] (4) If a marriage certificate is missing, and all means HAVE NOT YET BEEN EXHAUSTED to find it, then the marriage is presumed to exist [Sevilla v Cardenas (2006)]

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(4) Bigamous or polygamous marriages not falling

under Article 41 (Art. 41: subsequent marriage by present spouse who obtained a declaration of presumptive death for absent spouse prior to the subsequent marriage) (5) There is a mistake as to the identity of the other contracting party (6) Subsequent marriages that are void under Article 53 (Non-compliance with Art. 52) Psychological incapacity Contracted by any party who, at the time of the celebration, was psychologically incapacitated to comply with the essential marital obligations of marriage, even if such incapacity becomes manifest only after its solemnization [Art. 36]

Absence of a marriage certificate is not proof of absence of marriage. To prove the fact of marriage, the following would constitute competent evidence: (1) the testimony of witnesses to matrimony; (2) the couple’s public cohabitation; and (3) birth and baptismal certificates of children born during the union. [Trinidad v CA (1998)]

Republic v. Molina, (1997): (1) The burden of proof to show the nullity of the marriage belongs to the plaintiff. (2) The root cause of the psychological incapacity must be: (a) medically or clinically identified, (b) alleged in the complaint, (c) sufficiently proven by the experts, (d) clearly explained in the decision. (3) The incapacity must be proven to be existing at “the time of the celebration” of the marriage. (4) Such incapacity must also be shown to be medically or clinically permanent or incurable. (5) Such illness must be grave enough to bring about the disability of the party to assume the essential obligations of marriage. (6) The essential marital obligations must be those embraced by Articles 68 up to 71 of the Family Code as regards the husband and wife as well as Articles 220, 221, and 225 of the same Code in regard to parents and their children. (7) Interpretations given by the National Appellate Matrimonial Tribunal of the Catholic Church in the Philippines, while not controlling/decisive, should be given great respect by our courts. (8) The trial court must order the prosecuting attorney or fiscal and the Solicitor General to appear as counsel for the state. No decision shall be handed down unless the Solicitor General issues a certification.

VOID MARRIAGES

Type of Void Marriages (1) Absence of any formal/essential requisites (2) Psychologically Incapacitated spouse (3) Incestuous Marriages (4) Marriages contrary to public policy (5) Void subsequent marriages Absence of Requisites Art. 4(1): The absence of any essential or formal requisites shall render the marriage void ab initio, except as stated in Article 35 (a). 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. Void from the Beginning [Art. 35]. – (1) Marriage where any party is below eighteen years of age even with the consent of parents or guardians (2) Marriage solemnized by any person not legally authorized to perform marriages unless such marriages were contracted with either or both parties believing in good faith that the solemnizing officer had the legal authority to do so. Note: One’s belief in good faith that the solemnizing officer has the required authority is a mistake of fact, and not of law. (3) Marriage solemnized without a valid marriage license, except in marriages under exceptional circumstances

Santos v. Bedia-Santos, (1995): Laid down 3 characteristics for determining psychological incapacity: gravity, antecedent, and incurability. Tsoi v. CA, (1997): Refusal of husband to have sex was interpreted to be PI. “A man who can but won’t is PI”

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Marcos vs. Marcos (2000): Psychological incapacity maybe established by the totality of the evidence presented. Personal medical examination could be dispensed with.

Article 41 (Presumptive Death) Failure of the present spouse to obtain a judicial declaration of presumptive death before entering a subsequent marriage

Republic vs. San Jose (2007): There is no requirement that the respondent be medically examined first.

Article 44 (Bad Faith of both spouses) Both spouses entering a subsequent marriage after presumptive death, who acted in bad faith

Antonio v. Reyes, (2006): “Pathological liar” considered as incapacity, Molina guidelines met.

Article 53 (Non-Recording): Subsequent marriage of spouses, where the requirements of recording under Art. 52 have not have been complied with, shall be null and void.

psychological

Incestuous marriages Article 37 (Incestuous): (1) Between ascendants and descendants of any degree, legitimate or illegitimate (2) Between brothers and sisters, whether of the full or half blood, legitimate or illegitimate

Art. 52. The judgment of annulment or of absolute nullity of the marriage, the partition and distribution of the properties of the spouses and the delivery of the children's presumptive legitimes shall be recorded in the appropriate civil registry and registries of property; otherwise, the same shall not affect third persons.

Against Public Policy Article 38 (Against Public Policy): (1) Between collateral blood relatives, legitimate or illegitimate, up to the fourth civil degree. (2) Between step-parents and step-children. Note: Stepbrothers and stepsisters can marry because marriages between them are not among those enumerated in Article 38. (3) Between parents-in-law and children-in-law. (4) Between adopting parent and adopted child. (5) Between the surviving spouse of the adopting parent and the adopted child. (6) Between the surviving spouse of the adopted child and the adopter. (7) Between an adopted child and a legitimate child of the adopter. (8) Between adopted children of the same adopter. (9) Between parties where one, with the intention to marry the other, killed that other person's spouse, or his or her own spouse.

Previous marriage declared void ab initio or annulled 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. In order to have a subsequent marriage: (1) The previous marriage should be judicially declared void or annulled (final judgment) (Terre v. Terre (1992), Atienza v. Brillantes (1995)) (2) Must comply with the requirements of Art. 52 Under the Civil Code (superseded by the Family Code), there was no need for a judicial declaration of nullity of a previous marriage for a subsequent marriage to be valid [People v. Mendoza (1954)] Terre v. Terre, (1998): A lawyer was disbarred for grossly immoral conduct by convincing the other party that a judicial declaration of nullity was not required and subsequently contracting another marriage while his first marriage was subsisting.

Relationships outside of Art. 37 and 38 which are not impediments to marriage: brother-in-law with sisterin-law, stepbrother with stepsister, guardian with ward, adopted with illegitimate child of the adopter, adopted son of the husband with adopted daughter of the wife, parties who have been convicted of adultery

If there is no Judicial Declaration of Nullity, subsequent marriage void for being bigamous. Atienza v. Brillantes, (1995): Even if the judge’s first marriage contracted in 1965 was void for not having a marriage license, the requirement for a judicial declaration of nullity in Art. 40 still applies for his subsequent marriage contracted in 1991.

Void subsequent marriages Article 40 (No Judicial Declaration of Nullity) A person entered into a subsequent marriage without first getting a judicial declaration of nullity of the first void marriage

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Apiag v. Cantero, (1997): Where both marriages were contracted prior to the effectivity of the FC, the requirement of Art. 40 does not apply to the second marriage where a right is already vested and which the FC cannot have retroactive effect.

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Notes: (1) Institution of a summary proceeding is not sufficient. There must also be a summary judgment. (Balane) (2) Only the deserted/present spouse can file or institute a summary proceeding for the declaration of presumptive death of the absentee. (Bienvenido case) (3) There must have been diligent efforts on the part of the deserted spouse to locate the absent spouse. These diligent efforts correspond to the requirement of the law for a well-founded belief.

Domingo v. CA, (1993): The judicial declaration of nullity can be invoked for purposes other than remarriage. Article 40 was interpreted as being a requirement for purposes of remarriage but not limited for that purpose. Separation of property is also a valid purpose for filing for a judicial declaration of nullity.

Effect of Reappearance of Absent Spouse General Rule: The subsequent marriage remains valid.

The word “solely” in Art. 40 referred to validating subsequent marriages but NOT to limiting the purposes for which a judicial declaration of nullity can be invoked.

Exception: It is automatically terminated by the recording of the affidavit of reappearance of the absent spouse at the instance of any interested person, with due notice to the spouses of the subsequent marriage. [Art. 42]

Borja-Manzano v. Sanchez, (2001): Legal separation does not severe marital bonds. Cohabitation under Art. 34 merely exempts the spouses from obtaining a marriage license, and is not met when there exists legal impediment to marry during the period of cohabitation.

Note: It is the recording of the affidavit of reappearance that automatically terminates the subsequent marriage. Hence, if absentee spouse reappears without recording affidavit of reappearance, then there is no legal effect. Meanwhile, absentee spouse cannot remarry. (Tolentino)

Subsequent Marriage when one spouse is absent Requirements for Subsequent Marriage to be Valid When Prior Spouse is Absent [Art. 41]: (1) Subsequent marriage due to ordinary absence where: (a) Absent spouse had been absent for 4 consecutive years; (b) The spouse present had a well-founded belief that absent spouse is dead; and (c) Judicial declaration of presumptive death was secured (no prejudice to the effect of the reappearance of the absent spouse). (2) Subsequent marriage due to extraordinary absence where: (a) Absent spouse had been missing for 2 consecutive years; (b) There is danger of death under the circumstances set forth in the provisions of Art. 391 CC attendant to the disappearance; (c) The spouse present had a well-founded belief that the missing person is dead; and (d) Judicial declaration of presumptive death was secured (no prejudice to the effect of the reappearance of the absent spouse).

Exception to the exception: If there is a judgment annulling the previous marriage or declaring it void ab initio. [Art. 42] Good Faith: PERIOD of absence for PRESUMPTIVE DEATH is MANDATORY thus cannot be shortened by good faith and if be done so will be VOID. Burden of Proof: Two successive marriages, nd presumption of validity on 2 marriage and burden ND on party ATTACKING VALIDITY OF 2 MARRIAGE. PRESUMPTION in favor of INNOCENCE prevails over ST PRESUMPTION of CONTINUANCE OF LIFE OF 1 SPOUSE & MARITAL RELATIONS. Difference between Absence in the Civil Code and Family Code Family Code

Civil Code As to period

Extraordinary circumstances [Art. 391, CC]: (a) ON BOARD VESSEL lost at sea voyage, airplane, (b) ARMED FORCES in war, or (c) DANGER OF DEATH under other circumstances, existence not known

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4 years under normal circumstances;

Absent for at least 7 years;

2 years under extraordinary

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Family Code

Family Code makes an exception for the purpose of remarriage by limiting such requirement to 4 years.

Civil Code

circumstances

circumstances

Article 43 and 44 (Effects of Termination of Bigamous Marriage under Art. 42)

As to remarriage In order to remarry, summary proceeding is necessary

Declaration of presumptive death is not necessary

Art. 43: (1) Children of subsequent marriage – conceived prior to its termination considered legitimate; custody and support decided by court in a proper proceeding (2) Property Regime – dissolved and liquidated (party in bad faith shall forfeit his/her share in favor of the common children or if there are none, children of the guilty spouse by a previous marriage, and in case there are none, to the innocent spouse) (3) Donation propter nuptias – remains valid, (but if the donee contracted marriage in bad faith, donations will be revoked) (4) Insurance benefits – innocent spouse may revoke designation of guilty party as beneficiary, even if such designation is stipulated as irrevocable (5) Succession Rights – Party in bad faith disqualified to inherit from innocent spouse, whether testate or intestate

As to who can institute the action Can be instituted by the present spouse, any interested party, and the subsequent spouse

The spouses themselves

As to effect on subsequent marriage Subsequent marriage is automatically terminated by the recording of an affidavit of reappearance of the absent spouse

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Upon reappearance, judicial proceeding is necessary to declare marriage null and void

As to ground Well founded belief that Generally believed to be the absent spouse is dead dead

Article 44: Donations: If both parties of subsequent marriage acted in bad faith, any donations and testamentary dispositions made by one party to the other by reason of marriage will be revoked

Connected Provisions Art. 390, Civil Code. After an absence of 7 years, it being unknown whether or not the absentee still lives, he shall be presumed dead for all purposes, except for those of succession.

ACTION OR DEFENSE OF NULLITY

Prescription Art. 39. The action or defense for the declaration of absolute nullity of a marriage shall not prescribe. (as amended by RA 8533)

The absentee shall not be presumed dead for the purpose of opening his succession till after an absence of 10 years. If he disappeared after the age of 75 years, an absence of 5 years shall be sufficient in order that his succession may be opened.

It must be noted that under the new Supreme Court Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages A.M. No. 02-11-10-SC, effective March 15, 2003, nullity of the marriage can still be collaterally attacked.

Art. 391, Civil Code. The following shall be presumed dead for all purposes, including the division of the estate among the heirs: (SAAD) (1) A person on board a vessel lost during a sea voyage, or an aeroplane which is missing, who has not been heard of for four years since the loss of the vessel or aeroplane; (2) A person in the armed forces who has taken part in war, and has been missing for four years; (3) A person who has been in danger of death under other circumstances and his existence has not been known for four years.

Who may file the petition for nullity? As to the parties allowed to file the action: Only an aggrieved or injured spouse may file a petition for annulment of voidable marriages or declaration of absolute nullity of void marriages. Such petition cannot be filed by compulsory or intestate heirs of the spouses or by the State. The Committee is of the belief that they do not have a legal right to file the petition. Compulsory or intestate heirs have only inchoate rights prior to the death of their predecessor, and, hence, can only question the validity of the marriage of the spouses upon the death of a

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spouse in a proceeding for the settlement of the estate of the deceased spouse filed in the regular courts. (Enrico v. Heirs of Sps. Medinaceli (2007)), also reiterated in (Carlos vs. Sandoval (2008))

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(b) Through concealment by the wife of the fact that at the time of the marriage she was pregnant by another man; (c) Through concealment of a sexuallytransmitted disease, regardless of its nature, existing at the time of marriage; (d) Through concealment of drug addiction, habitual alcoholism or homosexuality/lesbianism. (Art.46) (4) The consent of either party was obtained through force, intimidation, or undue influence. (5) Either party is physically incapable of consummating the marriage (impotence; this is different from sterility, which is the inability to produce offspring). (6) Either party has a serious and incurable sexuallytransmissible disease, even if not concealed.*

How to attack a void marriage? General Rule: Void Marriages may be attacked collaterally or directly. Exception: A person in a void marriage must first file for a declaration of nullity in order to subsequently marry ANNULLABLE MARRIAGE

(Note: Although the Supreme Court in its syllabus seems to make a distinction between annullable and voidable marriages by the fact that they made two separate categories for the two, Tolentino makes no mention of any such difference.)

Action to Annul: Action in rem, concerns status of parties; res is relation between parties or marriage tie; jurisdiction depends on nationality or domicile not the place of celebration.

Art. 14: In case either or both of the contracting parties, not having been emancipated by a previous marriage, are between the ages of eighteen and twenty-one, In addition to the requirements of the preceding articles: (a) Exhibit to the local civil registrar the consent to their marriage of their father, mother, surviving parent or guardian, or persons having legal charge of them, in the order mentioned (b) Manifested in writing by the interested party, who personally appears before the proper local civil registrar, or (c) In the form of an affidavit made in the presence of two witnesses and attested before any official authorized by law to administer oaths (d) The personal manifestation shall be recorded in both applications for marriage license, and the affidavit, if one is executed instead, shall be attached to said applications.

Grounds for Annulment explained: (1) Lack of parental consent (a) 18 ≤ x < 21 without parental consent (b) Ratified by party 18 or above but below 21 upon free cohabitation upon reaching 21. (c) TOLENTINO: parents whose consents were wanting may ratify before 21; this right can be waived; however, the Code Commission believes that no such ratification can be made by the parent. (2) Insanity (a) Mental incapacity or insanity is a vice of consent; insanity (1) of varying degrees, (2) curable being an illness, capable of ratification or convalidation, (3) has lucid intervals, (4) ground only for annulment in many countries (b) Can be ratified by cohabitation after insanity is cured or during a lucid interval (c) Mere mental weakness is not a ground for annulment, but if found grave enough may amount to psychological incapacity. (d) Intoxication, somnambulism where one had no mental capacity to give consent is equivalent to insanity (e) Must EXIST AT THE TIME of the celebration of the marriage. (f) Law presumes SANITY, burden of proof on party alleging insanity

Grounds for Annulment Article 4 states that “xxx A defect in any of the essential requisites shall render the marriage voidable as provided in Article 45.” Article 45. Marriage may be annulled on the following grounds existing at time of marriage: (PIFFIS) (1) One of the parties is 18 or above but below 21 years old, and there is no parental consent. (2) Either party was of unsound mind (insanity). (3) The consent of either party was obtained through fraud (different from mistake in identity): (a) Through non-disclosure of a previous conviction of a crime involving moral turpitude;

(3) Fraud (a) Only those enumerated in Art. 46:

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(b)

(c)

(d)

(e)

(f)

PERSONS & FAMILY RELATIONS

(1) Non-disclosure of previous CONVICTION by final judgment of a crime involving MORAL TURPITUDE (2) Concealment by wife at the time of marriage, that she was pregnant by another man (3) Concealment of STD regardless of nature existing at time of marriage (4) Concealment of drug addiction, habitual alcoholism, homosexuality, lesbianism existing at time of marriage NO other misrepresentation or deceit of CHARACTER, HEALTH, RANK, FORTUNE OR CHASTITY shall constitute FRAUD. Conviction of Crime: requisites are (1) Moral turpitude (2) Conviction Concealment of Pregnancy (1) Fraud against very essence of marriage; importance of procreation of children; an assault to the integrity of the union by introducing ALIEN BLOOD (2) If husband knew of pregnancy, the marriage cannot be annulled on the ground of concealment Marriage cannot be annulled on the ground that wife concealed the fact that she had been lewd & corrupt and had illegitimate child. (Shrady v. Logan (1896)) Maybe ratified upon free cohabitation after knowledge of fraud. Art. 45 STD

Ground for annulment Does not have to be concealed Must be serious and incurable The STD itself is the ground for annulment

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when wife had been at least 6 months pregnant prior to marriage. Aquino v. Delizo, (1960): The Supreme Court granted annulment because the wife concealed the fact that she was 4 months pregnant during the time of the marriage. It argued that since Delizo was “naturally plump,” Aquino could hardly be expected to know, by mere looking, whether or not she was pregnant at the time of the marriage. Almelor v. RTC, (2008): It is the concealment of homosexuality, and not homosexuality per se, that vitiates the consent of the innocent party. Such concealment presupposes bad faith and intent to defraud the other party in giving consent to the marriage. Corpuz v. Ochoterena, (2004): In a legal separation or annulment case, the prosecuting attorney must first rule out collusion as a condition sine qua non for further proceedings. A certification by the prosecutor that he was present during the hearing and even cross-examined the plaintiff does not suffice to comply with the mandatory requirement. (4) Force, intimidation, undue influence (a) FORCE must be one as to prevent party from acting as a free agent; will destroyed by fear/compulsion (b) INTIMIDATION must be one as to compel the party by reasonable/well-grounded fear/evil imminent upon person/properties (c) DEGREE OF INTIMIDATION: age, sex, condition of person borne in mind (d) Threat or intimidation as not to act as FREE AGENT; threatened of armed demonstrations by brother is ANNULLABLE (Tiongco v Matiga) (e) Man rapes a girl, marries her to conceal the rape & has no intention to live with the girl; marriage is annullable (People v Santiago (1927)) (f) Committee added “undue influence”, maybe compelled to enter out of REVERENTIAL FEAR e.g., fear of causing distress to parents, grandparents, etc. (g) May be ratified upon cohabitation after force, intimidation, or undue influence has ceased or disappeared.

Art. 46 STD The STD is a type of fraud which is a ground for annulment Must be concealed Need not be serious nor incurable It is the concealment that gives rise to the annulment

Effect of Cure to Fraud in Art. 46: Recovery or rehabilitation from STD, drug addiction, and habitual alcoholism will NOT BAR ACTION for annulment; The defect is not the disease, but the FRAUD which VITIATED CONSENT.

(5) Impotency (a) Must exist at time of marriage, must be continuous, must be incurable; thus if incapacity can be remedied or is removable by

Buccat v. Mangonon de Buccat, (1941): Wife gave birth 3 months after marriage celebration. Husband filed for annulment. Denied. Ground: Concealment of non-virginity. Court held that it was unbelievable that husband could not have noticed PAGE 22

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operation, NOT ANNULLABLE (Sarao v Guevarra(1940)) (b) Should be unknown to the other party (c) Physical condition: sexual intercourse with a person of the opposite sex is impossible, not mere sterility (d) When both spouses are impotent, marriage cannot be annulled because neither spouse is aggrieved (e) POTENCY PRESUMED; party who alleges impotency has burden of proof (Jimenez v Canizares (1960)) (f) Although potency is presumed, there is a doctrine in England called TRIENNIAL COHABITATION that if wife remains virgin after 3 yrs, husband presumed impotent & has burden to prove otherwise (Tompkins v Tompkins) (g) REFUSAL of wife to be examined DOES NOT PRESUME impotency because Filipino women are inherently shy & bashful; TC must order physical examination because w/o proof of impotency, she is presumed potent; to order her to undergo physical exam does not infringe constitutional rights against selfincrimination (Jimenez v Canizares) (h) Villanueva vs. CA (2006): Absence of cohabitation is not a ground for annulment. (i) NOTE: if wife continues to refuse to undergo physical exam, she can be held for CONTEMPT & ordered to be confined in jail until she does so Who may file, Prescription, Ratification Ground Who can file (Art. 45) (Art. 47) Lack of Under-aged party (18 or above parental but below 21) consent Parent or guardian without consent Insanity Sane spouse with no knowledge of the other’s insanity Legal guardian of insane party Insane party

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(j) RELATIVE IMPOTENCY: may now be invoked because there are cases where one is impotent with respect to his spouse but not with other men or women. (k) EXAMPLE: penile erection to other women possible; unusually large penis cannot fit with abnormally small vagina (6) Sexually-transmissible disease serious and incurable (a) Should exist at the time of the marriage (b) Should be found serious (c) Should appear to be incurable (d) Should be unknown to other party (e) Reason: danger to the health of spouse & offspring/s (f) Same as incurable impotency (g) Not subject to ratification  cannot be ratified or convalidated by prescription or cohabitation: (a) Prior subsisting marriage; would result in anomalous relationship (b) Vitiated by impotency remains as long as afflicted (c) Vitiated by affliction of STD remains as long as afflicted (d) Affliction of STD is unknown to the other spouse (Balane) (e) The other spouse must also be free from a similar STD. (Balane) (h) 2 & 3 above prescribe w/in 5 yrs by Art. 47(5)

Prescription (Art. 47) Within 5 years after attaining 21. Before party below 21 reaches 21. Any time before the death of either party

During lucid interval or after regaining sanity, and before death Within 5 years after discovery of fraud Within 5 years after disappearance of force, undue influence, or intimidation

Fraud

Injured party (defrauded party)

Force, intimidation, undue influence Impotence

Injured party

Potent spouse

Within 5 years after marriage

STD

Healthy party

Within 5 years after marriage PAGE 23

Ratification (Art. 45) Free cohabitation after attaining age of 21. Free cohabitation of insane party after insane party comes to reason

Free cohabitation after having full knowledge of fraud Free cohabitation after the force or intimidation or undue influence has ceased or disappeared Cannot be ratified but action prescribes Cannot be ratified but action

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Ground (Art. 45)

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Who can file (Art. 47)

Prescription (Art. 47)

Marriages Not Subject to Ratification/ Convalidation by cohabitation (1) One spouse is incurably impotent (Art. 47 – prescription: 5 years) (2) One spouse has an incurable STD (Art. 47 – prescription: 5 years) (3) Sane spouse marries an insane spouse w/o knowledge of insanity

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Ratification (Art. 45) prescribes

in the proper cases to marriages which are declared ab initio or annulled by final judgment under Articles 40 and 45 (Art. 50(1)). Final judgment in such cases shall provide for the liquidation, partition, and distribution of the: (1) Properties of the spouses (2) Custody and support of the common children (3) Delivery of their presumptive legitimes (a) Unless such matters had been adjudicated in previous judicial proceedings (Art. 50(2)) (b) All creditors (of the spouses/property regime) shall be notified of the proceedings for liquidation (Art. 50(2 and 3))

Presence of Prosecutor Art. 48: To prevent collusion between the parties, fabrication or suppression of evidence, the prosecuting attorney or fiscal shall appear on behalf of the State. EFFECT OF PENDING ACTIONS/DECREE

In the partition, the conjugal dwelling and lot shall be adjudicated to the spouse with whom majority of the common children remain (Art. 102 and 129) (Art. 50(4)

Art. 49: During the pendency of the action and in the absence of adequate provisions in a written agreement between the spouses, the Court shall provide for the support of the spouses and the custody and support of their common children. The Court shall give paramount consideration to the moral and material welfare of said children and their choice of the parent with whom they wish to remain as provided for in Title IX. It shall also provide for appropriate visitation rights of the other parent.

Presumptive legitimes, computed as of the date of the final judgment, shall be delivered in cash, property or sound securities: (1) Unless the parties, by mutual agreement judicially approved, had already provided for such (Art. 51(1)) (2) The children/guardian/trustee of property may ask for the enforcement of the judgment (Art. 51(2)) (3) The delivery of the presumptive legitimes shall not prejudice the ultimate successional rights, but the value of the properties already received shall be considered as advances on their legitime (Art. 51(3))

(1) The court shall provide for the support of the spouses, (2) The custody and support of the common children, giving paramount consideration to their moral and material welfare, their choice of parent with whom they wish to remain. (3) The court shall also provide for visitation rights of other parent.

Generally, children born or conceived within void marriages are illegitimate.

Decisions on the nullification of the marriage Art. 48 (2): In the cases referred to in the preceding paragraph, no judgment shall be based upon a stipulation of facts or confession of judgment.

Exceptions: (a) Children conceived or born before the judgment under Article 36 has become final and executor (Art. 54) (b) Children conceived or born of subsequent marriages under Article 53 (Art. 54)

Stipulation of Facts: An admission by both parties after agreeing to the existence of any of the grounds or facts that would constitute a void/voidable marriage Confession of judgment: The admission by one party admitting his/her fault to cause the invalidity of the marriage.

Legal Separation GROUNDS FOR LEGAL SEPARATION Note: The grounds for legal separation are exclusive. (Article 55) (RPC Final DH BSAA)

EFFECTS OF NULLITY

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These must be filed within 5 years after occurrence of cause (Article 57) (1) Repeated physical violence or grossly abusive conduct directed against the petitioner, a common child, or a child of the petitioner; (2) Physical violence or moral Pressure to compel the petitioner to change religious or political affiliation; (3) Attempt of respondent to Corrupt or induce the petitioner, a common child, or a child of the petitioner, to engage in prostitution, or connivance in such corruption or inducement; (4) Final judgment sentencing the respondent to imprisonment of more than six years, even if pardoned; (5) Drug addiction or habitual alcoholism of the respondent; (6) Lesbianism or Homosexuality of the respondent; (7) Contracting by the respondent of a subsequent Bigamous marriage, whether in the Philippines or abroad; (8) Sexual infidelity or perversion; (9) Attempt by the respondent Against the life of the petitioner; or (10) Abandonment of petitioner by respondent without justifiable cause for more than one year.

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(2) Threatening to cause the woman or her child physical harm; (3) Attempting to cause the woman or her child physical harm; (4) Placing the woman or her child in fear of imminent physical harm; (5) Attempting to compel or compelling the woman or her child to engage in conduct which the woman or her child has the right to desist from or desist from conduct which the woman or her child has the right to engage in, or attempting to restrict or restricting the woman's or her child's freedom of movement or conduct by force or threat of force, physical or other harm or threat of physical or other harm, or intimidation directed against the woman or child. This shall include, but not limited to, the following acts committed with the purpose or effect of controlling or restricting the woman's or her child's movement or conduct: (a) Threatening to deprive or actually depriving the woman or her child of custody to her/his family; (b) Depriving or threatening to deprive the woman or her children of financial support legally due her or her family, or deliberately providing the woman's children insufficient financial support; (c) Depriving or threatening to deprive the woman or her child of a legal right; (d) Preventing the woman in engaging in any legitimate profession, occupation, business or activity or controlling the victim's own money or properties, or solely controlling the conjugal or common money, or properties; (6) Inflicting or threatening to inflict physical harm on oneself for the purpose of controlling her actions or decisions; (7) Causing or attempting to cause the woman or her child to engage in any sexual activity which does not constitute rape, by force or threat of force, physical harm, or through intimidation directed against the woman or her child or her/his immediate family; (8) Engaging in purposeful, knowing, or reckless conduct, personally or through another, that alarms or causes substantial emotional or psychological distress to the woman or her child. This shall include, but not be limited to, the following acts: (a) Stalking or following the woman or her child in public or private places; (b) Peering in the window or lingering outside the residence of the woman or her child; (c) Entering or remaining in the dwelling or on the property of the woman or her child against her/his will;

People v. Zapata and Bondoc (1951): Adultery is not a continuing crime, but is consummated and exhausted at the moment of carnal union. Each sexual act constitutes one act of adultery. As such, every sexual act is a ground for legal separation. Gandioco v. Peñaranda (1989): In sexual infidelity as a ground for legal separation, there is no need for prior conviction for concubinage, because legal separation only requires a preponderance of evidence, as opposed to proof beyond reasonable doubt required in concubinage. Lapuz Sy v. Eufemio (1972): The death of one party in a legal separation case abates the action. This is because the death of either spouse automatically dissolves the marriage. An action for legal separation is also purely personal between the spouses. Dela Cruz. v. Dela Cruz (1968): Abandonment is not mere physical estrangement but also financial and moral desertion. There must be an absolute cessation of marital relations, duties, and rights with the intention of perpetual separation. ACTS OF VIOLENCE ACCORDING TO RA 9262

(1) Causing physical harm to the woman or her child;

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(d) Destroying the property and personal belongings or inflicting harm to animals or pets of the woman or her child; and (e) Engaging in any form of harassment or violence; (9) Causing mental or emotional anguish, public ridicule or humiliation to the woman or her child, including, but not limited to, repeated verbal and emotional abuse, and denial of financial support or custody of minor children of access to the woman's child/children.

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apply in cases where violence, as used in RA 9262 (Anti-Violence Against Women and their Children), is alleged. The case should be heard as soon as possible by the court. CONFESSION OF JUDGMENT No decree of legal separation shall be based upon a stipulation of facts or a confession of judgment (Art. 60, par. 1. FC). Note: Art. 60 par. 1 applies only if the judgment was based solely on the stipulation of facts or solely on the confession of judgment. Thus, if other grounds were used, Art. 60 par. 1 is not applicable. (Balane)

DEFENSES GROUNDS FOR DENYING LEGAL SEPARATION (ARTICLE 56) (4CMPRD):

(1) Condonation by aggrieved party (2) Consent by aggrieved party to the commission of the offense (3) Connivance between parties in the commission of the offense (4) Mutual guilt or Recrimination between spouses in the commission of any ground for legal separation (5) Collusion between parties to obtain decree of legal separation (6) Prescription of action for legal separation (Art. 57: 5 years from occurrence of the cause of action) (7) Reconciliation of parties during pendency of action (Art. 66 par.1) (8) Death of either party during pendency of action (Lapuz-Sy vs. Eufemio)

Ocampo v Florenciano (1960): The prohibition on confession of judgment does not mean that the Court will not grant petition if one party admits to being guilty of the charges of adultery. The point of this provision is that the Court should still admit evidence, not decide just based on an admission of guilt. Because what is prohibited is handing down a decree of legal separation based solely on a confession of judgment. EFFECTS OF FILING PETITION (1) The spouses are entitled to Live separately, but the marital bond is not severed. (Art. 61 (1) (2) Administration of Community or Conjugal Property – If there is no written agreement between the parties, the court shall designate one of them or a third person to administer the ACP or CPG. (Art. 61, par. 2)

COOLING-OFF PERIOD AND RECONCILIATION EFFORTS Action cannot be tried before six months have elapsed from the filing of the petition (Art. 58).

EFFECTS OF PENDENCY The Court shall provide for: (Art. 62, cf. Art. 49. FC) (a) Support of spouses (b) Custody of children The court shall give custody of children to one of them, if there is no written agreement between the spouses. It shall also provide for visitation rights of the other spouse. (c) Visitation rights of the other spouse

Action cannot be tried unless the court has attempted to reconcile the spouses, and determined that despite such efforts, reconciliation is highly improbable (Art. 59) Note: This is without prejudice to judicial determination of custody of children, alimony, and support pendente lite.

EFFECTS OF LEGAL SEPARATION (1) The spouses can live separately (Art. 63) but the marriage bonds are not severed. (2) The ACP or CPG shall be dissolved and liquidated, and the share of the guilty spouse shall be forfeited in favor the common children, previous children, or innocent spouse, in that order (Art. 63. cf. Art. 43, par. 2). (3) Custody of the minor children shall be awarded to the innocent spouse (Art. 63, cf. Art 213) (4) Guilty spouse shall be disqualified from Inheriting from innocent spouse by intestate succession.

Araneta vs. Concepcion, (1956): Courts can still resolve other issues, pending the waiting period or cooling off period. In resolving issues, try not to touch, as much as possible, on the main issue (i.e. adultery if that is the ground used). However, Court must still receive evidence if just to settle incidental issues of support and custody. Note: This provision of the Family Code dictating a mandatory 6-month cooling-off period does not

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The provisions in favor of the guilty party in the will of the innocent spouse shall also be revoked by operation of law. (Art. 63) (5) Donations in favor of the guilty spouse may be revoked (Art. 64) but this action prescribes after 5 years from the decree of legal separation. (6) Innocent spouse may also revoke designation of guilty spouse as beneficiary in an Insurance policy, even if such stipulations are irrevocable. (Art. 64. FC, cf. PD 612, sec. 11) (7) Obligation for Mutual support ceases, but the court may order the guilty spouse to support the innocent spouse. (Art. 198) (8) The wife shall continue to use the Surname of the husband even after the decree for legal separation. (Art. 372, CC)

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RECONCILIATION HOW DONE

Should the spouses reconcile, they should file a corresponding joint manifestation under oath of such reconciliation. (Art. 65) EFFECTS OF RECONCILIATION

(1) Proceedings for legal separation shall be terminated at whatever stage. (Art. 66) (2) If there is a final decree of legal separation, it shall be set aside. (Art. 66) (3) The separation of property and forfeiture of share of guilty spouse shall subsist, unless the spouses agree to revive their former property regime or to institute another property regime. (Art. 66 cf. Art. 67) (4) Joint custody of children is restored. (5) The right to intestate succession by guilty spouse from innocent spouse is restored. The right to testamentary succession depends on the will of the innocent spouse.

ANNEX TO VOID AND VOIDABLE MARRIAGES AND LEGAL SEPARATION GROUNDS

Void Marriages

Voidable Marriages

One is a minor No authority to marry

Lack of parental consent Insanity

No valid marriage license Bigamous and polygamous marriages Mistake of identity Void subsequent marriage

Fraud Force, Intimidation or Undue Influence Impotence Serious and Incurable STD

Psychological incapacity Incestuous Marriages Marriages against public policy

Legal Separation Repeated Physical Violence Pressure to compel to change religious/political affiliations Corruption / Inducement to engage in prostitution Final judgement with sentence of more than 6 yrs. Drug Addiction / Habitual Alcoholism Homosexuality / Lesbianism Bigamous marriage (engaging in) Sexual Infidelity Attempts against the life Abandonment without just cause for more than 1 year

EFFECTS OF FILING / PENDING DECREE

Void/Voidable Marriages

Legal Separation

Support for the spouses Custody and support for the children Visitation rights to the other spouse No right to live separately Spouses to live separately Properties are still managed by both parties Designation of an administrator of the properties

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EFFECTS OF AFFIDAVIT OF REAPPEARANCE, JUDICIAL DECLARATION OF NULLITY, ANNULMENT AND LEGAL SEPARATION

Void Marriages

Terminated Marriage (Art. Voidable Marriages Legal Separation 41) Status of Marital ties Severed Severed Severed Not Severed Status of Marriage Void ab initio Subsequent marriage is Void Valid terminated (not invalidated) Status of Children born and conceived before termination Illegitimate Legitimate Legitimate Legitimate EXCEPT: Art. 36 and 35 conceived and born before judgement (legitimate) Custody of Children Court Proceeding Court Proceeding Court Proceeding Innocent Spouse Property Relations (1) Dissolution and Liquidation of properties (a) Guilty/Bad Faith spouse will forfeit his/her share from the Net Profits to the (in order): (i) Common children (ii) Children of the guilty spouse (iii) Children of the innocent spouse (2) Notification of creditors with the proceedings for liquidation (3) Conjugal dwelling to be adjudicated to the spouse who has majority custody of common children (4) Insurance policy may be revoked only by the innocent spouse (Legal Separation: Only within 5 years) (5) Spouse in bad faith/guilty shall be disqualified to inherit (testate and intestate) Donation Propter Nuptias Valid, but if donee contracted marriage in bad faith, revoked by operation of law May be revoked within 5 years

sexual acts. The wife refused but the husband kept insisting. The wife left the family home. Wife petitioned for support/ separate maintenance.

Rights and Obligations between Husband and Wife

SC: Court cannot compel the woman to go back to the husband. The duty of the husband to support the wife is also not terminated because she left the house, when it is the husband’s fault she left in the first place.

ESSENTIAL OBLIGATIONS (1) Live together (cohabitation – Art. 68) Exemption: One spouse living abroad or there are valid and compelling reasons (Art. 69 (2)) Exemption To Exemption: Incompatibility with the solidarity of the family (Art. 69 (2)) (2) Observe mutual love, respect, and fidelity (3) Render mutual help and support (Art. 68)

Husband is compelled, in this case, to give support for separate maintenance (outside family home). Arroyo v. Vasquez de Arroyo (1921): A court cannot compel a married woman to go back to her husband.

Ilusorio v. Bildner (2000): A person has a purely personal right to consortium (Constitutional right to liberty). Court cannot order a man to go back to the conjugal dwelling. (Shows that what is in Family Code is not the former spousal unity doctrine (Old England)).

FAMILY DOMICILE The husband and wife shall fix the family domicile. (Art. 69) In case of disagreement, the court shall decide. (Art. 69 (1))

Goitia v. Campos Rueda (1916): The husband demanded the wife perform ‘unchaste and lewd’

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(2) Benefit has accrued to the family before OR after the objection. If BEFORE the objection, enforce resulting obligation against the separate property of the spouse who has not obtained consent.

SUPPORT From the conjugal property; If none, income or the fruits of their separate properties; if none, from their separate properties (liable in proportion to their properties). MANAGEMENT OF HOUSEHOLD This is the right and duty of both spouses.

Property Relations of the Spouses

EFFECT OF NEGLECT OF DUTY In case the other spouse neglects his or her duties or commits acts which tend to bring danger, dishonor or injury to the family, the aggrieved party may apply to the court for relief. (Art. 72)

MARRIAGE SETTLEMENTS Art. 75. Future spouses may agree upon, in the marriage settlement, which property regime will govern their marriage (ACP, CPG, complete separation of property, other regimes). However, in the absence of a marriage settlement, or when the regime agreed upon is void, the system of absolute community of property as established by this Code shall govern.

Injury contemplated is physical, moral, emotional or psychological, not financial. EXERCISE OF PROFESSION Either spouse may exercise any legitimate profession, without need for consent of the other. (a) The other spouse may only object on valid, serious, and moral grounds. (b) In case of disagreement, the Court shall decide whether: (1) The objection is proper, and

Marriage settlements are considered accessory to the marriage, therefore as per Art. 81, stipulations in consideration of future marriage and donations will be void if the marriage does not take place.

MARRIAGE SETTLEMENT RULES

When modifications can be made

Requirements of marriage settlements and any modification thereof [Art. 77]

General rule: Before marriage is celebrated [Art. 76] Art. 63(2) – Property regime is dissolved Arts. 66 and 67 - Reconciliation in case of legal separation Art. 128 - When spouse leaves family without just cause Art. 135 - Sufficient cause for judicial separation of property Art. 136 - Voluntary dissolution of ACP or CPG by the spouses If a spouse petitions the court for: (1) Receivership; (2) Judicial separation of property; or, (3) Authority to be the sole administrator of the conjugal partnership, if he or she is abandoned by the other without just cause or fails to comply with his or her obligations to the family [Art. 128] Made in writing Signed by the parties Executed before the marriage celebration Registered in the local civil registry where the marriage is recorded and in registries of property in order to prejudice third persons If executed by a person below 21 y.o., valid only when persons required to give consent to the marriage (father, mother, or guardian, respectively) are made parties to the agreement [Art. 78] If executed by a person upon whom civil interdiction has been pronounced or who is subject to any other disability, valid only when his guardian is made party to the agreement [Art. 79]

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DONATIONS BY REASON OF MARRIAGE Solis v. Barroso (1928): In donations propter nuptias, the marriage is really a consideration, but not in the sense of giving birth to the obligation. There can be a valid donation even if the marriage never took place, but the absence of marriage is a ground for the revocation fo the donation. Mateo v. Lagua (1969): Donations propter nuptias are without onerous consideration, marriage being merely the occasion or motive for the donation, not its cause. Being liberalities, they remain subject to reduction for inofficiousness upon the donor’s death, if they should infringe the legitime of a forced heir. Requisites of donations propter nuptias

Donations excluded

Who may donate Sources of rules governing donations propter nuptias

Rules for donations before marriage

Grounds for revocation of donation propter nuptias [Art. 86]

Effects of judicial declaration of nullity

Made before the celebration of marriage Made in consideration of marriage In favor of one or both of the future spouses Donor must be one of the betrothed or any third person Ordinary wedding gifts given after the celebration of the marriage Donations in favor of future spouses made before marriage but not in consideration thereof Donations made in favor of persons other than the spouses even if founded on the intended marriage Spouses to each other Parents of one or both spouses Third persons to either or both spouses Family code provisions [Arts. 82-87] Ordinary donation provisions [Art. 83; Title III of Book III, NCC] Provisions on testamentary succession and the formalities of wills for donations on future property [Art. 84, par. 2] General rule: Future spouses cannot donate to each other more than 1/5 of their present property (excess shall be considered void). [Art. 84] Exception: If they are governed by ACP Donations of property subject to encumbrances (1) Are considered valid. (2) In case of foreclosure: (a) if property value < obligation, donee shall not be liable for the deficiency (b) if property value > obligation, donee shall be entitled to the excess (Art. 85) (1) If the marriage is not celebrated or judicially declared void ab initio, except donations made in settlements. (2) When the marriage takes place without the consent of the parents or guardians, as required by law. (3) When the marriage is annulled, and the donee acted in bad faith. (4) Upon legal separation, if the donee is the guilty spouse. (5) If there is a resolutory condition, and it is not complied with. 1. When donee has committed an act of ingratitude: [Art. 765, CC] a. An offense against person or property of donor, or his wife or children under parental authority. b. An imputation to the donor of any criminal offense, or any act involving moral turpitude, even if proven, unless the crime is committed against the donee, his wife or children under his authority. c. Refusing to support the donor, if he/she is legally required to do so. Donations by reason of marriage shall remain valid except that if the donee contracted marriage in bad faith, such donations made to said donee are revoked by operation of law. [Art. 43 (3)] Revocation by operation of law - Thus, even if spouse in good faith condones the donee, the donation propter nuptias is still forfeited. Effects provided for by Art. 43(2), (3), (4), and (5) and by Art. 44 shall also apply to marriages that are declared void ab initio or annulled by final judgment under Article 40 (Judicial declaration of nullity) and 45 (Voidable marriages). [Art. 50]

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Rules for donations during marriage

Rules for donations between common-law spouses

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General rule: Spouses cannot donate to each other, directly or indirectly (donations made by spouses to each other during the marriage are void). [Art. 87] Exception: Moderate gifts on the occasion of any family rejoicing. Harding v. Commercial Union, (1918): The prohibition on donations can only be assailed by persons who bear such relation to the parties or the property itself, that their rights are being interfered with. Here, the insurance company of the donated car cannot assail the validity of the donation. In addition, the codal exception of “moderate gifts” depends on the income class of the spouses and a car could be considered a “moderate gift” that does not infringe the prohibition of donation between spouses. Matabuena v Cervantes, (1971): The donation between common-law spouses falls within the provision prohibiting donations between spouses during marriage. Sumbad v. CA, (1999): The donation made by a man to a woman was held valid because no proof was shown that they were still living in a common-law relationship at the time of the donation.

DISTINGUISHED FROM ORDINARY DONATIONS

Donations Propter Nuptias Does not require express acceptance May be made by minors (Art. 78) May include future property If present property is donated and property is not absolute community, limited to 1/5 (Art. 84) Grounds for revocation - In Art. 86

Ordinary Donations Express acceptance necessary Cannot be made by minors Cannot include future property No limit to donation of present property provided legitimes are not impaired Grounds for revocation - in donation laws

ABSOLUTE COMMUNITY OF PROPERTY AND CONJUGAL PARTNERSHIP OF GAINS Art. 80. Property relations between Filipino spouses are governed by Philippine laws, regardless of the place of marriage and their residence. By the Nationality Rule [Art. 15], the rule that Absolute Community Property (ACP) is the default mode of property relations absent any marriage settlement applies to all Filipinos, regardless of the place of the marriage and their residence. Exceptions: (1) Where both spouses are aliens (2) As to the extrinsic validity of contracts (3) Contrary stipulation Art. 81. Everything stipulated in marriage settlements in consideration of a future marriage are void if marriage does not take place. However, stipulations that do not depend upon the celebration of marriage (e.g.: recognition of paternity of illegitimate child) remain valid. Art. 89. As a general rule, a waiver of rights is not allowed, except in the following cases: (1) When there is judicial separation of property (2) When there is legal separation (3) When the marriage is dissolved by death of one of the spouses (4) When the marriage is annulled Art. 90. Co-ownership rules shall apply to ACP in matters not provided by the Family Code. COMPARISON OF ACP AND CPG

Absolute Community Property At the precise moment of the celebration of the marriage [Art. 88]

Conjugal Partnership Of Gains When it commences Default property regime for marriages celebrated before the Family Code took effect (1988) For marriages after the Family Code, if agreed to by the parties through a marriage settlement.

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Conjugal Partnership Of Gains What it consists of All the property owned by the spouses at Proceeds, products, fruits, and income of their separate properties the time of the celebration of the Everything acquired by them within marriage through their own marriage or acquired thereafter [Art. 91] efforts Under the ACP, spouses cannot exclude Everything acquired by them by chance specific properties from the regime. Acquired by onerous title during the marriage at the expense of the common fund Winnings from gambling shall accrue to Acquired through the labor, industry, work, or profession of either or the community property [Art. 95] both spouses Fruits from common property and net fruits of the exclusive property of each spouse Share of either spouse in hidden treasure, whether as finder or owner of property where treasure was found Acquired through occupation such as fishing or hunting Livestock existing at dissolution of partnership in excess of what is brought by either spouse to the marriage Acquired by chance, such as winnings from gambling or betting Moral damages arising from a contract paid from the CPG [Zulueta v. Pan Am (1973)] Loans contracted during the marriage are conjugal, and so is any property acquired therefrom [Mendoza v. Reyes (1983)] Property purchased by installment, paid partly with conjugal funds and partly with exclusive funds, if full ownership was vested during the marriage; the CPG shall reimburse the owner-spouse [Art. 118] If a winning ticket is bought by conjugal funds, the prize is conjugal (otherwise, the prize is exclusive property of the spouse who owns the ticket) Improvement on exclusive property: if original value < new value (where new value = value of land + value of improvements + net change in value), then land becomes conjugal property, subject to the reimbursement of the value of the property of the ownerspouse at the dissolution of the CPG Property belonging to one spouse converted into another kind totally different in nature from its original form during marriage becomes conjugal in the absence of proof that the expenses of the conversion were exclusively for the account of the original ownerspouse, subject to reimbursement of the value of the original property from the conjugal partnership What remains exclusive property Properties acquired before the marriage, Property brought into a marriage by each spouse as his/her own for those with legitimate descendants with a former marriage (to protect rights of children by a former marriage) Properties acquired by a gratuitous title, Property acquired by either spouse during the marriage by i.e. donation, inheritance by testate and gratuitous title intestate succession, including the fruits of such properties Except: When expressly provided by the donor or testator that the property shall form part of the ACP Properties for personal use Property acquired by right of redemption, by barter, or by exchange Except: Jewelry with property belonging to either spouse Plata v. Yatco: Plata purchased property when she was single. When married, she and her husband Bergosa co-signed a mortgage on the property. Upon foreclosure, Bergosa was

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Absolute Community Property

All properties acquired during the marriage form part of the ACP, unless it be proven that they are excluded. [Art. 93]

Art. 94 Support of the following: (1) Spouses (a) Even if not living together, except when a spouse leaves conjugal home without just cause (b) Even during pendency of action for legal separation/annulment of

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Conjugal Partnership Of Gains sued for illegal detainer. A writ of execution on the property was carried out but Plata refused to leave the premises. SC ruled that Plata cannot be held in contempt. Property is not conjugal. Her husband signing as co-mortgagor does not convert it to CPG. She could ignore execution because the decision was for her husband alone. Property purchased with exclusive money of either spouse Property purchased by installment, paid partly with conjugal funds and partly with exclusive funds, if full ownership was vested before the marriage [Art. 118] Even if the installment is completed after the marriage, the property is exclusive if ownership was vested in one spouse before the marriage [Lorenzo v. Nicolas (1952)] Improvement on exclusive property: if original value > new value (where new value = value of land + value of improvements + net change in value), then land remains exclusive property of the owner-spouse, subject to the reimbursement of the cost of improvement Money received under the Social Security Act is not conjugal, although the employee-spouse contributes to the SS with his salaries, but belongs to the designated beneficiary under the Social Security Law. SSA governs, not FC. Intellectual property, like copyright or patent, should, according to Tolentino, be considered separate property Business property (e.g. trademarks, trade names, service marks, business goodwill) are merely accessories to some commercial establishment or product, so that if such establishment or product is separate property of one spouse, then all the business property is separate property; but all benefits or earnings derived from these during the marriage should belong to the conjugal property (Tolentino) Collection of credits belonging to one spouse exclusively but the interests shall belong to the CPG [Art. 119] Sale of separate property of a spouse Indemnity paid in case of expropriation of separate property or under an insurance policy covering separate property Presumption All property acquired during the marriage, whether made, contracted, or registered in the name of one spouse, are presumed conjugal unless the contrary is prove. [Art 116] As a condition sine qua non in favor of the conjugal partnership, the party who invokes the presumption must first prove that the property was acquired during the marriage [Acabal v. Acabal (2005)] Charges and obligations Arts. 121-123 Debts and obligations (1) Parag. 2: Debts incurred (a) By administrator-spouse for the benefit of the family (b) By both spouses (c) By one spouse with the consent of the other (2) Parag. 3: By one spouse without the consent of the other for the benefit of the family

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Absolute Community Property marriage (2)Common children (3) Legitimate children of previous marriage (4)Illegitimate children – follow the provisions on Support and parag. 9 Debts and obligations contracted during the marriage (1) Either by both spouses or one of them, with the consent of the other (2)In parags. 2 and 3, creditors need not prove that the debts benefited the family Debts contracted by one spouse without consent of the other – ACP is liable only to the extent that the debt benefited the family

Tax, liens, repairs (both major and minor) on community property Taxes and expenses for mere preservation of separate properties - Applies only to separate properties by either spouse being used by the family, not those that do not benefit the family - Expenses limited to minor repairs only Expenses for professional, vocational, or self-improvement courses of spouses Ante-nuptial debts that benefited the family – if the ante-nuptial debt did not benefit the family, the applicable rule is parag. 9 Donations by both spouses to common legitimate children, for purposes of professional/vocational courses or activities for self-improvement Ante-nuptial debts not under parag. 7, support of illegitimate children, and liabilities of either spouse arising from crime/quasi-delict - Only if the debtor-spouse has no exclusive property or his/her property is insufficient - The payments by the ACP are deemed advances to be deducted from the share of the guilty spouse upon the liquidation of the absolute community Expenses of litigation between spouses, except when suit is groundless If community property is insufficient except in parag. 9, the spouses are solidarily liable for the unpaid balance

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Conjugal Partnership Of Gains (3) Parag. 7: Ante-nuptial debts for the benefit of the family

Taxes and expenses (1) Parag. 4: Maintenance of the CPG properties (2) Parag. 5: Mere preservation of all exclusive properties (3) Parag. 9: Litigation expenses, unless the suit is groundless

Support (1) Parag. 1: Support of spouses and common children (2) Parag. 6: Education of spouses, absolute (3) Parag. 8: Education of common children, only for value of donation Support to surviving spouse & children during liquidation is charged against the fruits or income of their shares in the properties. [Art. 133] Debts incurred in the exercise of a spouse’s profession [Javier v. Osmeña (1916)] Loan contracts signed by both spouses are conjugal, and they are jointly liable for payment, even if only one spouse signs a subsequent promissory note [DPB v. Adil (1988)]

Debts incurred during the marriage are presumed to be conjugal and thus are charged to the CPG [Cobb-Perez v. Latin (1968)]

Ayala Investment v. Ching (1998): The Supreme Court ruled that indirect benefits that might accrue to a husband in signing as a surety or guarantee agreement not in favor of the family but in favor of his employer corporation are not benefits that can be considered as giving a direct advantage accruing to the family. Hence, the creditors cannot go against the conjugal partnership property of the husband in satisfying the obligation subject of the surety agreement. A contrary view would put in peril the conjugal partnership by allowing it to be given gratuitously as in cases of donation of conjugal partnership property, which is prohibited

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Absolute Community Property Conjugal Partnership Of Gains from their separate properties Gambling losses shall be borne by the losing spouse’s separate property [Art. 95] Ownership, administration, enjoyment, and disposition Art. 96: Administration of property Art. 124, par. 1: Administration of property belongs to both spouses, belongs to both spouses, jointly. If they jointly. In case of disagreement, the husband’s decision shall disagree, the husband’s decision prevails. prevail, subject to recourse by the wife for proper remedy, which However, the wife has 5 years to seek must be availed of within 5 years from the date of the contract recourse from the court. Otherwise, it is implementing such decision presumed she agreed to his decision. Sale by the husband of property belonging to the conjugal partnership without the consent of the wife, when there is no Exception: When the other spouse is showing that the latter is incapacitated, is void ab initio [Abalos v. incapacitated, or unable to participate in Macatangay (2004)] the administration, e.g. when abroad. Uy v. CA (2000): Capacitated spouse may assume sole FC124 contemplates a situation where one spouse is absent, or powers of administration. However, separated in fact or has abandoned the other or consent is power is limited to administration. withheld or cannot be obtained. Such rules do not apply to cases where the non-consenting spouse is incapacitated or incompetent to give consent ie, in coma. The proper remedy is to file for guardianship under the ROC. Even assuming that the rules on summary proceedings apply, the power of the administrator is the same as a guardian. So a spouse who desires to sell conjugal property as administrator must still observe the procedure for the sale of the ward’s estate required of judicial guardians under ROC not the summary judicial proceedings under FC. De Ansaldo v. Sheriff of Manila (1937): Spouses are not co-owners of CPG during the marriage and cannot alienate the supposed ½ interest of each in the said properties. The interest of the spouses in the CPG is only inchoate or a mere expectancy and does not ripen into title until it appears after the dissolution and liquidation of the partnership that there are net assets. [ Either spouse may, through a will, Art. 124, par. 2: Disposition or encumbrance of conjugal property dispose of his or her interest in the requires the following: community property. [Art. 97] However, (1) Consent or approval by both spouses, or the will should refer only to his or her (2) Judicial authority secured in court share in the community property. Donation of one spouse without the Donation of CPG must be with the consent of the other spouse consent of the other is not allowed. [Art. except moderate donations for charity, on occasions of family 98] rejoicing, or family distress [Art. 125; cf. Art. 98] Exceptions: (1) Moderate donations to charity due to family rejoicing or distress (2) Moderate gifts by each spouse to the other due to family rejoicing Moderation depends on the family’s socio-economic status. ACP allows donations in excess of onefifth of present property of future spouses because the donation would form part of the community property once the marriage is celebrated. [Art. 84] Mere awareness of a transaction is NOT consent [Jader-Manalo v. Camaisa (2002)] Homeowner’s Savings & Loan Bank v. Dallo (2005):

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Absolute Community Property Conjugal Partnership Of Gains In the absence of (court) authority or written consent of the other spouse, any disposition or encumbrance of the conjugal property shall be void. Cheeseman v. IAC (1991): If however, one of the spouses is an alien, the Filipino spouse may encumber or dispose of the property w/o the consent of the former. The property is presumed to be owned exclusively by the Filipino spouse. Dissolution of the regime Terminates upon [Art. 99]: Terminates upon [Art. 126; cf. Art. 99]: (1) Death of either spouse – follow rules (1) Death in Art. 103 (2) Legal separation (2) Legal separation – follow rules in (3) Annulment or judicial declaration of nullity Arts. 63 and 64 (4) Judicial separation of property (3) Annulment or judicial declaration of nullity – follow rules in Arts. 50 and 52 (4) Judicial separation of property during marriage – follow rules in Arts. 134 to 138 Rules on de facto separation [Art. 100] Not affected by de facto separation [Art. 128; cf. Art. 100] De facto separation does not affect the ACP, except that: (1) Spouse who leaves the conjugal home without just cause shall not be entitled to support; however, he/she is still required to support the other spouse and the family (2) If consent is necessary for transaction but is withheld or otherwise unobtainable, authorization may be obtained from the court (3) Support for family will be taken from the ACP (4) If ACP is insufficient, spouses shall be solidarily liable (5) If it is necessary to administer or encumber separate property of spouse who left, spouse present may ask for judicial authority to do this (6) If ACP is not enough and one spouse has no separate property, spouse who has property is liable for support, according to provisions on support Abandonment [Art. 101] Abandonment and absence [cf. Art. 101] Present/aggrieved spouse may petition the court for: (1) Receivership (2) Judicial separation of property Partosa-Jo v. CA (1992): (3) Authority to be the sole administrator Physical separation of the spouses, coupled with the husband’s of the absolute community, subject to refusal to give support to the wife, sufficed to constitute precautionary conditions that the abandonment as a ground for an action for the judicial separation court may impose of their conjugal property. A spouse is deemed to have abandoned the other when he or she has left the conjugal dwelling without any intention of returning. Spouse is prima facie considered to have PAGE 36

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Absolute Community Property Conjugal Partnership Of Gains abandoned the other spouse and the family if he or she has: (1) Left for a period of 3 months (2) Failed to inform the other spouse of his or her whereabouts for a period of 3 months Liquidation of assets and liabilities Procedure [Art. 102] Procedure [Art. 129] (a) Inventory of assets of ACP and of (1) Prepare an inventory of all properties spouses, with market values (2) Amounts advanced by CPG in payment of personal debts and (b) Obligations are paid with community obligations shall be credited to the CPG property, and separate obligations not (3) Reimburse each spouse for the use if his/her exclusive funds in charged to ACP paid by respective the acquisition of property or for the value of his or her assets of spouses exclusive property, the ownership of which has been vested by If obligations exceed the assets of the law in the conjugal partnership ACP, nothing is divided. Creditors can (4) Debts and obligations of CPG shall be paid out of the conjugal go after the separate properties of the assets, otherwise both spouses are solidarily liable with their spouses, which are solidarily liable for exclusive property the deficiency (5) Remains of the exclusive properties shall be delivered to (c) Delivery of whatever remains in their respective owner-spouses exclusive property (6) Indemnify loss/deterioration of movables belonging to either (d) Balance, or net remainder is divided spouse, even due to fortuitous event, used for the benefit of the equally between the spouses, family irrespective of how much each (7) Net remainder of CPG shall constitute the profits which shall brought into the community be divided equally between husband and wife except when: (e) If personal obligations of a spouse (a) A different proportion or division was agreed upon in the exceed his/her separate property, marriage settlements creditor can go after the share of the (b) There has been a voluntary waiver or forfeiture of such share spouse on the net remainder of the as provided in the FC ACP, without prejudice to the (8) Presumptive legitimes are delivered to common children provisions of law on forfeitures and (9) Conjugal dwelling goes to: delivery of presumptive legitimes (a) Spouse with whom majority of common children choose to (f) After covering all community remain (below 7 y.o. = deemed to have chosen the mother) obligations and obligations of (b) Whoever the court chooses in case of lack of majority spouses, balance of separate properties shall be delivered to respective spouses or their heirs, and they will also divide into two equal shares whatever is left of the community assets, without prejudice to the provisions of law on forfeitures and delivery of presumptive legitimes Rules in case of termination of marriage by death of one of the spouses [Art. 104]: (1) The community property shall be liquidated in the same proceeding for the settlement of the estate of the deceased spouse. (2) If no such judicial settlement proceeding is instituted, surviving spouse shall liquidate the community property either judicially or extra-judicially within one year from the death of the deceased spouse. (a) If no liquidation is made within the period, any disposition or encumbrance involving community property of the terminated marriage shall be void. (b) Non-compliance with liquidation procedures would mean that a subsequently contracted marriage will follow a regime of complete separation of property. Procedure for liquidation of properties of two marriages [Art. 104]: (1) Determine the capital, fruits, and income of each community upon such proof as may be considered according to the rules of evidence. (2) In case of doubt as to which community the existing properties belong, they shall be divided between two communities in proportion to the capital and duration of each. PAGE 37

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SEPARATION OF PROPERTY OF THE SPOUSES AND ADMINISTRATION OF COMMON PROPERTY BY ONE SPOUSE DURING THE MARRIAGE Art. 134. In the absence of an express declaration in the marriage settlements, the separation of property between spouses during the marriage shall not take place except by judicial order. Such judicial separation of property may either be voluntary or for sufficient cause. JUDICIAL SEPARATION OF PROPERTY MAY EITHER BE (1) VOLUNTARY OR (2) FOR SUFFICIENT CAUSE. (a) Sufficient Causes and Grounds for Return to Previous Regime Sufficient Causes for Judicial Separation of Property (Art. Grounds for Return to Previous Regime 135) (CALASA) (Art. 141) (1) Spouse of petitioner has been sentenced to a (1) Termination of the civil interdiction penalty which carries with it the penalty of civil interdiction (2) Spouse of petitioner is judicially declared an (2) Reappearance of absentee spouse absentee (3) Loss of parental authority of the spouse of (5) Restoration of parental authority to the spouse petitioner has been decreed by the court previously deprived of it (4) Spouse of petitioner has abandoned the latter or (4) When the spouse who left the conjugal home without failed to comply with his or her obligations to the legal separation resumes common life with the other family (5) The spouse granted the power of administration in (3) When the court, being satisfied that the spouse the marriage settlements has abused that power granted the power of administration in will not again abuse that power, authorizes the resumption of said administration (6) At the time of the petition, the spouses have been (6) Reconciliation and resumption of common life of the separated in fact for at least 1 year and spouse who have separated in fact for at least 1 year reconciliation is highly improbable. (7) When after voluntary dissolution of the ACP or CPG has been judicially decreed upon the joint petition of the spouses, they agree to the revival of the former property regime. No voluntary separation of property may thereafter be granted. Separation of Property Agreed upon in the marriage settlements by the spouses Mandatory under Arts. 103 & 130 (subsequent marriages contracted by a surviving spouse When it applies without judicial settlement of previous property regime) Default property regime when there is reconciliation between spouses after judicial separation of property Present or future property or both Each spouse’s earnings from his or her own profession, business, or industry What it consists Natural, industrial or civil fruits of spouse’s separate properties of May be total or partial If partial, property not considered separate is presumed to pertain to the ACP Family expenses: Both spouses are liable in proportion to their income; if insufficient, based on the current value of their separate properties Liabilities Creditors for family expenses: Spouses solidarily liable Spouses may own, dispose, possess, and administer separate estates without the consent of the other Ownership, Administration of exclusive properties may be transferred between spouses when: administration, 1. One spouse becomes the other spouse’s guardian enjoyment, and 2. One spouse is judicially declared an absentee disposition 3. One spouse is given the penalty of civil interdiction 4. One spouse becomes a fugitive Conveyance between the spouses is allowed under Art. 1490, NCC.

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In Re: voluntary dissolution of CPG of spouses Bernas (1965): A voluntary separation of properties is not perfected by mere consent but upon the decree of the court approving the st nd same. The petition for voluntary separation of property was denied because the children of the 1 and 2 marriages were not informed; the separation of property may prejudice the rights and shares of the children. Maquilan v. Maquilan (2007): A compromise agreement with judicial recognition is valid, pending petition for declaration of nullity of marriage. PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE, ARTS. 147-148 Art. 147 Man and woman living together as husband and wife, with capacity to marry (Art.5, without any legal impediment) (a) at least 18 years old (b) not Art. 37 (incestuous void marriage) (c) not Art. 38 (void marriage by reason of public policy) (d) not bigamous Other void marriages due to absence of formal requisite

Art. 148 Applicability Man and woman living together as husband and wife, NOT capacitated to marry (a) Under 18 years old (b) Adulterous relationship (c) Bigamous/polygamous marriage (d) Incestuous marriages under Art. 37 (e) Void marriages by reason of public policy under Art. 38

Salaries and wages Separately owned by parties Properties acquired through exclusive funds Remains exclusive, provided there is proof Remains exclusive Villanueva v. CA (2004): Transfer of certificate Juaniza v. Jose (1979): Property acquired by a married party during and tax declarations are not sufficient proof cohabitation with another not his spouse belongs to the CPG of of joint contribution. the marriage, and the other party cannot be held jointly/severally liable for it Properties acquired by both through work and industry Governed by rules on co-ownership Owned in common in proportion to respective contribution Properties acquired while living together Owned in equal shares since it is presumed to No presumption of joint acquisition. When there is evidence of have been acquired through joint efforts joint acquisition but none as to the extent of actual contribution, there is a presumption of equal sharing. If one party did not participate in acquisition, Joaquina v. Reyes (2004): Prohibitions against donations between presumed to have contributed through care spouses must likewise apply to donations between persons living and maintenance of family and household together in illicit relations Forfeiture (1) In favor of their common children If one party is validly married to another his/her share in the co(2) In case of default of or waiver by any or all owned properties will accrue to the ACP/CPG of his/her existing of the common children or their valid marriage descendants, each vacant share shall belong to the respective surviving If the party who acted in bad faith is not validly married to another, descendants his/her share shall be forfeited in the same manner as that In the absence of such descendants, such provided in Art 147. share belongs to the innocent party The same rules on forfeiture shall apply if both parties are in bad faith. Owned in equal shares

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Yaptinchay v. Torres (1969): Application of Article 148; there was no proof of actual contribution, while there was a subsisting marriage apart from the union without marriage, therefore, the N. Forbes house goes to the CPG of subsisting marriage Juaniza v. Jose (1979): Property acquired by a married party during cohabitation with another not his spouse belongs to the CPG of the marriage, and the other party cannot be held jointly/severally liable for it Villanueva v. CA (2004): Transfer of certificate and tax declarations are not sufficient proof of joint contribution. Joaquino v. Reyes (2004): Prohibitions against donations between spouses must likewise apply to donations between persons living together in illicit relations; Valdez vs. QC-RTC (1996): Marriages that have been declared void come under the rules of co-ownership under FC147/148 regardless of the reason.

The Family

Except: For a suit between members of the same family to prosper, the following are required: (1) Earnest efforts towards a compromise have been made (2) Such efforts have failed (3) Such earnest efforts and the fact of failure must be alleged

Art. 149. The family, being the foundation of the nation, is a basic social institution which public policy cherishes and protects. Consequently, family relations are governed by law and no custom, practice or agreement destructive of the family shall be recognized or given effect.

Note: The case will be dismissed if it is shown that no such efforts were made.

THE FAMILY AS AN INSTITUTION

The rules shall not apply to cases, which may not be the subject of compromise.

ASPECTS OF FAMILY RELATIONS

(1) External Aspect (a) Governed by law (Art. 149) (b) Only in this aspect can third persons and the public interest be concerned (2) Internal Aspect (a) Sacred to the family and inaccessible to law because law must respect the freedom of action of man (b) E.g. spiritual relations, sexual relations of spouses, career or profession of spouses, profession and career of spouses, practices and customs of family

EXCEPTIONS TO THE GENERAL RULE – CANNOT BE SUBJECT OF COMPROMISE (ART 2035, CC; VJLAFF)

(1) Civil status of persons, (2) Validity of marriage or a legal separation, (3) Any ground for legal separation, (4) Future support, (5) Jurisdiction of courts, (6) Future legitime Hontiveros v. RTC (1999): Whenever a stranger is a party in a case involving family members, the requisite showing of earnest efforts to compromise is no longer mandatory, as such inclusion of a stranger takes the case out of the ambit of Art. 151.

FAMILY RELATIONS INCLUDE:

(1) Between husband and wife (2) Between parents and children (3) Among other ascendants and descendants (4) Among brothers and sisters, full or half blood.

THE FAMILY HOME CONSTITUTED BY: (1) Jointly by the husband and the wife (2) By an unmarried head of a family;

General rule: (Art. 151): No suit between members of the same family shall prosper.

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INCLUDES:

REQUISITES TO BE A BENEFICIARY (RLD)

(1) Dwelling house where they and their family reside (2) The land on which it is situated (Art. 152)

(1) The relationship is within those enumerated (2) They live in the family home (3) They are dependent for legal support on the head of the family

The actual value of the family home shall not exceed, at the time of the constitution, the amount of Three hundred thousand pesos (P300,000.00) in urban areas, and Two hundred thousand pesos (P200,000.00) in rural areas or such amounts as may hereafter be fixed by law. (Art. 157)

REQUIREMENTS FOR THE SALE, ALIENATION, DONATION, ASSIGNMENT, OR ENCUMBRANCE OF THE FAMILY HOME (ART. 158)

(1) the written consent of the person constituting it, (2) his/her spouse, and (3) majority of the beneficiaries of legal age

A person may constitute and be the beneficiary of only one family home (Art. 161)

Note: If there is a conflict, the Court will decide. The provisions of the Chapter on Family Home shall govern existing family residences insofar as said provisions are inapplicable (Art. 162)

In case of death of one or both spouses or the unmarried head of the family (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 as long as there is a minor beneficiary.

GUIDELINES:

(1) It is deemed constituted from time of actual occupation as a family residence (2) It must be owned by person constituting it (3) It must be permanent (4) Rule applies to valid and voidable and even to common-law marriages under Arts.147 and 148 (5) It continues despite death of one or more spouses or unmarried head of family for 10 years or as long as there is a minor beneficiary (Art.159) (6) Can only constitute one family home

The heirs cannot partition the home unless the court finds compelling reasons therefore. REQUISITES FOR CREDITOR TO AVAIL OF THE RIGHT UNDER ARTICLE 160 (If a claim of a creditor is not among the

exceptions mentioned in Art. 155 and has reasonable grounds to believe that the family home is worth more than the amount fixed in Art. 157)

General rule: The family home is exempt from (EFA) from the time of its constitution and so long as any of its beneficiaries actually resides therein (Art. 153): (1) Execution (2) Forced sale (3) Attachment

Requisites: (1) He must be a judgment creditor; (2) His claim is not among those excepted under Article155, and (3) He has reasonable grounds to believe that the family home is worth more than the maximum amount fixed in Art. 157.

Exceptions in the exemption of the family home from execution (Art. 155) (1) Nonpayment of taxes. (2) Debts incurred prior to the constitution of the family home. (3) Debts secured by mortgages on the premises before or after such constitution. (4) Debts due to laborers, mechanics, architects, builders, materialmen and others who have rendered service or furnished material for the construction of the building. BENEFICIARIES OF THE FAMILY HOME (ART. 154) (1) Husband and wife, or an unmarried person who is the head of the family (2) Parents (may include parent-in-laws), ascendants, descendants, brothers and sisters (legitimate/illegitimate), who are living in the family home and who depend on the head of the family for support

Procedure to avail of right under Art. 160 (1) The creditor must file a motion in the court proceeding where he obtained a favorable decision for a writ of execution against the family home. (2) There will be a hearing on the motion where the creditor must prove that the actual value of the family home exceeds the maximum amount fixed by the FC either at the time of its constitution or as a result of improvements introduced thereafter its constitution. (3) If the creditor proves that the actual value exceeds the maximum amount the court will order its sale in execution. (4) If the family home is sold for more than the value allowed, the proceeds shall be applied as follows: (a) First, the obligation enumerated in Article 157 must be paid

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(b) Then the judgment in favor of the creditor will be paid, plus all the costs of execution (c) The excess, if any, shall be delivered to the judgment debtor

(1) Executed & signed by husband and wife before the birth of the child. (2) Recorded in the civil registry together with the birth certificate of the child.

Versola v. Mandolaria (2006): The proof that the house is the family home must be alleged against creditors; Applied the rule in Art. 160, FC.

[Tolentino]: Dual consent is required whether the semen used comes from the husband or a third person donor

Patricio v. Dario III (2006): WON the grandson of the deceased is a beneficiary according to Art. 154 FC. The beneficiary should satisfy all requisites; he must be dependent on the head of the family.

General rule: Those conceived and born outside of a valid marriage. [Art. 165]

WHO ARE ILLEGITIMATE CHILDREN

Arriola v. Arriola (2008): This case involves half-brothers and a second wife; the family home includes the land it is built on. The rule in Art. 159 of the FC regarding the 10 year period is applied, the parties involved must wait.

Exceptions: (1) Children of marriages void under Art. 36 (psychological incapacity). (2) And under Art. 53 (the second marriage of a widow or widower who has not delivered to his or her children by his or her first marriage the legitime of said children). (Sempio-Dy)

Paternity and Filiation

De Castro v. Assidao-De Castro, (2008): Common children born before the annulment are legitimate, and therefore entitled to support from each of the spouses.

KINDS OF FILIATION (ARTS. 163, 164, 165): (1) Natural (a) Legitimate (b) Illegitimate (2) Legal Fiction (Adoption)

IMPUGNING LEGITIMACY

Grounds for impugning legitimacy of a child are [Art. 166]: (1) Physical impossibility for the husband to have sexual intercourse with his wife within the first 120 days of the 300 days which immediately preceded the child's birth due to: (a) Physical incapacity of the husband to have sexual intercourse with his wife (b) Husband and wife were living separately as to make sexual intercourse impossible (c) Serious illness of the husband absolutely preventing sexual intercourse (2) Other biological or scientific reasons, except Artificial Insemination (3) And in case of Artificial Insemination, the written consent of either parent was vitiated through fraud, violence, mistake, intimidation, or undue influence

LEGITIMATE CHILDREN WHO ARE LEGITIMATE CHILDREN (ART. 164)

Those conceived or born during the marriage of parents either by natural means or by artificial insemination Natural/Biological [Liyao v. Liyao (2002)]: A child conceived or born during a valid marriage is presumed to belong to that marriage, regardless of the existence of extramarital relationships. Artificial Insemination (Art. 164) Requisites to be considered legitimate: (a) Artificial insemination made on wife (b) Sperm comes from any of the following: (1) Husband (2) Third Person Donor (3) Husband and third person donor (c) In case of donor sperm, husband and wife must authorize/ratify insemination in a written instrument

Macadangdang v. CA (1980): Mere proximate separation between the spouses is not sufficient physical separation as grounds for impugning legitimacy. Andal v. Macaraig (1951): Serious illness of the husband which absolutely prevented him from having sexual intercourse with his wife, like if the husband was already in comatose or a

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vegetable, or sick with syphilis in the tertiary stage so that copulation was not possible. But tuberculosis, even in its most crucial stage, does not preclude copulation between the sick husband and his wife.

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(2) Within 2 years  if the husband or all heirs live in the Philippines but do not reside in the same city or municipality where the child's birth took place or was recorded (3) Within 3 years  if the husband or all heirs live outside the Philippines when the child's birth took place or was recorded in the Philippines

Jao v. CA (1987): Blood-type matching is an acceptable means of impugning legitimacy, covered by Art. 166(2), under "biological or other scientific reasons." But this is only conclusive of the fact of non-paternity.

If the birth of the child has been concealed or was unknown to the husband, the above periods shall be counted: (1) From the discovery or knowledge of the birth of the child, or (2) From the discovery or knowledge of its registration, (3) Whichever is earlier.

Legitimacy with regard to the mother: (1) Child considered legitimate although [Art. 167]: (a) Mother may have declared against its legitimacy (b) Mother may have been sentenced as an adulteress (also applies to wife who was raped) (2) If the marriage is terminated and the mother contracted another marriage within 300 days after the termination of the former marriage, the rules shall govern in the absence of proof to the contrary [Art 168]: (a) If child born before 180 days after the solemnization of the subsequent marriage – child is considered conceived during the former marriage, provided it be born within 300 days after termination of the former marriage (b) If child born after 180 days following the celebration of the subsequent marriage – child is considered conceived during such marriage, even if it be born within 300 days after the termination of the former marriage

General rule: Only the husband can impugn the legitimacy of a child. If he does not bring an action within the prescribed periods, he cannot file such action anymore thereafter, and this is also true with his heirs. Exception: That the heirs of the husband may file the action or continue the same within the periods prescribed in Art. 170 [Art. 171]: (a) If the husband died before the expiration of the period fixed for bringing his action (b) If he should die after the filing of the complaint without having desisted therefrom (c) If the child was born after the death of the husband. Sayson v. CA (1992): Legitimacy can only be attacked directly.

Note: The legitimacy or illegitimacy of a child born after 300 days following the termination of the marriage – burden of proof upon whoever alleges the status. [Art. 169]

PROOF OF FILIATION Legitimate children may establish their filiation by any of the following [Art. 172]: (1) Primary Evidence (a) Their record of birth appearing in the civil registry. (b) An admission of his filiation (legitimate or illegitimate) by his parent or parents in a public document or a private handwritten instrument and signed by said parent or parents

[Tolentino:] If nobody asserts the legitimacy or illegitimacy of the child described in Art. 169, the child should be considered illegitimate unless legitimacy is proved. Legitimacy cannot be presumed here since the birth was beyond the 300-day period of gestation. While it goes against the policy of law to lean in favor of legitimacy, this interpretation is better than the anomalous situation created by Art. 169, which is a child without a status.

(2) Secondary Evidence (a) Proof of open and continuous possession of status as legitimate or illegitimate child (b) Any other means stated by the rules of court or special laws

ACTION FOR IMPUGNING LEGITIMACY [ARTS. 170 AND 171]

May be brought within 1, 2, or 3 years from the knowledge of the birth, or the knowledge of registration of birth. (1) Within 1 year  if husband or any heirs reside in the same city or municipality where the child was born or his birth was recorded.

Note: Only in the absence of primary evidence can secondary evidence be admitted

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ACTION FOR CLAIMING FILIATION [ART. 173]:

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reputation or tradition regarding pedigree like inscriptions on tombstones, monuments, or coffin plates.

(a) The child can bring the action during his or her lifetime, and once commenced such action survives even after the death of the parents. The action does not prescribe as long as he lives. (b) If the child dies during minority or in a state of insanity, such action shall be transmitted to his heirs, who shall have a period of five years within which to institute the action.

Eceta v. Eceta (2004): Signature of the father on the birth certificate is considered as an acknowledgement of paternity and mere presentation of a duly authenticated copy of such certificate will successfully establish filiations.

RIGHTS OF LEGITIMATE CHILDREN [ART. 174]:

Heirs of Rodolfo Bañas v. Heirs of Bibiano Bañas (1985): "Su padre [Your father]" ending in a letter is only proof of paternal solicitude and not of actual paternity. Signature on a report card under the entry of "Parent/Guardian" is likewise inconclusive of open admission.

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

De Jesus v. Syquia (1933): By "open and continuous possession of the status of a legitimate child" is meant the enjoyment by the child of the position and privileges usually attached to the status of a legitimate child, like bearing the paternal surname, treatment by the parents and family of the child as legitimate, constant attendance to the child's support and education, and giving the child the reputation of being a child of his parents.

ILLEGITIMATE CHILDREN Illegitimate children may establish their illegitimate filiation in the same way and on the same evidence (primary or secondary) as legitimate children. [Art. 175] ACTION FOR CLAIMING FILIATION [ART. 175]:

Agustin v. CA (2005): DNA evidence can be used as proof of paternity.

(a) For actions based on primary evidence, the same periods stated in Art. 173 apply. (b) For actions based on secondary evidence, the action may only be brought during the lifetime of the alleged parent.

De Jesus v. Estate of Decedent Juan Gamboa Dizon (2001): 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.

Mendoza v. Melia (1966): Baptismal certificates are given probative value only for births before 1930. Birth certificates must be signed by the parents and sworn for it to be admitted as evidence.

Gono-Javier vs. Court of Appeals (1994): Mere possession of status as an illegitimate child does not make a recognized illegitimate child but is only a ground for bringing an action to compel judicial recognition by the assumed parent.

Baluyut v. Baluyut (1990): Unsigned birth certificates are not evidence of recognized filiation.

Herrera v. Alba (2005): In assessing the probative value of DNA evidence, therefore, courts should consider, among other things, the following data: (a) How the samples were collected, (b) How they were handled, (c) The possibility of contamination of the samples, (d) The procedure followed in analyzing the samples, (e) Whether the proper standards and procedures were followed in conducting the tests, (f) The qualification of the analyst who conducted the tests.

Acebedo v. Arquero (2003): Baptismal certificates are only conclusive of the sacrament administered, and cannot be used as proof of filiation. Lim v. CA (1975): Marriage certificates cannot be used as proof of filiation. Jison v. CA (1998): Rule 130, Sec. 40 is limited to objects commonly known as family possessions reflective of a family's PAGE 44

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governing successional rights shall remain in force.

Estate of Rogelio Ong v. Diaz (2007): DNA evidence can still be used even after the death of the parent.

LEGITIMATED CHILDREN "Legitimated" children are illegitimate children who because of the subsequent marriage of their parents are, by legal fiction, considered legitimate.

Gotardo v. Buling (2012): There are four significant procedural aspects of a traditional paternity action that parties have to face: a prima facie case, affirmative defenses, presumption of legitimacy, and physical resemblance between the putative father and the child. A prima facie case exists if a woman declares — supported by corroborative proof — that she had sexual relations with the putative father; at this point, the burden of evidence shifts to the putative father. Further, the two affirmative defenses available to the putative father are: (1) incapability of sexual relations with the mother due to either physical absence or impotency, or (2) that the mother had sexual relations with other men at the time of conception.

TO BE CAPABLE OF LEGITIMATION:

(1) The child must have been conceived and born outside of wedlock; and (2) General rule: The parents, at the time of the child's conception, were not disqualified by any impediment to marry each other (Art. 177). Exception: RA 9858 - Children born to parents who were so disqualified only because either or both of them were below eighteen (18) years of age at the time of child’s conception may be legitimated.

Perla v. Baring and Perla (2012): To prove open and continuous possession of the status of an illegitimate child, there must be evidence of the manifestation of the permanent intention of the supposed father to consider the child as his, by continuous and clear manifestations of parental affection and care, which cannot be attributed to pure charity.

PROCEDURE:

(a) Legitimation shall take place by a subsequent valid marriage between the parents. The annulment of a voidable marriage shall not affect the legitimation. [Art. 178] (b) Effects of legitimation shall retroact to the time of the child’s birth [Art. 180] (c) Legitimation of children who died before the celebration of the marriage shall benefit their descendants [Art. 181]

Meanwhile, the lack of participation of the supposed father in the preparation of a baptismal certificate renders this document incompetent to prove paternity. Baptismal certificates are per se inadmissible in evidence as proof of filiation and they cannot be admitted indirectly as circumstantial evidence to prove the same

GROUNDS FOR IMPUGNING LEGITIMATION:

(1) The subsequent marriage of the child's parents is void. (2) The child allegedly legitimated is not natural. (3) The child is not really the child of the alleged parents. (Sempio-Dy)

RIGHTS OF ILLEGITIMATE CHILD [ART. 176]:

RIGHTS:

(a) Use the surname and be under the parental authority of the mother (b) However, may use the surname of their father if (1) Their filiation has been expressly recognized by the father through the record of birth appearing in the civil register. (2) There is an admission in a public document or private handwritten instrument made by the father. (3) Provided, the father has the right to institute an action before the regular courts to prove non-filiation during his lifetime [RA 9255] (c) Shall be entitled to support in conformity with the Family Code (d) Legitime shall consist of one-half of the legitime of a legitimate child. Except for such modification, all other provisions of the Civil Code

The same as those of legitimate children [Art. 179] IMPUGNING LEGITIMATION [ART. 182]

(1) May be made only by those who are prejudiced in their rights (2) Within five years from the time their cause of action accrues

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Adoption Legitimation

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emergency reasons are allowed) in RP prior to the filing of application and maintains such residence until the decree is entered (4) Has been certified by his/her diplomatic or consular office or any appropriate government agency that he/she has the legal capacity to adopt in his/her country (5) His/her government allows the adoptee to enter his/her country as his/her adoptee (6) Has submitted all the necessary clearances and such certifications as may be required

Adoption

Legal effect The law merely makes The law merely creates by legal what exists by fiction a relation which nature did not in fact exist Persons affected Natural Children Strangers (generally) Procedure Extrajudicial acts of Always by judicial decree parents Who should apply Both parents Both parents, but with exceptions allowing only one of them to apply [RA 85520] Effect on parent-child relationship Same status and rights Creates a relationship with that of a legitimate only between the child child not only in relation and the adopting parents to the legitimizing parents but also to other relatives

**Items 3, 4 and 5 may be waived under the following circumstances: (a) Adopter is a former Filipino Citizen who seeks to th adopt a relative within the 4 degree of consanguinity or affinity (b) Adopter seeks to adopt the legitimate or illegitimate child of his/her Filipino spouse (c) Adopter is married to a Filipino Citizen and seeks to adopt jointly with his/her spouse a relative th within the 4 degree of consanguinity or affinity of the Filipino spouse (3) Guardians With respect to theirs ward after the termination of the guardianship and clearance of his/her accountabilities.

ADOPTION is a juridical act, which creates between two persons a relationship similar to that which results from legitimate paternity and filiation.

Husband and wife shall adopt jointly, EXCEPT: (1) If one spouse seeks to adopt the legitimate child of the other (2) If one of the spouse seeks to adopt his/her illegitimate child provided that other spouse has signified his/her consent (3) If spouses are legally separated from each other

RA 8552 – DOMESTIC ADOPTION LAW WHO CAN ADOPT

(1) Filipino Citizens (a) Of legal age (b) With full civil capacity and legal rights (c) Of good moral character (d) Has not been convicted of any crime involving moral turpitude (e) Emotionally and psychologically capable of caring for children (f) At least sixteen (16) years older than adoptee, except when adopter is biological parent of the adoptee or is the spouse of the adoptee’s parent (g) In a position to support and care for his/her children in keeping with the means of the family (2) Aliens Same for Filipinos provided further that: (1) At least 27 years old (2) His/her country has diplomatic relations with the Philippines (3) Has been living continuously for 3 years (provided that absences not exceeding 60 days per 1 year for professional, business, or

Note: If spouses jointly adopt, parental authority shall be exercised jointly WHO CAN BE ADOPTED

(a) Minor who has been administratively or judicially declared available for adoption (b) Legitimate child of one spouse by another (c) Illegitimate child by a qualified adopter to improve the child’s status to that of legitimacy (d) A person of legal age if, prior to the adoption, said person has been consistently considered and treated by the adopter(s) as his/her child since minority (e) A child whose previous adoption has been rescinded (f) A child whose biological or adoptive parent(s) has died, provided that no proceedings shall be initiated within 6 months from the time of death of said parent(s)

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Persons whose written consent is necessary for adoption [Sec. 9] (1) The prospective adoptee if 10 years or older (2) The prospective adoptee’s biological parents, legal guardian or the government instrumentality or institution that has custody of the child (3) The prospective adopters’ legitimate and adopted children who are 10 years or older (4) The prospective adopters’ illegitimate children, if any, who are 10 years or older and living with them (5) The spouse, if any, of the person adopting or to be adopted.

Posting of the petition, then recommendation by the Regional Director of the DSWD (5 days each) Issuance of certification by DSWD Secretary declaring the child legally available for adoption Notes: (1) Abandoned child – no proper parental care/guidance; or parents have deserted him/her for at least 3 continuous months, including foundlings

Note: A decree of adoption shall be effective as of the date the original petition was filed. It also applies in case the petitioner dies before the issuance of the decree of adoption to protect the interest of the adoptee.

(2) Neglected child – his basic needs have been deliberately unattended or inadequately attended within 3 continuous months either by: (a) Physical Neglect – child is malnourished, illclad, without proper shelter, or without proper provisions (b) Emotional Neglect – child is maltreated, raped, seduced, exploited, overworked, or in moral danger

PRE-ADOPTION PROCEDURES

(1) Voluntary Commitment of biological mother wanting to put her child up for adoption Counseling on her options other than adoption

(3) Required supporting documents for a petition for the declaration of involuntary commitment: (a) Social Case Study Report by DSWD / LGU / institution charged with child’s custody (b) Proof of efforts to locate the child’s parents/known relatives (1) Written certification that a local/national radio/TV case was aired on 3 different occasions (2) Publication in 1 newspaper of general circulation (3) Police report / barangay certification of due diligence (4) Returned registered mail to last known address of parents (c) Birth certificate, if available (d) Recent photo and photo upon abandonment of child

Explaining to her the implications of losing her parental authority over the child Continuing services shall be provided after relinquishment to cope with feelings of loss, etc. and other services for his/her reintegration to the community Biological parent(s) who decide to keep the child shall be provided with adequate services and assistance to fulfill their parental responsibilities Biological parent(s) who decide to put the child for adoption shall sign the Deed of Voluntary Commitment (DVC), which shall be rescissible within 3 months from signing of the same (2) Involuntary Commitment neglected child

of

abandoned

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ADOPTION PROCEDURES

Inquiry of prospective adopters at DSWD or

Attendance of DSWD Adoption Fora and Seminars (include counseling)

Filing of a petition at Regional DSWD in the form of an affidavit and with the required supporting documents

Application for Adoption

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RIGHTS OF AN ADOPTED CHILD

Case Study Report

(a) Parental Authority All legal ties between biological parents and adoptee are severed, and the same shall be vested on the adopter, except if the biological parent is the spouse of the adopter. [Art. 189 as amended] (b) Legitimacy The adoptee shall be considered legitimate son/daughter of the adopter for all intents and purposes, and shall be entitled to all the rights and obligations provided by law to legitimate children born to them without discrimination of any kind. [Art. 189 as amended] (c) Succession Adopter and adoptee shall have reciprocal rights of succession without distinction from legitimate filiation, in legal and intestate succession. If adoptee and his/her biological parents had left a will, the law on testamentary succession shall govern. [Art. 189 as amended]

Certificate of Availability for Adoption

Matching

Placement

Supervised Trial Custody

Home Study Report

Recommendation and Consent of DSWD

Art. 190 as amended. Rules on legal or intestate succession to the estate of the adoptee:

Petition for Adoption

(1) Legitimate and illegitimate children, descendants and the surviving spouse of the adoptee shall inherit in accordance with the ordinary rules of legal/intestate succession

Adoption Decree

(2) When the surviving spouse OR illegitimate children AND adopters concur, they shall inherit on a 50-50 basis

Note: After the decree of adoption, the court may also issue a travel authority, if needed; DSWD to provide post adoption services

(3) When the surviving spouse AND illegitimate children AND adopters concur, they shall inherit on a 1/3-/1/3-1/3 basis

WHO MAY NOT ADOPT/ BE ADOPTED

Art. 184 (as amended by RA 8552) The following may not adopt: (1) The guardian, with respect to the ward prior to the approval of the final accounts rendered upon the termination of the guardianship (2) Any person convicted of a crime of moral turpitude

(4) When only adopters survive, they shall inherit 100% of the estate (5) When only collateral blood relatives survive, ordinary rules of legal or intestate succession shall apply

Art. 187 The following may not be adopted: (1) A person of legal age unless he is a natural child of the adopter or of his/her spouse; or he was treated as a natural child since minority (2) An alien whose government has no diplomatic relations with the Philippines (3) A person already adopted unless his adoption has been previously revoked/rescinded

Art. 365, NCC. An adopted child shall bear the surname of the adopter. RESCISSION OF ADOPTION

Adoptee may request for rescission, with the assistance of DSWD if he/she is a minor or over 18 but incapacitated, based on the ff. grounds: (1) Repeated physical and verbal maltreatment by adopters despite having undergone counseling (2) Attempt on life of adoptee (3) Sexual assault or violence

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(4) Abandonment or failure to comply with parental obligations

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Sec. 22 (RA 8552) A person who has, prior to the effectivity of RA 8552, simulated the birth of a child shall not be punished for such act, PROVIDED: (a) The simulation was for the child’s best interest (b) Child has been treated consistently as his own (c) Petition filed within 5 years of RA 8552’s effectivity (2003)

Note: Adoption, being in the best interest of the child, shall not be subject to rescission by the adopter(s). However, the adopter(s) may disinherit the adopted based on causes enumerated in Art. 919 of the NCC: (1) Conviction of an attempt on the life of the adopter (2) Having accused, without grounds, the adopter of a crime punishable by imprisonment for more than 6 years (3) Conviction of adultery/concubinage with the adopter’s spouse (4) Having caused the adopter to make or change a will by force, intimidation or undue influence (5) Refusal without just cause to support the adopter (6) Maltreatment of the adopter by word/deed (7) Living a dishonorable/disgraceful life (8) Conviction of a crime which carries with it the penalty of civil interdiction

Three-in-one Procedure (a) Correction of entries in birth certificate (b) Declaration of abandonment (c) Adoption decree RA 8043 – THE LAW ON INTER-COUNTRY ADOPTION INTER-COUNTRY ADOPTION refers to the socio-legal process of adopting a Filipino child by a foreigner or a Filipino citizen permanently residing abroad where the petition is filed, the supervised trial custody is undertaken, and the decree of adoption is issued outside the Philippines

Effects of Rescission [Sec. 20]: (1) Parental authority of the adoptee's biological parents, if known, OR the legal custody of the DSWD shall be restored if the adoptee is still a minor or incapacitated (2) Reciprocal rights and obligations of the adopters and the adoptee shall be extinguished (3) Court shall order the Civil Registrar to cancel the amended certificate of birth of the adoptee and restore his/her original birth certificate (4) Succession rights shall revert to its status prior to adoption, but only as of the date of judgment of judicial rescission (5) Vested rights prior to judicial rescission shall be respected

WHO CAN ADOPT

Any foreign national or a Filipino citizen permanently residing abroad who has the qualifications and none of the disqualifications under the Act may file an application if he/she: (a) Is at least 27 years of age and at least 16 years older than the child to be adopted, at the time of application unless the adopter is the parent by nature of the child to be adopted or the spouse of such parent (b) If married, his/her spouse must jointly file for the adoption (c) Has the capacity to act and assume all rights and responsibilities of parental authority under his national laws, and has undergone the appropriate counseling from an accredited counselor in his/her country (d) Has not been convicted of a crime involving moral turpitude (e) Is eligible to adopt under his/her national law (f) Is in a position to provide the proper care and support and to give the necessary moral values and example to all his children, including the child to be adopted (g) Agrees to uphold the basic rights of the child as embodied under Philippine laws, the U.N. Convention on the Rights of the Child, and to abide by the rules and regulations issued to implement the provisions of this Act (h) Comes from a country with whom the Philippines has diplomatic relations and whose government maintains a similarly authorized and accredited agency and that adoption is allowed under his/her national laws

Note: Rescission contemplates a situation where the adoption decree remains valid until its termination RECTIFICATION OF SIMULATED BIRTH

Simulation of birth is the tampering of LCR records to make it appear that a certain child was born to a person who is not his/her biological parent, causing said child to lose his true identity/status Sec. 21-b (RA 8552) Any person who shall cause the fictitious registration of the birth of a child under the name(s) of a person(s) who is not his/her biological parent(s) shall be guilty of simulation of birth, and shall be punished by prision mayor in its medium period and a fine not exceeding Fifty thousand pesos (P50,000.00).

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Landingin v. Republic (2006) Consents for adoption must be written and notarized.

WHO CAN BE ADOPTED

(a) Only a legally-free child may be the subject of inter-country adoption. (b) A legally-free child is one who has been voluntarily or involuntarily committed to the DSWD of the Philippines, in accordance with the Child and Youth Welfare Code. (c) No child shall be matched to a foreign adoptive family unless it is satisfactorily shown that the child cannot be adopted locally. (d) In order that such child may be considered for placement, the following documents must be submitted to the Board: (a) Child study (b) Birth Certificate / Foundling Certificate (c) Deed of Voluntary Commitment/ Decree of Abandonment/ Death Certificate of parents (d) Medical Evaluation / History (e) Psychological Evaluation, as necessary (f) Recent photo of the child

Sayson v. CA (1992): Adopted children have a right to represent their adopters in successional interests. (“Although an adopted child shall be deemed to be a legitimate child and have the same rights as the latter, these rights do not include the right of representation. The relationship created by the adoption is between only the adopting parents and the adopted child. It does not extend to the blood relatives of either party.”) Republic v. Hernandez (1996): The change of surname of the adoptee as a result of the adoption and to follow that of the adopter does not lawfully extend to or include the proper or given name. The birth certificate, as it appears in the civil register, contains the official name. It does not matter if the mother, with all intention to abandon it later, named the child for the sake of naming it. If they really want to change the name, they must institute another action under Rule 103 of the Rules of Court.

Tamargo v. CA (1992): Where the petition for adoption was granted after the child had shot and killed a girl, the Supreme Court did not consider that retroactive effect may be given to the decree of adoption so as to impose a liability upon the adopting parents accruing at a time when adopting parents had no actual or physically custody over the adopted child. Retroactive effect may perhaps be given to the granting of the petition for adoption where such is essential to permit the accrual of some benefit or advantage in favor of the adopted child. In the instant case, however, to hold that parental authority had been retroactively lodged in the adopting parents so as to burden them with liability for a tortuous act that they could not have foreseen and which they could not have prevented would be unfair and unconscionable.

Support WHAT IT COMPRISES Consists of everything indispensable for sustenance, dwelling, clothing, medical attendance, education and transportation, in keeping with the financial capacity of the family. [Art. 194] (a) Education includes a person’s schooling or training for some profession, trade or vocation. [Art. 194] (b) Transportation includes expenses in going to and from school, or to and from place of work. [Art. 194] (c) The right and duty to support, especially the right to education, subsists even beyond the age of majority. [Art. 194]

Lazatin v. Campos (1979): Adoption is a juridical act, proceeding in rem. Because it is artificial, the statutory requirements in order to prove it must be strictly carried out. Petition must be announced in publications and only those proclaimed by the court are valid. Adoption is never presumed.

WHO ARE OBLIGED TO SUPPORT EACH OTHER:

(a) Spouses; (b) Legitimate ascendants and descendants; (c) Parents and their children (legitimate and illegitimate) and the children of the latter (legitimate and illegitimate); (d) Legitimate brothers and sisters, whether of full or half-blood; [Art. 195] (e) Illegitimate brothers and sisters, whether of full or half-blood, EXCEPT when the need for support of one (of age) is due to a cause imputable to his/her fault or negligence. [Art. 196]

Santos v. Aranzanso (1966): Validity of facts behind a final adoption decree cannot be collaterally attacked without impinging on that court’s jurisdiction. DSWD v. Belen (1997): Participation of the appropriate government instrumentality in performing the necessary studies and precautions is important and is indispensable to assure the child’s welfare.

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Note: Both legitimate and illegitimate children are entitled to support.

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Lacson v. San Jose-Lacson (1968): Man is still liable for support in arrears since the mother advanced it from a stranger (the uncle of the daughters).

PROPERTIES ANSWERABLE FOR SUPPORT

From the separate property of the obligor. If no separate property, the ACP/CPG (if financially capable) shall advance the support, to be deducted from the obligor’s share upon liquidation of such regime. [Art. 197]

Lacson v. Lacson (2006): Acknowledgment of and commitment to comply with support obligation through a note in his own handwriting is proof that a demand was made. Gotardo v. Buling (2012): The amount of support is variable and, for this reason, no final judgment on the amount of support is made as the amount shall be in proportion to the resources or means of the giver and the necessities of the recipient.

ORDER OF SUPPORT

If there are multiple obligors (SDAB) (1) Spouses (2) Descendants, nearest in degree (3) Ascendants, nearest in degree (4) Brothers and Sisters [Art. 199] [Tolentino]: The order of liability among ascendants and descendants would be: (1) legitimate children and descendants, (2) legitimate parents and ascendants, (3) illegitimate children and their descendants.

STRANGER GIVES SUPPORT

When, WITHOUT THE KNOWLEDGE of the person obliged to give support, it is given by a stranger, the stranger has the right to claim the same from the person obliged, unless it appears that he gave it without intention of being reimbursed. [Art. 206]

When two or more are obliged to give support, the payment shall be divided between them IN PROPORTION to their resources;

PERSON OBLIGED REFUSES OR FAILS TO GIVE SUPPORT

When the person obliged to give support UNJUSTLY REFUSES OR FAILS to give support when urgently needed, any third person may furnish support to the needy individual, with right of reimbursement from the person obliged to give support. This particularly applies when the father or mother of a minor child unjustly refuses to support or fails to give support to the child when urgently needed. [Art. 207]

Also, in case of URGENT NEED and by special circumstances, judge may order only one obligor to furnish support without prejudice to reimbursement from other obligors of the share due from them (Art. 200). If there are multiple recipients and only one obligor, and the latter has no sufficient means to satisfy all claims: (1) Observe order in Article 199 (SDAB) as to whose claim shall be satisfied first; (2) But if the concurrent obligees are the spouse and a child subject to parental authority, the child shall be preferred. [Art. 200]

CONTRACTUAL SUPPORT OR THAT GIVEN BY WILL

The excess in amount beyond that required for legal support shall be subject to levy on attachment or execution. [Art. 208] Reason: The amount of support agreed upon in the contract or given in the will can be more than what the recipient needs (Sempio-Diy).

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

Furthermore, contractual support shall be subject to adjustment whenever modification is necessary due to changes in circumstances manifestly beyond the contemplation of the parties. [Art. 208] SUPPORT DURING MARRIAGE LITIGATION Pending legal separation or annulment, and for declaration of nullity, support (pendente lite) for spouses and children will come from the ACP/CPG. After final judgment granting the petition, mutual support obligation between spouses ceases. (But in legal separation court may order guilty spouse to give support to innocent spouse.) [Art. 198]

Pelayo v. Lauron (1909): Even if the parents-in-law were the ones who called for the physician’s services for the childbirth of their daughter-in-law, it is the woman’s husband who is bound to pay the fees due to the physician.

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Note: De facto separation does not affect the ACP, except that the spouse who leaves the conjugal home without just cause shall not be entitled to support. [Art. 100]

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PARENTAL AUTHORITY AND RESPONSIBILITY MAY NOT BE RENOUNCED OR TRANSFERRED EXCEPT IN THE CASES AUTHORIZED BY LAW. [ART. 210] CASES WHEN PARENTAL AUTHORITY AND RESPONSIBILITY MAY BE TRANSFERRED OR RENOUNCED:

AMOUNT The amount of support is in proportion to the means of the provider and the needs of the receiver, and can be reduced or increased if such circumstances change. [Arts. 201, 202]

(a) Adoption; (b) Guardianship; or (c) Commitment of the child in an entity or institution engaged in child care or in a children’s home

WHEN DEMANDABLE (a) The obligation to give support shall be DEMANDABLE from the time the person who has a right to receive the same needs it for maintenance, but it shall not be PAYABLE except from the date of judicial or extra-judicial demand. [Art. 203] (b) Support pendente lite may be claimed in accordance with the Rules of Court. [Art. 203] (c) Payment shall be made within the first five days of each corresponding month. When the recipient dies, his heirs shall not be obliged to return what he has received in advance. [Art. 203]

RULES AS TO THE EXERCISE OF PARENTAL AUTHORITY:

(a) Jointly exercised by the father and mother over their common children, but in case of disagreement, the father's decision shall prevail, unless there is a judicial order to the contrary [Art. 211] (b) Exercised by the mother if the child is illegitimate [Art.176] (c) Children under parental authority shall always observe respect and reverence towards their parents and are obliged to obey them [Art. 211] CHARACTERISTICS OF PARENTAL AUTHORITY:

OPTIONS (a) Payment of the amount; or (b) Receiving and maintaining the recipient in the home of the provider, unless there is a legal or moral obstacle for doing so.

(1) Natural right and duty of parents [Art. 209, FC] (2) Cannot be renounced, transferred or waived, except in cases authorized by law [Art 210, FC] (3) Jointly exercised by the father and the mother [Art. 211, FC] (4) Purely personal and cannot be exercised through agents (5) Temporary

ATTACHMENT The right to receive support as well as any money or property obtained as such support shall not be levied upon on attachment or execution. (Art. 205)

PARENTAL PREFERENCE RULE:

The natural parents, who are of good character and who can reasonably provide for the child, are ordinarily entitled to custody as against all persons. [Santos v CA (1995)]

[Tolentino:] This is to protect that which the law gives to the recipient against want and misery.

WHO EXERCISES AUTHORITY IN CASES OF DEATH, ABSENCE, UNSUITABILITY, REMARRIAGE, OR SEPARATION OF PARENTS:

Parental Authority

(1) In case one parent is absent or already dead, the present or surviving parent [Art. 212] - Remarriage of the surviving parent shall not affect his/her parental authority over the children, unless the court appoints another person to be the guardian of the children or their property [Art. 212] (2) In case of a void/annulled marriage, and there is no agreement between spouses, the parent designated by the court [Art. 43 par. 1; Art. 49] (3) Innocent spouse gets custody of minor children in legal separation [Art. 63 par. 3]

GENERAL PROVISIONS Parental authority is the mass of rights and obligations which parents have in relation to the person and property of their children until their emancipation, and even after this under certain circumstances (Manresa). PARENTAL AUTHORITY INCLUDES [ART. 209]:

(1) The caring for and rearing of children for civic consciousness and efficiency; (2) The development of the moral, mental and physical character and well-being of said children

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(4) 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 [Art. 213 par. 1] (5) Substitute parental authority [Art. 214] (a) In case of death, absence or unsuitability of the parents, substitute parental authority shall be exercised by the surviving grandparent (b) When several grandparents survive, the one designated by the court shall exercise parental authority, taking into account all relevant considerations, especially the choice of the child over seven years of age, unless the grandparent chosen is unfit

SUBSTITUTE PARENTAL AUTHORITY OVER DISADVANTAGED CHILDREN (ART. 217)

DESCENDANT’S PRIVILEGE OF REFUSAL TO TESTIFY [ART.

PERSONS EXERCISING SPECIAL PARENTAL AUTHORITY [ART. 218 FC]

Entrusted in summary judicial proceedings to: (1) Heads of children’s homes (2) Orphanages Similar institutions duly accredited by the proper government agency (such as the DSWD) Who are disadvantaged children: (1) Foundlings (2) Abandoned (3) Neglected (4) Abused (5) Others similarly situated

215]: No descendant shall be compelled, in a criminal case, to testify against his parents and grandparents.

(1) School, its administrators and teachers; or (2) The individual, entity or institution engaged in child care

Exception: When such testimony is indispensable in (1) a crime against the descendant, or (2) a crime by one parent against the other.

Note: Exercised over minor child while under their supervision, instruction or custody; authorized activities include those conducted both within or outside the school, entity or institution

TENDER YEARS PRESUMPTION:

NO child under 7 years of age shall be separated from the mother, unless the court finds compelling reasons to order otherwise. [Art. 213 par 2; Gamboa v. CA (2007)]

Substitute Parental Authority It is exercised in case of death, absence, or in case of unsuitability of parents.

Examples of compelling reasons are: (1) When the mother is insane; (2) with a communicable disease that might endanger the life or health of the child; (3) is maltreating the child; or (4) has another child by another man who lives with her. [Cervantes v. Fajardo (1989)] Note: Prostitution or infidelity to husband does not make a mother unfit as parent. SUBSTITUTE AUTHORITY

AND

SPECIAL

Special Parental Authority It is exercised concurrently with the parental authority of the parents and rests on the theory that while the child is in the custody of the person exercising special parental authority, the parents temporarily relinquish parental authority over the child to the latter.

St. Mary’s Academy v. Carpitanos (2002): The special parental authority and responsibility applies to all authorized activities, whether inside or outside the premises of the school, entity or institution.

PARENTAL

PERSONS EXERCISING SUBSTITUTE PARENTAL AUTHORITY IN DEFAULT OF PARENTS OR JUDICIALLY APPOINTED GUARDIAN (IN THIS ORDER):

LIABILITY OF THOSE EXERCISING SPECIAL PARENTAL AUTHORITY OVER THE CHILD (ART. 219 FC)

(1) Principal and solidary liability for damages caused by the acts or omissions of the minor child while under their special parental authority (2) Subsidiary liability for the parents and judicial guardians of the minor, or those exercising substitute parental authority over such minor for his acts and omissions

(a) The surviving grandparent [Art. 214, FC] (b) Oldest brother or sister, over 21 years old, unless unfit or unqualified. (c) Child’s actual custodian, over 21 years old, unless unfit or unqualified. Note: The same order applies to the appointment of judicial guardian over the property of the child

Note: Both groups can use the defense that they exercised proper diligence to avoid liability

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EFFECT OF PARENTAL AUTHORITY UPON THE PERSONS OF THE CHILDREN

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(3) If the court finds the petition meritorious, disciplinary measures may include the commitment of the child for not more than 30 days in entities or institutions engaged in child care or in children’s homes duly accredited by the proper government agency. [Art. 224] (a) The parent exercising parental authority shall not interfere with the case of the child whenever committed but shall provide for his support. [Art. 224] (b) Upon proper petition or at its own instance, the court may terminate the commitment of the child whenever just and proper. [Art. 224] If the court finds the petitioner at fault, irrespective of the merits of the petition, or when the circumstances so warrant, the court may also order the deprivation or suspension of parental authority or adopt such other measures as it may deem just and proper. [Art. 223]

RIGHTS OF PARENTS UPON THE PERSON OF THE CHILDREN:

(1) To have them in their custody [Art. 220] (2) To represent them in all matters affecting their interests [Art. 220] (3) To demand from them respect and obedience and impose necessary discipline on them [Art. 220] (4) To give or withhold consent to their marriage, their marriage settlements, their donations by reason of marriage, adoption, and employment (Art. 220) (5) To disinherit them for just cause (Tolentino)

People v Silvano (1999): Art. 220 which states that the parent has a right to impose necessary discipline on the child does not authorize the parent to invade or disregard the child’s honor and dignity under the mask of discipline. Such acts can never be justified as parental punishment.

EFFECTS OF PARENTAL AUTHORITY UPON THE PROPERTY OF THE CHILDREN (a) The father and mother shall jointly exercise legal guardianship over the property of the minor child without court appointment. [Art. 225] (b) In case of disagreement, the father’s decision shall prevail, unless there is judicial order to the contrary. [Art. 225] (c) The ordinary rules on guardianship shall be merely suppletory except when the child is under special parental authority, or the guardian is a stranger, or a parent has remarried, in which case the ordinary rules on guardian ship shall apply. [Art. 225] (d) If the market value of the property or the annual income of the child exceeds P50,000, the parent is required to furnish a bond of not less than 10% of the value of the child’s property or income. [Art. 225]

DUTIES OF PARENTS UPON THE PERSON OF THE CHILDREN:

(a) To support them, providing for their upbringing in accordance with their means [Art. 220] (b) To educate, instruct, and provide them with moral and spiritual guidance and love and understanding [Art. 220] (c) To defend them against unlawful aggression [Art. 220] (d) To give their lawful inheritance (Tolentino) (e) To perform such other duties as are imposed by law [Art. 220] (f) To answer for damages caused by their fault or negligence and for the civil liability for crimes committed by them. [Art. 221] SUBSTITUTE REPRESENTATION [ART. 222]

The courts may appoint a guardian of the child’s property, or a guardian ad litem when the best interests of the child so requires.

PROCEDURE IN THE APPROVAL OF THE PARENT’S BOND [ART. 225]

(a) A verified petition for approval of the bond shall be filed in the proper court of the place where the child resides. (b) If the child resides in a foreign country, the petition shall be filed in the proper court of the place where the property or any part thereof is situated. (c) The petition shall be docketed as a summary special proceeding. The court shall determine the amount of the bond, but shall not be less than 10% of the market value of the child’s property or of his annual income.

COURT ASSISTANCE IN THE DISCIPLINE OF THE CHILD [ARTS. 223-224]

(1) The parents or, in their absence or incapacity, the individual, entity or institution exercising parental authority, may petition the proper court of the place where the child resides, for an order providing for disciplinary measures over the child. [Art. 223] (2) The child shall be entitled to the assistance of counsel, either of his choice or appointed by the court, and a summary hearing shall be conducted wherein the petitioner and the child shall be heard. [Art. 223]

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OWNERSHIP OF CHILD’S ACQUISITIONS [ART. 226]

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(4) Upon final judgment of a competent court divesting the party concerned of parental authority.

The property of the unemancipated child earned or acquired with his work or industry or by onerous or gratuitous title shall belong to the child in ownership and shall be devoted exclusively to the latter’s support and education, unless the title or transfer provides otherwise.

GROUNDS FOR SUSPENSION OF PARENTAL AUTHORITY [CLEBC; ART. 230-231]

The right of the parents over the fruits and income (not the property itself) of the child’s property shall be limited primarily to the child’s support and secondarily to the collective daily needs of the family.

(1) Conviction of parent for crime which carries with it the penalty of civil interdiction (2) Treats child with excessive harassment and cruelty (3) Gives corrupting orders, counsel, or example (4) Compels child to beg (5) Subjects or allows acts of lasciviousness

WHEN PARENTS ENTRUST THE MANAGEMENT OF THEIR PROPERTIES TO A CHILD [ART. 227]

SCOPE OF SUBSTITUTE AND SPECIAL PARENTAL AUTHORITY [ART. 233]

PARENT’S USUFRUCT [ART. 226]

(a) If the parents entrust the management or administration of any of their properties to an unemancipated child, the net proceeds of such property shall belong to the owner. (b) The child shall be given a reasonable monthly allowance in an amount not less than that which the owner would have paid if the administrator were a stranger, unless the owner grants the entire proceeds to the child. (c) In any case, the proceeds thus given in whole or in part shall not be charged to the child’s legitime.

(a) The person exercising substitute parental authority shall have the same authority over the person of the child as the parents. (b) In no case shall the school administrators, teacher or individual engaged in child care exercising special parental authority inflict corporal punishment upon the child. RA 7610 – CHILD ABUSE LAW

An ascendant, stepparent or guardian of a minor who shall induce, deliver or offer the minor to: (1) Any one prohibited to keep the minor or (2) Any one prohibited to have in his company a minor, twelve (12) years or under or who is ten (10) years or more his junior in any public or private place, hotel, motel, beer joint, discotheque, cabaret, pension house, sauna or massage parlor, beach and/or other tourist resort or similar places shall suffer penalties and imprisonment.

SUSPENSION OR TERMINATION OF PARENTAL AUTHORITY; RA 7610 – CHILD ABUSE LAW PARENTAL AUTHORITY PERMANENTLY TERMINATES

(1) Upon death of parents [Art. 228] (2) Upon death of child [Art. 228] (3) Upon emancipation of child [Art. 228] (4) If the parents exercising parental authority has subjected the child or allowed him to be subjected to sexual abuse [Art. 232]

Note: Those not prohibited to have in his company such minor in any of the mentioned places: anyone who is related within the fourth degree of consanguinity or affinity or any bond recognized by law, local custom and tradition or acts in the performance of a social, moral or legal duty

Note: In the case of death of parents, there is no absolute termination of parental authority because while the child is still a minor, the grandparents, brothers and sisters, or a guardian may exercise substitute parental authority over the child [Art. 216]

Emancipation, as amended by RA 6809

TERMINATION OF PARENTAL AUTHORITY WHICH CAN BE REVIVED BY FINAL JUDGMENT [ART. 229]

(1) Upon adoption of the child; (2) Upon the appointment of a general guardian for the child; (3) Upon judicial declaration of (a) Abandonment of the child in a case filed for the purpose (b) Absence or incapacity of the person exercising parental authority

Art. 234. Emancipation takes place by the attainment of majority. Unless otherwise provided, majority commences at the age of eighteen years. Art. 236. Emancipation shall terminate parental authority over the person and property of the child who shall then be qualified and responsible for all acts of

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civil life, save the exceptions established by existing laws in special cases.

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exercised by the proper court authorized to hear family cases, if one exists, or in the regional trial court or its equivalent sitting in the place where either of the spouses resides. [Art. 241]

Contracting marriage shall require parental consent until the age of twenty-one.

NOTIFICATION TO OTHER SPOUSE:

Nothing in this Code shall be construed to derogate from the duty or responsibility of parents and guardians for children and wards below twenty-one years of age mentioned in the second and third paragraphs of Article 2180 of the Civil Code. RA 6809: By virtue of this law, emancipation can no longer take place by virtue of the minor’s marriage or by the concession of the parents to a minor in a recorded public instrument.

(1) Upon the filing of the petition, the court shall notify the other spouse, whose consent to the transaction is required, of said petition, ordering said spouse to show cause why the petition should not be granted, on or before the date set in said notice for the initial conference. (2) The notice shall be accompanied by a copy of the petition and shall be served at the last known address of the spouse concerned. [Art. 242] PROCEDURE:

(1) A preliminary conference shall be conducted by the judge personally without the parties being assisted by counsel. (2) After the initial conference, if the court deems it useful, the parties may be assisted by counsel at the succeeding conferences and hearings. [Art. 243] (3) If the petition is not resolved at the initial conference, said petition shall be decided in a summary hearing. Basis of summary hearing (at the sound discretion of the court): (a) Affidavits (b) Documentary evidence (c) Oral testimonies at the court’s sound discretion. If testimony is needed, the court shall specify the witnesses to be heard and the subject-matter of their testimonies, directing the parties to present said witnesses. [Art. 246(a)]

Summary Judicial Proceedings in the Family Law PROCEDURAL RULES PROVIDED FOR IN THIS TITLE SHALL APPLY TO [ART. 238]: (1) Separation in fact between husband and wife (2) Abandonment by one of the other (3) Incidents involving parental authority SEPARATION IN FACT A verified petition alleging the following facts is required when [Art. 239]: (a) A husband and wife are separated in fact; or, (b) One has abandoned the other

WHEN APPEARANCE OF SPOUSES REQUIRED:

Situation: Where one of them seeks judicial authorization for a transaction where the consent of the other spouse is required by law but such consent is withheld or cannot be obtained

(1) In case of non-appearance of the spouse whose consent is sought, the court shall inquire into the reasons for his failure to appear, and shall require such appearance, if possible. [Art. 244] (2) If, despite all efforts, the attendance of the nonconsenting spouse is not secured, the court may proceed ex parte and render judgment as the facts and circumstances may warrant. In any case, the judge shall endeavor to protect the interests of the non-appearing spouse. [Art. 245]

The petition shall: (1) Attach the proposed deed, if any, embodying the transaction, if none, shall describe in detail the said transaction and state the reason why the required consent thereto cannot be secured. (2) The final deed duly executed by the parties shall be submitted to and approved by the court.

NATURE OF JUDGMENT: The

judgment of the court shall be immediately final and executory. [Art 247]

SEPARATE CLAIM FOR DAMAGES: Claims for damages by

either spouse, except costs of the proceedings, may be litigated only in a separate action. [Art. 240]

RULES APPLICABLE FOR ADMINISTERING OR ENCUMBERING SEPARATE PROPERTY OF SPOUSE: The petition for

judicial authority to administer or encumber specific separate property of the abandoning spouse and to use the fruits or proceeds thereof for the support of

JURISDICTION:

Jurisdiction over the petition shall, upon proof of notice to the other spouse, be

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the family shall also be governed by these rules. [Art. 248]

Retroactive Effect

INCIDENTS INVOLVING PARENTAL AUTHORITY

RETROACTIVE EFFECT

PROCEDURE

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

(1) Such petitions shall be verified and filed in the proper court of the place where the child resides. [Art. 250] (2) Upon the filing of the petition, the court shall notify the parents or, in their absence or incapacity, the individuals, entities or institutions exercising parental authority over the child. [Art. 251]

INVALIDITY OF OTHER PROVISIONS If any provision is held invalid, other provisions not affected shall remain valid. [Art. 255]

Note: (a) Petitions filed under Articles 223, 225 and 235 of this Code involving parental authority shall be verified. [Art. 249] (b) The rules in Chapter 2 hereof shall also govern summary proceedings under this Chapter insofar as they are applicable [Art. 253] (c) The foregoing rules in Chapter 2 (Separation in Fact) and (Incidents Involving Parental Authority) hereof shall likewise govern summary proceedings filed (1) Declaration of presumptive death [Art. 41] (2) Delivery of presumptive legitime [Art. 51] (3) Fixing of family domicile [Art. 69] (4) Disagreements regarding one spouse’s profession, occupation, business, or activity [Art. 73] (5) Disposition or encumbrance of common property in ACP where one spouse is incapacitated or unable to participate in the administration; administration of absolute community in a disagreement and the wife takes recourse within five years [Art. 96] (6) Disposition or encumbrance of common property in CPG where one spouse is incapacitated or unable to participate in the administration; administration of absolute community in a disagreement and the wife takes recourse within five years, [Art. 124]

Funeral, NCC Arts. 305-310 The duty and the right to make arrangements for the funeral of a relative shall be in accordance with the order established for support, under Article 294 [Art. 305]: (1) Spouse (2) Descendants in the nearest degree. In case of descendants of the same degree, or of brothers and sisters, the oldest shall be preferred. (3) The ascendants in the nearest degree. In case of ascendants, the paternal shall have a better right (4) The brothers and sisters. (5) Municipal authorities – if there are no persons who are bound to support or if such persons are without means NATURE OF FUNERAL: Every funeral shall be in keeping

with the social position of the deceased. [Art. 306] The funeral shall be: (1) In accordance with the expressed wishes of the deceased. (2) In the absence of such expression, his religious beliefs or affiliation shall determine the funeral rites. (3) In case of doubt, the form of the funeral shall be decided upon by the person obliged to make arrangements for the same, after consulting the other members of the family [Art. 307]

When wife and husband are de facto separated and the CPG is insufficient, the spouse present shall, upon a petition, be given judicial authority to administer or encumber any specific property of the other spouse and use the fruits and proceeds thereof to satisfy the latter’s share. [Art. 127]

Note: No human remains shall be retained, interred, disposed of or exhumed without the consent of the persons mentioned in articles 294 and 305. Damages: Any person who shows disrespect to the dead, or wrongfully interferes with a funeral shall be liable to the family of the deceased for damages, material and moral [Art. 309]

Retroactive Effect RETROACTIVE EFFECT

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Funeral Expenses: The construction of a tombstone or mausoleum shall be deemed a part of the funeral expenses, and shall be chargeable to the conjugal partnership property, if the deceased is one of the spouses [Art. 310].

(5) Illegitimate children referred to in Article 287 shall bear the surname of the mother. [Art 368] (6) Children conceived before the decree annulling a voidable marriage shall principally use the surname of the father. [Art. 369]

GUIDELINES IN MAKING FUNERAL ARRANGEMENTS

WIFE AFTER AND DURING MARRIAGE (1) A married woman may use [Art. 370]: (a) Her maiden first name and surname and add her husband's surname, or (b) Her maiden first name and her husband's surname or (c) Her husband's full name, but prefixing a word indicating that she is his wife, such as "Mrs."

(1) The persons who are preferred in the right to make funeral arrangements may waive the right expressly or impliedly in which case the right and duty immediately descend to the person next in the order. (2) It must be in keeping with the social position of the deceased. (3) Law shall prevail over the will of the persons who have the right to control the burial of deceased – exhumation, evidential purpose, disposition of corpse by deceased, mutilation of corpses and autopsies. (4) Corpses which are to be buried at public expenses may also be used for scientific purposes under certain conditions. (5) Expressed wishes of the deceased is given priority provided that it is not contrary to law and must not violate the legal and reglementary provisions concerning funerals and disposition of the remains (time, manner, place or ceremony) (6) In the absence of expressed wishes, his religious beliefs or affiliation shall determine the funeral rights. (7) In case of doubt, the persons in Art. 199 shall decide. (8) Any person who disrespects the dead or interferes with the funeral shall be liable for material and moral damages.

[Tolentino:] The wife cannot claim an exclusive right to use the husband’s surname. She can’t be prevented from using it; but neither can she restrain others from using it. (2) In case of annulment of marriage, and the wife is the guilty party, she shall resume her maiden name and surname. If she is the innocent spouse, she may resume her maiden name and surname. However, she may choose to continue employing her former husband's surname, unless [Art. 371]: (a) The court decrees otherwise, or (b) She or the former husband is married again to another person. (3) When legal separation has been granted, the wife shall continue using her name and surname employed before the legal separation. [Art. 372] (4) A widow may use the deceased husband's surname as though he were still living, in accordance with Article 370. [Art 373] CONFUSION AND CHANGE OF NAMES In case of identity of names and surnames, the younger person shall be obliged to use such additional name or surname as will avoid confusion. [Art. 374]

Use of Surnames, Arts. 364369, 369-380

In case of identity of names and surnames between ascendants and descendants, the word "Junior" can be used only by a son. Grandsons and other direct male descendants shall either [Art. 375]: (a) Add a middle name or the mother's surname, or (b) Add the Roman Numerals II, III, and so on.

SURNAMES OF CHILDREN (1) Legitimate and legitimated children shall principally use the surname of the father. [Art. 364] (2) An adopted child shall bear the surname of the adopter. [Art. 365] (3) A natural child acknowledged by both parents shall principally use the surname of the father. If recognized by only one of the parents, a natural child shall employ the surname of the recognizing parent. [Art 366] (4) Natural children by legal fiction shall principally employ the surname of the father [Art. 367]

No person can change his name or surname without judicial authority. [Art. 376] Usurpation of a name and surname may be the subject of an action for damages and other relief. [Art. 377]

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The unauthorized or unlawful use of another person's surname gives a right of action to the latter [Art. 378]

Note: Applicable only to two or more persons who perish in the same calamity, and it is not shown who died first, and there are no particular circumstances from which it can be inferred.

The employment of pen names or stage names is permitted, provided it is done in good faith and there is no injury to third persons. Pen names and stage names cannot be usurped. [Art. 379]

Article 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 wellfounded belief that the absent spouse was already dead. In case of disappearance where there is danger of death under the circumstances set forth in the provisions of Article 391 of the Civil Code, an absence of only two years shall be sufficient.

Except as provided in the preceding article, no person shall use different names and surnames. [Art 380]

Absence – Art. 43, CC; Art. 41, FC

General rule: Marriage contracted by any person during the subsistence of a previous marriage is void.

PROVISIONAL MEASURES IN CASE OF ABSENCE, ARTS. 381-383

Exceptions: The following subsequent marriage of the present spouse is valid: (1) Subsequent marriage due to ordinary absence where: (a) The prior spouse had been absent for 4 consecutive years; (b) The spouse present had a well-founded belief that absent spouse is dead; and (c) Judicial declaration of presumptive death was secured (no prejudice to the effect of the reappearance of the absent spouse). (2) Subsequent marriage due to extraordinary absence where: (a) The prior spouse had been missing for 2 consecutive years; (b) There is danger of death attendant to the disappearance [Art. 391, Civil Code]; (c) The spouse present had a well-founded belief that the missing person is dead; and (d) Judicial declaration of presumptive death was secured (no prejudice to the effect of the reappearance of the absent spouse).

Art. 43. If there is a doubt, as between two or more persons who are called to succeed each other, as to which of them died first, whoever alleges the death of one prior to the other, shall prove the same; in the absence of proof, it is presumed that they died at the same time and there shall be no transmission of rights from one to the other. Note: Article 43 provides a statutory presumption when there is doubt on the order of death between persons who are called to succeed each other (only). Joaquin v. Navarro (1948): The statutory presumption of Article 43 was not applied due to the presence of a credible eyewitness as to who died first. PRESUMPTION IN THE RULES OF COURT

(Rule 131, sec. 3,

(jj.) (presumption of survivorship) Age Both under 15 Both above 60 One under 15, the other above 60 Both over 15 and under 60; different sexes Both over 15 and under 60; same sex One under 15 or over 60, the other between those ages

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Presumed Survivor

Notes: (a) Institution of a summary proceeding is not sufficient. There must also be a summary judgment. (Balane) (b) Only the deserted spouse can file or institute an action a summary proceeding for the declaration of presumptive death of the absentee. (Bienvenido case) (c) There must have been diligent efforts on the part of the deserted spouse to locate the absent spouse. These diligent efforts correspond to the requirement of the law for a well-founded belief.

Older Younger One under 15 Male Older One between 15 and 60

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Exception to the Exception: Art. 381. When a person disappears from his domicile, his whereabouts being unknown, and without leaving an agent to administer his property, the judge, at the instance of an interested party, a relative, or a friend, may appoint a person to represent him in all that may be necessary.

(4) Those who may have over the property of the absentee some right subordinated to the condition of his death.

This same rule shall be observed when under similar circumstances the power conferred by the absentee has expired.

WHEN MAY A DECLARATION OF ABSENCE BE DECLARED?

Article 386. The judicial declaration of absence shall not take effect until six months after its publication in a newspaper of general circulation. (a) Two years without any news about the absentee (b) Five years if the absentee left a person in charge of administration of his property (c) Declaration takes effect only after six months after publication in a newspaper of general circulation

Art. 382. The appointment referred to in the preceding article having been made, the judge shall take the necessary measures to safeguard the rights and interests of the absentee and shall specify the powers, obligations and remuneration of his representative, regulating them, according to the circumstances, by the rules concerning guardians.

WHO MAY ASK FOR A DECLARATION OF ABSENCE?

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

Art. 383. In the appointment of a representative, the spouse present shall be preferred when there is no legal separation. If the absentee left no spouse, or if the spouse present is a minor, any competent person may be appointed by the court.

ADMINISTRATION OF THE PROPERTY OF THE ABSENTEE, ARTS. 387-389 Art. 387. An administrator of the absentee's property shall be appointed in accordance with Article 383.

REQUISITES:

The judge may appoint a person to represent absentee when: (1) Person disappears from his domicile (2) His whereabouts are unknown (3) No agent to administer his property (4) An interested party, a relative, or a friend files the action

Art. 388. The wife who is appointed as an administratrix of the husband's property cannot alienate or encumber the husband's property, or that of the conjugal partnership, without judicial authority. Art. 389. The administration shall cease in any of the following cases: (1) When the absentee appears personally or by means of an agent; (2) When the death of the absentee is proved and his testate or intestate heirs appear; (3) When a third person appears, showing by a proper document that he has acquired the absentee's property by purchase or other title.

WHO MAY BE APPOINTED AS REPRESENTATIVE?

(1) Spouse present shall be preferred when there is no legal separation (2) If no spouse or spouse is incapacitated, any competent person DECLARATION OF ABSENCE, ARTS. 384-389 Art. 384. Two years having elapsed without any news about the absentee or since the receipt of the last news, and five years in case the absentee has left a person in charge of the administration of his property, his absence may be declared.

In these cases the administrator shall cease in the performance of his office, and the property shall be at the disposal of those who may have a right thereto.

Art. 385. The following may ask for the declaration of absence: (1) The spouse present; (2) The heirs instituted in a will, who may present an authentic copy of the same; (3) The relatives who may succeed by the law of intestacy;

WHO MAY ADMINISTER THE PROPERTY?

(a) Spouse present shall be preferred when there is no legal separation (b) If no spouse or spouse is incapacitated, any competent person

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WHEN WILL THE ADMINISTRATION OF PROPERTY CEASE?

Administrator shall cease in performance of his office, and property shall be disposed in favor of those who have a right thereto when (1) Absentee appears personally or by means of an agent (2) Testate or intestate heirs appear, upon proof of death of absentee (3) Third person appears, with a proper document showing he has acquired absentee’s property by purchase or other title

Note: (1) Although 7 years is required for the presumption of death of an absentee in the Civil Code, Art. 41 of the Family Code makes an exception for the purpose of remarriage by limiting such requirement to 4 years. (2) Art. 41 also limits the required 4 years in Art. 391 for absence under exceptional circumstances to only 2 years. Art. 392. If the absentee appears, or without appearing his existence is proved, he shall recover his property in the condition in which it may be found, and the price of any property that may have been alienated or the property acquired therewith; but he cannot claim either fruits or rents.

PRESUMPTION OF DEATH, ARTS. 390-392 Art. 390. After an absence of 7 years, it being unknown whether or not the absentee still lives, he shall be presumed dead for all purposes, except for those of succession. The absentee shall not be presumed dead for the purpose of opening his succession till after an absence of 10 years. If he disappeared after the age of 75 years, an absence of 5 years shall be sufficient in order that his succession may be opened.

Republic of the Philippines v. Granada (2012): The petition for declaration of presumptive death of an absent spouse for the purpose of contracting a subsequent marriage under Article 41 of the Family Code is a summary proceeding “as provided for” under the Family Code, and as such, the judgment of the court therein shall be immediately final and executor, and not subject to ordinary appeal.

Art. 391. The following shall be presumed dead for all purposes, including the division of the estate among the heirs: (SAAD) (7) A person on board a vessel lost during a sea voyage, or an aeroplane which is missing, who has not been heard of for four years since the loss of the vessel or aeroplane; (8) A person in the armed forces who has taken part in war, and has been missing for four years; (9) A person who has been in danger of death under other circumstances and his existence has not been known for four years.

However, the losing party in a summary proceeding for the declaration of presumptive death for purposes of remarriage under Art. 41 of the FC may file a petition for certiorari with the CA on the ground that, in rendering judgment thereon, the trial court committed grave abuse of discretion amounting to lack of jurisdiction. From the decision of the CA, the aggrieved party may elevate the matter to the Supreme Court via a petition for review on certiorari under Rule 45 of the Rules of Court.

General rule: A person shall be presumed dead for all purposes after absence for a period of 7 years. Exception: Succession (a) In succession, 10 years is required for presumption of death. (b) If absentee disappeared after age 75, 5 years shall be sufficient.

Civil Registrar ARTS. 407-413 Art. 407. Acts, events and judicial decrees concerning the civil status of persons shall be recorded in the civil register.

EXTRAORDINARY ABSENCE

Only 4 years is required for presumption to arise if: (1) A person on board a vessel lost during a sea voyage, or an aeroplane which is missing, who has not been heard of for four years since the loss of the vessel or aeroplane; (2) A person in the armed forces who has taken part in war, and has been missing for four years; (3) A person who has been in danger of death under other circumstances and his existence has not been known for four years.

Art. 408. The following shall be entered in the civil register: (1) Births; (2) marriages; (3) deaths; (4) legal separations; (5) annulments of marriage;

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(6) judgments declaring marriages void from the beginning; (7) legitimations; (8) adoptions; (9) acknowledgments of natural children; (10) naturalization; (11) loss, or (12) recovery of citizenship; (13) civil interdiction; (14) judicial determination of filiation; (15) voluntary emancipation of a minor; and (16) changes of name.

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Exception: (a) Clerical or typographical errors; (b) Change of: first name or nickname, day and month in the date of birth, or sex of a person This exception applies 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 Notes: (a) 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 (i.e. misspelled name, 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) (b) Before the amendment by RA 10172, no correction must involve the change of sex, nationality, age or status of the petitioner. After the amendment, change of sex can now be subjected to correction without judicial order under the rules of this Act. (c) Civil Register refers to the various registry books and related certificates and documents kept in the archives of the local civil registry offices, Philippine Consulates and of the Office of the Civil Registrar General.

Art. 409. In cases of legal separation, adoption, naturalization and other judicial orders mentioned in the preceding article, it shall be the duty of the clerk of the court which issued the decree to ascertain whether the same has been registered, and if this has not been done, to send a copy of said decree to the civil registry of the city or municipality where the court is functioning.

Art. 410. The books making up the civil register and all documents relating thereto shall be considered public documents and shall be prima facie evidence of the facts therein contained. Art. 411. Every civil registrar shall be civilly responsible for any unauthorized alteration made in any civil register, to any person suffering damage thereby. However, the civil registrar may exempt himself from such liability if he proves that he has taken every reasonable precaution to prevent the unlawful alteration.

Sec. 3. Who May File the Petition and Where. – Any person having direct and personal interest in the correction of a clerical or typographical error in an entry and/or change of first name or nickname in the civil register may file, in person, a verified petition with the local civil registry office of the city or municipality where the record being sought to be corrected or changed is kept.

Art. 412. No entry in a civil register shall be changed or corrected, without a judicial order. Art. 413. All other matters pertaining to the registration of civil status shall be governed by special laws. RA 9048 AS AMENDED BY RA 10172 AN ACT AUTHORIZING THE CITY OR MUNICIPAL CIVIL REGISTRAR OR THE CONSUL GENERAL TO CORRECT A CLERICAL OR TYPOGRAPHICAL ERROR IN AN ENTRY AND/OR CHANGE OF FIRST NAME OR NICKNAME IN THE CIVIL REGISTER WITHOUT NEED OF A JUDICIAL ORDER, AMENDING FOR THIS PURPOSE ARTICLES 376 AND 412 OF THE CIVIL CODE OF THE PHILIPPINES

In case the petitioner has already migrated to another place in the country and it would not be practical for such party, in terms of transportation expenses, time and effort to appear in person before the local civil registrar keeping the documents to be corrected or changed, the petition may be filed, in person, with the local civil registrar of the place where the interested party is presently residing or domiciled. The two (2) local civil registrars concerned will then communicate to facilitate the processing of the petition.

General rule: No entry in a civil register shall be changed or corrected without a judicial order

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petition and shall show affirmatively that the petitioner is competent to testify to the matters stated. The petitioner shall state the particular erroneous entry or entries, which are sought to be corrected and/or the change sought to be made.

Citizens of the Philippines who are presently residing or domiciled in foreign countries may file their petition, in person, with the nearest Philippine Consulates. The petitions filed with the city or municipal civil registrar or the consul general shall be processed in accordance with this Act and its implementing rules and regulations. All petitions for the clerical or typographical errors and/or change of first names or nicknames may be availed of only once.

The petition shall be supported with the following documents: (1) A certified true machine copy of the certificate or of the page of the registry book containing the entry or entries sought to be corrected or changed. (2) At least two (2) public or private documents showing the correct entry or entries upon which the correction or change shall be based; and (3) Other documents which the petitioner or the city or municipal civil registrar or the consul general may consider relevant and necessary for the approval of the petition.

GROUNDS

Who may file the petition and where? (1) Any person having direct personal interest in the correction of a clerical or typographical error in an entry and/or change of first name or nickname in the civil register (2) Verified petition with the local civil registry office of the city or municipality (a) where the record being sought to be corrected or changed is kept (b) where the interested party is presently residing or domiciled, if it will be impractical to submit in the place where record is kept (i.e. when party has migrated to another place in the country (c) nearest Philippine Consulates, if the petitioner is presently residing or domiciled in foreign countries

No petition for correction of erroneous entry concerning the date of birth or the sex of a person shall be entertained except if the petition is accompanied by earliest school record or earliest school documents such as, but not limited to, medical records, baptismal certificate and other documents issued by religious authorities; nor shall any entry involving change of gender corrected except if the petition is accompanied by a certification issued by an accredited government physician attesting to the fact that the petitioner has not undergone sex change or sex transplant. The petition for change of first name or nickname, or for correction of erroneous entry concerning the day and month in the date of birth or the sex of a person, as the case may be, shall be published at least once a week for two (2) consecutive weeks in a newspaper of general circulation.

Note: All petitions for the clerical or typographical errors and/or change of first names or nicknames may be availed of only once. Sec. 4. Grounds for Change of First Name or Nickname. – The petition for change of first name or nickname may be allowed in any of the following cases: (1) The petitioner finds the first name or nickname to be ridiculous, tainted with dishonor or extremely difficult to write or pronounce. (2) The new first name or nickname has been habitually and continuously used by the petitioner and he has been publicly known by that by that first name or nickname in the community: or (3) The change will avoid confusion.

Furthermore, the petitioner shall submit a certification from the appropriate law enforcements, agencies that he has no pending case or no criminal record. The petition and its supporting papers shall be filed in three (3) copies to be distributed as follows: first copy to the concerned city or municipal civil registrar, or the consul general; second copy to the Office of the Civil Registrar General; and third copy to the petitioner. RULE 108, RULES OF COURT CANCELLATION OR CORRECTION OF ENTRIES IN THE CIVIL REGISTRY

Sec. 5. Form and Contents of the Petition. – The petition for correction of a clerical or typographical error, or for change of first name or nickname, as the case may be, shall be in the form of an affidavit, subscribed and sworn to before any person authorized by the law to administer oaths. The affidavit shall set forth facts necessary to establish the merits of the

Sec. 1. Who may file petition. - Any person interested in any act, event, order or decree concerning the civil status of persons which has been recorded in the civil register, may file a verified petition for the cancellation

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or correction of any entry relating thereto, with the Court of First Instance of the province where the corresponding civil registry is located.

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(2) Any act, event, order or decree concerning the civil status of persons which has been recorded in the civil register (3) Verified petition for the cancellation or correction of any entry relating thereto with the Court of First Instance of the province where the corresponding civil registry is located

Sec. 2. Entries subject to cancellation or correction. Upon good and valid grounds, the following entries in the civil register may be cancelled or corrected: (a) births; (b) marriages; (c) deaths; (d) legal separations; (e) judgments of annulments of marriage; (f) judgments declaring marriages void from the beginning; (g) legitimations; (h) adoptions; (i) acknowledgments of natural children; (j) naturalization (k) election, loss or recovery of citizenship (l) civil interdiction; (m) judicial determination of filiation; (n) voluntary emancipation of a minor; and (o) changes of name.

ENTRIES SUBJECT TO CANCELLATION

(a) Births (b) Marriages (c) Deaths (d) Legal separations (e) Judgments of annulments of marriage (f) Judgments declaring marriages void from the beginning (g) Legitimations (h) Adoptions (i) Acknowledgments of natural children (j) Naturalization (k) Election, loss or recovery of citizenship (l) Civil interdiction (m) Judicial determination of filiation (n) Voluntary emancipation of a minor (o) Changes of name

Sec. 3. Parties. - When cancellation or correction of an entry in the civil register is sought, the civil registrar and all persons who have or claim any interest which would be affected thereby shall be made parties to the proceeding. Sec. 4. Notice and publication. - Upon the filing of the petition, the court shall, by an order, fix the time and place for the hearing of the same, and cause reasonable notice thereof to be given to the persons named in the petition. The court shall also cause the order to be published once a week for three (3) consecutive weeks in a newspaper of general circulation in the province. Sec. 5. Opposition. - The civil registrar and any person having or claiming any interest under the entry whose cancellation or correction is sought may, within fifteen (15) days from notice of the petition, or from the last date of publication of such notice, file his opposition thereto. Sec. 6. Expediting proceedings. - The court in which the proceeding is brought may make orders expediting the proceedings, and may also grant preliminary injunction for the preservation of the rights of the parties pending such proceedings. Sec. 7. Order. - After hearing, the court may either dismiss the petition or issue an order granting the cancellation or correction prayed for. In either case, a certified copy of the judgment shall be served upon the civil registrar concerned who shall annotate the same in his record. WHO MAY FILE PETITION?

(1) Any person interested

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Property – All things which are, or may be, the object of appropriation. [NCC 414]

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.

Characteristics (USA) (1) Utility – capacity to satisfy human wants (2) Substantivity and Individuality – separate and autonomous existence (3) Susceptibility of being appropriated – what cannot be appropriated because of their distance, depth, or immensity cannot be considered ‘things’ (i.e. stars, ocean)

Classification

Categories of Immovables (NIDA) (1) By nature (2) By incorporation (3) By destination (4) By analogy

HIDDEN TREASURE Hidden treasure –any hidden and unknown deposit of money jewels or other precious objects, the lawful ownership of which does not appear. [NCC 439]

Immovables by Nature: cannot be moved from place to place; their intrinsic qualities have no utility except in a fixed place (Par. 1 & 8) (1) Par. 1 (a) “Building” - their adherence to the land must be permanent and substantial. (b) Buildings have been considered as immovables, despite: (i) Treatment by the parties e.g. they constitute a separate mortgage on the building and the land [Punzalan v. Lacsamana] (ii) Separate Ownership i.e. a building on rented land is still considered an immovable. [Tolentino] (2) Par. 8 (a) Mineral Deposits (i) Minerals still deposited in the soil (ii) When minerals have been extracted, they become chattel. (b) Slag Dump: dirt and soil taken from a mine and piled upon the surface of the ground. Inside the dump can be found the minerals. (c) Waters: those still attached to or running thru the soil or the ground.

Owner of the land, building or other property on which the hidden treasure was found, also owns it, subject to: (1) Right of a finder by chance who is not a trespasser/intruder: ½ of treasure (2) Right of a usufructuary who finds treasure: ½ of treasure (3) Right of State to acquire things of interest to science or the arts [NCC 438] BASED ON MOVABLE

MOBILITY

–

IMMOVABLE

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OR

REAL OR IMMOVABLE PROPERTY [NCC 415]

(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

Immovables by Incorporation: are essentially movables but are attached to an immovable in such a way as to be an integral part [Par. 2, 3, 4, 6 & 7] (1) Par. 2 (a) Trees and plants: only immovables when they are attached to the land or form an integral part of an immovable (i) When they have been cut or uprooted, they become movables.

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(b) By special treatment of Act 1508 (Chattel Mortgage Law), growing crops may be subject of a Chattel Mortgage. (c) For the purpose of attachment: growing crops are to be attached in the same manner as realty. (Rule 59, Sec. 7)

work in which they are utilized) they recover their condition as movables. (ii) If it is still needed for the industry but separated from the tenement temporarily, the property continues to be immovable. (b) Requisites for Immovability in Par. 5: (i) Placed by the owner or the tenant (as agent); (ii) Adapted to the needs of the industry or work (c) Except: Estoppel (d) Parties may, by agreement, treat as personal property that which by nature would be real, as long as no third parties would be prejudiced. That characterization is effective between the parties. [Makati Leasing v. Wearever(1983)] (e) Effect of Attachment (i) Machinery becomes part of the immovable. (ii) The installation of machinery and equipment in a mortgaged sugar central for the purpose of carrying out the industrial functions and increasing production, constitutes a permanent improvement on said sugar central and subjects said machinery and equipment to the mortgage constituted thereon. [Berkenkotter v. Cu Unjieng(1935)]

(2) Par. 3 (a) Res vinta in Roman Law (b) “Attachment in a fixed manner”: breakage or injury in case of separation will be substantial e.g. wells, sewers, aqueducts and railways (i) Whether attached by the owner himself or some other person (3) Par. 7 Actually used (it has been spread over the land) Immovables by Destination: are essentially movables but by the purpose for which they have been placed in an immovable, partake of the nature of an immovable [Par. 4, 5, 6 & 9] (1) Par. 4 (a) Requisites: (i) Placed by the owner or by the tenant (as agent); (ii) With intention of attaching them permanently even if adherence will not involve breakage or injury. (b) Where the improvement or ornaments placed by the lessee are not to pass to the owner at the expiration of the lease, they remain movables for chattel mortgage purposes. [Davao Sawmill v. Castillo(1935)] (2) Par. 3 v. Par. 4 Par. 3 Cannot be separated from immovable without breaking or deterioration Need not be placed by the owner Real property by incorporation

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(4) Par. 6 Requisites: (a) Placed by the owner or the tenant (as agent); (b) With the intention of permanent attachment; (c) Forming a permanent part of the immovable.

Par. 4

(5) Par. 9: (a) A floating house tied to a shore and used as a residence is considered real property, considering that the waters on which it floats are considered immovables. (b) But if the floating house makes it a point to journey from place to place, it assumes the category of a vessel, and is considered immovable

Can be separated from immovable without breaking or deterioration Must be placed by the owner, or by his agent, expressed or implied Real property by incorporation and destination

Immovables by Analogy: Contracts for public works, servitudes, other real rights over immovable property e.g. usufruct and lease of real property for a period of 1 year and registered [Par. 10]

(3) Par. 5 (a) Immovability depends upon their being destined for use in the industry or work in the tenement; (i) The moment they are separated, (from the immovable or from the industry or

Note: Enumeration in Art. 415 not absolute (1) Parties may by agreement treat as, but effective only as to them.

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It is based, partly, upon the principle of estoppel. [Evangelista vs. Alto Surety(1958)]

(c) Intellectual property – considered personal property; it consists in the pecuniary benefit which the owner can get by the reproduction or manufacture of his work.

(2) For purposes of taxation, improvements on land are commonly taxed as realty, even though for some purposes, they might be considered as personalty.

(4) By forces of nature – e.g. electricity, gas, heat, oxygen

It is a familiar phenomenon to see things classified as real property for purposes of taxation, which on general principle, might be considered personal property. [Manila Electric v. Central Bank(1962)]

IMPORTANCE AND SIGNIFICANCE OF CLASSIFICATION UNDER THE CIVIL CODE

(1) In Criminal Law (a) Usurpation of property can take place only with respect to real property. [RPC 312] (b) Robbery and theft can be committed only against personal property. [RPC 293, 308]

PERSONAL OR MOVABLE [416 & 417, CC]

(1) Those movables susceptible of appropriation which are not included in the preceding article; (2) Real property which by any special provision of law is considered as personalty; (3) Forces of nature which are brought under control by science; and (4) In general, all things which can be transported from place to place without impairment of the real property to which they are fixed. (5) Obligations and actions which have for their object movables or demandable sums; and (6) Shares of stock of agricultural, commercial and industrial entities, although they may have real estate. Tests to Determine Movable Character (1) By exclusion (a) Everything NOT included in Article 415 (b) Parties cannot by agreement treat immovable that which is legally movable.

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(2) In the Form of Contracts Involving Movables and Immovables (a) Subject matter of specific contracts: (i) Only real property can be the subject of real mortgage [NCC 2124] and antichresis [NCC 2132] (ii) Only personal property can be the subject of voluntary deposit [NCC 1966], pledge [NCC 2094] and chattel mortgage [Act 1508[ (b) Donations of real property are required to be in a public instrument [NCC 749] but a donation of a movable may be made orally or in writing [NCC 748] (3) For Acquisitive Prescription (a) Real property can be acquired by prescription in 30 years (bad faith) and 10 years (good faith). (NCC 1137, 1134) (b) Movables can be acquired by prescription in 8 years (bad faith) and 4 years (good faith). (NCC 1132)

as

(2) By description (a) Ability to change location – whether it can be carried from place to place; (b) Without substantial injury to the immovable to which it is attached.

(4) Actions for Recovery of Possession (a) Possession of real property - recovered through accion reivindicatoria, accion publiciana, forcible entry and unlawful detainer. (b) Possession of movable property - recovered through replevin.

The steel towers built by MERALCO are not buildings or constructions since they are removable and merely attached to a square metal frame by means of bolts, which when unscrewed could easily be dismantled and moved from place to place, without breaking the material or causing deterioration to the object they are attached. [Board of Assessment Appeals v. Meralco]

(5) Venue of actions (a) Real actions - Actions concerning real property are commenced in the court which has jurisdiction over the area where the real property is situated. [Rules of Court Rule 4 Sec. 1] (b) Personal actions - Commenced where the plaintiff or any of the principal plaintiffs, or where the defendant or any of the principal defendants resides, or if a non-resident

(3) By special provision of law (a) Growing crops under the Chattel Mortgage Law (b) Machinery installed by a lessee not acting as agent of the owner [Davao Sawmill v. Castillo]

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defendant, where he may be found, at the election of the plaintiff. [Rule 4 Sec. 2]

May be used by everybody, even by strangers or aliens but nobody can exercise over it the rights of a private owner

(6) The Governing Law (Private International Law) (a) Immovables - governed by the law of the country where they are located (b) Movables - governed by the personal laws of the owner (which in some cases is the law of his nationality and in other cases, the law of his domicile)

(2) Those intended for some public service (a) may be used only by authorized persons but exists for the benefit of all (b) e.g. fortresses, unleased mines and civil buildings

(7) In affecting third persons (a) In transactions involving real property – must be recorded in the Registry of Property to affect third persons (b) In transactions involving personal property – registration is not required, except for chattel mortgages [Chattel Mortgage Register, NCC 2140]

(3) Those for the development of the national wealth Includes natural resources such as minerals, coal, oil and forest (4) Patrimonial property (a) Owned by the State over which it has the same rights as private individuals in relation to their own property (b) Subject to the administrative laws and regulations on the procedure of exercising such rights. (c) E.g. friar lands, escheated properties and commercial buildings (d) Purpose: (i) Enables the State to attain its economic ends (ii) Serves as a means for the State’s subsistence and preservation (iii) Enables the State to fulfill its primary mission (e) Conversion of Property of Public Dominion for Public Use to Patrimonial Property: (i) Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State [NCC 422, Civil Code] (ii) Requires a Declaration by the Government (executive or legislative departments) that it is no longer needed for public use or service.

BASED ON OWNERSHIP Either of public dominion or private ownership [NCC 419] Churches and other consecrated objects are considered outside the commerce of man; they are considered neither public nor private property PUBLIC DOMINION

Property of public dominion is outside the commerce of man. They cannot be the subject matter of private contracts, cannot be acquired by prescription and they are not subject to attachment and execution nor burdened with a voluntary easement. Public Dominion Public Domain

As defined by NCC 420

Public Lands

Public Land Act

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Used in Art XII, Section 2, 1987 Constitution

Characteristics: (1) Not owned by the State but pertains to it as territorial sovereign; to hold in trust for the interest of the community. (2) Purpose: For public use, and not for use by the State as a juridical person (3) Cannot be the subject of appropriation either by the State or by private persons

Administered by Municipal Corporations: [NCC 424] (1) Property for public use, in the provinces, cities, and municipalities, consist of the provincial roads, city streets, municipal streets, the squares, fountains, public waters, promenades, and public works for public service paid for by said provinces, cities, or municipalities. (2) Patrimonial property of Municipal Corporations: (a) The province or municipality, as a juridical entity, also possesses private property to answer for its economic necessities.

Classifications: Administered by the State: [NCC 420] (1) Those intended for public use (roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character)

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(b) Classification of Properties of provinces, cities, and municipalities [Salas v. Jarencio, (1972)] (i) Properties acquired with their own funds in their private or corporate capacity over which the political subdivision has ownership and control (ii) Properties of public dominion held in trust for the State’s inhabitants are subject to the control and supervision of the State

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acquired with its private or corporate funds, the presumption is that such land came from the State upon the creation of the municipality. Conversion Alienable Public Land converted to Private Property through Prescription – Alienable public land held by a possessor – personally/through predecessors-ininterest, openly, continuously and exclusively – for 30 years is CONVERTED to private property by the mere lapse or completion of the period. The application for confirmation is mere formality, because land had already been converted, giving rise to a registrable title. [Director of Lands v. IAC]

(c) A municipal corporation must prove that they acquired the land with their own corporate funds (d) Presumption: that land comes from the State upon the creation of the municipality. All lands in the possession of the municipality

Private Land converted to Property of Public Dominion through abandonment and reclamation – Through the gradual encroachment or erosion by the ebb and flow of the tide, private property may become public IF the owner appears to have ABANDONED the land, and permitted it to be totally destroyed so as to become part of the shore. The land having disappeared on account of the gradual erosion, and having remained submerged until they were reclaimed by the government, they are public land. [Government v. Cabangis]

Except for those acquired with its private funds, are deemed to be property of public dominion, held in trust for the State for the benefit of its inhabitants. (e) Congress has paramount power to dispose of lands of public dominion in a municipality, the latter being a subdivision only for purposes of local administration. [Salas v. Jarencio, (1972)] PRIVATE OWNERSHIP

BASED ON CONSUMABILITY [NCC 418] Only applies to movables, determined by nature

Can be exercised by the State in its private capacity or by private persons

CONSUMABLE

(1) Movables which cannot be used in a manner appropriate to their nature without their being consumed (e.g. food) (2) Consumable goods cannot be the subject matter of a commodatum unless the purpose of the contract is not the consumption of the object, as when it is merely for exhibition.

Kinds: (1) Patrimonial property - Property owned by the State and its political subdivisions in their private capacity; all property of the State not included in NCC 420 (on public dominion) [NCC 421-424] (2) Property belonging to private persons, either individually or collectively [NCC 425] (1) Property of private ownership, besides the patrimonial property of the State, provinces, cities, and municipalities, consists of all property belonging to private persons, either individually or collectively. (2) Refers to all property belonging to private persons, natural or juridical, either individually or collectively (co-owned property)

NON-CONSUMABLE

All others not falling under ‘consumable’ e.g. money in coin SUSCEPTIBILITY TO SUBSTITUTION Only applies to movables, determined by the intention of the parties. FUNGIBLES

Things which, because of their nature or the will of the parties, are capable of being substituted by others of the same kind, not having a distinct individuality

Determination (two different views): (1) Determined by how the property was used: In Province of Zamboanga v. City of Zamboanga (1968), property was considered patrimonial for they were not for public use.

NON-FUNGIBLES

(1) Things which cannot be substituted for another (2) If the parties agreed that the same thing be returned, it is not fungible

(2) Determined by how the property was acquired: According to Salas v. Jarencio (1972), the absence of a title deed to any land, showing that it was

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BASED ON THE CONSTITUTION [ARTICLE XII, SEC 3] (1) Public Agricultural Land (2) Mineral Land (3) Timber Land (4) National Parks

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Ownership DEFINITION (a) Independent right of exclusive enjoyment and control of a thing (b) For the purpose of deriving all advantages required by the reasonable needs of the owner/holder of right and promotion of general welfare (c) Completely subjected to his will (d) In everything not prohibited by public law or the rights of another

OTHER CLASSIFICATIONS BY THEIR PHYSICAL EXISTENCE

(1) Corporeal - All property the existence of which can be determined by the senses (res qui tangi possunt) (2) Incorporeal (a) Things having abstract existence, created by man and representing value. (b) Includes rights over incorporeal things, credits, and real rights other than ownership over corporeal things.

RIGHT IN GENERAL RIGHTS INCLUDED IN OWNERSHIP [NCC 428]

(1) Right to enjoy and dispose of a thing, without other limitations than those established by law (2) Right of action against the holder and possessor of the thing in order to recover it.

BY THEIR AUTONOMY OR DEPENDENCE

(1) Principal - Those to which other things are considered dependent or subordinated, such as the land on which a house is built. (2) Accessory - Those which are dependent upon or subordinated to the principal. They are destined to complete, enhance or ornament another property.

BUNDLE OF RIGHTS

(1) Jus Utendi: Right to enjoy and receive what the

property produces Jus Fruendi: Right to receive fruits Jus Accessiones: Right to the accessories Jus Abutendi: Right to consume a thing by use Jus Disponendi: Right to alienate, encumber, transform or even destroy the thing owned (6) Jus Vindicandi: Right to recover possession of property based on a claim of ownership (7) Jus Possidendi: Right to possess the property (Implied from all the other rights) (2) (3) (4) (5)

BY SUSCEPTIBILITY TO DETERIORATION

(1) Deteriorable that deteriorate through use or by time (2) Non-deteriorable BY REASON OF THEIR SUSCEPTIBILITY TO DIVISION

PROTECTING PROPERTY

(1) Divisible - Those which can be divided physically or juridically without injury to their nature. E.g.: piece of land or an inheritance. (2) Indivisible - Those which cannot be divided without destroying their nature or rendering impossible the fulfillment of the juridical relation of which they are object.

BASIC DISTINCTIONS

(1) Real right v. Personal right Real Rights - Rights that confer upon its holder an autonomous power to derive directly from a thing certain economic advantages independently of whoever the possessor of the thing Personal Rights - Rights of a person to demand from another as a definite passive subject, the fulfillment of a prestation to give, to do or not to do

BY REASON OF DESIGNATION

(1) Generic - That which indicates its homogenous nature, but not the individual such as a horse, house, dress, without indicating it (2) Specific - That which indicates the specie or its nature and the individual, such as “the white horse of X”

Real Rights Definite active subject who has a right against ALL persons generally as an indefinite passive subject Object is generally a corporeal thing

EXISTENCE IN POINT OF TIME

(1) Present - Those which exist in actuality, either physical or legal, such as, the erected building (2) Future - Those which do not exist in actuality, but whose existence can reasonably be expected with more or less probability, such as ungathered fruits.

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Personal Rights Definite active subject (creditor) and a definite passive subject (debtor) Subject matter is always an incorporeal thing

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Real Rights Generally extinguished by the loss or destruction of the thing over which it is exercised

Personal Rights Personal right survives the subject matter

It is directed against the whole world, giving rise to rd real actions against 3 persons

It is binding or enforceable only against a particular person giving rise to personal actions against such debtor

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Distinction between forcible entry and unlawful detainer (1) Forcible Entry: Lawful possessor deprived through FISTS: (a) FISTS (Force, Intimidation, Strategy, Threats, Stealth) (b) Prescription: 1 year from dispossession (force, intimidation, threats) or from knowledge of dispossession (strategy, stealth) (2) Unlawful Detainer: Possessor refused to vacate upon demand by owner (a) Legal possession (by permission/ tolerance) becomes unlawful upon failure to vacate (b) Prescription of action: 1 year from last notice to vacate

(2) Real action v. Personal action (Rule 4 Sec 1-2) Real action – actions affecting title to or possession of real property or any interest therein

Actions for recovery of possession of movable property Replevin (1) for manual delivery of property (2) Prescription of Right: 4 years (GF) or 8 years (BF)

Personal action – all other actions (3) Action in rem v. Action in personam v. Action quasi in rem Action in rem – action against a property, judgment binding against the whole world

Requisites for recovery of property [NCC 434] (1) Property must be identified Through a relocation survey and a title properly identifying boundaries and location

Action in personam – action against a specific person, judgment binding against that particular person

(2) Plaintiff must rely on the strength of his title and not on weakness of defendant’s title (a) Right must be founded on positive title and not on lack or insufficiency of defendant’s (b) Ei incumbit probatio qui dicit, non qui negat: He who asserts, not he who denied must prove

Action quasi in rem – action against a specific property with respect to a person REMEDIES

(1) Self-help [NCC 429-430] (a) The owner may use such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property. (b) Every owner may enclose or fence his land or tenements by any other means without detriment to servitudes constituted thereon. (2) Actions to recover ownership and possession of real property

LIMITATIONS ON OWNERSHIP LIMITATIONS ON THE RIGHTS OF OWNERSHIP PROVIDED BY LAW

General limitations – taxation, eminent domain, police power (1) Police Power: Property taken with no compensation for general welfare (a) When any property is condemned or seized by competent authority in the interest of health, safety or security, the owner thereof shall not be entitled to compensation, unless he can show that such condemnation or seizure is unjustified. [Art. 436, Civil Code] (b) Requisites: To justify the exercise of police power, the following must appear: (i) The interests of the public generally, require such interference (as distinguished from those of a particular class) (ii) The means are reasonably necessary for the accomplishment of a purpose, and not unduly oppressive

RIGHT TO RECOVER POSSESSION

Immovable Property (1) Accion Reivindicatoria: Recovery of ownership of real property (a) Including but not limited to possession (b) Prescription of Action: 30 years (2) Accion Publiciana: Recovery of a better right to possess (de jure) (a) Judgment as to who has the better right of possession (b) Also, actions for ejectment not filed within 1 year must be filed as accion publiciana (c) Prescription: 10 years

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(2) Taxation: Forced contribution to the operation of government (3) Eminent Domain: Property taken for public use/purpose, but subject to due process and payment of just compensation Requisites – To justify the exercise of the right of eminent domain, the following requisites must all be present: (a) Private property as the object of the expropriation; (b) The property is taken by the State or by competent authority; (c) The purpose of the taking is for public use; (d) The taking must be attended with due process of law; (e) There is payment of just compensation

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(3) Act in State of Necessity The owner of a thing has no right to prohibit the interference of another with the same, if the interference is necessary to avert an imminent danger and the threatened damage, compared to the damage arising to the owner from the interference, is much greater. The owner may demand from the person benefited, indemnity for the damage to him. (NCC 432) (4) Nuisance - A nuisance is any act, omission, establishment, business, condition of property, or anything else which: (a) Injures or endangers the health or safety of others; or (b) Annoys or offends the senses; or (c) Shocks, defies or disregards decency or morality; or (d) Obstructs or interferes with the free passage of any public highway or street, or any body of water; or (e) Hinders or impairs the use of property. (NCC 694)

Specific Limitations – imposed by law, sic utere tuo, nuisance, stat of necessity, easements voluntarily imposed by owner: servitudes, mortgages imposed by contract (1) Legal Servitudes: once requisites are satisfied, the servient owner may ask the Court to declare the existence of an easement (a) Art. 644 & 678: Aqueduct (b) Art. 679: Planting of trees (c) Art. 670: Light and View (d) Art. 649 & 652: Right of Way (e) Art. 637: Passage of water from upper to lower tenements (f) Art. 676: Drainage of buildings (g) Art. 684-687: Lateral and subjacent support (2) Must not injure the rights of a third person (a) Sic Utere Tuo Ut Alienum Non Laedas (b) The owner of a thing cannot make use thereof in such manner as to injure the rights of a third person. [NCC 431] Summary of Actions: Action Forcible Entry/Unlawful Detainer Accion Publiciana

Venue

Summon

Prayer

Basis Prior physical possession Real right of Possession Ownership

Real Action

In personam

Possession

Real Action

In personam

Possession

Real Action

In personam

Possession

Accion Reividicatoria

Reconveyance

Prescription 1 year 10 years [NCC 555(4)] GF: 10 years BF: 30 years [NCC 1137] Unless--Torrens Title -- Unless laches

Real Action

In personam

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Ownership

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Quieting of Title Replevin

PROPERTY

Venue

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Summon

Real Action

Quasi-in rem

Personal Action

In personam

Accession

Prayer Quieting of Title Possession

Basis Ownership Ownership

Prescription (NCC 1456) Imprescriptible GF: 4 years BF: 8 years

(3) Lease (4) Antichresis (a) He who receives the fruits has the obligation to pay the expenses made by a third person in their production, gathering, and preservation. [NCC 443] (b) Necessary expenses of production, gathering and preservation must be borne by the receiver of the fruits

Accession – the right by virtue of which the owner of a thing becomes the owner of everything which is produced thereby, or which is incorporated or attached thereto, either naturally or artificially. [NCC 440] Accessories – things joined to or included with the principal thing for the latter’s embellishment, better use, or completion.

Fruits – all periodical additions to a principal thing produced by forces inherent to the thing itself

CLASSIFICATION OF ACCESSION (1) Accession Discreta (fruits) – the right pertaining to the owner of a thing over everything produced thereby (by internal forces)

Kinds of Fruits (1) Natural – spontaneous products of soil and the young and other products of animals [NCC 442 (1)]

(2) Accession Continua – the right pertaining to the owner of a thing over everything that is incorporated or attached thereto either naturally or artificially; by external forces (by external forces) (a) Over Immovables (i) Industrial (ii) Natural (1) Alluvion (2) Avulsion (3) Change of Course of River (4) Formation of Islands

Under the rule partus sequitur ventrem, to the owner of female animals would also belong the young of such animals although this right is lost when the owner mixes his cattle with those of another. (2) Industrial – produced by lands of any kind through cultivation or labor [NCC 442 (2)] Standing trees are not fruits since they are considered immovables although they produce fruits themselves. However, they may be considered as industrial fruits when they are cultivated or exploited to carry on an industry.

(b) Over Movables (i) Conjunction and Adjunction (ii) Commixtion and Confusion (iii) Specification

(3) Civil Fruits – easily prorated for under NCC 544 they are deemed to accrue daily and belong to the possessor in good faith in that proportion

WITH RESPECT TO IMMOVABLES:

Accession Discreta - Right of ownership to the fruits [NCC 441]

Note: (a) Natural and Industrial Fruits are real property while still ungathered (b) Only such as are manifest or born are considered as natural or industrial fruits

General Rule: To the owner of the principal belongs the natural, industrial and civil fruit. Exception: [PULA] (1) Possession in good faith (2) Usufruct

Principles Applicable to Accession Discreta (1) Time of Accrual depending on kind:

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(a) Annuals: from the time seedlings appear on the ground (b) Perennials: from the time fruits actually appear on the plants (c) Young of animals: from the time they are in the womb, although unborn – beginning of maximum ordinary period of gestation Fowls: from the time of incubation

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Note: (a) Bad faith leads to liability for damages and the loss of the works or the improvement without reimbursement (b) Bad faith of one party neutralizes the bad faith of the other (2) Accession Continua Natural: Land deposits, etc. (a) Alluvium: Soil is gradually deposited on banks adjoining the river

(2) A receiver of fruits has the obligation to pay the expenses incurred by a third person in the production, gathering and preservation. [NCC 443] (a) Exception: Receiver does not have to pay if fruits are recovered before gathering from a possessor in bad faith, receiver does NOT have to pay indemnity (b) But if recovered after fruits have been gathered, receiver must pay since the fruits have been separated from immovable, hence accession principles will not apply

Requisites (i) Deposit of soil or sediment is gradual and imperceptible (ii) As a result of the action of the currents of the waters of the river (iii) Land where the accretion takes place is adjacent to the banks of the rivers (iv) Deemed to Exist: When the deposit of the sediment has reached a level higher than the highest level of the water during the year

Principles Applicable to Accession Continua (1) Accession Continua Artificial or Industrial: Building, planting or sowing on land owned by another (over immovables)

Effect (i) Land automatically owned by the riparian owner (ii) BUT does not automatically become registered property

General Rule: Whatever is built, planted or sown on the land of another + improvements or repairs made thereon, belong to the owner of the land subject to the rules on BPS.

Rationale (i) To offset the owner’s loss from possible erosion due to the current of the river (ii) Compensate for the subjection of the land to encumbrances and legal easements

Presumptions: (a) All works, sowing and planting are presumed made by the owner (b) All works are presumed made at the owner’s expense, unless the contrary is proved (c) The owner of the principal thing owns the natural, industrial and civil fruits, except when the following persons exist: (i) Possessor in Good Faith (ii) Usufructuary (iii) Lessee (iv) Antichretic creditor

(b) Avulsion: A portion of land is segregated from one estate by the forceful current of a river, creek or torrent and transferred to another Requisites (i) Segregation and transfer of land is sudden and abrupt (ii) Caused by the current of the water (iii) Portion of land transported must be known and identifiable OR (iv) Can also apply to sudden transfer by other forces of nature such as land transferred from a mountain slope because of an earthquake

Meaning of bad faith (a) On the part of the landowner: Whenever the building, planting or sowing was done with the knowledge and without opposition on his part (b) On the part of owner of materials: Allows the use of his materials without protest (c) On the part of the builder, planter and sower: Knows that he does not have title to the land, nor the right to build thereon OR no permission of the owner of the materials to pay their value

Effect: The ownership of the detached property is retained by the owner subject to removal within 2 years from the detachment

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(d) Formation of Islands They belong to the State if: (i) Formed on the SEAS within the jurisdiction of the Philippines (ii) Formed on LAKES (iii) Formed on NAVIGABLE or FLOATABLE RIVERS (1) Capable of affording a channel or passage for ships and vessels (2) Must be sufficient not only to float bancas and light boats, but also bigger watercraft (3) Deep enough to allow unobstructed movements of ships and vessels (4) TEST: can be used as a highway of commerce, trade and travel

(c) Change Of Course Of River Requisites (i) Change in the natural course of the waters of the river (ii) Such change causes the abandonment of the river beds Natural Bed: ground covered by its waters during ordinary floods. Such change is sudden or abrupt Results: (i) Owners whose lands are occupied by the new course automatically become owners of the old bed, in proportion to the area they lost (ii) Owners of the lands adjoining the old bed are given the right to acquire the same by paying the value of the land

They belong to the Owners of the nearest margins or banks if (i) Formed through successive accumulation of alluvial deposits (ii) On NON-NAVIGABLE and NONFLOATABLE RIVERS (iii) If island is in the middle: divided longitudinally in half.

Not exceeding the value of the land invaded by the new bed (the old property of the owner) (iii) The new bed opened by the river on a private estate shall become of public dominion

Landowner Good Faith

Bad Faith

Builder, Planter, Sower [BPS]

Good Faith

Rights of Landowner [NCC 448]: (a) Buy (only after payment of indemnity under NCC 546 and 548 to BPS) 546 and 548 – Necessary, Useful and Ornamental (b) Sell to BP (unless the value of the land is considerably more than that of the building or trees) Remedy: Rent to BP if L does not want to buy (c) Rent to S

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Absolute Duties of Landowner [NCC 447]: (a) Pay damages (b) Buy or pay for value (c) Allow removal

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Landowner

Bad Faith

Good Faith

Bad Faith

Absolute Right of Landowner [NCC 449-452] (a) Get (b) Demolish the work of B at the expense of B (c) Removal of PS at the expense of PS (d) Sell to BP (e) Rent to the S (f) Damages

SAME AS GF: GF

Landowner

Material Man

Good Faith

Bad Faith

Good Faith

Rights of Landowner: [NCC 447] Buy unless M can remove without damage

Absolute Duties of Landowner: [NCC 447] (1) Pay damages (2) Buy or pay for value (3) Allow removal

Bad Faith

Absolute Right of Landowner [NCC 447] Get

SAME AS GF: GF

Case 1: Landowner is BPS using material of another Landowner and BPS

Owner of Material

Good faith Right to acquire the improvements after paying the value of materials.

Good faith (1) Limited right of removal if there would be no injury to work constructed, or without plantings or constructions being destroyed. [Article 447] (2) Right to receive payment for value of materials Good faith (a) Right to receive payment for value of materials (b) Absolute right of removal of the work constructed in any event (c) Right to be indemnified for damages Bad faith Lose materials without right to indemnity

Bad faith Acquire BPS after paying its value and paying indemnity for damages [Article 447] but subject to OM’s right to remove Good faith (1) Right to acquire the improvements without paying indemnity (2) Right to acquire indemnity for damages if there are hidden defects known to OM Bad faith Same as though acted in good faith under Article 453

Bad faith Same as though acted in good faith under Article 453

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Case 2: BPS builds, plants, or sows on another’s ;and using his own materials Landowner

BPS and Owner of Material

Good faith Good faith Landowner has option to: BPS has right to retain (right of retention) the land until (a) Acquire the improvement after paying indemnity the payment of indemnity which may be the original cost of improvement OR increase in value of the whole brought about by the NOTE: During this period BPS is not required to pay improvement rent. (b) Sell the land to the BP or collect rent from sower UNLESS value of land is more than the thing built, planted or sown or BP shall pay rent fixed by parties or by the court in case of disagreement. NOTE: Landowner can be forced to choose under pain of direct contempt or court can choose for him. Good faith Landowner has right to collect damages in any case and option to: (a) Acquire improvements without paying indemnity if the improvements are still standing on the land (b) Sell the land to BP or collect rent from the sower unless value of the improvements in which case there will be a forced lease (c) Order demolition of improvements or restoration of land to its former condition at the expense of the BPS Landowner must pay for necessary expenses for preservation Bad faith (1) Landowner must indemnify BPS for the improvements and pay damages as if he himself did the BPS (2) Landowner has no option to sell the land and cannot compel BPS to buy the land unless BPS agrees to Bad faith Same as though acted in bad faith under Article 453

Bad faith (1) Pay damages to landowner (2) BPS lose materials without right to indemnity (3) No right to refuse to buy the land (4) Recover necessary expenses for preservation of land

Good faith BPS has right to : (1) Be indemnified for damages (2) Remove all improvements in any event Bad faith Same as though acted in bad faith under Article 453

Case 3: BPS builds, plants or sows on another’s land with materials owned by third persons Landowner

BPS

Owner of Material

Good faith (a) Right to acquire improvements and pay indemnity to BPS; subsidiarily liable to OM (b) Has option to: (1) Sell land to BP except if the value of the land is considerably more (2) Rent to sower Good faith (1) Right to acquire improvements and pay indemnity to BPS (2) Has option to: (1) Sell land to BP except if the value of the land is

Good faith (1) Right of retention until necessary and useful expenses are paid (2)Pay value of materials to OM

Good faith (1) Collect value of material primarily from BPS and subsidiarily liable for landowner if BPS is insolvent (2) Limited right of removal

Good faith (1) Right of retention until necessary and useful expenses are paid. (2)Keep BPS without indemnity to OM and collect damages from him

Bad faith (1) Lose the material without right to indemnity (2) Must pay for damages to BPS

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Landowner considerably more (2) Rent to sower (3) Without subsidiary liability for cost of materials Good faith (1) Landowner has right to collect damages in any case and option to: (1) Acquire improvements w/o paying for indemnity; or (2) Demolition or restoration; or (3) Sell to BP, or to rent to sower (2) Pay necessary expenses to BPS Bad faith Same as when all acted in good faith under Article 453 Bad faith (1) Acquire improvement after paying indemnity and damages to BPS unless latter decides to remove (2) Subsidiarily liable to OM for value of materials Bad faith (1) Acquire improvements after indemnity; subsidiarily liable to OM for value of materials (2) Has option to: (a) Sell the land to BP except if the value of the land is considerably more (b) Rent to sower Good faith (a) Acquire improvement after paying indemnity; subsidiarily liable to OM (b) Landowner has option to: (a) Sell land to BP except if value of land is considerably more (b) Rent to sower Bad faith Acquire improvements and pay indemnity and damages to BPS unless latter decides to remove materials

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BPS

Owner of Material

Bad faith Recover necessary expenses for preservation of land from landowner unless landowner sells land

Bad faith (1) Recover value from BPS (as if both are in good faith) (2) If BPS acquires improvement, remove materials if feasible w/o injury (3) No action against landowner but liable to landowner for damages

Bad faith Same as when all acted in good faith under Article 453 Good faith (1) May remove improvements (2)Be indemnified for damages in any event

Bad faith Same as when all acted in good faith under Article 453 Good faith (1) Remove materials if possible w/o injury (2) Collect value of materials from BPS; subsidiarily from landowner

Bad faith (a) Right of retention until necessary expenses are paid (b)Pay value of materials to OM and pay him damages

Good faith (a) Collect value of materials primarily from BPS and subsidiarily from landowner (b) Collect damages from BPS (c) If BPS acquires improvements, remove materials in any event

Bad faith (1) Right of retention until necessary expenses are paid (2)Pay value of materials to OM (3) Pay damages to OM

Good faith - Collect value of materials primarily from BPS and subsidiarily from landowner - Collect damages from BPS - If BPS acquires improvements, absolute right of removal in any event Bad faith (1) No right to indemnity (2) Loses right to material

Good faith (1) Receive indemnity for damages (2)Absolute right of removal of improvements in any event

(2) Mixture – the union of material where the components lose their identity

WITH RESPECT TO MOVABLE PROPERTY

Three Types: (1) Conjunction or Adjunction - process where 2 movables belonging to different owners are attached to each other to form a single object

Kinds: (a) Commixtion – mixture of solids (b) Confusion – mixture of liquids and gases

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(3) Specification – transforming/giving of a new form to another’s material through labor

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When separation allowed (1) Separation without injury (2) Accessory much more precious (a) Owner of accessory may demand separation even though the principal thing may suffer (b) Owner who caused the union shall bear the expenses for separation even if he acted in good faith (3) Owner of principal in bad faith

Adjunction Requisites (1) There are 2 movables belonging to 2 different owners (2) They are united in such a way that they form a single object (3) They are so inseparable that their separation would impair their nature or result in substantial injury to either component

Mixture Kinds of Mixtures: (1) Commixtion: mixture of solid things (2) Confusion: mixture of liquid things

Kinds of Adjunction (1) Inclusion or engraftment – e.g. a diamond is set on a gold ring (2) Soldadura or soldering – e.g. when lead is united or fused to an object made of lead (a) It is ferruminacion if both the accessory and principal objects are of the same metal; and (b) Plumbatura, if they are of different metals (3) Escritura or writing – e.g. when a person writes on paper belonging to another; (4) Pintura or painting – e.g. when a person paints on canvas belonging to another; (5) Tejido or weaving – e.g. when threads belonging to different owners are used in making textile

Rules: (1) Mixture by will of the owners (a) First governed by their stipulations (b) In the absence of stipulation, each owner acquires a right or interest in the mixture in proportion to the value of his material (2) Mixture caused by an owner in good faith or by chance (a) Share of each owner shall be proportional to the value of the part which belonged to him (b) If things mixed are exactly the same kind and quality, divide mixture equally/proportionally (c) If things mixed are of different kind or quality, a co-ownership arises (d) If they can be separated without injury, owners may demand separation (e) Expenses borne by owners pro rata (f) NOTE: Good faith does not necessarily exclude negligence, which gives rise to damages

Ownership of new object formed by adjunction (1) If union was made in good faith, owner of principal thing acquires the accessory, with obligation to indemnify the owner of the accessory for its value in its uncontroverted state (2) If union was in bad faith, NCC 470 applies: (a) Owner of accessory in bad faith loses the thing incorporated and has the obligation to indemnify the owner of the principal thing for damages (b) If owner of principal is in bad faith, owner of the accessory has a right to choose between the owner of principal paying him its value or that the thing belonging to him be separated, even though for this purpose it be necessary to destroy the principal thing; and in both cases, there shall be indemnity for damages

(3) Mixture caused by an owner in bad faith (a) Actor forfeits the thing belonging to him (b) Actor also becomes liable for damages (4) Mixture made with knowledge and without objection of the other owner Rights to be determined as though both acted in good faith

Test to determine the principal thing In the order of application, the principal is that: (1) To which the other has been united as an ornament or for its use or perfection (“Rule of importance and purpose”) (2) Of greater value (3) Of greater volume (4) That of greater merits, taking into consideration all the pertinent legal provisions, as well as the comparative merits, utility and volume of their respective things

Specification Definition: Takes place when the work of a person is done on the material of another, such material, in consequence of the work itself, undergoes a transformation Rules: (1) Person in good faith General rule:

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Worker becomes the owner but must indemnify owner (who was also in good faith) for the value of the material

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NATURE: QUASI IN REM (a) A suit against a particular person or persons in respect to the res and the judgment will apply only to the property in dispute. (b) The action to quiet title is characterized as proceeding quasi in rem. Technically, it are neither in rem nor in personam. In an action quasi in rem, an individual is named as defendant. However, unlike suits in rem, a quasi in rem judgment is conclusive only between the parties. [Spouses Portic v. Cristobal]

Exception: If material is more valuable than the new thing, owner of material may choose: (a) To take the new thing but must pay for the work or labor (b) To demand indemnity for the material If the owner was in bad faith, maker may appropriate the new thing without paying the owner OR require the owner to pay him the value of the thing or his work, with right to indemnity

JUSTIFICATIONS FOR QUIETING OF TITLE (1) To prevent future or further litigation on the ownership of the property (2) To protect the true title and possession (3) To protect the real interest of both parties (4) To determine and make known the precise state of the title for the guidance of all

(2) Person in bad faith General rule: (a) Owner may either appropriate the new thing to himself without paying the maker OR (b) Owner may demand value of material plus damages

THE ACTION TO QUIET TITLE DOES NOT APPLY: (1) To questions involving interpretation of documents (2) To mere written or oral assertions of claims (a) Unless made in a legal proceeding (b) Or asserting that an instrument or entry in plaintiff’s favor is not what it purports to be (3) To boundary disputes (4) To deeds by strangers to the title unless purporting to convey the property of the plaintiff (5) To instruments invalid on their face (6) Where the validity of the instrument involves a pure question of law

Exception: The first option is not available in case the value of the work, for artistic or scrientific reasons, is considerably more than that of the material (3) Person made use of material with consent and without objection of owner Rights shall be determined as though both acted in good faith

REQUIREMENT

Quieting of Title or Interest in and Removal or Prevention of Cloud over Title to or Interest in Real Property

REQUISITES OF AN ACTION TO QUIET TITLE

(1) There is a CLOUD on title to real property or any interest to real property. (2) The plaintiff must have legal or equitable title to, or interest in the real property. (3) Plaintiff must return the benefits received from the defendant. THERE IS A CLOUD ON TITLE TO REAL PROPERTY OR ANY INTEREST TO REAL PROPERTY

IN GENERAL (1) Applicable to real property (2) Basis: Equity comes to the aid of the plaintiff who would suffer if the instrument (which appear to be valid but is in reality void, ineffective, voidable or unenforceable) was to be enforced.

“Cloud on title” means a semblance of title, either legal or equitable, or a claim or a right in real property, appearing in some legal form but which is, in fact, invalid or which would be inequitable to enforce.

PURPOSE (1) To declare: (a) The invalidity of a claim on a title (b) The invalidity of an interest in property (2) To free the plaintiff and all those claiming under him from any hostile claim on the property.

A cloud exists if: (1) There is a claim emerging by reason of: (a) Any instrument e.g. a contract, or any deed of conveyance, mortgage, assignment, waiver, etc. covering the property concerned

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(b) Any record, claim, encumbrance e.g. an attachment, lien, inscription, adverse claim, lis pendens, on a title (c) Any proceeding e.g. an extrajudicial partition of property (2) The claim should appear valid or effective and extraneous evidence is needed to prove their validity or invalidity. (a) Test: Would the owner of the property in an action for ejectment brought by the adverse party be required to offer evidence to defeat a recovery? (b) As a general rule, a cloud is not created by mere verbal or parole assertion of ownership or an interest in property. (3) Such instrument, etc. is, in truth and in fact, invalid, ineffective, voidable, or unenforceable, or has been extinguished or terminated, or has been barred by extinctive prescription. (4) Such instrument, etc. may be prejudicial to the true owner or possessor.

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affirmatively and within the time provided by the statute. Possession is a continuing right as is the right to defend such possession. So it has been determined that an owner of real property in possession has a continuing right to invoke a court of equity to remove a cloud that is a continuing menace to his title. Such a menace is compared to a continuing nuisance or trespass which is treated as successive nuisances or trespasses, not barred by statute until continued without interruption for a length of time sufficient to affect a change of title as a matter of law." [Pingol v. CA] (2) When the plaintiff is not in possession of the property, the action to quiet title may prescribe. (a) 10 yrs. – ordinary prescription (b) 30 yrs. – extraordinary prescription

Co-ownership

THE PLAINTIFF MUST HAVE LEGAL OR EQUITABLE TITLE TO, OR INTEREST IN THE REAL PROPERTY [NCC 477]

(1) Legal title: the party is the registered owner of the property. (2) Equitable title: the person has the beneficial ownership of the property.

DEFINITION: The form of ownership when the ownership of an undivided thing or right belongs to different persons. [NCC 484]

PLAINTIFF MUST RETURN THE BENEFITS RECEIVED FROM THE DEFENDANT [NCC 479]

REQUISITES: (1) Plurality of owners (2) Object must be an undivided thing or right (3) Each co-owner’s right must be limited only to his ideal or abstract share of the physical whole

QUIETING OF TITLE V. REMOVAL OF CLOUD REQUISITES OF AN ACTION TO PREVENT A CLOUD

(1) Plaintiff has a title to a real property or interest therein (2) Defendant is bent on creating a cloud on the title or interest therein. The danger must not be merely speculative or imaginary but imminent. (3) Unless the defendant is restrained or stopped, the title or interest of the plaintiff will be prejudiced or adversely affected.

WHAT GOVERNS CO-OWNERSHIP: (1) Contracts (2) Special provisions (3) Civil Code CHARACTERISTICS OF CO-OWNERSHIP (1) There are 2 or more co-owners (2) There is a single object which is not materially or physically divided and over which and his ideal share of the whole (3) There is no mutual representation by the coowners (4) It exists for the common enjoyment of the coowners (5) It has no distinct legal personality (6) It is governed first of all by the contract of the parties; otherwise, by special legal provisions, and in default of such provisions, by the provisions of Title III on Co-ownership

PRESCRIPTION/NON-PRESCRIPTION OF ACTION PRESCRIPTION OF ACTION

(1) When plaintiff is in possession of the property – the action to quiet title does not prescribe. The rationale for this rule has been aptly stated thus: “The owner of real property who is in possession thereof may wait until his possession is invaded or his title is attacked before taking steps to vindicate his right. A person claiming title to real property, but not in possession thereof, must act

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(b) Article 148: between a man and a woman not capacitated to marry each other (c) Article 90: if matter is not provided in the FC Chapter on ACP, then rules on co-ownership will apply

THERE ARE IDEAL SHARES DEFINED BUT NOT PHYSICALLY IDENTIFIED [NCC 485]

(1) The share of the co-owners, in the benefits as well as in the charges, shall be proportional to their respective interests. (2) Any stipulation in a contract to the contrary shall be void. (3) The portions belonging to the co-owners in the co-ownership shall be presumed equal, unless the contrary is proved

(2) Purchase creating implied trust: co-ownership between persons who agree to purchase property If two or more persons agree to purchase property and by common consent the legal title is taken in the name of one of them for the benefit of all, a trust is created by force of law in favor of the others in proportion to the interest of each [NCC 1452]

Each co-owner has absolute control over his ideal share Every co-owner has absolute ownership of his undivided interest in the co-owned property and is free to alienate, assign or mortgage his interest except as to purely personal rights. While a coowner has the right to freely sell and dispose of his undivided interest, nevertheless, as a co-owner, he cannot alienate the shares of his other co-owners – nemo dat qui non habet. [Acabal v. Acabal]

(3) Easement of Party Wall: co-ownership of partowners of a party wall (NCC 658) (4) Condominium Law: co-ownership of the common areas by holders of units Sec. 6, RA 4726. The Condominium Act. Unless otherwise expressly provided in the enabling or master deed or the declaration of restrictions, the incidents of a condominium grant are as follows: (a) Unless otherwise, provided, the common areas are held in common by the holders of units, in equal shares, one for each unit.

Mutual respect among co-owners with regard to use, enjoyment, and preservation of the things as a whole (1) The property or thing held pro-indiviso is impressed with a fiduciary character: each coowner becomes a trustee for the benefit of his coowners and he may not do any act prejudicial to the interest of his co-owners. (2) Until a judicial division is made, the respective part of each holder cannot be determined. The effects of this would be: (a) Each co-owner exercises, together with the others, joint ownership over the pro indiviso property, in addition to his use and enjoyment of the same (b) Each co-owner may enjoy the whole property and use it.

CONTRACTS

By Agreement of Two or More Persons Article 494, Civil Code. 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.

Only limitation: a co-owner cannot use or enjoy the property in a manner that shall injure the interest of his other co-owners. [Pardell v. Bartolome]

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.

SOURCES OF CO-OWNERSHIP Law, contract, succession, testamentary disposition or donation inter vivos, fortuitous event or chance, and by occupancy

No prescription shall run in favor of a co-owner or coheir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership.

LAW

(1) Cohabitation: co-ownership between common law spouses

(1) Two or more persons may agree to create a coownership (2) Note: there is a 10-year term limit for ownership by agreement; BUT: Term may be extended by a new agreement

The Family Code, in the following provisions, made the rules on co-ownership apply (a) Article 147: between a man and a woman capacitated to marry each other

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By the creation of a Universal Partnership Of all present property NCC 1778. A partnership of all present property is that in which the partners contribute all the property which actually belongs to them to a common fund, with the intention of dividing the same among themselves, as well as all the profits which they may acquire therewith.

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when the discovery is made on the property of another, or of the State or any of its subdivisions, and by chance, one-half shall be allowed to the finder. BY OCCUPANCY

Harvesting and Fishing: co-ownership by two or more persons who have seized a res nullius thing BY ASSOCIATIONS AND SOCIETIES WITH SECRET ARTICLES

NCC 1779. In a universal partnership of all present property, the property which belonged to each of the partners at the time of the constitution of the partnership, becomes the common property of all the partners, as well as all the profits which they may acquire therewith.

[NCC 1775] Articles are kept secret among the members and any one of the members may contract in his own name with third persons: (1) governed by the provisions relating to coownership

A stipulation for the common enjoyment of any other profits may also be made; but the property which the partners may acquire subsequently by inheritance, legacy, or donation cannot be included in such stipulation, except the fruits thereof.

RIGHT OF CO-OWNERS RIGHT TO THE SHARE IN THE BENEFITS AS WELL AS CHARGES [NCC 485]

(1) Proportional to their interests (2) Stipulation to the contrary is void (3) Portions belonging to the co-owners is presumed equal

SUCCESSION

Intestate succession: co-ownership between the heirs before partition of the estate

RIGHT TO USE THE THING OWNED IN COMMON [NCC 486]

Limitation: That he use the thing in accordance with the purpose for which it is intended

NCC 1078. Where there are two or more heirs, the whole estate of the decedent is, before its partition, owned in common by such heirs, subject to the payment of debts of the deceased.  For as long as the estate is left undivided the heirs will be considered co-owners of the inheritance.  If one of the heirs dies, his heirs will in turn be coowners of the surviving original heirs.

That he uses it in such a way as to not injure the interest of the co-ownership or prevent the other coowners from using it RIGHT TO BRING AN ACTION IN EJECTMENT [NCC 487] RIGHT TO COMPEL OTHER CO-OWNERS TO CONTRIBUTE TO THE EXPENSES OF PRESERVATION AND TO THE TAXES

TESTAMENTARY DISPOSITION OR DONATION INTER VIVOS

(1) When a donation is made to several persons jointly, it is understood to be in equal shares, and there shall be no right of accretion among them, unless the donor has otherwise provided [NCC 753] (2) A donor or testator may prohibit partition for a period which shall not exceed 20 years.

[NCC 488] (1) Any one of the other co-owners may exempt himself by renouncing so much of his undivided interest as may be equivalent to his share of the expenses and taxes. (2) No waiver if it is prejudicial to the co-ownership

BY FORTUITOUS EVENT OR BY CHANCE

(1) Repairs for preservation may be made at the will of one of the co-owners but he must first notify his co-owners (2) Expenses to improve or embellish, decided upon by a majority

RIGHT TO REPAIR [NCC 489]

(1) Co-ownership between owners of 2 things that are mixed by chance or by will of the owners: Each owner shall acquire a right proportional to the part belonging to him, bearing in mind the value of the things mixed or confused [NCC 472]

RIGHT TO OPPOSE ALTERATIONS [NCC 491]

(1) Consent of all the others is needed to make alterations, even if the alteration benefits all.

(2) Hidden Treasure - co-ownership between finder and owner of the land [NCC 438]

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(2) If the withholding of the consent is clearly prejudicial to the common interest, the courts may afford relief (3) Reason for the rule: alteration is an act of ownership, not of mere administration.

Repairs for preservation (1) First, notify other co-owners, as far as practicable (2) Co-owner may advance expenses for preservation even without prior consent; he is entitled to reimbursement.

RIGHT TO FULL OWNERSHIP OF HIS PART AND OF THE FRUITS AND BENEFITS PERTAINING THERETO [NCC 493] (1) Therefore he may alienate, assign or mortgage it,

Embellishment or improvements (1) Notify co-owners of improvements and embellishments to be made If no notification, co-owner who advanced the expenses has the right to reimbursement if he proves the necessity of such repairs and the reasonableness of the expense

and even substitute another person in its enjoyment (2) Except: when personal rights are involved. (3) The effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the coownership

Exception: If proven that had there been a notification, they could have hired another who would charge less or that they know of a store that sells the needed material at a cheaper price

RIGHT TO PARTITION [NCC 494]

(1) Each may demand at any time the partition of the thing, insofar as his share is concerned (2) An agreement to keep the thing undivided for a certain period NOT exceeding 10 years is valid. (3) Term may be extended by a new agreement (4) Donor or testator may prohibit partition, period NOT to exceed 20 years (5) No partition if prohibited by law (6) Right does not prescribe

Only entitled to reimbursement for the amount that should have been spent had he notified the others, and difference shall be borne by him alone (2) Decision by majority must be followed TERMINATION/EXTINGUISHMENT TOTAL DESTRUCTION OF THING OR LOSS OF THE PROPERTY CO-OWNED

RIGHT TO REDEMPTION [NCC 1619]

Is there still co-ownership if a building is destroyed?— Yes, over the land and the debris.

(1) May exercise this in case the shares of other coowners are sold to a third person (2) If 2 or more co-owners wish to exercise this right = in proportion to their share in the thing

MERGER OF ALL INTERESTS IN ONE PERSON ACQUISITIVE PRESCRIPTION

Note: Rules on Co-Ownership Not Applicable to CPG or ACP (1) These are governed by the Family Code (2) Even void marriages and cohabitation of incapacitated persons are governed by FC 50, 147, and 148

By whom (1) A third person [NCC 1106] (2) A co-owner against the other co-owners Requisites (1) Unequivocal acts of repudiation of the rights of the other co-owners (oust the other co-owners) (a) Must be shown by clear and convincing evidence (b) Must be within the knowledge of the other coowners (c) Must not be a mere refusal to recognize the others as co-owners (2) Open and adverse possession - Not mere silent possession

RULES:

On Renunciation (1) Other co-owners may choose not to contribute to the expenses by renouncing so much of his undivided interest as may be equivalent to his share of the necessary expenses and taxes (2) Must be express; thus, failure to pay is not a renunciation (3) Requires the consent of other co-owners because it is a case of dacion en pago (cessation of rights) involving expenses and taxes already paid (J.B.L. Reyes) (4) Cannot renounce his share if it will be prejudicial to another co-owner

Note: there is a presumption that possession of a co-owner is NOT adverse Prescription only arises and produces all effects when the acts are clearly meant to oust the rights of the other co-owners

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to take part in the division presupposes the duty to notify. (2) If notice is not given, the partition will not be binding on them. (3) Once notice has been given, it is the duty of creditors and assignees to intervene and make known their stand. (a) If they fail, they cannot question the division made, except in cases of fraud. (b) If they formulate a formal question, they can contest such partition

PARTITION OR DIVISION

Effect: (1) Confers exclusive ownership of the property adjudicated to him (2) Co-heirs shall be reciprocally bound to warrant the title to and the quality of each property adjudicated (3) Reciprocal obligation of warranty shall be proportionate to the respective hereditary shares of co-heirs (4) An action to enforce warranty must be brought within 10 years from the date the right accrues (5) The co-heirs shall not be liable for the subsequent insolvency of the debtor of the estate

Possession DEFINITION [NCC 523] The holding of a thing or the enjoyment of a right

Unless partition is effected, each heir cannot claim sole ownership over a definite portion of the land. Heirs become the undivided owner of the whole estate Until said partition, he cannot alienate a specific part of the estate. Until then, they can only sell their successional rights. [Carvaria v. CA]

CONCEPT OF POSSESSION (1) To possess, in a grammatical sense, means to have, to physically and actually occupy a thing, with or without right. (Sanchez Roman) (2) It is the holding of a thing or a right, whether by material occupation or by the fact that the thing or the right is subjected to the action of our will. (Manresa) (3) It is an independent right apart from ownership.

Rights against individual co-owners in case of partition [NCC 497] (1) The creditors are allowed to take part in the partition. (2) Reason for the rule: They own part of the interest of the co-owners who made the assignment or alienation.

Right of Possession (jus possessionis) Independent right

Partition in case co-owners cannot agree (NCC 498)

Right to possess (jus possidendi) Incident to ownership

(4) Possession includes the idea of occupation. It cannot exist without it. (Exceptions: NCC 537)

Procedure for Partition (1) Governing rule: Rule 69 (2) How: By agreement of parties or by judicial decree (3) Form: Oral or Written (Statute of Frauds does not operate here because it is not a conveyance of property but a mere segregation or designation of which parts belong to whom) (4) Rules of Court do not preclude agreements or settlements.

CHARACTERISTICS ESSENTIAL REQUISITES OF POSSESSION

(1) Corpus possessionis: Holding (actual or constructive) of a thing or exercise of a right, if right is involved. (a) General Rule: Possession and cultivation of a portion of a tract under claim of ownership of all is a constructive possession of all, if the remainder is not in adverse possession of another. [Ramos v. Director of Lands] (b) Doctrine of constructive possession applies when the possession is under title calling for the whole. It does not apply where possession is without title.

Action for Partition: (1) W/N the plaintiff is indeed a co-owner of the property (2) HOW will the property be divided between the plaintiff and defendant. Intervention of creditors and assignees: (1) The law does not expressly require previous notice to the creditors and assignees before a partition, but the right of creditors and assignees

(2) Animus possidendi: Intention to possess (a) There is no possession if the holder does not want to exercise the rights of a possessor. (b) Implied from the acts of the possessor.

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(c) May be contradicted and rebutted by evidence – to prove that the person who is in possession does not in fact exercise power or control and does not intend to do so.

does not become effective unless ratified by the person in whose name it is exercised. Possession in the Concept of an Owner, and Possession in the Concept of a Holder with the Ownership Belonging to Another [NCC 525] (1) Possession in Concept of Holder: (a) One who possesses as a mere holder, not in the concept of owner, acknowledges in another a superior right which he believes to be ownership, whether his belief be right or wrong. (b) e.g. tenant, usufructuary, borrower in commodatum.

DEGREES OF POSSESSION

(1) Mere holding or possession without title and in violation of the right of the owner (a) e.g. possession of a thief or usurper of land (b) Here, both the possessor and the public know that the possession is wrongful. (2) Possession with juridical title but not that of ownership (a) e.g. possession of a tenant, depository agent, bailee trustee, lessee, antichretic creditor. (b) This possession is peaceably acquired. (c) This degree of possession will never ripen into full ownership as long as there is no repudiation of concept under which property is held.

(2) Possession in Concept of Owner: (a) May be exercised by the owner himself or one who claims to be so. (b) When a person claims to be the owner of a thing, whether he believes so or not, acting as an owner, and performing acts of ownership, and he is or may be considered as the owner by those who witness his exercise of proprietary rights, then he is in the possession of an owner. This is the kind of possession that ripens into ownership under Article 540, when such possession is public, peaceful and uninterrupted [see Art. 1118].

(3) Possession with just title or title sufficient to transfer ownership, but not from the true owner (a) e.g. possession of a vendee from a vendor who pretends to be the owner. (b) This degree of possession ripens into full ownership by lapse of time. (4) Possession with a just title from the true owner This is possession that springs from ownership.

Effects of Possession in Concept of an Owner (1) Converted into ownership by the lapse of time necessary for prescription (2) Possessor can bring all actions necessary to protect his possession, availing himself of any action which an owner can bring, except accion reivindicatoria which is substituted by accion publiciana. (3) He can ask for the inscription of possession in the registry of property (4) Upon recovering possession from one who has unlawfully deprived him of it, he can demand fruits and damages (5) He can do on the thing possessed everything that the law authorizes an owner to do; he can exercise the right of pre-emption and is entitled to the indemnity in case of appropriation.

CASES OF POSSESSION

Possession for Oneself, or Possession Exercised in One’s Own Name and Possession in the Name of Another [NCC 524] (1) In one’s own name – the fact of possession and the right to such possession is found in the same person. (2) In the name of another – the one in actual possession is without any right of his own, but is merely an instrument of another in the exercise of the latter’s possession. Kinds of possession in the name of another (a) Necessary – arises by operation of law e.g. representatives who exercise possession in behalf of a conceived child, juridical persons, persons not sui juris and the conjugal partnership (b)

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Possession in Good Faith and Possession in Bad Faith [NCC 526] (1) Possessor in good faith – one who is unaware that there exists a flaw which invalidates his acquisition (a) Good faith – consists in the possessor’s belief that the person from whom he received a

Voluntary – effected through the mutual consent of the parties (i) e.g. agents or administrators appointed by the owner or possessor. (ii) Third person may also voluntary exercise possession in the name of another, but it

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thing was the owner of the same and could convey his title. It implies freedom from knowledge and circumstances which ought to put a person on inquiry. The belief of a possessor that he is the owner of the thing must be based upon the title or mode of acquisition, such as a sale, a donation, inheritance or other means of transmitting ownership; for without this, there can be no real, well-grounded belief of one’s ownership. Error in the application of the law, in the legal solutions that arise from such application, in the appreciation of legal consequence of certain acts, and in the interpretation of doubtful provisions or doctrines, may properly serve as basis for good faith. A misconception of the law, no matter how honest cannot have the effect of making one a possessor in good faith when he does not hold a title valid in form or a deed sufficient in terms to transfer property.

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ACQUISITION OF POSSESSION WAYS OF ACQUIRING POSSESSION [NCC 531] (1) By material occupation (a) “Material occupation” – used in its ordinary meaning and not in its technical meaning under NCC 712, which defines occupation as a mode of acquiring ownership. (b) Possession acquired by material occupation is only possession as a fact, not the legal right of possession. (c) Constructive delivery is considered as an equivalent of material occupation in two situations where such occupation is essential to the acquisition of possession: (i) Tradicion brevi manu – takes place when one who possess a thing by title other than ownership, continues to possess the same under a new title, that of ownership. (ii) Tradicion constitutum possessorium – takes place when the owner alienates the thing, but continues to possess the same under a different title.

(2) Possessor in bad faith – one who knows his title is defective (a) Only personal knowledge of the flaw in the title or mode of acquisition can make him a possessor in bad faith for bad faith is not transmissible from one person to another. (b) Mistake upon a doubtful or difficult question of law as a basis of good faith (c) Mistake or ignorance of the law, by itself, cannot become the basis of good faith. What makes the error or ignorance a basis of good faith is the presence of an apparent “doubt” or “difficulty” in the law. In other words, the law is complex, ambiguous, or vague such that it is open to two or more interpretations. (d) When the ignorance of the law is gross and inexcusable, as when a person of average intelligence would know the law, such ignorance cannot be the basis of good faith. Otherwise, the intendment of Article 3 which states that, “Ignorance of the law excuses no one from compliance therewith,” will be defeated.

(2) By subjection to the action of one’s will (a) This mode refers more to the right of possession than to possession as a fact. The “action of our will” must be juridical, in the sense that it must be according to law. (b) Includes: (i) Tradicion symbolica – by delivering some object or symbol placing the thing under the control of the transferee (ii) Tradicion longa manu – by the transferor pointing out to the transferee the things which are being transferred (3) By execution of proper acts under legal formalities (a) This mode refers to juridical acts or the acquisition of possession by sufficient title evidenced by the performance of required formalities. (b) Examples: (i) Donations (ii) Succession (iii) Contracts (like a sale with right to repurchase) (iv) Judicial possession (v) Execution of judgments (vi) Execution and registration of public instruments (vii) Inscription of possessory information titles (c) The execution of the required formalities is equivalent to delivery of the property

What Things May be Possessed [NCC 530] Only things and rights which are susceptible of being appropriated may be the object of possession. What May Not Be Possessed by Private Persons (1) Res Communes (2) Property of Public Dominion (3) Right under discontinuous and/or non-apparent easement

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BY WHOM MAY POSSESSION BE ACQUIRED [NCC 532]

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cannot read and write, spendthrifts and those under civil interdiction) (2) Object of possession – things only, not rights. (3) Method of acquisition – material occupation; acquisition by means for which the incapacitated person has the capacity, such as acquisition by succession, testate or intestate, or by donations propter nuptias, pure and simple donations

(1) By the same person (2) By his legal representative (3) By his agent (4) By any person without any power whatsoever but subject to ratification, without prejudice to proper case of negotiorum gestio [Arts. 2144, 2149, 2150] (5) Qualifiedly, minors and incapacitated persons

WHAT DO NOT AFFECT POSSESSION (NCC 537)

By the same person Elements of personal acquisition: (1) Must have the capacity to acquire possession (2) Must have the intent to possess (3) The possibility to acquire possession must be present.

(1) Acts merely tolerated (a) Those which because of neighborliness or familiarity, the owner of property allows another person to do on the property; (b) Those services or benefits which one’s property can give to another without material injury or prejudice to the owner, who permits them out of friendship or courtesy (c) Acts of little disturbances which a person, in the interest of neighborliness or friendly relations permits others to do on his property, although continued for a long time, no right will be acquired by prescription

By his legal representative Requisites of acquisition through another: (1) That the representative or agent has the intention to acquire the thing or exercise the right for another, and not for himself (2) That the person for whom the thing has been acquired or the right exercised, has the intention of possessing such thing or exercising such right

Note: Permissive use merely tolerated by the possessor cannot affect possession and cannot be the basis of acquisitive prescription. Possession to constitute the foundation of prescriptive right must be possession under claim of title; it must be adverse. [Cuaycong v. Benedicto]

Note: (a) Bad faith is personal and intransmissible. Its effects must be suffered only by the person who acted in bad faith; his heir should not be saddled with the consequences (b) Good faith can only benefit the person who has it; and the good faith of the heir cannot erase the effects of bad faith of his predecessor.

(2) Acts executed clandestinely and without the knowledge of the possessor [NCC 1108] Possession has to be in the concept of an owner, public, peaceful and uninterrupted. (UPPO)

By any person without any power whatsoever but subject to ratification, without prejudice to proper case of negotiorum gestio [NCC 2144, 2149, 2150] (1) Whoever voluntarily takes charge of the agency or management of the business or property of another, without any power from the latter, is obliged to continue until the termination of the affair and its incidents, or to require the person concerned to substitute him, if the owner is in a position to do so. (2) This juridical relation does not arise in either of these instances: (a) When the property or business is not neglected or abandoned; (b) If in fact the manager has been tacitly authorized by the owner.

(3) Acts of violence as long as the possessor objects thereto (i.e. he files a case) [NCC 536] (a) Possession cannot be acquired through force or intimidation. Includes forcibly taking away the property from another and also when one occupied the property in the property in the absence of another, and repels the latter upon his return (b) Effect on Possession: Acts mentioned do not constitute true possession. They do not interrupt the period of prescription nor affect the rights to the fruits.

Qualifiedly, minors and incapacitated persons [NCC 535] (1) Incapacitated – all those who do not have the capacity to act (insane, lunatic, deaf-mutes who

RULES TO SOLVE CONFLICTS OF POSSESSION (NCC 538)

General Rule: Possession cannot be recognized in two different personalities, except in cases of copossession by co-possessors without conflict of claims of interest.

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(3) Accion Reivindicatoria (1) Recovery of possession based on a claim of ownership) (2) An action setting up title and right to possession (3) Not barred by a judgment in an action for forcible entry and unlawful detainer

In case of conflicting possession – preference is given to: (1) Present possessor or actual possessor (2) If there are two or more possessors, the one longer in possession (3) If the dates of possession are the same, the one who presents a title (4) If all conditions are equal, the thing shall be placed in judicial deposit pending determination of possession or ownership through proper proceedings

(4) Action for Replevin (a) Possession or ownership for movable property Rules: (1) Lawful possessor can employ self-help (NCC 429) (2) To consolidate title by prescription, the possession must be under claim of ownership, and it must be peaceful, public and uninterrupted (UPPO) (3) It is only the conviction of ownership externally manifested, which generates ownership. (4) Acts of possessory character done by virtue of a license or mere tolerance by the real owner are not sufficient and will not confer title by prescription or adverse possession. (5) The following cannot acquire title by prescription: (a) Lessees, trustees, pledges, tenants on shares or planters and all those who hold in the name or representation of another; (b) Mere holders placed in possession of the property by the owner, such as agents, employees; (c) Those holding in a fiduciary character, like receivers, attorneys, depositaries and antichretic creditors (d) Co-owner, with regard to common property; Except: When he holds the same adversely against all of them with notice to them of the exclusive claim of ownership (i) Possession of real property presumes possession of the movables therein (NCC 542) (ii) Each co-owner is deemed to have exclusive possession of the part which may be allotted to him upon the division, for the entire period during which the copossession lasted.

EFFECTS OF POSSESSION (1) Right to be Protected in His Possession (NCC 539) (2) Entitlement to fruits – possessor in good faith/bad faith (Art. 544, 549) (3) Reimbursement for Expenses—Possessor in Good Faith/Bad Faith RIGHT TO BE PROTECTED IN HIS POSSESSION (NCC 539)

(1) Every possessor has a right to be respected in his possession; if disturbed, possessor has a right to be protected in or restored to said possession. (2) Every possessor – includes all kinds of possession, from that of an owner to that of a mere holder, except that which constitutes a crime. (3) Reason for the rule: To prevent anyone from taking the administration of justice into his own hands. Even the owner cannot forcibly eject the possessor, but must resort to the courts. Actions to Recover Possession: (1) Forcible entry and Unlawful detainer (Summary proceedings) (a) Action by a person deprived of the possession of any land or building by force, intimidation, strategy, threat, or stealth (FISTS) at any time within 1 year after such unlawful deprivation (Rule 70) (b) May ask for writ of preliminary mandatory injunction within 10 days from filing of complaint in forcible entry (NCC 539). (c) The same writ is available in unlawful detainer actions upon appeal. (Art. 1674) (2) Accion Publiciana (1) Based on superior right of possession, no ownership (2) Action for the recovery of possession of real property upon mere allegation and proof of a better title

Interruption in the possession of the whole or a part of a thing possessed in common shall be to the prejudice of all the possessors. (NCC 543) ENTITLEMENT TO FRUITS – POSSESSOR FAITH/BAD FAITH (ART. 544, 549)

IN GOOD

(1) Possessor in good faith is entitled to the fruits received before the possession is legally interrupted

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(2) Natural and industrial fruits are considered received from the time they are gathered or severed (3) Civil fruits are deemed to accrue daily and belong to the possessor in good faith in that proportion

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When fruits are insufficient There should only be reimbursement of expenses; but each possessor should suffer a proportionate reduction due to the insufficiency of the harvest. REIMBURSEMENT FOR EXPENSES—POSSESSOR IN GOOD FAITH/BAD FAITH (NCC 546-552)

Provision is based on the following reasons of equity (1) The fruits received are generally used for the consumption and livelihood of the possessor, and his life and expenses may have been regulated in view of such fruits (2) The owner has been negligent in not discovering or contesting the possession of the possessor; it would be unjust after the possessor has been thus allowed to rely on the efficacy of the title, to require him to return the fruits he has received on the basis of that title. (3) Between the owner, who has abandoned his property and left it unproductive, and the possessor, who has contributed to the social wealth, by the fruits he has produced, the law leans toward the latter

Necessary Expenses (1) Imposed by the thing itself and have no relation to the desire or purpose of the possessor (2) They are the “cost of living” for the thing and must be reimbursed to the one who paid them, irrespective of GF or BF. (a) Only the possessor in GF may retain the thing until he has been reimbursed therefor (3) Those imposed for the preservation of the thing. They are not considered improvements; they do not increase the value of the thing, but merely prevent them from becoming useless. Useful Expenses (1) Incurred to give greater utility or productivity to the thing (2) e.g. Wall surrounding an estate, an irrigation system, planting in an uncultivated land, a fishpond, an elevator in the building, electric lighting system (3) They are reimbursed only to the possessor in GF as a compensation or reward for him. Possessor in BF cannot recover such expenses (4) If the useful improvements can be removed without damage to the principal thing, the possessor in good faith may remove them, unless the person who recovers the possession refunds the expenses or pays the increase in value which the thing may have acquired by reason thereof

Right of the possessor in good faith Only limited to the fruits of the thing. He must restore the fruits received from the time such good faith ceased. He has no rights to the objects which do not constitute fruits. Legal interruption of possession in good faith Takes place when an action is filed against him— from the time he learns of the complaint, from the time he is summoned to the trial. When good faith ceases (NCC 545) (1) If at the time the good faith ceases, there should be any natural or industrial fruits, the possessor shall have a right to a part of the expenses of cultivation, and to a part of the net harvest, both in proportion to the time of the possession. (2) The charges divided on the same basis by the two possessors. (a) “Charges” – Those which are incurred, not on the thing itself but because of it (e.g. taxes, contributions in favor of the government) (3) The owner of the thing may give the possessor in good faith the right to finish the cultivation and gathering of the growing fruits, as an indemnity for his part of the expenses of cultivation and the net proceeds. (a) The possessor in good faith who refuses to accept this concession shall lose the right to be indemnified in any other manner.

Expenses for Luxury (1) They do not affect the existence or the substance of the thing itself, but only the comfort, convenience or enjoyment of the possessor. (2) They are not the subject of reimbursement, because the law does not compensate personal whims or caprices. (3) e.g. Opening of a garden, placing fountains and statues in it, adorning the ceilings with paintings, and the walls with reliefs Useful Expenses

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Those which increased the income derived from the thing

Those which merely embellished the thing

Result: Increase in the products, either absolutely, or because of

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Useful Expenses greater facilities for producing them

Expenses for Luxury

Possessor in GF

possessors

Possessor in BF

and to a part of the net (549) harvest, in proportion to the time of the possession.

Includes expenses resulting in real benefit or advantage to the thing Result: Benefit or advantage is only for the convenience of definite possessors

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Indemnity may be, at the owner’s option, 1. In money, OR 2. By allowing full cultivation and gathering of the fruits (545)

The utility is for the possessor or particular persons alone and is therefore accidental.

Charges Possessor In Bad Faith (1) Reimburse the fruits received and those which the legitimate possessor could have received (2) Has a right only to the reimbursement of necessary expenses and the production, gathering, and preservation of fruits (3) Does not have right to reimbursement of expenses for luxury but may remove them as long as the principal thing suffers no injury, or may sell them to the owner. (4) Liable for deterioration or loss in every case, even if caused by a fortuitous event a. As opposed to a possessor in good faith, not liable for the deterioration or loss, except when proved that he has acted with fraudulent intent or negligence, after the judicial summons

Must share with the legitimate possessor, in Same as with GF (545) proportion to the time of the possession (545) Necessary Expenses Right to reimbursement and retention in the Reimbursement only meantime (546) (546) Useful Expenses Right of retention until reimbursed; Owner’s option to reimburse him either for expenses or for increase in value which the thing may have No right to acquired (546) reimbursement and no right of removal (547) Limited right of removal – should not damage principal and owner does not exercise option of paying the expenses or increase in value (547)

Note: (1) Costs of litigation over the property shall be borne by every possessor. (NCC 550) (2) Improvements caused by nature or time shall always inure to the benefit of the person who has succeeded in recovering possession (NCC 551) (1) Includes all the natural accessions referred to by articles 457-465, and all those which do not depend upon the will of the possessor. (e.g. widening of the streets, rising of fountains of fresh or mineral water, increase of foliage of trees) Possessor in GF

Ornamental Expenses Limited right of removal Limited right of removal (548) (549) Deterioration or Loss

Possessor in BF

No liability unless due to fraud or negligence after Liable in every case (552) becoming in BF (552)

Fruits Received Entitled to the fruits Must reimburse the while possession is in GF legitimate possessor and before legal (549) interruption (544)

Costs of Litigation Bears cost (550)

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LOSS OR UNLAWFUL DEPRIVATION OF A MOVABLE POSSESSION OF MOVABLE ACQUIRED IN GOOD FAITH (IN CONCEPT OF OWNER) IS EQUIVALENT TO TITLE (NCC 559) (1) Possessor has actual title which is defeasible only by true owner.

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The finder and the owner shall be obliged, as the case may be, to reimburse the expenses. (6) If the owner should appear in time, he shall be obliged to pay, as a reward to the finder, onetenth of the sum or of the price of the thing found DISTINGUISHED FROM VOIDABLE TITLE (NCC 1506) (1) Seller of goods with voidable title not avoided at the time of the sale: buyer acquires a good title to the goods, provided he buys them in good faith, for value, and without notice of the seller's defect of title (2) A movable lost or which the owner has been unlawfully deprived acquired by a possessor in good faith at a public sale - the owner can always recover the movable provided he reimburses the price paid.

Requisites of Title (a) Possession in GF (b) The owner has voluntarily parted with the possession of the thing (c) The possession is in the concept of an owner (2) Nevertheless, one who has lost any movable or has been unlawfully deprived thereof may recover it from the person in possession When the owner can recover (a) Has lost the thing (b) Has been unlawfully deprived thereof

EFFECTS OF POSSESSION EFFECTS OF POSSESSION IN THE CONCEPT OF OWNER

Possession may lapse and ripen into full ownership

(3) If the current possessor has acquired it in good faith at a public sale, owner must reimburse the price paid

General Rule: Presumption of just title and cannot be obliged to show or prove it (NCC 541) (1) Basis: Possession is presumed ownership, unless the contrary is proved. This presumption is prima facie and it prevails until contrary is proved. (2) Just title – that which is legally sufficient to transfer the ownership or the real right to which it relates (3) For the purposes of prescription, there is just title when the adverse claimant came into possession of the property through one of the modes recognized by law for the acquisition of ownership or other real rights, but the grantor was not the owner or could not transmit any right. (NCC 1129)

PERIOD TO RECOVER (NCC 1140, 1132, 1133)

(1) Actions to recover movables prescribe 8 years from the time the possession thereof is lost, unless the possessor has acquired the ownership by prescription for a lesser period (2) Ownership of movables prescribes through uninterrupted possession for 4 years in good faith. (3) Ownership of personal property also prescribes through uninterrupted possession for 8 years, without need of any other condition. (4) Movables possessed through a crime can never be acquired through prescription

Exception: For the purposes of prescription, just title must be proved; it is never presumed (NCC 1131) (1) Possessor may bring all actions necessary to protect his possession except reivindicatoria (2) May employ self-help under Art. 429 (3) Possessor may ask for inscription of such real right of possession in the registry of property (4) Has right to the fruits and reimbursement of expenses (assuming he is possessor in good faith) (5) Upon recovery of possession which he was unlawfully deprived of, may demand fruits and damages (6) Generally, he can do on the things possessed everything that the law authorizes the owner to do until he is ousted by one who has a better right. (7) Possession in good faith and possession in bad faith (Art. 528)

FINDER OF LOST MOVABLE (NCC 719-720)

(1) Whoever finds a movable, which is not a treasure, must return it to its previous possessor. (2) If the previous possessor is unknown, the finder shall immediately deposit it with the mayor of the city or municipality where the finding has taken place. (3) The finding shall be publicly announced by the mayor for two consecutive weeks in the way he deems best. (4) 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. (5) Six months from the publication having elapsed without the owner having appeared, the thing found, or its value, shall be awarded to the finder.

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(g) In all these cases, the period of the interruption shall be counted for the prescription

PRESUMPTION IN FAVOR OF THE POSSESSOR—FOR ACQUISITIVE PRESCRIPTION

(1) Of good faith until contrary is proved (NCC 527) (a) Presumption is only juris tantum because possession is the outward sign of ownership. Unless such proof of bad faith is presented, the possessor will be held to be in good faith. (b) So long as the possessor is not actually aware of any defect invalidating his title, he is deemed a possessor in good faith.

(5) Other presumptions with respect to specific properties of property rights (a) Of extension of possession of real property to all movables contained therein so long as in is not shown that they should be excluded (b) Non-interruption of possession of hereditary property (NCC 553) (i) Possession of hereditary property is deemed transmitted to the heir without interruption and from the moment of the death of the decedent (c) Of just title in favor of possessor in concept of owner (NCC 541)

(2) Of continuity of initial good faith in which possession was commenced; possession in good faith does not lose this character except in case and from the moment possessor became aware or is not unaware of improper or wrongful possession (NCC 528) (a) Good faith ceases from the date of the summons to appear at the trial (b) Good faith ceases when there is: (i) Extraneous evidence (ii) Suit for recovery of the property by the true owner

LOSS/TERMINATION OF POSSESSION (NCC 555) (1) By the abandonment of the thing; (2) By an assignment made to another either by onerous or gratuitous title; (3) By the destruction or total loss of the thing, or because it goes out of commerce; (4) By the possession of another, subject to the provisions of Article 537, if the new possession has lasted longer than one year. But the real right of possession is not lost till after the lapse of ten years.

(3) Of enjoyment of possession in the same character in which possession was required until contrary is proved (NCC 529) (4) Of non-interruption of possession in favor of present possessor who proves possession at a previous time until the contrary is proved (NCC 554) (a) Possession is interrupted for the purposes of prescription, naturally or civilly. (NCC 1120) (b) Possession is naturally interrupted when through any cause it should cease for more than one year (NCC 1121) (c) Old possession is not revived if a new possession should be exercised by the same adverse claimant (NCC 1121) (d) If the natural interruption is for only one year or less, the time elapsed shall be counted in favor of the prescription (NCC 1122) (e) Civil interruption is produced by judicial summons to the possessor. (NCC 1123) (f) Judicial summons shall be deemed not to have been issued and shall not give rise to interruption (NCC 1124): (i) If it should be void for lack of legal solemnities; (ii) If the plaintiff should desist from the complaint or should allow the proceedings to lapse; (iii) If the possessor should be absolved from the complaint

ABANDONMENT

(1) Includes the giving up of possession, and not necessarily of ownership by every possessor. (2) It is the opposite of occupation. It consists of the voluntary renunciation of all the rights which the person may have in a thing, with intent to lose such a thing. To be effective, it is necessary that it be made by a possessor in the concept of an owner. (3) It must be clearly appear that the spes recuperandi is gone and the animus revertendi is finally given up. ASSIGNMENT, EITHER ONEROUS OR GRATUITOUS

Complete transmission of ownership rights to another person, gratuitously or onerously POSSESSION BY ANOTHER; IF POSSESSION HAS LASTED LONGER THAN ONE YEAR; REAL RIGHT OF POSSESSION NOT LOST AFTER 10 YEARS - (SUBJECT TO NCC 537)

(1) Acts merely tolerated, and those executed clandestinely and without the knowledge of the possessor of a thing, or by violence, do not affect possession. (2) Possession that is lost here refers only to possession as a fact (de facto), not the legal right

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of possession (de jure). It is the possession that the new possessor acquires. (3) Real right of possession is lost only after 10 years. (4) After one year, the actions for forcible entry and unlawful detainer can no longer be brought. But accion publiciana may still be instituted to recover possession de jure

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(3) Unproductive things e.g. sterile or absolutely unproductive land, or things for mere pleasure, such as promenades, statues or paintings, even if they do not produce any utility. CHARACTERISTICS (1) It is a real right (2) Of temporary duration (3) To derive all advantages from the thing due to normal exploitation

RULES FOR LOSS OF MOVABLES

(1) The possession of movables is not deemed lost so long as they remain under the control of the possessor, even though for the time being he may not know their whereabouts. (NCC 556) (2) Control – judicial control or right, or that the thing remains in one’s patrimony (3) Wild animals are possessed only while they are under one's control (NCC 560) (a) Domesticated or tamed animals - if they retain the habit of returning to the premises of the possessor

NATURAL CHARACTERISTICS

(1) Includes only the right to use (jus utendi) and the right to the fruits (jus fruendi) (2) Usufructuary must preserve the form or substance of the thing (a) Preservation is a natural requisite, not essential because the title constituting it or the law may provide otherwise (b) Reason for preserving form and substance – (i) To prevent extraordinary exploitation; (ii) To prevent abuse, which is frequent; (iii) To prevent impairment. (c) Exception: In an abnormal usufruct, alteration is allowed (3) Usufruct is extinguished by the death of the usufructuary (a) Natural because a contrary intention may prevail

Kinds of Animals (1) Wild—those which live naturally independent of man (2) Domesticated—those which, being wild by nature, have become accustomed to recognize the authority of man. When they observe this custom, they are placed in the same category as domestic and when they lose it, they are considered as wild. (3) Domestic or Tame—those which are born and reared ordinarily under the control and care of man; they are under the ownership of man, and do not become res nullius unless they are abandoned.

CLASSIFICATION BY ORIGIN

(1) Voluntary: created by the will of private persons (a) By act inter vivos – such as contracts and donations (i) By alienation of the usufruct (ii) By retention of the usufruct (iii) Where a usufruct is constituted inter vivos and for valuable consideration, the contract is unenforceable unless in writing (b) By act mortis causa – such as testament

Usufruct CONCEPT (NCC 562): Usufruct gives a right to enjoy the property of another with the obligation of preserving its form and substance, unless the title constituting it or the law otherwise provides

(2) Legal: as provided by law Usufruct of parents over the property of unemancipated children (now limited to the collective daily needs of the family, FC 26)

OBJECTS OF USUFRUCT (1) Independent Rights (a) A servitude which is dependent on the tenement to which it attaches cannot be the object of usufruct

(3) Mixed: created both by law and the acts of persons (a) The rights and duties of the usufructuary provided by law may be modified or eliminated by the parties. (b) The title constituting the usufruct may validly authorize the usufructuary to alienate the thing itself held in usufruct.

(2) Things (a) Non-consumable things (b) Consumable things, but only as to their value if appraised, or on an equal quantity and quality if they were not appraised

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(i) If the usufructuary is authorized to alienate the thing in case of necessity, it is the usufructuary who determines the question of necessity.

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the return of the value or of the things of the same quantity and quality (as if converted into a simple loan)

BY PERSON ENJOYING RIGHT OF USUFRUCT

BY THE EXTENT OF THE USUFRUCT

(1) Simple: only one usufructuary enjoys the property (2) Multiple: several usufructuaries enjoy the property (a) Simultaneous: at the same time (b) Successive: one after the other

As to the fruits (1) Total: all consumed by the usufruct (2) Partial: only on certain aspects of the usufruct’s fruits As to object (1) Singular: only on particular property of the owner (2) Universal: pertains to the whole property; A universal usufructuary must pay the debts of the naked owner, if stipulated. Article 758 and 759 on donations apply.

Limitations on Successive Usufruct (1) If usufruct is by donation, ALL donees must be alive. (NCC 756) (2) Fiduciary or first heir and the second heir must be alive at the time of the death of the testator. (NCC 863) (3) If by testamentary succession, there must be only 2 successive usufructuaries, and both must be alive or at least already conceived at the time of the testator’s death. (NCC 869)

NCC 758: When the donation imposes upon the donee the obligation to pay the debts of the donor, if the clause does not contain any declaration to the contrary, the former is understood to be liable to pay only the debts which appear to have been previously contracted. In no case shall the donee be responsible for the debts exceeding the value of the property donated, unless a contrary intention clearly appears.

BY OBJECT OF USUFRUCT

Usufruct may be constituted on the whole or a part of the fruits of the thing or on a right, provided it is not strictly personal or intransmissible (NCC 564) Rights (1) Must not be strictly personal or intransmissible. (2) Usufruct over a real right is by itself a real right. (a) Right to receive present or future support cannot be the object of the usufruct.

NCC 759: There being no stipulation regarding the payment of debts, the donee shall be responsible therefor only when the donation has been made in fraud of creditors. The donation is always presumed to be in fraud of creditors, when at the time thereof the donor did not reserve sufficient property to pay his debts prior to the donation.

Things (1) Normal: involves non-consummable things where the form and substance are preserved (2) Abnormal or irregular: when the usufruct includes things which cannot be used without being consumed (a) The usufructuary has right to make use of them under the obligation of paying their appraised value at the termination of the usufruct, if they were appraised when delivered. (b) In case they were not appraised, he has the right to return the same quantity and quality, or pay their current price at the time the usufruct ceases (NCC 574) (c) In reality, the usufruct is not upon the consumable things themselves, but upon the sum representing their value or upon a quantity of things of the same kind and quality. (d) The usufructuary, in effect, becomes the owner of the things in usufruct, while the grantor becomes a mere creditor entitled to

BY THE TERMS OF THE USUFRUCT

(1) Pure: no terms or conditions (2) Conditional: either suspensive or resolutory (3) With a term or period (a) Ex die: from a certain day (b) In diem: up to a certain day (c) Ex die in diem: from a certain day up to a certain day

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RIGHTS AND OBLIGATIONS OF USUFRUCTUARY

ungathered for no fault imputable to him, but because of malice or an act imputable to the naked rd owner or a 3 person, or even due to force majeure or fortuitous event.

RIGHTS

As to Thing and Its Fruits Right to enjoy the property to the same extent as the owner, but only with respect to its use and the receipt of its fruits. (1) Usufructuary cannot extract products which do not constitute fruits because he is bound to preserve the form and substance of the thing. (2) Usufructuary rights may be transferred, assigned or otherwise disposed of by the usufructuary. (3) Not exempt from execution and can be sold at public auction.

Right to civil fruits (1) Civil fruits – deemed to accrue daily, and belong to the usufructuary in proportion to the time the usufruct may last. (2) Whenever a usufruct is constituted on the right to receive a rent or periodical pension, whether in money or in fruits, or in the interest on bonds or securities payable to bearer, each payment due shall be considered as the proceeds or fruits of such right (3) Whenever it consists in the enjoyment of benefits accruing from a participation in any industrial or commercial enterprise, the date of the distribution of which is not fixed, such benefits shall have the same character (a) In either case they shall be distributed as civil fruits

As to hidden treasure, usufructuary is considered a stranger without a right to a share, unless he is also the finder of the treasure (1) With respect to hidden treasure which may be found on the land or tenement, he shall be considered a stranger (2) Hidden treasure belongs to the owner of the land, building, or other property on which it is found. (3) 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.

Right to enjoy any increase through accessions and servitudes, including products of hunting and fishing Right to lease the thing General rule: The usufructuary may lease the thing to another but this shall terminate upon the expiration of the usufruct, saving leases of rural lands, which shall be considered as subsisting during the agricultural year

Right to fruits pending at the beginning of usufruct Fruits pending at the Fruits pending at the beginning of the usufruct beginning of the usufruct Belong to the usufructuary

Belong owner

to

the

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naked

Exceptions: (1) Legal usufructs cannot be leased. (2) Caucion juratoria (lease would show that the usufructuary does not need the property badly)

Without need to The owner shall reimburse the expenses to reimburse to the the owners usufructuary ordinary cultivation expenses from the proceeds of the fruits (not to exceed the value of the fruits)

Effect of the transfer of right: (1) The transfer or lease of the usufruct does NOT terminate the relation of the usufructuary with the owner (2) Death of the transferee does not terminate the usufruct but it terminates upon the death of the usufructuary who made the transfer.

rd

Without prejudice to the Rights of innocent 3 rd right of 3 persons e.g. if parties should not be the fruits had been prejudiced. planted by a possessor in good faith, the pending crop expenses and charges shall be prorated between said possessor and the usufructuary

Rules as to Lease (1) The property in usufruct may be leased even without the consent of the owner. (2) The lease should be for the same period as the usufruct. (a) EXCEPT: leases of rural lands continues for the remainder of the agricultural year (b) A lease executed by the usufructuary before the termination of the usufruct and subsisting after the termination of the usufruct must be

Fruits already matured at the time of the termination of the usufruct, which ordinarily would have already been gathered by the usufructuary, may remain

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respected, but the rents for the remaining period will belong to the owner. (c) If the usufructuary has leased the lands or tenements given in usufruct, and the usufruct should expire before the termination of the lease, he or his heirs and successors shall receive only the proportionate share of the rent that must be paid by the lessee. (Art. 568, Civil Code) (3) It is the usufructuary and not the naked owner who has the right to choose the tenant. (a) As corollary to the right of the usufructuary to all the rent, to choose the tenant, and to fix the amount of the rent, she necessarily has the right to choose herself as the tenant thereof; and, as long as the obligations she had assumed towards the owner are fulfilled. (Fabie v. Gutierrez David) (4) A lease executed by the owner before the creation of the usufruct is not extinguished by such usufruct.

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usufruct, he has the right to do so, and the owner cannot prevent him from doing so even upon payment of their value. (3) This right does not involve an obligation – if the usufructuary does not wish to exercise it, he cannot be compelled by the owner to remove the improvements. (4) This right to remove improvements can be enforced only against the owner, not against a purchaser in good faith to whom a clean title has been issued. (5) Usufructuary may set off the improvements against any damage to the property (a) The improvements should have increased the value of the property, and that the damages are imputable to the usufructuary. (b) Increase in value and the amount of damages are set off against each other. (c) If the damages exceed the increase in value, the difference should be paid by the usufructuary as indemnity. (d) If the increase in value exceeds the damages, and the improvements are of such nature that they can be removed without injury to the thing in usufruct, the settlement of the difference must be agreed upon by the parties. (e) If the improvements cannot be removed without injury, the excess in value accrues to the owner. (6) Registration of improvements – to protect rd usufructuary against 3 persons

Limitations on the Right to Lease the Property (1) Usufructuary cannot alienate a thing in usufruct (a) Cannot alienate or dispose of the objects included in the usufruct (b) Cannot renounce a servitude (c) Cannot mortgage or pledge a thing (d) EXCEPT: (i) When the right of usufruct is converted into the right of ownership (ii) When the things are consumable (574); (iii) When the things by their nature are intended for sale, such as the merchandise in a commercial establishment; and (iv) When the things, whatever their nature, are delivered under appraisal as equivalent to their sale (2) Future crops may be sold but such sale would be void if not ratified by the owner. (a) The buyer’s remedy is to recover from the usufructuary. (3) Only voluntary usufruct can be alienated. (4) The usufructuary-lessor is liable for the act of the substitute. (a) A usufructuary who alienates or leases his right of usufruct shall answer for any damage which the things in usufruct may suffer through the fault or negligence of the person who substitutes him. (Art. 590, Civil Code)

As to the Legal Right of Usufruct Itself Right to mortgage right of usufruct (1) The usufructuary may alienate his right of usufruct, even by a gratuitous title; but all the contracts he may enter into as such usufructuary shall terminate upon the expiration of the usufruct [Art. 572] (2) Does not include parental usufruct because of personal and family considerations. Right to alienate the usufruct except in purely personal usufructs or when title constituting it prohibits the same Parental usufruct is inalienable OBLIGATIONS

At the Beginning of Usufruct or Before Exercising the Usufruct (1) To make, after notice to the owner or his legitimate representative, an inventory of all the property, which shall contain an appraisal of the movables and a description of the condition of the immovables;

Right to improve the thing, but improvement inures to the benefit of the naked owner (1) Usufructuary is not entitled to reimbursement. (2) Whenever the usufructuary can remove the improvements without injury to the property in

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(2) To give security, binding himself to fulfill the obligations imposed upon him in accordance with this Chapter.

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(iv) Sworn promise (c) A usufructuary under this can neither alienate his right nor lease the property, for that would mean that he does not need the dwelling or the implements and furniture.

Note: These requirements are NOT conditions precedent to the commencement of the right of the usufructuary but merely to the entry upon the possession and enjoyment of the property.

(4) Effect of filing a bond (a) Retroactivity: upon giving the security, the usufructuary will be entitled to all the benefits accruing since the time when he should have begun to receive them. (5) Effect of failure to give bond (NCC 586) (a) The owner may demand that the immovables be placed under administration; (i) That the movables be sold; (ii) That the public bonds, instruments of credit payable to order or to bearer be converted into registered certificates or deposited in a bank or public institution; (iii) That the capital or sums in cash and the proceeds of the sale of the movable property be invested in safe securities. (b) Owner may, until the usufructuary gives security, retain in his possession the property in usufruct as administrator, subject to the obligation to deliver to the usufructuary the net proceeds, after deducting the sums which may be agreed upon or judicially allowed him for such administration.

To Make An Inventory: (1) Requisites (a) Immovables must be described (b) Movables must be appraised because they are easily lost or deteriorated. (2) Concurrence of the owner in the making of the inventory (3) Expenses for the making of the inventory are borne by the usufructuary (4) Inventory may be in a private document, except when immovables are involved (a public rd instrument is prescribed to affect 3 persons) (5) Failure to make an inventory does not affect the rights of the usufructuary to enjoy the property and its fruits. (a) A prima facie presumption arises that the property was received by the usufructuary in good condition (b) Even if he is already in possession, he may still be required to make an inventory. (6) Exception to the requirement of inventory (a) When no one will be injured , the usufructuary may be excused from this obligation

During the Usufruct (1) To take care of the thing like a good father of a family (2) To undertake ordinary repairs (3) To notify owner of need to undertake extraordinary repairs (4) To pay for annual charges and taxes on the fruits (5) To notify owner of any act detrimental to ownership (6) To shoulder the costs of litigation re usufruct (7) To answer for fault or negligence of alienee, lessee or agent of usufructuary

To give a bond for the faithful performance of duties as usufructuary: (1) Any kind of sufficient security is allowed, e.g. cash, personal bond, mortgage (2) No bond is required in the following (a) No prejudice would result (Art. 585) (b) Usufruct is reserved by a donor (Art. 584) (i) Gratitude on the donee’s part demands that the donor be excused from filing the bond (c) Title constituting usufruct excused usufructuary (3) If usufructuary takes possession under a caucion juratoria (Art. 587) (a) The security given may be by a personal bond, a pledge, or a mortgage. (b) It is only by way of exception that a caucion juratoria is allowed, and only under the special circumstances: (i) Proper court petition (ii) Necessity for delivery of furniture, implements or house included in the usufruct (iii) Approval of the court

To take care of the thing like a good father of a family (1) When damages are caused to the property by the fault or negligence of the usufructuary, the naked owner need not wait for the termination of the usufruct before bringing the action to recover proper indemnity. (2) The bad use of a thing, which causes considerable injury, entitles the owner to demand the delivery and administration of the thing. (3) The exercise of this remedy does NOT extinguish the usufruct.

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To undertake ordinary repairs The usufructuary is obliged to make the ordinary repairs needed by the thing given in usufruct (NCC 592) (1) Ordinary repairs: (a) Such as are required by the wear and tear due to the natural use of the thing and are indispensable for its preservation. (b) Deteriorations or defects arise from the natural use of the thing; (c) Repairs are necessary for the preservation of the thing.

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(b) The usufructuary who has made the extraordinary repairs necessary for preservation is entitled to recover from the owner the increase in value which the tenement acquired by reason of such works. (c) Usufructuary may retain until he is paid. To pay for annual charges and taxes on the fruits It is well settled that a real tax, being a burden upon the capital, should be paid by the owner of the land and not by a usufructuary. There is no merit in the contention of distinguishing public lands into alienable and indisposable. All properties owned by the government, without any distinction, are exempt from taxation. (Board of Assessment Appeals of Zamboanga del Sur v. Samar Mining Company, Inc.)

(2) The usufructuary is bound to pay only for the repairs made during the existence of the usufruct. (a) If the defects existed already at the time the usufruct began, the obligation to defray the ordinary repairs falls upon the owner.

To notify owner of any act detrimental to ownership (NCC 601)

(3) If the defects are caused by the ordinary use of the thing, the usufructuary may exempt himself from making the repairs by returning to the owner the fruits received during the time that the defects took place.

To shoulder the costs of litigation re usufruct (NCC 602) To answer for fault or negligence of alienee, lessee or agent of usufructuary (NCC 590) The usufructuary is made liable for the acts of the substitute. While the substitute answers to the usufructuary, the usufructuary answers to the naked owner.

Except: When the ordinary repairs are due to defects caused by the fault of the usufructuary (4) If the usufructuary fails to make the repairs even after demand, the owner may make them at the expense of the usufructuary

At the Time of the Termination of the Usufruct To deliver the thing in usufruct to the owner in the condition in which he has received it, after undertaking ordinary repairs

To notify owner of need to undertake extraordinary repairs (1) Extraordinary repairs (a) Those caused by exceptional circumstances, whether or not they are necessary for the preservation of the thing; (b) Those caused by the natural use of the thing, but are not necessary for its preservation.

Exception: abnormal usufruct – return the thing of same kind, quantity and quality; if with appraised value, must return value appraised SPECIAL CASES OF USUFRUCT

USUFRUCT OVER A PENSION OR PERIODICAL INCOME (NCC

570) (1) Each payment due shall be considered as the proceeds or fruits of such right (2) Shall be distributed as civil fruits

(2) General Rule: Naked owner must make the extraordinary repairs (a) Usufructuary obliged to pay legal interest on the amount while usufruct lasts

USUFRUCT OF PROPERTY OWNED IN COMMON (NCC 582)

(3) If the extraordinary repairs are indispensable, and the naked owner fails to undertake them, the usufructuary may make such repairs (a) Requisites: (i) There must be due notification to the naked owner of the urgency – if it is not urgent, there is no obligation to give notice. (ii) The naked owner failed to make them (iii) The repair is needed for preservation

(1) The usufructuary takes the place of the owner as to: (a) Management; (b) Fruits; and (c) Interest (2) Effect of partition: (a) The right of the usufructuary is not affected by the division of the property in usufruct among the co-owners. (b) After partition, the usufruct is transferred to the part allotted to the co-owner

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Exceptions: (1) When it is so stipulated; in which case the usufructuary shall be liable for the debt specified. (2) If there is no specification, he is liable only for debts incurred by the owner before the usufruct was constituted. (3) When the usufruct is constituted in fraud of creditors

USUFRUCT CONSTITUTED ON A FLOCK OR HERD OF LIVESTOCK (NCC 591)

(1) On sterile stock: same rules on consumable property govern (i.e. replacement upon termination) (2) On fruitful stock (a) Must replace ordinary losses of the stock with the young if: (i) Some animals die from natural causes (ii) Some animals are lost due to rapacity of beasts of prey (b) NO obligation to replace if: (i) There is a total loss of animals because of some unexpected or unnatural loss (like contagious disease or any other uncommon event, provided the usufructuary has no fault); (1) If all perish, the usufructuary should deliver the remains to the owner. (ii) There is a partial loss (1) If a part of the stock perishes, the usufruct subsists on the remainder.

In no case shall the usufructuary be responsible for debts exceeding the benefits under the usufruct. (except when the contrary intention appears) USUFRUCT OVER DETERIORABLE PROPERTY (NCC 753)

(1) The usufructuary shall have the right to make use thereof in accordance with the purpose for which they are intended (2) It is sufficient if the usufructuary returns the things in the condition in which they may have been found at the time of the expiration of the usufruct despite ordinary defects caused by use and deterioration produced by age and time.

USUFRUCT OVER FRUIT BEARING TREES AND SPROUT AND WOODLANDS (NCC 575-576)

Except: when caused by the usufructuary’s fraud and negligence.

The usufructuary can: (1) Use dead trunks and those cut off or uprooted by accident. (2) Make usual cuttings that owner used to do. (3) Cut the trees that are not useful

(3) If usufructuary does not return the things upon the expiration of the usufruct, he should pay an indemnity equivalent to the value of the things at the time of such expiration.

USUFRUCT ON A RIGHT OF ACTION (NCC 578)

(1) The action may be instituted in the usufructuary’s name. As the owner of the usufruct, he is properly deemed a proper party in interest. (2) If the purpose is the recovery of the property or right, he is still required under 578 to obtain the naked owner’s authority. (3) If the purpose is to object to or prevent disturbances over the property, no special authority from the naked owner is needed.

USUFRUCT OVER CONSUMABLE PROPERTY (NCC 574)

(1) The usufructuary shall have the right to make use of them under the obligation of paying their appraised value at the termination of the usufruct, if they were appraised when delivered. (2) If not appraised, he shall have the right to return at the same quantity and quality, or pay their current price at the time the usufruct ceases. RIGHTS OF THE OWNER (1) At the beginning of the usufruct (see obligations of usufructuary at the beginning of the usufruct) (2) During the usufruct (a) Retains title to the thing or property (b) He may alienate the property: he may not alter the form or substance of the thing; nor do anything prejudicial to the usufructuary (c) He may construct buildings, make improvements and plantings, provided: (1) Value of the usufruct is not impaired (2) Rights of the usufructuary are not prejudiced

USUFRUCT ON MORTGAGED PROPERTY (NCC 600)

(1) When the usufruct is universal and some objects are mortgaged, apply Art. 598. (2) If the usufructuary mortgaged the usufruct himself, he is liable to pay his own debt. USUFRUCT OVER AN ENTIRE PATRIMONY (NCC 598)

Applies when: (1) The usufruct is a universal one (2) And the naked owner – Has debts or is obliged to make periodical payments (whether or not there be known capital) General rule: The usufructuary is not liable for the owner’s debts.

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EXTINGUISHMENT/TERMINATION (NCC 603) (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.

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association is dissolved, the usufruct shall be extinguished. rd (2) Time that may elapse before a 3 person attains a certain age [Art. 606, CC] (a) Usufruct subsists for the number of years rd specified, even if the 3 person should die before the period expired (b) Unless the usufruct has been expressly granted only in consideration of the existence of the person MERGER OF RIGHTS OF OWNERSHIP IN ONE PERSON

USUFRUCT

AND

NAKED

Illustration: H was the usufructuary of land owned by X. x dies, leaving in his will, the naked ownership of the land to H. the usufruct is extinguished because now H is both the naked owner and the usufructuary.

DEATH OF USUFRUCTUARY

Exceptions: (1) In multiple usufructs: it ends at the death of the last survivor (NCC 611) (a) If simultaneously constituted: all the usufructuaries must be alive (or at least conceived) at the time of constitution. (b) If successively constituted: (i) If by virtue of donation – all the doneesusufructuaries must be living at the time of the donation; (ii) If by will – there should only be 2 successive usufructuaries and both must have been alive at the time of testator’s death.

RENUNCIATION OF USUFRUCT

(1) Waiver: voluntary surrender of the rights of the usufructuary, made by him with intent to surrender them (2) Limitations (a) Must be express: tacit renunciation is not sufficient (b) Does not need the consent of naked owner (c) If made in fraud of creditors, waiver may be rescinded by them through action under Article 1381 (accion pauliana) EXTINCTION OR LOSS OF PROPERTY (NCC 608 & 608)

(2) If the period is fixed by reference to the life of another or there is a resolutory condition

Situation

Effect

Art. 607 If destroyed property is not insured

Death does not affect the usufruct and the right is transmitted to the heirs of the usufructuary until the expiration of the term or the fulfillment of the condition.

If the building forms part If the building forms part of an immovable under of an immovable under usufruct usufruct

(3) When a contrary intention clearly appears (a) If the usufructuary dies before the happening of a resolutory condition, the usufruct is extinguished. st (b) 1 view: usufruct is personal and it CANNOT be extended beyond the lifetime of the usufructuary. (Sanchez Roman and SC)

If usufruct is on the Usufruct continues over building only the land and materials (plus interests), if owner does not rebuild. If owner rebuilds, usufructuary must allow owner to occupy the land and to make use of materials; but the owner must pay interest on the value of both the land and the materials.

EXPIRATION OF PERIOD OR FULFILLMENT OF RESOLUTORY CONDITION IMPOSED ON USUFRUCT BY PERSON CONSTITUTING THE USUFRUCT

(1) In favor of juridical persons [Art. 605, CC] (a) Usufruct cannot be constituted in favor of a town, corporation, or association for more than fifty year (b) If before the expiration of such period the town is abandoned, or the corporation or

Art. 608 If destroyed property is insured before termination of the usufruct When insurance premium paid by owner and

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building. If owner does not rebuild interest upon insurance proceeds paid to usufructuary

When the insurance taken by the naked owner only because usufructuary refuses to contribute to the premium (par. 2)

Owner entitled to insurance money (no interest paid to usufructuary). If he does not rebuild, usufruct continues over remaining land and/or owner may pay interest on value of both materials and land (607). If owner rebuilds, usufruct does not continue on new building, but owner must pay interest on value of land and old materials.

When insurance taken by usufructuary only depends on value of usufructuary’s insurable interest

(2) If both the naked owner and the usufructuary were separately given indemnity, each owns the indemnity given to him, the usufruct being totally extinguished. (3) If usufructuary alone was given the indemnity, he must give it to the naked owner and compel the latter to return either the interest or to replace the property. He may even deduct the interest himself, if the naked owner fails to object.

Effect

usufructuary (par. 1)

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BAD USE OF THING IN USUFRUCT (NCC 610)

Does not extinguish the usufruct but (1) Entitles the owner to demand delivery and administration of the thing. (2) The bad use must cause considerable injury not to the thing, but to the owner. (a) Destruction of a building over which the usufruct is constituted (Arts. 607 and 608)

Easement

Insurance proceeds goes to the usufructuary. No obligation to rebuild. Usufruct continues on the land. Owner has no share in insurance proceeds.

(1) An encumbrance imposed upon an immovable for the benefit of another immovable belonging to a different owner (NCC 613) (2) A real right which burdens a thing with a prestation of determinate servitudes for the exclusive enjoyment of one who is NOT an owner of a tenement (3) A real right by virtue of which the owner has to ABSTAIN from doing or ALLOW somebody else to do something to his property for the benefit of another

TERMINATION OF RIGHT OF PERSON CONSTITUTING THE USUFRUCT

Example: usufructs constituted by a vendee a retro terminate upon redemption

Dominant Estate – the immovable in favor of which the easement is established

PRESCRIPTION

(1) Adverse possession against the owner or the usufructuary. (2) It is not the non-use which extinguishes the rd usufruct by prescription, but the use by a 3 person. (3) There can be no prescription as long as the usufructuary receives the rents from the lease of the property, or he enjoys the price of the sale of his right.

Servient Estate – the immovable which is subject to the easement CHARACTERISTICS ESSENTIAL FEATURES: (1) It is a real right – it gives an action in rem or real action against any possessor of the servient estate (a) Owner of the dominant estate can file a real action for enforcement of right to an easement (b) Action in rem: an action against the thing itself, instead of against the person.

CONDITIONS NOT AFFECTING USUFRUCT EXPROPRIATION OF THING IN USUFRUCT (NCC 609) 3 Situations (1) If naked owner alone was given the indemnity, he has the option: (a) To replace with equivalent thing (b) Or to pay to the usufructuary legal interest on the indemnity – requires security given by the naked owner for the payment of the interest

(2) It is a right enjoyed over another property (jus in re aliena) – it cannot exist in one’s property (nulli res sua servit) When a dominant and servient estate have the same owner, an easement is extinguished. PAGE 103

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Separate ownership is a prerequisite to an easement.

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Any alienation of the property covered carries with it the servitudes affecting said property. But this affects only the portion of the tenement with the easement, meaning the portions unaffected can be alienated without the servitude.

(3) It is a right constituted over an immovable by nature (land and buildings), not over movables. (Article 613) Immovable: used in its common and not in the legal sense, meaning only property immovable BY NATURE can have easements.

(9) It is indivisible (NCC 618) (a) If the servient estate is divided between two or more persons, the easement is not modified, and each of them must bear it on the part which corresponds to him (b) If the dominant estate is divided between two or more persons, each of them may use the easement in its entirety, without changing the place of its use, or making it more burdensome in any other way

(4) It limits the servient owner’s right of ownership for the benefit of the dominant estate. (a) Right of limited use but no right to possess servient estate. (b) There exists a limitation on ownership: the dominant owner is allowed to enjoy or use part of the servient estate, or imposes on the owner a restriction as to his enjoyment of his own property. (i) Being an abnormal limitation of ownership, it cannot be presumed.

(10) It has permanence – once it attaches, whether used or not, it continues and may be used anytime Perpetual: exists as long as property exists, unless it is extinguished.

(5) It creates a relation between tenements No transfer of ownership, but a relationship is created, depending on the easement.

CLASSIFICATION AS TO RECIPIENT OF BENEFITS

(1) Real or Praedial: exists for the benefit of a particular tenement. (2) Personal: exists for the benefit of persons without a dominant tenement e.g. usus habitatio (right to reside in a house) and operae servorum (right to the labor of slaves) in Roman Law

(6) Generally, it may consist in the owner of the dominant estate demanding that the owner of the servient estate refrain from doing something (servitus in non faciendo) or that the latter permit that something be done over the servient property (servitus in patendo), but not in the right to demand that the owner of the servient do something (servitus in faciendo) except if such act is an accessory obligation to a praedial servitude (obligation propter rem) Servient owner merely allows something to be done to his estate.

AS TO CAUSE OR ORIGIN

(1) Legal: created by law, whether for public use or for the interest of private persons (a) Once requisites are satisfied, the owner of the dominant estate may ask the Court to declare that an easement is created. (b) Example: Natural drainage of waters, Abutment of land, Aqueduct, etc. (2) Voluntary: Created by the will of the owners of the estate through contract

Exceptions: Praedial servitudes (a) Right to place beams in an adjoining wall to support a structure (b) Right to use another’s wall to support a building

Note: There is no such thing as a JUDICIAL EASEMENT. The Courts cannot create easements, they can only declare the existence of one, if it exists by virtue of the law or will of the parties.

(7) It is inherent or inseparable from estate to which they actively or passively belong (NCC 617) (a) Easements are merely accessory to the tenements, and a “quality thereof.” They cannot exist without tenements. (b) Easements exist even if they are not expressly stated or annotated as an encumbrance on the titles.

AS TO ITS EXERCISE (NCC 615)

(1) Continuous: Use is or may be incessant, without the intervention of any man (2) Discontinuous: Used at intervals, and dependent upon the acts of man. Note: This classification is important in determining prescription: only continuous and apparent easements can be created by prescription

(8) It is intransmissible – it cannot be alienated separately from the tenement affected or benefited

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may be acquired only by virtue of a title (NCC 622) (2) The existence of an apparent sign of easement between two estates, established or maintained by the owner of both, shall be considered, as a title in order that the easement may continue actively and passively.

AS INDICATION OF ITS EXISTENCE

(1) Apparent: Made known and continually kept in view by external signs that reveal the use and enjoyment of the same (2) Non-apparent: No external indication of their existence Note: Also important for purposes of prescription

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. (NCC 624)

BY THE OBJECT OR OBLIGATION IMPOSED (NCC 616)

(1) Positive: Imposes upon the owner of the servient estate the obligation of allowing something to be done, or doing it himself (2) Negative: Prohibits the owner of the servient estate from doing something which he could lawfully do if the easement did not exist. e.g. Negative Easement of Light and View: An opening is made on the wall of the dominant estate, and the easement consists of imposing upon the servient estate the obligation to not build anything that would obstruct the light

DETERMINES HOW TO COMPUTE THE PRESCRIPTIVE PERIOD (NCC 621)

(1) In positive easements, from the day on which the owner of the dominant estate, or the person who may have made use of the easement, commenced to exercise it upon the servient estate (2) In negative easements, from the day on which the owner of the dominant estate forbade, by an instrument acknowledged before a notary public, the owner of the servient estate from executing an act which would be lawful without the easement.

Note: Prescription starts to run from service of notarial prohibition GENERAL RULES

(1) Nulli res sua servi: No one can have a servitude over one’s own property (2) Servitus in faciendo consistere nequit: A servitude cannot consist in doing (a) Although some easements seem to impose a positive prestation upon the owner of the servient estate, in reality, the primary obligation is still negative. (b) Illustration: Under Article 680: the owner of a tree whose branches extend over to a neighboring property is required to cut off the extended branches, but the real essence of the easement is the obligation NOT TO ALLOW the branches of the tree to extend beyond the land (3) Servitus servitutes esse non potes: There can be no servitude over another servitude (4) A servitude must be exercised civiliter – in a way least burdensome to the owner of the land (5) A servitude must have a perpetual cause

DETERMINES HOW EASEMENT IS LOST BY PRESCRIPTION [NCC 631 (2)]

By nonuser for 10 years (1) With respect to discontinuous easements, this period shall be computed from the day on which they ceased to be used (2) With respect to continuous easements, from the day on which an act contrary to the same took place CREATION BY TITLE

(1) Continuous and apparent easements may be acquired by virtue of a title (NCC 620) (2) Continuous nonapparent easements, and discontinuous ones, whether apparent or not, are acquired only by virtue of a title (NCC 622) (3) The absence of a document or proof showing the origin of an easement which cannot be acquired by prescription may be cured by a deed of recognition by the owner of the servient estate or by a final judgment (NCC 623) (4) The existence of an apparent sign of easement between two estates, established or maintained by the owner of both, shall be considered as a

RELEVANCE OF CLASSIFICATIONS DETERMINES WHAT EASEMENTS CAN BE ACQUIRED BY PRESCRIPTION

Continuous and apparent easements may be acquired by prescription of 10 years (NCC 620) DETERMINES WHAT EASEMENTS CAN BE ACQUIRED BY TITLE

(1) Continuous nonapparent easements, and discontinuous ones, whether apparent or not,

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title in order that the easement may continue actively and passively.

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established thereon without the consent of both owners. (NCC 690) (4) Consent of all co-owners is required to impose an easement on an undivided tenement (NCC 691)

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. (NCC 624)

RIGHTS AND OBLIGATIONS OF OWNERS OF DOMINANT AND SERVIENT ESTATES RIGHT OF DOMINANT ESTATE OWNER

(1) To use the easement and exercise all rights necessary for it (NCC 625, 626) (a) Owner of the dominant estate is granted the right to use the principal easement, and all accessory servitudes (b) Example: Easement of drawing water carries with it the easement of right of way to the place where water is drawn. (c) Limitation: Only for the original immovable and the original purpose (2) To do at his expense, all necessary works for the use and preservation of the easement (NCC 627) Necessity of the works determine extent of such works. (3) In a right of way, to ask for change in width of easement sufficient for needs (NCC 651)

BY LAW (LEGAL EASEMENTS)

(1) Easements imposed by law have for their object either public use or the interest of private persons (NCC 634) (2) These easements may be modified by agreement of the interested parties, whenever the law does not prohibit it or no injury is suffered by a third person (NCC 636) BY WILL OF THE OWNERS (VOLUNTARY EASEMENTS)

Every owner of a tenement or piece of land may establish the easements which he may deem suitable and best (NCC 688)

Encarnacion v. Court of Appeals: The Court granted the modification of the easement stating that under the law, the needs of the dominant property ultimately determine the width of the passage. And these needs may vary from time to time.

BY PRESCRIPTION

Continuous and apparent easements may be acquired by prescription of 10 years (NCC 620) LEGAL EASEMENTS LAW GOVERNING LEGAL EASEMENTS

For public easements (1) Special laws and regulations relating thereto (ex: PD 1067 and PD 705) (2) By the provisions of Chapter 2, Title VII, Book II, NCC

OBLIGATIONS OF DOMINANT ESTATE OWNER

(1) To use the easement for the benefit of immovable and in the manner originally established (NCC 626) If established for a particular purpose, the easement cannot be used for a different one. However, if established in a general way, without specific purpose, the easement can be used for all the needs of the dominant estate. (2) To notify owner of servient before making repairs and to make repairs in a manner least inconvenient to servient estate [NCC 627(2)]

For private legal easements (1) By agreement of the interested parties whenever the law does not prohibit it and no injury is rd suffered by a 3 person (2) By the provisions of Chapter 2, title VII, Book II VOLUNTARY EASEMENTS (1) Every owner of a tenement or piece of land may establish thereon the easements which he may deem suitable, and in the manner and form which he may deem best (NCC 688) (2) The owner of a thing, the usufruct of which belongs to another, may impose, without the consent of the usufructuary, any servitudes which will not injure the right of usufruct (NCC 689) (3) Whenever the naked ownership belongs to one person and the beneficial ownership to another, no perpetual voluntary easement may be

(3) Not to alter easement or render it more burdensome (a) Owner of dominant estate may make repairs at his expense, but cannot alter the easement or make it more burdensome. (NCC 627) (b) Court allowed Central to use the right of way to transport the additional sugar. This did not make the easement more burdensome nor did it alter it. What is prohibited is extending the road or repairing it or depositing excavations outside the area. But the

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additional use produced no such effects. (Valderama v. North Negros) (4) To contribute to expenses of works necessary for use and preservation of servitude, if there are several dominant estates, unless he renounces his interest (NCC 628) (a) The contribution is in proportion to the benefits which each may derive from the work (b) Anyone who does not wish to contribute may exempt himself by renouncing the easement for the benefit of the others (c) If the owner of the servient estate should make use of the easement in any manner whatsoever, he shall also be obliged to contribute to the expenses in the proportion stated, saving an agreement to the contrary

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KINDS OF LEGAL EASEMENTS (1) Natural drainage (NCC 637) (2) Riparian banks (NCC 638) (3) Drainage of buildings (NCC 674) (4) Dam (NCC 639) (5) Drawing water (NCC 640-41) (6) Aqueduct (NCC 642-646) (7) Sluice gate (647) (8) Right of way (NCC 649-657) (9) Party wall (NCC 658-666) (10) Light and view (NCC 667-681) (11) Intermediate distances (NCC 677-681) (12) Nuisance (NCC 682-683) (13)Lateral and subjacent support (684-687) NATURAL DRAINAGE

(1) Lower estates are obliged to receive the waters which naturally and without the intervention of man descend from the higher estates (as well as the stones or earth which they carry with them) (2) The owner of the lower estate cannot construct those which will impede this easement (3) The owner of the higher estate cannot construct those which will increase the burden.

RIGHT OF SERVIENT ESTATE OWNER

(1) To retain ownership and use of his property (a) The owner of the servient estate retains the ownership of the portion on which the easement is established, and may use the same in such a manner as not to affect the exercise of the easement. (NCC 630) (b) Servient owner must respect the use of the servitude, but retains ownership and use of the same, in a manner not affecting the easement. (2) To change the place and manner of the use of the easement (NCC 629) General rule: The owner of the servient estate cannot impair the use of the servitude Exception: (a) By reason of the place/manner originally assigned, the use of such easement has become VERY INCONVENIENT to the owner (b) The easement should prevent him from making any important works, repairs or improvements thereon (c) Change must be done at his expense (d) He offers another place or manner equally convenient (e) In such a way that no injury is caused by the change to the owner of the dominant estate or to those who may have a right to use the easement (3) To use the easement May use the easement but must also contribute proportionately to the expenses

RIPARIAN BANKS

(1) The banks of rivers and streams are subject throughout their entire length and within a zone of 3 meters along their margins, to the easement of public use in the general interest of navigation, floatage, fishing, and salvage. (2) Estates adjoining the banks of navigable or floatable rivers are subject to the easement of towpath for the exclusive service of river navigation and floatage. (3) If it be necessary to occupy lands of private ownership, the proper indemnity shall first be paid. DRAINAGE OF BUILDINGS

(1) The owner of a building is obliged to construct its roof or covering in such manner that the rain water shall fall on his own land or on a street or public place, and NOT on the land of his neighbor, even though the adjacent land may belong to two or more persons, one of whom is the owner of the roof. (2) Even if it should fall on his own land, the owner shall be obliged to collect the water in such a way as not to cause damage to the adjacent land or tenement.

OBLIGATIONS OF SERVIENT ESTATE OWNER

(1) Not to impair the use of the easement [NCC 629(1)] (2) To contribute proportionately to expenses if he uses the easement [NCC 628(2)] Unless there is an agreement to the contrary

DAM

Whenever it should be necessary to build a dam, and the person who is to construct it is not the owner of the banks, or lands which must support it, he may

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establish the easement of abutment of a dam, after payment of the proper indemnity.

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easement to such owners and to the other irrigators.

DRAWING WATER

RIGHT OF WAY

(1) Compulsory easements for drawing water or for watering animals can be imposed only for reasons of public use in favor of a town or village, after payment of the proper indemnity. (2) Easements for drawing water and for watering animals carry with them the obligation of the owners of the servient estates to allow passage to persons and animals to the place where such easements are to be used, and the indemnity shall include this service.

Who may demand: (1) The owner of the dominant estate (2) Any person with the real right to cultivate or use the immovable e.g. a usufructuary Note: a lessee cannot demand such easement, because the lessor is the one bound to maintain him in the enjoyment of the property Requisites: (1) Dominant estate is surrounded by other immovables owned by other persons (2) There must absolutely be no access to a public highway (3) Even if there is access, it is difficult or dangerous to use, or grossly insufficient (a) Mere inconvenience in the use of an outlet does not render the easement a necessity. (b) An adequate outlet is one that is sufficient for the purpose and needs of the dominant owner, and can be established at a reasonable expense. (c) Does not necessarily have to be by land – an outlet through a navigable river if suitable to the needs of the tenement is sufficient. (4) Isolation of the immovable is NOT due to the dominant owner’s own acts e.g. if he constructs building to others obstructing the old way (5) Payment of indemnity (a) If right of way is permanent and continuous for the needs of the dominant estate = value of the land + amount of damage caused to the servient estate (b) If right of way is limited to necessary passage for cultivation of the estate and for gathering crops, without permanent way = damage caused by encumbrance.

AQUEDUCT

(1) Any person who may wish to use upon his own estate any water of which he can dispose shall have the right to make it flow through the intervening estates, with the obligation to indemnify their owners, as well as the owners of the lower estates upon which the waters may filter or descend. (2) Person desiring to make use of this right is obliged to: (a) To prove that he can dispose of the water and that it is sufficient for the use for which it is intended; (b) To show that the proposed right of way is the most convenient and the least onerous to third persons; (c) To indemnify the owner of the servient estate in the manner determined by the laws and regulations (3) Easement of aqueduct for private interest cannot be imposed on buildings, courtyards, annexes, or outhouses, or on orchards or gardens already existing (4) This easement does not prevent the owner of the servient estate from closing or fencing it, or from building over the aqueduct in such manner as not to cause the latter any damage, or render necessary repairs and cleanings impossible (5) This easement is considered as continuous and apparent, even though the flow of the water may not be continuous, or its use depends upon the needs of the dominant estate, or upon a schedule of alternate days or hours.

Rules For Establishing The Right Of Way (1) Must be established at the point LEAST prejudicial to the servient estate (NCC 650) (2) Insofar as consistent with the first rule, where the distance from the dominant estate to a public highway is shortest (3) The criterion of least prejudice to the servient estate must prevail over the criterion of shortest distance although this is a matter of judicial appreciation. While shortest distance may ordinarily imply least prejudice, it is not always so as when there are permanent structures obstructing the shortest distance; while on the other hand, the longest distance may be free of

SLUICE GATE

(1) Constructing a stop lock or sluice gate in the bed of the stream from which the water is to be taken, for the purpose of improving an estate (2) Such person may demand that the owners of the banks permit its construction, after payment of damages, including those caused by the new

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obstructions and the easiest or most convenient to pass through. (Quimen v. CA) (4) The fact that LGV had other means of egress to the public highway cannot extinguish the said easement, being voluntary and not compulsory. The free ingress and egress along Mangyan Road created by the voluntary agreement between the parties is thus legally demandable with the corresponding duty on the servient estate not to obstruct the same. (La Vista Association v. CA) (5) Width of the easement shall be that which is sufficient for the needs of the dominant estate (6) Easement may be changed from time to time depending upon the needs of the dominant tenement (7) The width of the easement of right of way shall be that which is sufficient for the needs of the dominant estate, and may accordingly be changed from time to time. (NCC 651) (8) Necessary repairs for a permanent right of way shall be made by the DOMINANT OWNER. (9) A proportionate share of taxes shall be reimbursed by the dominant owner to the proprietor of the servient estate (a) If the right of way is permanent, the necessary repairs shall be made by the owner of the dominant estate. A proportionate share of the taxes shall be reimbursed by said owner to the proprietor of the servient estate (NCC 654) (10) In cases where the dominant estate needing the right of way is acquired by sale, exchange or partition and the Estate is surrounded by other estates owned by the vendor, exchanger or coowner (11) Vendor, exchanger or co-owner shall grant the right of way WITHOUT INDEMNITY (a) Granting the servitude without indemnity is a tacit condition of the sale, exchange or partition: each party receives something (12) Donor (simple donation) must still be indemnified for right of way (a) Grantor receives nothing from the grantee, therefore no implied condition as to a right of way is constituted (13)If the land of the grantor is the one which becomes isolated, he may demand right of way after paying an indemnity (a) Whenever a piece of land acquired by sale, exchange or partition, is surrounded by other estates of the vendor, exchanger, or co-owner, he shall be obliged to grant a right of way without indemnity. In case of a simple donation, the donor shall be indemnified by the donee for the establishment of the right of way. (NCC 652)

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Extinguishment (1) Owner has joined the dominant estate to another abutting the public road (2) A new road is opened giving access to the isolated estate (3) Extinguishment is NOT automatic. The owner of the servient estate must ask for such extinguishment (4) Indemnity paid to the servient owner must be returned: (a) If easement is permanent: value of the land must be returned (b) If easement is temporary: nothing to be returned Special Rights Of Way (1) Right of way to carry materials for the construction, repair, improvement, alteration or beautification of a building through the estate of another (2) Right of way to raise on another’s land scaffolding or other objects necessary for the work (a) If it be indispensable for the construction, repair, improvement, alteration or beautification of a building, to carry materials through the estate of another, or to raise therein scaffolding or other objects necessary for the work, the owner of such estate shall be obliged to permit the act, after receiving payment of the proper indemnity for the damage caused him. (NCC 656) (3) Right of way for the passage of livestock known as animal path, animal trail, watering places, resting places, animal folds (NCC 657) (a) Easements of the right of way for the passage of livestock known as animal path, animal trail or any other, and those for watering places, resting places and animal folds, shall be governed by the ordinances and regulations relating thereto, and, in the absence thereof, by the usages and customs of the place. (b) Without prejudice to rights legally acquired, the animal path shall not exceed in any case the width of 75 meters, and the animal trail that of 37 meters and 50 centimeters. (c) Whenever it is necessary to establish a compulsory easement of the right of way or for a watering place for animals, the provisions of this Section and those of Articles 640 and 641 shall be observed. In this case the width shall not exceed 10 meters PARTY WALL

Refers to all those mass of rights and obligations emanating from the existence and common

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enjoyment of wall, fence, enclosures or hedges, by the owners of adjacent buildings and estates separated by such objects

When existence of exterior sign is presumed (NCC 660) (1) Whenever in the dividing wall of buildings there is a window or opening (2) Whenever the dividing wall is, on one side, straight and plumb on all its facement, and on the other, it has similar conditions on the upper part, but the lower part slants or projects outward (3) Whenever the entire wall is built within the boundaries of one of the estates (4) Whenever the dividing wall bears the burden of the binding beams, floors and roof frame of one of the buildings, but not those of the others (5) Whenever the dividing wall between courtyards, gardens, and tenements is constructed in such a way that the coping sheds the water upon only one of the estates (6) Whenever the dividing wall, being built of masonry, has stepping stones, which at certain intervals project from the surface on one side only, but not on the other (7) Whenever lands enclosed by fences or live hedges adjoin others which are not enclosed

Nature (1) A common wall which separates two estates, built by common agreement at the dividing line such that it occupies a portion of both estates on equal parts (2) A party wall is a co-ownership (a kind of compulsory co-ownership) (a) Each owner owns part of the wall but it cannot be separated from the other portions belonging to the others. A party wall has a special characteristic that makes it more of an easement as it is called by law (b) An owner may use a party wall to the extent of the ½ portion on his property. Co-Ownership

Party Wall

Before division of shares, a co-owner cannot point to any definite portion of the property as belonging to him

Shares of the co-owners cannot be physically segregated but they can be physically identified

None of the co-owners may use the community property for his exclusive benefit because he would be invading the rights of the others

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Note: The deposit of earth or debris on one side alone is an exterior sign that the owner of that side is the owner of the ditch or drain. The presumption is an addition to those enumerated in NCC 660.

No such limitation

Demolition of building supported by party wall (1) An owner may also renounce his part ownership of a party wall if he desires to demolish his building supported by the wall. (2) He shall bear all the expenses of repairs and work necessary to prevent any damage which the demolition may cause to the party wall.

In a co-ownership, partial Any owner may free renunciation himself from contributing is allowed to the cost of repairs and construction of a party wall by renouncing all his rights thereto

Increasing height of party wall An owner is given the right to increase the height of a party wall subject to the following conditions: (1) He must do so at his own expense; (2) He must pay for any damage which may be caused thereby even if the damage is temporary; (3) He must bear the cost of maintaining the portion added; (4) He must pay the increased cost of preservation of the wall

When existence of easement of party wall presumed (1) In dividing walls of adjoining buildings up to the point of common elevation (2) In dividing walls of gardens or yards situated in cities, or towns, or in rural communities (3) In fences, walls and live hedges dividing rural lands Note: may be rebutted by a title or exterior sign, or any other proof showing that the entire wall in controversy belongs exclusively to one of the adjoining property-owners

Proportional use of party wall The part owners share in the expenses of maintaining a party wall in proportion to the interest of each

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(ii) The outer line of the openings if they project (iii) The dividing line between the two properties in cases of oblique view (d) If distances are not complied with: (i) Windows are considered unlawful openings (ii) Owner may be ordered by the Court to close them (iii) Even if the adjoining owner does not object to the construction of such structures at first, he cannot be held to be in estoppel, except if 10-year period of acquisitive prescription has passed. (iv) Does not give rise to prescription (v) Mere opening of the window in violation of the distances does not give rise to the easement of light and view by prescription (3) In buildings separated by a public way or alley, not less than 3 meters wide, the distances required (2 m, 60 cm) do not apply (4) If an easement is acquired to have direct views, balconies or belvederes, the owner of the servient estate must not build at less than 3 meters from the boundary line of the two tenements. (a) The distances may be stipulated by the parties, but should not be less than what is prescribed by the law (2 meters and 60 cm)

LIGHT AND VIEW

Definition (1) Easement of light (jus luminum) is the right to admit light from the neighboring estate by virtue of the opening of a window or the making of certain openings (2) Easement of view (jus prospectus) is the right to make openings or windows, to enjoy the view through the estate of another and the power to prevent all constructions or works which would obstruct such view or make the same difficult. (a) Necessarily includes the easement of light (b) It is possible to have light only without view Nature (1) Positive: Opening a window through a party wall When a part owner of a party wall opens a window therein, such act implies the exercise of the right of ownership by the use of the entire thickness of the wall = invasion of the right of the other part owners / violation of the right to proportional use of the party wall. (2) Negative: Formal prohibition upon the owner of the adjoining land or tenement (a) When a person opens a window on his own building, he does nothing more than exercise an act of ownership on his property. (i) Does not establish an easement (b) Coexistent is the right of the owner of the adjacent property to build on his own land, even if such structures cover the window (c) If the adjacent owner does not build structures to obstruct the window, such is considered mere tolerance and NOT a waiver of the right to build. (d) An easement is created only when the owner opens up a window, prohibits or restrains the adjacent owner from doing anything, which may tend to cut off or interrupt the light + prescriptive period

Exception to Easement Vs. Direct View (1) Owners of a wall (not a party wall) adjoining a tenement of another can make openings to admit light without complying with the distance requirements SO LONG AS: (a) Openings are made at the height of the ceiling joists (horizontal beams) or immediately under the ceiling (i) Size: 30 cm square (ii) With iron grating imbedded in the wall (iii) With a wire screen (2) But owner of the adjoining estate can close the opening if: (a) He acquires part ownership of the party wall (b) He constructs a building or raises a wall on his land, unless an easement of light has been acquired (3) If requirements are not complied with, the owner of the adjoining estate may compel the closure of the opening. (4) The action to compel the closing of the opening may prescribe if the opening is permitted without protest. (a) BUT prescription of the action to compel the closure of the opening DOES NOT MEAN that the servitude of light and view has been acquired.

Easement against Direct view (1) Acquired by the person who opens the window (2) The following structures cannot be built without following the prescribed distances (a) Window, apertures, balconies and other projections with a direct view upon or towards an adjoining land must have a distance of 2 METERS between the wall and the contiguous property. (b) For structures with a side or oblique view (at an angle from the boundary line), there should be a distance of 60 centimeters. (c) Measured from: (i) The outer line of the wall if the openings do not project

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(b) Period of acquisitive prescription will only start to run from the time the owner asserting the servitude has forbidden the owner of the adjoining tenement from doing something he could lawfully do. (c) THUS, although the action to compel the closure might have prescribed, the owner of the adjoining estate may still build on his own land a structure which might obstruct the view.

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(4) Obstructs or interferes with the free passage of any public highway or street, or any body of water; or (5) Hinders or impairs the use of property. LATERAL AND SUBJACENT SUPPORT

(1) The proprietor is prohibited from making dangerous excavations. (a) No proprietor shall make such excavations upon his land as to deprive any adjacent land or building of sufficient lateral or subjacent support. (2) Easement of lateral and subjacent support is deemed essential to the stability of buildings (3) Support is lateral when the supported and supporting lands are divided by a vertical plane. (4) Support is subjacent when the supported land is above and the supporting land is beneath it.

INTERMEDIATE DISTANCES (NCC 677)

NCC 677, in effect, establishes an easement in favor of the State. The general prohibition is dictated by the demands of national security. The following must comply with the regulations or customs of the place: (1) Construction of aqueduct, well, sewer, etc. (678) Constructions which by reason of their nature or products are dangerous or noxious

MODES OF ACQUIRING EASEMENT BY TITLE

Juridical act which gives rise to the servitude (e.g. law, donations, contracts or wills) (1) If easement has been acquired but no proof of existence of easement available, and easement is one that cannot be acquired by prescription

(2) Planting of trees (NCC 679) (a) No trees shall be planted near a tenement or piece of land belonging to another except at the distance authorized by the ordinances or customs of the place (b) In the absence of regulations: (i) At least 2 meters from the dividing line of the estates if tall trees are planted (ii) At least 50 centimeters if shrubs or small trees are planted (c) In case of violation, a landowner shall have the right to demand the uprooting of the plant even if it has grown spontaneously.

The defect may be cured by: (a) Deed of recognition by owner of servient estate: By affidavit or a formal deed acknowledging the servitude (b) By final judgment: Owner of the dominant estate must file a case in Court to have the easement declared by proving its existence through other evidence

Branches, roots, and fruits: (1) If the branches of any tree should extend over a neighboring estate, tenement, garden or yard, the owner of the latter shall have the right to demand that they be cut-off (2) If it be the roots of a neighboring tree which should penetrate into the land of another, the latter may cut them off himself within his property (3) Fruits naturally falling upon adjacent land belong to the owner of said land.

(2) Existence of an apparent sign considered as title Illustration: The presence of 4 windows was considered an apparent sign which created a negative easement of light and view (altius non tollendi) i.e. not to build a structure that will cover the windows. (Amor v. Florentino) BY PRESCRIPTION

Requisites (1) Easement must be continuous and apparent. (2) Easement must have existed for 10 years. (3) NO NEED for good faith or just title.

NUISANCE

A nuisance is any act, omission, establishment, business, condition of property, or anything else which: (1) Injures or endangers the health or safety of others; or (2) Annoys or offends the senses; or (3) Shocks, defies or disregards decency or morality; or

EXTINGUISHMENT OF EASEMENTS (1) By merger in the same person of the ownership of the dominant and servient estates (2) By nonuser for ten years (3) When either or both of the estates fall into such condition that the easement cannot be used

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(4) By the expiration of the term or the fulfillment of the condition, if the easement is temporary or conditional (5) By the renunciation of the owner of the dominant estate; (6) By the redemption agreed upon between the owners of the dominant and servient estates

RENUNCIATION OF THE OWNER OF THE DOMINANT ESTATE

Must be specific, clear, express (distinguished from non-user) REDEMPTION AGREED UPON BETWEEN THE OWNERS OTHER CAUSES NOT MENTIONED IN NCC 631

(1) Annulment and rescission of the title constituting the voluntary easement (2) Termination of the right of grantor of the voluntary easement (3) Abandonment of the servient estate (a) Owner of the servient estate gives up ownership of the easement (e.g. the strip of land where the right of way is constituted) in favor of the dominant estate. (b) The easement is extinguished because ownership is transferred to the dominant owner, who now owns both properties. (4) Eminent domain (a) The government’s power to expropriate property for public use, subject to the payment of just compensation. (5) Special cause for extinction of legal rights of way; if right of way no longer necessary (a) NCC 655 (i) If the right of way granted to a surrounded estate ceases to be necessary because its owner has joined it to another abutting on a public road, the owner of the servient estate may demand that the easement be extinguished, returning what he may have received by way of indemnity. The interest on the indemnity shall be deemed to be in payment of rent for the use of the easement. (ii) The same rule shall be applied in case a new road is opened giving access to the isolated estate. (iii) In both cases, the public highway must substantially meet the needs of the dominant estate in order that the easement may be extinguished. (b) Right of way ceases to be necessary: (i) Owner of the of the dominant estate has joined to another abutting on a public road (ii) A new road is opened giving access to the isolated estate (c) Requisite: the public highway must substantially meet the needs of the dominant estate in order that the easement may be extinguished (d) Owner of the servient estate may demand that the easement be extinguished.

MERGER

Must be absolute, perfect and definite, not merely temporary (1) Absolute: Ownership of the property must be absolute, thus not applicable to lease, usufruct, etc. (2) Perfect: Merger must not be subject to a condition (3) If the merger is temporary, there is at most a suspension of the easement, but no extinguishment. BY NON-USER FOR 10 YEARS

(1) Owner of dominant estate does not exercise right over easement. (2) Inaction, not outright renunciation. (3) Due to voluntary abstention by the dominant owner, and not due to a fortuitous event (4) Computation of the period (a) Discontinuous easements: counted from the day they ceased to be used (b) Continuous easements: counted from the day an act adverse to the exercise of the easement took place (i) E.g. in an easement of light and view, the erection of works obstructing the servitude would commence the period of prescription (5) Use by a co-owner of the dominant estate bars prescription with respect to the others (6) Servitudes not yet exercised cannot be extinguished by non-user (a) An easement must have first been used, before it can be extinguished by inaction. EXTINGUISHMENT BY IMPOSSIBILITY OF USE

(1) Impossibility referred to must render the entire easement unusable for all time. (2) Impossibility of using the easement due to the condition of the tenements (e.g. flooding) only suspends the servitude until it can be used again. (3) Except: If the suspension exceeds 10 years, the easement is deemed extinguished by non-user EXPIRATION OF THE TERM RESOLUTORY CONDITION

OR

FULFILLMENT

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OF

Applicable only to voluntary easements

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(e) Owner of the servient estate must return

indemnity he received (value of the land)

Nuisance A nuisance is any act, omission, establishment, business, condition of property, or anything else which: (1) Injures or endangers the health or safety of others; or (2) Annoys or offends the senses; or (3) Shocks, defies or disregards decency or morality; or (4) Obstructs or interferes with the free passage of any public highway or street, or any body of water; or (5) Hinders or impairs the use of property.

Per se

ACCORDING TO SCOPE OF INJURIOUS EFFECTS

Test: not the number of persons annoyed but the possibility of annoyance to the public by the invasion of its rights – the fact that it is in a public place and annoying to all who come within its sphere. (1) Public (a) The doing of or the failure to do something that injuriously affects the safety, health or morals of the public. (b) It causes hurt, inconvenience or injury to the public, generally, or to such part of the public as necessarily comes in contact with it. (2) Private One which violates only private rights and produces damages to but one or a few persons

NUISANCE V. NEGLIGENCE Whether the defendant’s use of his property was unreasonable as to plaintiff, without regard to foreseeability of injury.

Liability for the resulting Liability is based on a injury to others regardless want of proper care of the degree of care or skill exercised to avoid such injury. Principles ordinarily apply Principles

Per accidence

The wrong is established Proof of the act and its by proof of the mere act. consequences. It becomes a nuisance as a matter of law.

Injury is immediate

Whether it was unreasonable for the defendant to act as he did in view of the threatened danger or harm to one in plaintiff’s position.

apply where the cause of action is for harm resulting from one act which created an unreasonable risk of injury.

(2) Nuisance per accidens or in fact (a) One that becomes a nuisance by reason of circumstances and surroundings. (b) It is not a nuisance by its nature but it may become so by reason of the locality, surrounding, or the manner in which it is conducted, managed, etc.

Use of one’s own property Direct infringement of in such a manner as to another’s right of cause injury to the property. property or right or interest of another, and generally results from the commission of an act beyond the limits of the property affected.

Negligence

where the cause of action is for continuing harm caused by continuing or recurrent acts which cause discomfort or annoyance to plaintiff in the use of his property.

(1) Nuisance per se or at law An act, occupation or structure which is a nuisance at all times and under any circumstances, regardless of location or surroundings.

Trespass

Nuisance

Negligence

ACCORDING TO NATURE

NUISANCE V. TRESPASS

Injury is consequential

Nuisance

CLASSES

Note: To constitute a nuisance there must be an arbitrary or abusive use of property or disregard of commonly accepted standards set by society.

Nuisance

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Public Affects the public at large Need not affect the whole community or

ordinarily

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LIABILITY OF TRANSFEREES

The grantee of land upon which there exists a nuisance created by his predecessors in title is NOT responsible therefore merely because he becomes the owner of the premises, or merely because he permits it to remain.

hurt and injure all the public. It is sufficient if it affects the surrounding community generally or if the injury is occasioned to such part of the public as come in contact with it.

He shall be liable if he knowingly continues the nuisance. Generally, he is not liable for continuing it in its original form, unless he has been notified of its existence and requested to remove it, or has actual knowledge that it is a nuisance and injurious to the rights of others.

(3) Mixed

NATURE OF LIABILITY

DOCTRINE OF ATTRACTIVE NUISANCE One who maintains on his premises dangerous instrumentalities or appliances of a character likely to attract children in play, and who fails to exercise ordinary care to prevent children from playing therewith or resorting thereto, is liable to a child of tender years who is injured thereby, even if the child is technically a trespasser in the premises.

All persons who participate in the creation or maintenance of a nuisance are jointly and severally liable for the injury done. If 2 or more persons who create or maintain the nuisance act entirely independent of one another, and without any community of interest, concert of action, or common design, each is liable only so far as his acts contribute to the injury.

Basis of liability – The attractiveness is an invitation to children. Safeguards to prevent danger must therefore be set up.

For joint liability, there must be some joint or concurrent act or community of action or duty, or the several wrongful acts done at several times must have concurred in their effects as one single act to produce the injury complained of.

Note: A swimming pool or water tank is not an attractive nuisance, for while it is attractive, it cannot be a nuisance, being merely an imitation of the work of nature. (Hidalgo Enterprises v. Balandan)

RIGHT TO RECOVER DAMAGES

The abatement of a nuisance does not preclude the right of any person injured to recover damages for its past existence. (NCC 697)

LIABILITY IN CASE OF NUISANCE WHO ARE LIABLE

Every successive owner or possessor of property who fails or refuses to abate a nuisance in that property started by a former owner or possessor is liable therefor in the same manner as the one who created it. (NCC 696)

Abatement and damages are cumulative remedies. NO PRESCRIPTION

The action to abate a public or private nuisance is NOT extinguished by prescription. [NCC. 1143(2)]

LIABILITY OF CREATOR OF NUISANCE

He who creates a nuisance is liable for the resulting damages and his liability continues as long as the nuisance continues. (1) There must be a breach of some duty on the part of the person sought to be held liable for damages resulting from a nuisance before an action will lie against him. (2) No one is to be held liable for a nuisance which he cannot himself physically abate without legal action against another for that purpose. (3) Where several persons, acting independently, cause damage by acts which constitute a nuisance, each is liable for the damage which he has caused or for his proportionate share of the entire damage.

REGULATION OF NUISANCES PUBLIC NUISANCE

Remedies The remedies against a public nuisance are: (1) A prosecution under the Penal Code or any local ordinance: or (2) A civil action; or (3) Abatement, without judicial proceedings. (a) It must be reasonably and efficiently exercised (b) Means employed must not be unduly oppressive on individuals, and (c) No more injury must be done to the property or rights of individuals than is necessary to accomplish the abatement.

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(d) No right to compensation if property taken or destroyed is a nuisance.

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allow thereafter a reasonable time to enable the other to abate the nuisance himself. (4) Means employed must be reasonable and for any unnecessary damage or force, the actor will be liable. Right to abate is not greater than the necessity of the case and is limited to the removal of only so much of the objectionable thing as actually causes the nuisance. (5) Abatement must be approved by the district health officer. (6) Property must not be destroyed unless it is absolutely necessary to do so. (7) Right must always be exercised with the assistance of local police so as not to disturb the public peace.

Action for abatement (1) The district health officer shall take care that one or all of the remedies against a public nuisance are availed of. (2) If a civil action is brought by reason of the maintenance of a public nuisance, such action shall be commenced by the city or municipal mayor. (3) The district health officer shall determine whether or not abatement, without judicial proceedings, is the best remedy against a public nuisance. (4) A private person may file an action on account of a public nuisance if it is especially injurious to himself.

PRIVATE NUISANCE

Remedies The remedies against a private nuisance are: (1) A civil action; or (2) Abatement, without judicial proceedings. (a) The procedure for extrajudicial abatement of a public nuisance by a private person be followed (b) Person extrajudicially abating a nuisance liable for damages if: (i) If he causes unnecessary injury (ii) If an alleged nuisance is later declared by the courts to be not a real nuisance

General rule: Individual has no right of action against a public nuisance. The abatement proceedings must be instituted in the name of the State or its representatives. Exception: An individual who has suffered some special damage different from that sustained by the general public may maintain a suit in equity for an injunction to abate it, or an action for damages which he has sustained. Action becomes a tort if an individual has suffered particular harm, in which case the nuisance is treated as a private nuisance with respect to such person.

Remedies of property owner A person whose property is seized or destroyed as a nuisance may resort to the courts to determine whether or not it was in fact a nuisance. (1) Action for replevin (2) Enjoin the sale or destruction of the property (3) Action for the proceeds of its sale and damages if it has been sold (4) Enjoin private parties from proceeding to abate a supposed nuisance

Requisites of the right of a private individual to abate a public nuisance (1) That demand be first made upon the owner or possessor of the property to abate the nuisance; (2) That such demand has been rejected; (3) That the abatement be approved by the district health officer and executed with the assistance of the local police; and (4) That the value of the destruction does not exceed P3000.

Modes of Acqiring Ownership

Rules: (1) The right must be exercised only in cases of urgent or extreme necessity. The thing alleged to be a nuisance must be existing at the time that it was alleged to be a nuisance.

MODES OF ACQUIRING OWNERSHIP: (OLDTIPS) (1) Occupation (2) Law (3) Donation (4) Tradition (5) Intellectual Property (6) Prescription (7) Succession

(2) Summary abatement must be resorted to within a reasonable time after knowledge of the nuisance is acquired or should have been acquired by the person entitled to abate. (3) Person who has the right to abate must give reasonable notice of his intention to do so, and

Mode is a specific cause which produces dominion and other real rights as a result of the co-existence of

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special status of things, capacity and intention of persons and fulfillment of the requisites of law.

The owner of a swarm of bees shall have a right to pursue them to another’s land, indemnifying the possessor of the latter for the damage.

Title is every juridical right which gives a means to the acquisition of real rights but in itself is insufficient to produce them.

If the owner has not pursued the swarm, or ceases to do so within 2 consecutive days, the possessor of the land may occupy or retain the same.

Ownership is not transferred by contract merely but by tradition or delivery. Contracts only constitute titles or rights to transfer or acquisition of ownership, while delivery is the mode of accomplishing the same. Mode

The 20 days to be counted from their occupation by another person. This period having expired, they shall pertain to him who has caught and kept them. Occupation of domesticated animals Wild animals are possessed only while they are under one's control; domesticated or tamed animals are considered domestic or tame if they retain the habit of returning to the premises of the possessor.

Title

Directly and immediately Serves merely to give the produces a real right occasion for its acquisition or existence Cause

Means

Proximate cause

Remote cause

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Pigeons and fish Pigeons and fish which from their respective breeding places pass to another pertaining to a different owner shall belong to the latter, provided they have not been enticed by some artifice or fraud.

Essence of the right Means whereby that which is to be created or “essence” is transmitted transmitted

Hidden treasure He who by chance discovers hidden treasure in another’s property: ½ shall be allowed to the finder.

OCCUPATION Note: Ownership of land cannot be acquired by occupation

If the finder is a trespasser, he shall not be entitled to any share of the treasure.

REQUISITES

(a) Corporeal personal property (b) Property susceptible of appropriation (c) Seizure with intent to appropriate (d) Res nullius (no owner) or res derelict (abandoned property) (e) Observance of conditions prescribed by law

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 Lost movables; procedure after finding lost movables Whoever finds a movable, which is not treasure, must return it to its previous possessor.

KINDS

Of Animals (1) Wild or feral animals – seizure (hunting/fishing) in open season by means NOT prohibited (2) Tamed/domesticated animals – General Rule: belong to the tamer, but upon recovering freedom, are susceptible to occupation UNLESS claimed within 20days from seizure by another (3) Tame/domestic animals – not acquired by occupation EXCEPT when ABANDONED

If 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 a public auction eight days after the publication.

Of Other Personal Property (1) Abandoned – may be acquired (2) Lost (3) Hidden treasure – finder gets ½ by occupation; landowner gets ½ by accession; EXCEPT in CPG system, share goes to the partnership

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

SPECIAL RULES

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and the owner shall be obliged, as the case may be, to reimburse the expenses.

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WHAT MAY NOT BE DONATED

Future property (1) Donations cannot comprehend future property. (2) “Future property” is understood anything which the donor cannot dispose of at the time of the donation.

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. DONATION Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it.

KINDS OF DONATIONS

As to its taking effect (1) Donation Inter Vivos (NCC 729) Donation which shall take effect during the lifetime of the donor, though the property shall not be delivered till after the donor's death

OTHER INSTANCES CONSIDERED AS DONATION

(1) When a person gives to another a thing or right on account of the latter's merits or of the services rendered by him to the donor, provided they do not constitute a demandable debt (2) When the gift imposes upon the donee a burden which is less than the value of the thing given

Takes effect independently of the donor’s death Irrevocable EXCEPT for the ff grounds: (a) Subsequent birth of the donor’s children (b) Donor’s failure to comply with imposed conditions (c) Donee’s ingratitude (d) Reduction of donation by reason of inofficiousness

NATURE

(1) BILATERAL contract creating UNILATERAL obligations on the donor’s part (2) Requires CONSENT of BOTH donor and donee though it produces obligations only on the side of the DONOR

(2) Donation by Reason of Marriage/ Donation Propter Nuptias (FC 86) Requisites (a) Must be made BEFORE the celebration of marriage (b) Made in CONSIDERATION of the marriage (c) Made in FAVOR of ONE or BOTH of the future spouses

Requisites (1) CONSENT and CAPACITY of the parties (2) ANIMUS DONANDI (intent to donate) (3) DELIVERY of thing donated (4) FORM as prescribed by law (5) IMPOVERISHMENT of donor’s patrimony and ENRICHMENT on part of donee

Ordinary v. Propter Nuptias Ordinary

WHAT MAY BE DONATED

All present property or part thereof of the donor (1) Provided he reserves, in full ownership or usufruct, sufficient means for support of himself and all relatives entitled to be supported by donor at the time of acceptance (2) Provided that no person may give or receive by way of donation, more than he may give or receive by will (NCC 752); also, reserves property sufficient to pay donor’s debts contracted before donation, otherwise, donation is in fraud of creditors (NCC 759, 1387) (3) If donation exceeds the disposable or free portion of his estate, donation is inofficious (4) EXCEPTIONS: (a) Donations provided for in marriage settlements between future spouses – not more than 1/5 of present property (b) Donation propter nuptias by an ascendant consisting of jewelry, furniture or clothing not to exceed 1/10 of disposable portion

Propter Nuptias Express acceptance

Necessary

Not required As to minors

Can’t be made by minors May be made by minors (FC 78) As to future property Cannot include property

future May include future property (same rule as wills)

Limit as to donation of present property No limit to donation of If present property is present property provided donated and property legitimes are not impaired regime is ACP, limited to 1/5 Grounds for revocation Law on donations

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Causes for revocation of donation propter nuptias: (1) If the marriage is not celebrated or judicially declared void ab initio, except donations made in the marriage settlements (2) When the marriage takes place without the consent of the parents or guardian, as required by law; (3) When the marriage is annulled, and the donee acted in bad faith; (4) Upon legal separation, the donee being the guilty spouse; (5) If it is with a resolutory condition and the condition is complied with; (6) When the donee has committed an act of ingratitude as specified by the provisions of the Civil Code on donations in general. Donation between spouses GENERAL RULE: Every donation or grant of gratuitous advantage, direct or indirect, between the spouses during the marriage shall be void. The prohibition applies to persons living together as husband and wife without a valid marriage

Inter vivos of the donor

the donor, the donation being effective only after the death of donor. Acceptance during the donor’s lifetime is premature and ineffective because there can be no contract regarding future inheritance

Ownership is immediately transferred. Delivery of Ownership is transferred possession is allowed after death after death As to revocation Irrevocable – may be Revocable upon the revoked only for the exclusive will of the donor reasons provided in CC 760, 764, 765 As to reduction or suppression When it is excessive or When it is excessive or inofficious, being inofficious, it is reduced preferred, it is reduced first, or even suppressed only after the donations mortis causa had been reduced or exhausted

(3) Donation Mortis Causa (NCC 728) (a) Becomes effective upon the death of donor (b) Donor’s death ahead of the donee is a suspensive condition for the existence of the donation Characteristics: (a) Transferor retains ownership and control of the property while alive (b) Transfer is revocable at will before his death (c) Transfer will be VOID if the transferor should survive the transferee

Note: (a) NATURE of the act, whether it’s one of disposition or of execution, is CONTROLLING to determine whether the donation is mortis causa or inter vivos. (b) What is important is the TIME of TRANSFER of ownership even if transfer of property donated may be subject to a condition or a term. (c) Whether the donation is inter vivos or mortis causa depends on whether the donor intended to transfer ownership over the properties upon the execution of the deed. (Gestopa v. CA; Austria-Magat v. CA)

Inter Vivos v. Mortis Causa Mortis causa As to formalities Executed and accepted Must be in the form of a with formalities will, with all the prescribed by CC formalities for the validity of wills

As to cause or consideration (1) Simple - made out of pure liberality or because of the merits of the donee (2) Remuneratory - made for services already rendered to the donor (3) Onerous - imposes a BURDEN inferior in value to property donated (a) Improper - burden EQUAL in value to property donated

As to effectivity Effective during the Effective after the death lifetime of the donor of the donor As to acceptance Acceptance must be made during the lifetime

Mortis causa

As to transfer of ownership for right of disposition

EXCEPTION: Moderate gifts which the spouses may give each other on the occasion of any family rejoicing.

Inter vivos

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(b) Sub-modo or modal - imposes a prestation upon donee as to how property donated will be applied (c) Mixed donations – e.g. sale for price lower than value of property

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QUALIFICATIONS OF DONOR, DONEE

Who May Give Donations All persons who may contract and dispose of their property may make a donation (NCC 735) NOTE: (1) Donor’s capacity shall be determined as of the time of the making of the donation. (NCC 737) (2) Capacity to donate is required for donations inter vivos and NOT mortis causa (3) Donor’s capacity determined as of the time of the donation. Subsequent incapacity is immaterial.

As to effectivity or extinguishment (1) Pure – donation is without conditions or periods (2) Conditional – donation is subject to suspensive or resolutory conditions (3) With a term FORMALITIES REQUIRED

How made and accepted Movables (NCC 748) (1) The donation of a movable may be made orally or in writing. (2) Oral donation: requires the simultaneous delivery of the thing or of the document representing the right donated. (3) If the value of the movable donated exceeds P5000, the donation and the acceptance should be in writing, otherwise, donation is void

Who May Receive Donations (1) All who are not specially disqualified by law (NCC 738) (2) Minors and others who cannot enter into a contract: acceptance made through their parents or legal representatives (NCC 741) (3) Donations made to conceived and unborn children: accepted by those persons who would legally represent them if they were already born (NCC 737)

Immovables (NCC 749) (1) Must be in a public instrument specifying donated property and burdens assumed by the done (2) Acceptance must be either: (a) In the same instrument or (b) In another public instrument notified to the donor in authentic form and noted in both deeds (3) Exceptions: (a) Donations propter nuptias – need no express acceptance (b) Onerous donations – form governed by the rules of contracts

Who May Not Give or Receive Donations By reason of public policy (NCC 739) (1) Those made between persons guilty of adultery or concubinage at the time of donation (2) Those made between persons guilty of the same criminal offense if the donation is made in consideration thereof (3) Those made to a public officer, his spouse, descendants, and/or ascendants by reason of the office By reason of donee’s unworthiness [NCC 1032 and 1027 except (4)] NCC 1032: (1) Parents who have abandoned their children or induced their daughters to lead a corrupt or immoral life, or attempted against their virtue; (2) Any person who has been convicted of an attempt against the life of the testator, his or her spouse, descendants, or ascendants; (3) Any person who has accused the testator of a crime for which the law prescribes imprisonment for six years or more, if the accusation has been found groundless; (4) Any heir of full age who, having knowledge of the violent death of the testator, should fail to report it to an officer of the law within a month, unless the authorities have already taken action; this prohibition shall not apply to cases wherein, according to law, there is no obligation to make an accusation; (5) Any person convicted of adultery or concubinage with the spouse of the testator;

Perfection Acceptance (1) Donation is perfected upon the donor’s learning of the acceptance (2) Acceptance may be made during the lifetime of both donor and donee Who May Accept Donee: must accept personally or through an authorized person with special power for the purpose (NCC 745) Time Of Acceptance During lifetime of donor and donee

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(6) Any person who by fraud, violence, intimidation, or undue influence should cause the testator to make a will or to change one already made; (7) Any person who by the same means prevents another from making a will, or from revoking one already made, or who supplants, conceals, or alters the latter's will; (8) Any person who falsifies or forges a supposed will of the decedent.

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(b) Donation to husband and wife jointly with right of accretion UNLESS donor provides otherwise Special Provisions Reservation by donor of power to dispose (in whole or in part) or to encumber property donated (NCC 755) (1) The right to dispose of some things donated, or of some amount which shall be a charge thereon, may be reserved by the donor (2) But if he should die without having made use of this right, the property or amount reserved shall belong to the donee.

NCC 1027: (a) The priest who heard the confession of the testator during his last illness, or the minister of the gospel who extended spiritual aid to him during the same period (b) The relatives of such priest or minister of the gospel within the fourth degree, the church, order, chapter, community, organization, or institution to which such priest or minister may belong (c) A guardian with respect to testamentary dispositions given by a ward in his favor before the final accounts of the guardianship have been approved, even if the testator should die after the approval thereof; nevertheless, any provision made by the ward in favor of the guardian when the latter is his ascendant, descendant, brother, sister, or spouse, shall be valid (d) Any physician, surgeon, nurse, health officer or druggist who took care of the testator during his last illness (e) Individuals, associations and corporations not permitted by law to inherit

Donation of naked ownership to one donee and usufruct to another (NCC 756) (1) May be donated (2) Provided all the donees are living at the time of the donation Conventional reversion in favor of donor or other person (NCC 757) (1) In favor of donor, for any case and circumstance (2) In favor of other persons who must be living at the time of donation (3) If rule is violated, reversion is void but donation is not nullified Payment of donor’s debt (NCC 758) (1) If expressly stipulated - donee to pay only debts contracted before the donation unless specified otherwise. But in no case shall donee be responsible for debts exceeding value of property donated unless clearly intended (2) if there’s no stipulation - donee answerable only for donor’s debt only in case donation is in fraud of creditors

By reason of prejudice to creditors or heirs (voidable) EFFECTS OF DONATION/LIMITATIONS

In general (1) Donee may demand actual delivery of thing donated (2) Donee is SUBROGATED to rights of donor in the property donated (3) Donor NOT obliged to warrant things donated EXCEPT in onerous donations in which case donor is liable for eviction up to extent of burden (ART. 754) (4) Donor is liable for EVICTION or HIDDEN DEFECTS in case of BF on his part (ART. 754) (5) In donation propter nuptias, donor must RELEASE property donated from mortgages and other encumbrances UNLESS the contrary has been stipulated (6) Donations to several donees jointly – NO right of accretion EXCEPT: (a) Donor provides otherwise

Illegal or impossible conditions (NCC 1183) (1) Impossible conditions, those contrary to good customs or public policy and those prohibited by law shall annul the obligation which depends upon them. (2) If the obligation is divisible, that part thereof which is not affected by the impossible or unlawful condition shall be valid. (3) The condition not to do an impossible thing shall be considered as not having been agreed upon. Double donations Rule: Priority in time, priority in right (1) If movable – one who first took possession in good faith (2) If immovable – one who recorded in registry of property in good faith (a) no inscription, one who first took possession in good faith

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In fraud of creditors (NCC 759) (1) Donation is always presumed to be in fraud of creditors, when at the time thereof the donor did not reserve sufficient property to pay his debts prior to the donation (2) Donee shall be responsible therefor only when the donation has been made in fraud of creditors

Excessive/Inofficious Donations A donation in which a person gives or receives more than what he may give or receive by will (NCC 752) Donation inter vivos, made by a person having no children or descendants, legitimate or legitimated by subsequent marriage, or illegitimate, may be revoked or reduced by the happening of any of these events: (1) If the donor, after the donation, should have legitimate or legitimated or illegitimate children, even though they be posthumous; (2) If the child of the donor, whom the latter believed to be dead when he made the donation, should turn out to be living; (3) If the donor subsequently adopt a minor child

VOID DONATIONS (NCC 739-740, 1027)

(1) Those made between persons who were guilty of adultery or concubinage at the time of the donation; NOTE: The action for declaration of nullity may be brought by the spouse of the donor or donee; and the guilt of the donor and donee may be proved by preponderance of evidence in the same action (2) Those made between persons found guilty of the same criminal offense, in consideration thereof;

The donation shall be revoked or reduced insofar as it exceeds the portion that may be freely disposed of by will, taking into account the whole estate of the donor at the time of the birth, appearance or adoption of a child

(3) Those made to a public officer or his wife, descendants and ascendants, by reason of his office.

Inofficious Donations (1) Shall be reduced with regard to the excess; (2) But this reduction shall not prevent the donations from taking effect during the life of the donor, nor shall it bar the donee from appropriating the fruits (3) Only those who at the time of the donor's death have a right to the legitime and their heirs and successors in interest may ask for the reduction or inofficious donations (4) If, there being two or more donations, the disposable portion is not sufficient to cover all of them, those of the more recent date shall be suppressed or reduced with regard to the excess.

(4) Those made to persons incapacitated to succeed by will [Art 1027]

Scope of amount (NCC 750-752) (1) The donations may comprehend all the present property of the donor, or part thereof

Reduction (1) Inofficiousness A donation in which a person gives or receives more than what he may give or receive by will is inofficious (NCC 752) (2) Subsequent birth, reappearance of child or adoption of minor by donor

REVOCATION AND REDUCTION

Revocation

Reduction

Total, whether the Made insofar as the legitime is impaired or legitime is prejudiced not Benefits the donor

Provided he reserves, in full ownership or in usufruct, sufficient means for the support of himself, and of all relatives who, at the time of the acceptance of the donation, are by law entitled to be supported by the donor

Benefits the donor’s heirs (except when made on the ground of the appearance of a child)

Effects: (1) Donation is VALID if not exceeding the free part computed as of the birth, adoption or reappearance of the child (2) Donee must return the property or its value at the time of the donation (3) Fruits to be returned from the filing of the action

(2) Donations cannot comprehend future property. Future property is understood anything which the donor cannot dispose of at the time of the donation

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(4) Mortgages by the donee are valid but may be discharged subject to reimbursement from the donee

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Effect as to fruits (NCC 768) When the donation is revoked for any of the causes stated in NCC 760, or by reason of ingratitude, or when it is reduced because it is inofficious, donee shall not return the fruits except from the filing of the complaint (1) If the revocation is based upon noncompliance with any of the conditions imposed in the donation, the donee shall return not only the property but also the fruits thereof which he may have received after having failed to fulfill the condition

Extent of revocation – only to the extent of the presumptive legitime of the child Prescription – 4yrs Revocation Ingratitude In the following cases: (1) If the donee should commit some offense against the person, the honor or the property of the donor, or of his wife or children under his parental authority; (2) If the donee imputes to the donor any criminal offense, or any act involving moral turpitude, even though he should prove it, unless the crime or the act has been committed against the donee himself, his wife or children under his authority; (3) If he unduly refuses him support when the donee is legally or morally bound to give support to the donor. Applies to all donations EXCEPT: (1) Mortis causa (2) Propter nuptias (3) Onerous Founded on moral duty – one who received a donation must be grateful to his benefactor Conviction NOT necessary Time to file action for revocation – within 1yr from knowledge of the offense Who may file Donor must bring action himself; not transmissible to his heirs Effect of revocation on alienations and encumbrances (NCC 766) (1) Alienations and mortgages effected before the notation of the complaint for revocation in the Registry of Property shall subsist (2) Later ones shall be void

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What may be donated All present property of the donor or part thereof

Limitation: (1) He reserves in full ownership or in usufruct, sufficient means for his support and for all relatives who are at the time of the acceptance of the donation are, by law, entitled to be supported Effect of non-reservation: reduction of the donation (2) He reserves sufficient property at the time of the donation for the full settlement of his debts Effect of non-reservation: considered to be a donation in fraud of creditors, and donee may be liable for damages

What may not be donated (1) Future property; those which the donor cannot dispose of at the time of the donation (Article 751) (2) More than what he may give or receive by will (Article 752) If exceeds: inofficious Donations made to several persons jointly No accretion – one donee does not get the share of Exception: those given to husband and wife, except the other donees who did not accept (Article 753) when the donor otherwise provides Donor Who are allowed: All persons who may contract (of legal age) and dispose of their property (Article 735)

Who are not allowed: (1) Guardians and trustees with respect to the property entrusted to them (Article 736) Donor’s capacity is determined at the time of the (2) Made between person who are guilty of adultery making of donation (Article 737) or concubinage (Article 739) Made between persons found guilty of the same criminal offense, in consideration thereof (Article 739) Donee Who are allowed to accept donations: Those who are not specifically disqualified by law (Article 738)

Who are not allowed: (1) Made between person who are guilty of adultery or concubinage (Article 739) Those who are allowed, with qualifications: (2) Made between persons found guilty of the same (1) Minors and others who are incapacitated (see criminal offense, in consideration thereof (Article Article 38), provided that their acceptance is done 739) through their parents or legal representatives (3) Made to a public officer or his wife, descendant (Article 741) and ascendants, by reason of his office (Article (2) Conceived and unborn children, provided that the 739) donation is accepted by those who would legally (4) Those who cannot succeed by will (Article 740) represent them if they were already born Those made to incapacitated persons, although simulated under the guise of another contract (Article 743) Acceptance of the donation Who may accept (Article 745): (1) Donee personally

When to accept: during the lifetime of the donor or donee (Article 746)

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(2) Authorized person with a special power for the purpose or with a general sufficient power What the donee acquires with the thing He shall be subrogated to all the rights and actions that would pertain to the donor in case of eviction (Article 754) Obligation of the donor No obligation to warrant (Article 754)

Exception: when the donation is onerous Obligation of the donee

If the donation so states, the donee may be obliged to Exception: when contrary intention appears pay the debts previously contracted by the donor and in no case shall he be responsible for the debts exceeding the value of the thing donated (Article 758) What may be reserved by the donor Right to dispose of some of the things donated, or of If the donor dies without exercising this right some amount which shall be a charge thereon Reversion The property donated may be restored or returned to (1) Donor or his estate; or (2) Another person

Limitation to (2): the third person would be living at the time of the donation

Revocation/Reduction Time of Action

Transmissibility

Effect

Liability (Fruits)

Birth, appearance, adoption Within 4 years from birth, Transmitted to children Property returned/ value Fruits returned from the legitimation and adoption and descendants upon (if sold)/ redeem filing of the complaint the death of donor mortgage with right to recover Non-compliance with condition Within 4 years from non- May be transmitted to compliance donor’s heirs and may be exercised against donee’s heirs

Property returned, Fruits received after alienations and having failed to fulfill mortgages void subject to condition returned rights of third persons in good faith

Ingratitude Within 1 year after Generally not transmitted Property returned, but Fruits received from the knowledge of the fact to heirs of donor/ donee alienations and filing of the complaint mortgages effected returned before the notation of the complaint for revocation in the registry of property subsist Failure to reserve sufficient means for support At any time, by the donor or relatives entitled to Not transmissible support

Reduced to the extent Donee entitled necessary to provide support

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Time of Action

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Transmissibility

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Effect

Liability (Fruits)

Inofficiousness for being in excess of what the donor can give by will Within 5 years from the Transmitted to donor’s Donation takes effect on Donee entitled death of the donor heirs the lifetime of donor. Reduction only upon his death with regard to the excess Fraud against creditors Rescission within 4 years Transmitted to creditor’s Returned for the benefit Fruits returned/ if from the perfection of heirs or successors-in- of the creditor who impossible, indemnify donation/ knowledge of interest brought the action creditor for damages the donation

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TRADITION

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where the delivery is effected solely by virtue of an express provision of law

CONCEPT

It is a derivative mode of acquiring ownership and other real rights by virtue of which, there being intention and capacity on the part of the grantor and grantee and the pre-existence of said rights in the estate of the grantor, they are transmitted to the grantee through a just title.

Prescription DEFINITION By prescription, one acquires ownership and other real rights through the lapse of time in the manner and under the conditions laid down by law.

REQUISITES

(1) Pre-existence in the estate of the grantor of the right to be transmitted (2) Just cause or title for the transmission (3) Intention on the part of the grantor to grant and on the part of the grantees to acquire (4) Capacity to transmit and to acquire (5) An act which gives it outward form, physically, symbolically, or legally

In the same way, rights and conditions are lost by prescription. It is a means of acquiring ownership and other real rights or losing rights or actions to enforce such rights through the lapse of time

PURPOSE

(1) Ownership is transferred, among other means, by tradition. (2) The delivery of a thing constitutes a necessary and indispensable requisite for the purpose of acquiring the ownership of the same by virtue of a contract

RATIONALE It is purely statutory in origin. It is founded on grounds of public policy which requires for the peace of society, that juridical relations susceptible of doubt and which may give rise to disputes, be fixed and established after the lapse of a determinate time so that ownership and other rights may be certain for those who have claim in them

KINDS

(1) Real Tradition: physical delivery (2) Constructive Tradition: when the delivery of the thing is not real or material but consists merely in certain facts indicative of the same (a) Symbolical Tradition: done through the delivery of signs or things which represent that which is being transmitted (e.g. keys or title itself) (b) Tradition by public instrument: consists in the substitution of real delivery of possession by a public writing with the delivery of a document which evidences the transaction (c) Tradicio longa manu: made by the grantor pointing out to the grantee the thing to be delivered (d) Tradicio brevi manu: takes place when the grantee is already in possession of the thing (e.g. when the lessee buys the thing leased to him) (e) Tradicion constitutum possessorium: similar to brevi manu but in the opposite sense – when the owner alienates a thing but remains in possession in another concept as lesee or depositary (3) Quasi tradition: delivery of incorporeal things or rights by the use by the grantee of his rights with the grantor’s consent (4) Tradicion by operation of law: delivery which is not included in the foregoing modes of delivery and

KINDS OF PRESCRIPTION (1) Acquisitive prescription (2) Extinctive prescription ACQUISITIVE PRESCRIPTION

(1) The acquisition of ownership and other real rights

through possession of a thing in the manner and condition provided by law (2) May be ordinary or extraordinary (a) Ordinary: requires possession of things in good faith and with just title for the time fixed by law. (b) Extraordinary: acquisition of ownership and other real rights without need of title or of good faith or any other condition Prescription where possession in good faith converted into possession in bad faith: Ordinary (1) Movables- 4 years (2) Immovables- 10 years Extraordinary: (1) Movables- 8 years (2) Immovables- 30 years Note: Since the period of extraordinary prescription for movables is two times longer than ordinary

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prescription (8:4) than ordinary prescription for movables and three times longer (30:10) than that for immovables, the period of possession in good faith should be computed twice or thrice, as the case may be, when tacked to the possession in bad faith.

NO PRESCRIPTION APPLICABLE BY OFFENDER

Movables possessed through a crime can never be acquired through prescription by the offender REGISTERED LANDS - PD 1529 (AMENDING AND CODIFYING THE LAWS RELATIVE TO REGISTRATION OF PROPERTY AND FOR OTHER PURPOSES)

As a mode of acquisition, prescription requires existence of following: (1) Capacity of the claimant to acquire by prescription; (2) A thing capable of acquisition by prescription; (3) Adverse possession of the thing under certain conditions; and (4) Lapse of time provided by law (5) Good faith of the possessor (6) Proof of just title

No title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession RIGHTS NOT EXTINGUISHED BY PRESCRIPTION (NCC 1143)

(1) To demand a right of way, regulated in NCC 649 (2) To bring an action to abate a public or private nuisance

Note: (1) For extraordinary prescription, only first 4 are required (2) Possession has to be in the concept of an owner, public, peaceful, and uninterrupted (UPPO)

ACTION TO QUIET TITLE IF PLAINTIFF IS IN POSSESSION

(1) When plaintiff is in possession of the property:

the action to quiet title does not prescribe

(2) The reason is that the owner of the property or

right may wait until his possession is disturbed or his title is assailed before taking steps to vindicate his right

EXTINCTIVE PRESCRIPTION

The loss or extinguishment of property rights or actions through the possession by another of a thing for the period provided by law or through failure to bring the necessary action to enforce one’s right within the period fixed by law Acquisitive Prescription

Extinctive Prescription

Requires positive action of the possessor (a claimant) who is not the Owner

Requires inaction of the owner out of possession or neglect of one with a right to bring his action

Applicable to ownership and other real rights

Applicable to all kinds of rights, whether real or personal

VOID CONTRACTS

(1) The action or defense for the declaration of the inexistence of a contract does not prescribe (NCC 1410) (2) The title is susceptible to direct as well as to collateral attack (Ferrer v. Bautista, 1994) ACTION TO DEMAND PARTITION

No prescription shall run in favor of a co-owner or coheir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership (NCC 494) PROPERTY OF PUBLIC DOMINION

Prescription, both acquisitive and extinctive, does not run against the State in the exercise of its sovereign function to protect its interest EXCEPT with respect to its patrimonial property which may be the object of prescription (NCC 1113)

Vests the property and Vests the property and raise a new title in the raise a new title in the occupant occupant Results in the acquisition of ownership or other real rights in a person as well as the loss of said ownership or real rights in another

Merely results in the loss of a real or personal right, or bars the cause of action to enforce said right

Can be proven under the general issue without its being affirmatively pleaded

Should be affirmatively pleaded and proved to bar the action or claim of the adverse party

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PRESCRIPTION DISTINGUISHED FROM LACHES Prescription

Laches

Concerned with the fact of Concerned with the effect delay of delay A question or a matter of Principally a question of time inequity of permitting a claim to be enforced, this inequity being founded on some subsequent change in the condition or the

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Prescription

(3) Actions that Prescribe in 6 Years (NCC 1145) (a) Upon an oral contract (b) Upon a quasi-contract

Laches relation of the parties

Statutory

NOT statutory

Applies at law

Applies at equity

(4) Actions that Prescribe in 4 Years (NCC 1145) (a) Upon an injury to the rights of the plaintiff (b) Upon a quasi-delict BUT when the action arises from any act of any public officer involving the exercise of powers arising from Martial Law including the arrest, detention and/or trial of the plaintiff, the same must be brought within 1 year.

Cannot be availed of Being a defense of equity, unless it is especially need not be specifically pleaded as an affirmative pleaded allegation Based on a fixed time

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NOT based on a fixed time

(5) Actions that Prescribe in One Year or Less (NCC 1147) (a) For forcible entry or unlawful detainer (b) For defamation

PRESCRIPTION OR LIMITATION OF ACTIONS TO RECOVER MOVABLES

(1) Prescribe 8 years from the time the possession

thereof is lost (NCC 1140)

(6) Other Actions that Prescribe in 1 Year under the Civil Code (a) To recover possession de facto (NCC 554 (4)] (b) To revoke a donation on the ground of ingratitude (NCC 769) (c) To rescind or recover damages if immovable is sold with non-apparent burden or servitude [NCC 1560 (3,4)] (d) To enforce warranty of solvency in assignment credits (NCC 629)

(2) However, the action shall not prosper if it is

brought after 4 years when the possessor has already acquired title by ordinary acquisitive prescription (NCC 1132) (3) If the possessor acquired the movable in good faith at a public sale, the owner cannot obtain its return without reimbursing the price paid TO RECOVER IMMOVABLES

(1) Real actions prescribe after 30 years (NCC 1141) (2) UNLESS the possessor has acquired ownership of

(7) Where Periods of Other Actions Not Fixed in the Civil Code and in Other Laws All other actions whose periods are not fixed in the Civil Code or in other laws must be brought within 5 years from the time the right of action accrues (NCC 1149)

the immovable by ordinary acquisitive prescription through possession of 10 years (NCC 1134) (3) Action for reconveyance (a) Based on fraud: prescribes 4 years from the discovery of fraud (b) Based on implied or constructive trust: 10 years from the alleged fraudulent registration or date of issuance of certificate of title over the property

(8) Interruption (NCC 1155) The prescription of actions is interrupted when: (a) They are filed before the court (b) When there is a written extrajudicial demand by the creditors (c) When there is any written acknowledgment of the debt by the debtor

OTHER ACTIONS

(1) Action to foreclose mortgage: prescribes after 10 years from the time the obligation secured by the mortgage becomes due and demandable (2) Actions that Prescribe in 10 Years (NCC 1144) (a) Upon a written contract (b) Upon an obligation created by law (c) Upon a judgment

Civil actions are deemed commenced from the date of the filing and docketing of the complaint with the Clerk of Court [Cabrera v. Riano (1963)] A written extrajudicial demand wipes out the period that has already elapsed and starts anew the prescriptive period [The Overseas Bank of Manila v. Geraldez, (1979)]

The computation of the period of prescription of any cause or right of action, which is the same as saying prescription of the action, should start from the date the cause of action accrues or from the day the right of the plaintiff is violated. (Nabus v. CA, 1991)

Not all acts of acknowledgement of a debt interrupt prescription. To produce such effect, the acknowledgment must be “written”, so that the payment, if not coupled with the communication

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signed by the payor would interrupt the running of the period of prescription [PNB v. Osete (1968)]

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OBLIGATIONS

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OBLIGATIONS

Definition

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FROM THE AFFIRMATIVENESS OR NEGATIVENESS OF THE OBLIGATION: (1) Positive/affirmative - obligation to give or to do (2) Negative – obligation not to do or not to give

ARTICLE 1156

Art. 1156. An obligation is a juridical necessity to give, to do or not to do.

FROM THE VIEWPOINT OF PERSONS OBLIGED: (1) Unilateral – only one of the parties is bound (2) Bilateral – both parties are bound (a) Reciprocal – performance by one is dependent on the other (b) Non-reciprocal – performance by one is independent of the other [Paras, 2008]

Elements of an Obligation ELEMENTS OF AN OBLIGATION [De Leon, 2003] (1) ACTIVE SUBJECT (Obligee/Creditor): The person who has the right or power to demand the prestation. (2) PASSIVE SUBJECT (Obligor/Debtor): The person bound to perform the prestation. (3) PRESTATION (Object): The conduct required to be observed by the debtor/obligor (to give, to do, or not to do). (4) VINCULUM JURIS (Juridical or Legal Tie; Efficient Cause): That which binds or connects the parties to the obligation.

Sources of Obligations, Arts. 1156-1157 SINGLE ACT OR OMISSION CAN GIVE RISE TO DIFFERENT CAUSES OF ACTION Barredo vs Garcia (1942): “…[A] concurrence of scope in regard to negligent acts does not destroy the distinction between the civil liability arising from a crime and the responsibility for cuasi-delitos or culpa extracontractual. The same negligent act causing damages may produce civil liability arising from a crime... or create an action for cuasi-delito or culpa extra-contractual.”

Different Kinds of Prestations (1) TO GIVE: real obligation; to deliver either (1) a specific or determinate thing, or (2) a generic or indeterminate thing. (2) TO DO: positive personal obligation; includes all kinds of work or service. (3) NOT TO DO: negative personal obligation; to abstain from doing an act; includes the obligation not to give.

NATURAL OBLIGATIONS ARTICLE 1423 Art. 1423. Obligations are civil or natural. Civil obligations give a right of action to compel their performance. Natural obligations, not being based on positive law but on equity and natural law, do not grant a right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by reason thereof. Some natural obligations are set forth in the following articles.

Classification of Obligations FROM THE VIEWPOINT OF “SANCTION”: (1) Civil obligation (or perfect obligation) – the sanction is judicial process (2) Natural obligation – the sanction is the law (3) Moral obligation (or imperfect obligation) – the sanction is conscience or morality

ARTICLE 1424

Art. 1424. When a right to sue upon a civil obligation has lapsed by extinctive prescription, the obligor who voluntarily performs the contract cannot recover what he has delivered or the value of the service he has rendered.

FROM THE VIEWPOINT OF SUBJECT MATTER: (1) Real obligation – obligation to give (2) Personal obligation – obligation to do or not to do

ARTICLE 1425

Art. 1425. When without the knowledge or against the will of the debtor, a third person pays a debt which the obligor is not legally bound to pay because

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the action thereon has prescribed, but the debtor later voluntarily reimburses the third person, the obligor cannot recover what he has paid.

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ARTICLE 2143

Art. 2143. The provisions for quasi-contracts in this Chapter do not exclude other quasi-contracts which may come within the purview of the preceding article.

ARTICLE 1426

Art. 1426. When a minor between eighteen and twenty-one years of age who has entered into a contract without the consent of the parent or guardian, after the annulment of the contract voluntarily returns the whole thing or price received, notwithstanding the fact the he has not been benefited thereby, there is no right to demand the thing or price thus returned.

Negotiorum Gestio ARTICLE 2144 Art. 2144. Whoever voluntarily takes charge of the agency or management of the business or property of another, without any power from the latter, is obliged to continue the same until the termination of the affair and its incidents, or to require the person concerned to substitute him, if the owner is in a position to do so. This juridical relation does not arise in either of these instances:

ARTICLE 1427

Art. 1427. When a minor between eighteen and twenty-one years of age, who has entered into a contract without the consent of the parent or guardian, voluntarily pays a sum of money or delivers a fungible thing in fulfillment of the obligation, there shall be no right to recover the same from the obligee who has spent or consumed it in good faith.

(1)When the property or business is not neglected or abandoned; (2) If in fact the manager has been tacitly authorized by the owner. In the first case, the provisions of Articles 1317, 1403, No. 1, and 1404 regarding unauthorized contracts shall govern.

ARTICLE 1428

Art. 1428. When, after an action to enforce a civil obligation has failed the defendant voluntarily performs the obligation, he cannot demand the return of what he has delivered or the payment of the value of the service he has rendered.

In the second case, the rules on agency in Title X of this Book shall be applicable. ARTICLE 2145

Art. 2145. The officious manager shall perform his duties with all the diligence of a good father of a family, and pay the damages which through his fault or negligence may be suffered by the owner of the property or business under management.

ARTICLE 1429

Art. 1429. When a testate or intestate heir voluntarily pays a debt of the decedent exceeding the value of the property which he received by will or by the law of intestacy from the estate of the deceased, the payment is valid and cannot be rescinded by the payer.

The courts may, however, increase or moderate the indemnity according to the circumstances of each case. ARTICLE 2146

ARTICLE 1430

Art. 2146. If the officious manager delegates to another person all or some of his duties, he shall be liable for the acts of the delegate, without prejudice to the direct obligation of the latter toward the owner of the business. The responsibility of two or more officious managers shall be solidary, unless the management was assumed to save the thing or business from imminent danger.

Art. 1430. When a will is declared void because it has not been executed in accordance with the formalities required by law, but one of the intestate heirs, after the settlement of the debts of the deceased, pays a legacy in compliance with a clause in the defective will, the payment is effective and irrevocable. EXTRA-CONTRACTUAL OBLIGATIONS QUASI-CONTRACTS ARTICLE 2142 Art. 2142. Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasicontract to the end that no one shall be unjustly enriched or benefited at the expense of another.

ARTICLE 2147

Art. 2147. The officious manager shall be liable for any fortuitous event:

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(1) If he undertakes risky operations which the owner was not accustomed to embark upon; (2) If he has preferred his own interest to that of the owner; (3) If he fails to return the property or business after demand by the owner; (4) If he assumed the management in bad faith.

owner, and there shall be no right of action between the owner and third persons. These provisions shall not apply: (1) If the owner has expressly or tacitly ratified the management, or (2) When the contract refers to things pertaining to the owner of the business.

ARTICLE 2148

ARTICLE 2153

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.

Art. 2153. The management is extinguished: (1) When the owner repudiates it or puts an end thereto; (2) When the officious manager withdraws from the management, subject to the provisions of Article 2144; (3) By the death, civil interdiction, insanity or insolvency of the owner or the officious manager. Solutio Indebiti ARTICLE 2154 Art. 2154. If something is received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it arises.

ARTICLE 2149

Art. 2149. The ratification of the management by the owner of the business produces the effects of an express agency, even if the business may not have been successful.

ARTICLE 2155 ARTICLE 2150

Art. 2155. Payment by reason of a mistake in the construction or application of a doubtful or difficult question of law may come within the scope of the preceding article.

Art. 2150. Although the officious management may not have been expressly ratified, the owner of the property or business who enjoys the advantages of the same shall be liable for obligations incurred in his interest, and shall reimburse the officious manager for the necessary and useful expenses and for the damages which the latter may have suffered in the performance of his duties.

ARTICLE 2156

Art. 2156. If the payer was in doubt whether the debt was due, he may recover if he proves that it was not due.

The same obligation shall be incumbent upon him when the management had for its purpose the prevention of an imminent and manifest loss, although no benefit may have been derived.

ARTICLE 2157

Art. 2157. The responsibility of two or more payees, when there has been payment of what is not due, is solidary.

ARTICLE 2151

ARTICLE 2158

Art. 2151. Even though the owner did not derive any benefit and there has been no imminent and manifest danger to the property or business, the owner is liable as under the first paragraph of the preceding article, provided: (1) The officious manager has acted in good faith, and (2) The property or business is intact, ready to be returned to the owner.

Art. 2158. When the property delivered or money paid belongs to a third person, the payee shall comply with the provisions of Article 1984. ARTICLE 2159

ARTICLE 2152

Art. 2159. Whoever in bad faith accepts an undue payment, shall pay legal interest if a sum of money is involved, or shall be liable for fruits received or which should have been received if the thing produces fruits.

Art. 2152. The officious manager is personally liable for contracts which he has entered into with third persons, even though he acted in the name of the

He shall furthermore be answerable for any loss or impairment of the thing from any cause, and for

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damages to the person who delivered the thing, until it is recovered.

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Art. 2166. When the person obliged to support an orphan, or an insane or other indigent person unjustly refuses to give support to the latter, any third person may furnish support to the needy individual, with right of reimbursement from the person obliged to give support. The provisions of this article apply when the father or mother of a child under eighteen years of age unjustly refuses to support him.

ARTICLE 2160

Art. 2160. He who in good faith accepts an undue payment of a thing certain and determinate shall only be responsible for the impairment or loss of the same or its accessories and accessions insofar as he has thereby been benefited. If he has alienated it, he shall return the price or assign the action to collect the sum.

ARTICLE 2167

Art. 2167. When through an accident or other cause a person is injured or becomes seriously ill, and he is treated or helped while he is not in a condition to give consent to a contract, he shall be liable to pay for the services of the physician or other person aiding him, unless the service has been rendered out of pure generosity.

ARTICLE 2161

Art. 2161. As regards the reimbursement for improvements and expenses incurred by him who unduly received the thing, the provisions of Title V of Book II shall govern. ARTICLE 2162

ARTICLE 2168

Art. 2162. He shall be exempt from the obligation to restore who, believing in good faith that the payment was being made of a legitimate and subsisting claim, destroyed the document, or allowed the action to prescribe, or gave up the pledges, or cancelled the guaranties for his right. He who paid unduly may proceed only against the true debtor or the guarantors with regard to whom the action is still effective.

Art. 2168. When during a fire, flood, storm, or other calamity, property is saved from destruction by another person without the knowledge of the owner, the latter is bound to pay the former just compensation. ARTICLE 2169

Art. 2169. When the government, upon the failure of any person to comply with health or safety regulations concerning property, undertakes to do the necessary work, even over his objection, he shall be liable to pay the expenses.

ARTICLE 2163

Art. 2163. It is presumed that there was a mistake in the payment if something which had never been due or had already been paid was delivered; but he from whom the return is claimed may prove that the delivery was made out of liberality or for any other just cause.

ARTICLE 2170

Art. 2170. When by accident or other fortuitous event, movables separately pertaining to two or more persons are commingled or confused, the rules on co-ownership shall be applicable.

OTHER QUASI-CONTRACTS ARTICLE 2164

ARTICLE 2171

Art. 2164. When, without the knowledge of the person obliged to give support, it is given by a stranger, the latter shall have a right to claim the same from the former, unless it appears that he gave it out of piety and without intention of being repaid.

Art. 2171. The rights and obligations of the finder of lost personal property shall be governed by Articles 719 and 720. ARTICLE 2172

ARTICLE 2165

Art. 2172. The right of every possessor in good faith to reimbursement for necessary and useful expenses is governed by Article 546.

Art. 2165. When funeral expenses are borne by a third person, without the knowledge of those relatives who were obliged to give support to the deceased, said relatives shall reimburse the third person, should the latter claim reimbursement.

ARTICLE 2173

Art. 2173. When a third person, without the knowledge of the debtor, pays the debt, the rights of the former are governed by Articles 1236 and 1237.

ARTICLE 2166

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ARTICLE 2174

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Guardians are liable for damages caused by the minors or incapacitated persons who are under their authority and live in their company. The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions.

Art. 2174. When in a small community a nationality of the inhabitants of age decide upon a measure for protection against lawlessness, fire, flood, storm or other calamity, any one who objects to the plan and refuses to contribute to the expenses but is benefited by the project as executed shall be liable to pay his share of said expenses.

Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry.

ARTICLE 2175

Art. 2175. Any person who is constrained to pay the taxes of another shall be entitled to reimbursement from the latter.

The State is responsible in like manner when it acts through a special agent; but not when the damage has been caused by the official to whom the task done properly pertains, in which case what is provided in Article 2176 shall be applicable.

QUASI-DELICTS ARTICLE 2176

Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.

Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices, so long as they remain in their custody.

ARTICLE 2177

The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage.

Art. 2177. Responsibility for fault or negligence under the preceding article is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for the same act or omission of the defendant.

ARTICLE 2181

Art. 2181. Whoever pays for the damage caused by his dependents or employees may recover from the latter what he has paid or delivered in satisfaction of the claim.

ARTICLE 2178

Art. 2178. The provisions of Articles 1172 to 1174 are also applicable to a quasi-delict.

ARTICLE 2182

ARTICLE 2179

Art. 2182. If the minor or insane person causing damage has no parents or guardians, the minor or insane person shall be answerable with his own property in an action against him where a guardian ad litem shall be appointed.

Art. 2179. When the plaintiff's own negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if his negligence was only contributory, the immediate and proximate cause of the injury being the defendant's lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded.

ARTICLE 2183

Art. 2183. The possessor of an animal or whoever may make use of the same is responsible for the damage which it may cause, although it may escape or be lost. This responsibility shall cease only in case the damage should come from force majeure or from the fault of the person who has suffered damage.

ARTICLE 2180

Art. 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible.

ARTICLE 2184

The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by the minor children who live in their company.

Art. 2184. In motor vehicle mishaps, the owner is solidarily liable with his driver, if the former, who was in the vehicle, could have, by the use of the due diligence, prevented the misfortune. It is disputably PAGE 136

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presumed that a driver was negligent, if he had been found guilty or reckless driving or violating traffic regulations at least twice within the next preceding two months.

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(1) By the explosion of machinery which has not been taken care of with due diligence, and the inflammation of explosive substances which have not been kept in a safe and adequate place; (2) By excessive smoke, which may be harmful to persons or property; (3) By the falling of trees situated at or near highways or lanes, if not caused by force majeure; (4) By emanations from tubes, canals, sewers or deposits of infectious matter, constructed without precautions suitable to the place.

If the owner was not in the motor vehicle, the provisions of Article 2180 are applicable. ARTICLE 2185

Art. 2185. 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. ARTICLE 2186 Art. 2186. Every owner of a motor vehicle shall file with the proper government office a bond executed by a government-controlled corporation or office, to answer for damages to third persons. The amount of the bond and other terms shall be fixed by the competent public official.

ARTICLE 2192

Art. 2192. If damage referred to in the two preceding articles should be the result of any defect in the construction mentioned in Article 1723, the third person suffering damages may proceed only against the engineer or architect or contractor in accordance with said article, within the period therein fixed. ARTICLE 2193

Art. 2193. The head of a family that lives in a building or a part thereof, is responsible for damages caused by things thrown or falling from the same.

ARTICLE 2187

Art. 2187. Manufacturers and processors of foodstuffs, drinks, toilet articles and similar goods shall be liable for death or injuries caused by any noxious or harmful substances used, although no contractual relation exists between them and the consumers.

ARTICLE 2194

Art. 2194. The responsibility of two or more persons who are liable for quasi-delict is solidary.

ARTICLE 2188

Art. 2188. There is prima facie presumption of negligence on the part of the defendant if the death or injury results from his possession of dangerous weapons or substances, such as firearms and poison, except when the possession or use thereof is indispensable in his occupation or business.

Nature and Effect of Obligations OBLIGATION TO GIVE A DETERMINATE OR SPECIFIC THING AN INDETERMINATE OR GENERIC THING

ARTICLE 2189

Art. 2189. Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered by, any person by reason of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or supervision.

Specific Thing Particularly designated or physically segregated from all other of the same class; identified by individuality.

ARTICLE 2190

Art. 2190. The proprietor of a building or structure is responsible for the damages resulting from its total or partial collapse, if it should be due to the lack of necessary repairs.

Cannot be substituted.

ARTICLE 2191

Art. 2191. Proprietors shall also be responsible for damages caused:

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Generic Thing Object is designated only by its class/ genus/ species. Debtor can give anything of the same class as long as it is of the same kind. Can be substituted by any of the same class and same kind.

Limited Generic Thing When the generic objects are confined to a particular class.

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Duties of the Debtor Duties of the Debtor

(3) To pay for damages in case of breach

To Give Specific Thing (1) To preserve or take (1) To compel specific care of the thing due performance (2) To deliver the thing (2) To recover damages itself in case of breach of (3) To deliver the fruits of the obligation, the thing exclusive or in (4) To deliver the addition to specific accessions and performance accessories (3) Entitlement to fruits (5) To pay for damages in and interests from case of breach the time the obligation to deliver arises To Give Generic Thing (1) To deliver a thing of (1) To ask for the quality intended by performance of the the parties taking into obligation consideration the (2) To ask that the purpose of the obligation be obligation and other complied with by a circumstances third person at the (2) Creditor cannot expense of the demand a thing of debtor superior quality (3) To recover damages neither can the debtor in case of breach of deliver a thing of obligation inferior quality (3) To be liable for damages in case of breach

what should not have been done, because of : (a) the very nature of the act itself; (b) rights acquired by third persons who acted in good faith; (c) when the effects of the acts prohibited are definite in character and will not cease even if the thing prohibited be undone.

BREACH OF OBLIGATIONS COMPLETE FAILURE TO PERFORM

OBLIGATION TO DO OR NOT TO DO Duties of the Debtor

Rights of the creditor

Rights of the creditor

Substantial Breach

Slight or Casual Breach

(1) Total breach (2) Amounts to nonperformance; basis for rescission (resolution) under Art. 1191 and for payment of damages.

(1) Partial breach (2) Obligation is partially performed, or substantial performance in good faith (3) Gives rise to liability for damages only

DEFAULT, DELAY, OR MORA

DEFAULT or DELAY (MORA): failure to perform an obligation on time which constitutes breach of the obligation [De Leon, 2003].

Rights of the creditor

To do (1) To do it (1) To compel (2) To shoulder the performance cost of having (2) To recover damages someone else do it where personal (3) To undo what has qualifications of the been poorly done debtor are involved (4) To pay for damages in case of breach Not to do (1) Not to do what should (1) To ask to undo what not be done should not be done (2) To shoulder the cost (2) To recover damages, of undoing what where it would be should not have been physically or legally done impossible to undo

Rules on Mora, Delay or Default Unilateral Obligations

Reciprocal Obligations

General Rule: “No demand, no delay.”

General Rule: Delay occurs from the moment one party fulfills his undertaking, while the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him.

The mere expiration of the period fixed by the parties is not enough in order that the debtor may incur in delay. Those obliged to deliver or to do something incur

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No delay if neither party

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Unilateral Obligations

Reciprocal Obligations

in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation [Art. 1169 par. 1].

performs his undertaking [Art. 1169, par. 2].

Mora Solvendi the debtor within the period agreed upon. (3) Demand, judicial or extra-judicial, by the creditor.

Mora Accipiendi prestation. (3) Creditor refuses the performance without just cause.

Effects (1) The debtor is liable for (1) The responsibility of damages. the debtor is reduced (2) The debtor is liable to fraud and gross even if the loss is due negligence. to fortuitous events. (2) The debtor is (3) For determinate exempted from risk of objects, the debtor loss of the thing shall bear the risk of which is borne by the loss. creditor. (3) The expenses incurred by the debtor for the preservation of the thing after the mora shall be chargeable to the creditor. (4) If the obligation bears interest, the debtor does not have to pay from the time of delay. (5) The creditor is liable for damages. (6) The debtor may relieve himself of the obligation by consigning the thing.

Exceptions: ARTICLE 1169 Art. 1169. par 2-3: xxx However, the demand by the creditor shall not be necessary in order that delay may exist: (1) When the obligation or the law expressly so declares; or (2) When from the nature and the circumstances of the obligation it appears that the designation of the time when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract; (time is of the essence) or (3) When demand would be useless, as when the obligor has rendered it beyond his power to perform. In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. From the moment one of the parties fulfills his obligation, delay by the other begins. (1) Mora solvendi- Delay on the part of the debtor to fulfill his obligation either to give (ex re) or to do (ex persona) No Mora Solvendi in: (a) Negative obligations because delay is impossible [De Leon, 2003] (b) Natural obligations [Tolentino, 1987] (2) Mora accipiendi- Delay on the part of the creditor to accept the performance of the obligation. (3) Compensatio morae- Delay of both parties in reciprocal obligations. Effect: As if there is no default. Mora Solvendi

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FRAUD (DOLO) IN THE PERFORMANCE OF OBLIGATION

Fraud (dolo): deliberate or intentional evasion of the normal fulfillment of an obligation [De Leon, 2003]. Waiver of future fraud is void. [Art. 1171] Past Fraud: Can be subject of a valid waiver by the aggrieved party. [De Leon, 2003] Woodhouse vs. Halili (1953): “...[I]n order that fraud may vitiate consent, it must be the dolo causante and not merely the dolo incidente, inducement to the making of the contract. The false representation was used by plaintiff to get from defendant a bigger share of net profits. This is just incidental to the matter in agreement. Because despite plaintiff’s deceit, respondent would have still entered into the contract.”

Mora Accipiendi

Requisites (1) Obligation must be (1) Debtor offers liquidated, due and performance. demandable. (2) Offer must be in (2) Non-performance by compliance with the

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NEGLIGENCE OBLIGATION

OBLIGATIONS

(CULPA) IN THE PERFORMANCE OF

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ARTICLE 2000

Art. 2000. The responsibility referred to in the two preceding articles shall include the loss of, or injury to the personal property of the guests caused by the servants or employees of the keepers of hotels or inns as well as strangers; but not that which may proceed from any force majeure. The fact that travelers are constrained to rely on the vigilance of the keeper of the hotels or inns shall be considered in determining the degree of care required of him.

Negligence or fault (culpa): Omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the person, of the time and of the place. [Art. 1173] DILIGENCE NORMALLY REQUIRED IS ORDINARY DILIGENCE OR DILIGENCE OF A GOOD FATHER OF A FAMILY; EXCEPTIONS IN ARTS. 1998-2002.

Diligence Required [De Leon, 2003] (a) By stipulation: that agreed upon by the parties. (b) By law: in the absence of stipulation, that required by law in the particular case. (c) Diligence of a good father of a family: if both the contract and law are silent. (d) Future Negligence: may be waived except in cases where the nature of the obligation or the public requires another standard of care (i.e. extraordinary diligence as for a common carrier)

ARTICLE 2001

Art. 2001. The act of a thief or robber, who has entered the hotel is not deemed force majeure, unless it is done with the use of arms or through an irresistible force. ARTICLE 2002

Art. 2002. The hotel-keeper is not liable for compensation if the loss is due to the acts of the guest, his family, servants or visitors, or if the loss arises from the character of the things brought into the hotel.

Exceptions: ARTICLE 1733 Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case.

Mandarin Villa Inc. v. CA (1996): Test of negligence: Did the defendant in doing the alleged negligent act use the reasonable care and caution, which an ordinary and prudent person would have used in the same situation? If not, then he is guilty of negligence.

Such extraordinary diligence in the vigilance over the goods is further expressed in Articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in Articles 1755 and 1756.

EXTENT OF DAMAGES TO BE AWARDED

ARTICLE 1998

Art. 1998. The deposit of effects made by the travelers in hotels or inns shall also be regarded as necessary. The keepers of hotels or inns shall be responsible for them as depositaries, provided that notice was given to them, or to their employees, of the effects brought by the guests and that, on the part of the latter, they take the precautions which said hotel-keepers or their substitutes advised relative to the care and vigilance of their effects.

Bad Faith Debtor is liable for all damages, which can be reasonably attributed to the non-performance of the obligation. Any waiver or renunciation made in anticipation of such liability is null and void.

Good Faith Debtor is liable only for the natural and probable consequences of the breach of obligation and fortuitous events.

Culpa Contractual

Culpa Aquiliana

Negligence is merely incidental in the performance of an obligation. There is always a preexisting contractual relation. The source of obligation of defendant to pay damages is the breach or non-fulfillment of the

ARTICLE 1999

Art. 1999. The hotel-keeper is liable for the vehicles, animals and articles which have been introduced or placed in the annexes of the hotel.

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Negligence is substantive and independent. There may or may not be a pre-existing contractual obligation. The source of obligation is the defendant’s negligence itself.

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(e) debtor has promised to deliver the same thing to two or more persons who do not have the same interest [Art. 1165 par. 3] (f) the thing is lost due to the obligor’s fraud, negligence, delay or contravention of the tenor of the obligation [Art. 1170] (g) the obligation to deliver a specific thing arises from a crime [Art. 1268] (h) the object is a generic thing, i.e. the genus never perishes

Culpa Aquiliana

contract. Proof of the existence of The negligence of the the contract and of its defendant must be breach or non-fulfillment proved. is sufficient prima facie to warrant recovery. Proof of diligence in the Proof of diligence in the selection and supervision selection and of the employees is NOT supervision of the available as defense. employee is a defense.

Requisites for Exemption (a) The event must be independent of the debtor’s will (fraud or negligence). (b) The event must be unforeseeable or inevitable. (c) The event renders it impossible for debtor to fulfill his obligation in a normal manner. (d) The debtor must be free from any participation in the aggravation of the injury to the creditor [Tolentino, 1987; De Leon, 2003]. (e) It must be the only and sole cause, not merely a proximate cause.

CONTRAVENTION OF THE TENOR OF OBLIGATION

Contravention of the tenor of obligation: Violation of the terms and conditions stipulated in the obligation, which must not be due to a fortuitous event or force majeure [De Leon, 2003]. “In any manner contravenes the tenor” means any illicit act, which impairs the strict and faithful fulfillment of the obligation, or every kind of defective performance [Tolentino, 1987]. LEGAL EXCUSE FOR BREACH FORTUITOUS EVENT; REQUISITES

OF

OBLIGATION

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-

REMEDIES AVAILABLE TO CREDITOR IN CASE OF BREACH

Fortuitous event (force majeure): Any event which could not be foreseen, or which though foreseen is inevitable [Art. 1174].

SPECIFIC PERFORMANCE

Performance by the debtor of the prestation itself. SUBSTITUTED PERFORMANCE BY A THIRD PERSON OF ANOTHER’S OBLIGATION TO DELIVER A GENERIC THING OR OF AN OBLIGATION TO DO, UNLESS IT IS PURELY PERSONAL ACT.

A happening independent of the will of the debtor and which makes the normal fulfillment of the obligation impossible [De Leon, 2003].

Substituted performance: Someone else performs or something else is performed at the debtor’s expense.

(1) Act of God: An accident, due directly or exclusively to natural causes without human intervention, which by no amount of foresight, pains or care, reasonably to have been expected, could have been prevented. (2) Act of Man: Force majeure is a superior or irresistible force, which is essentially an act of man; includes unavoidable accidents, even if there has been an intervention of human element, provided that no fault or negligence can be imputed to the debtor.

RESCISSION (RESOLUTION IN RECIPROCAL OBLIGATIONS)

Right to rescind or cancel the contract. Rescission / Resolution Rescission [Art. 1380] [Art. 1191] Based on non-performance or non-fulfillment of obligation. Action is instituted only by the injured party.

Liability in case of Fortuitous Event No person shall be responsible for fortuitous events, UNLESS: (a) expressly specified by law [Arts. 552 (2), 1942, 2147, 2148, 2159] (b) liability specified by stipulation (c) the nature of the obligations requires assumption of risk [Art. 1174] (d) debtor is guilty of concurrent or contributory negligence

In some cases, court may grant a term. Nonperformance by the other party is important.

Based on lesion or fraud upon creditors. Action is instituted by either party or by a third person. Court cannot grant a period or term within which one must comply. Nonperformance by the other party is immaterial.

DAMAGES, IN ANY EVENT ARTICLE 1170

Art. 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay,

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and those who in any manner contravene the tenor thereof, are liable for damages. SUBSIDIARY REMEDIES OF CREDITORS [ART. 1177] General rule: Contracts are binding only between the parties thereto, their heirs, assignees, and the estate [Art. 1311]. Exceptions: Accion subrogatoria and accion pauliana

ACCION DIRECTA [ARTS. 1652, 1608, 1729, 1893] ARTICLE 1652

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.

ACCION SUBROGATORIA Right of creditor to exercise all of the rights and bring all of the actions which his debtor may have against third persons; novation by change of debtor [Art. 1291, par. 3]. Requisites: (1) Debtor to whom the right of action properly pertains must be indebted to the creditor (2) The debt is due and demandable (3) The creditor must be prejudiced by the failure of the debtor to collect his own debt from third persons, either through malice or negligence (4) The debtor’s assets are insufficient (debtor is insolvent) (5) The right of action is not purely personal to the debtor

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 payment were effected in virtue of the custom of the place. ARTICLE 1608

Art. 1608. The vendor may bring his action against every possessor whose right is derived from the vendee, even if in the second contract no mention should have been made of the right to repurchase, without prejudice to the provisions of the Mortgage Law and the Land Registration Law with respect to third persons. ARTICLE 1729

ACCION PAULIANA Rescission, which involves the right of the creditor to attack or impugn by means of a rescissory action any act of the debtor which is in fraud and to the prejudice of his rights as creditor.

Art. 1729. Those who put their labor upon or furnish materials for a piece of work undertaken by the contractor have an action against the owner up to the amount owing from the latter to the contractor at the time the claim is made. However, the following shall not prejudice the laborers, employees and furnishers of materials: 1. Payments made by the owner to the contractor before they are due 2. Renunciation by the contractor of any amount due him from the owner This article is subject to the provisions of special laws.

Rescinds the contract entered into in fraud of creditors. Requisites: (CASAL) (1) There is a credit in favor of plaintiff prior to alienation. (2) The debtor has performed a subsequent contract conveying a patrimonial benefit to third person(s). (3) The creditor has no other legal remedy to satisfy his claim. (4) The debtor’s acts are fraudulent to the prejudice of the creditor. (5) The third person who received the property is an accomplice in the fraud. Accion Subrogatoria Not necessary that creditor’s claim is prior to the acquisition of the right by the debtor No need for fraudulent intent No period for prescription

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ARTICLE 1893

Art. 1893. In the cases mentioned in Nos. 1 and 2 of the preceding article, the principal may furthermore bring an action against the substitute with respect to the obligations which the latter has contracted under the substitution.

Accion Pauliana Credit must exist before the fraudulent act

Siguan v. Lim (1999): “Petitioner cannot invoke the credit of a different creditor to justify the rescission of the subject deed of donation, because the only creditor who may benefit from the rescission is the creditor who brought the action; those who are strangers to the action cannot benefit from its effects.”

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POTESTIVE – CASUAL OR MIXED

Casual Condition: The fulfillment of the condition depends upon chance and/or upon the will of a third person [Art. 1182].

PURE, ARTS. 1179-1180 ARTICLE 1179 Art. 1179. Every obligation, whose performance does not depend upon a future or uncertain event, or upon a past event unknown to the parties, is demandable at once.

Mixed Condition: The fulfillment of the condition depends partly upon the will of a party to the obligation and partly upon chance and/or will of a third person.

Every obligation which contains a resolutory condition shall also be demandable, without prejudice to the effects of the happening of the event.

OBLIGATIONS SUBJECT TO POTESTATIVE SUSPENSIVE CONDITIONS ARE VOID [ART. 1182]. ARTICLE 1182

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 will of a third person, the obligation shall take effect in conformity with the provisions of this Code.

ARTICLE 1180

Art. 1180. When the debtor binds himself to pay when his means permit him to do so, the obligation shall be deemed to be one with a period, subject to the provisions of Article 1197.

Exclusively upon the Creditor’s Will

Pure Obligation Its effectivity or extinguishment does not depend upon the fulfillment or non-fulfillment of a condition or upon the expiration of a term or period and characterized by the quality of its being IMMEDIATELY DEMANDABLE.

Condition and obligation are valid.

CONDITIONAL, ART. 1181 ARTICLE 1180 Art. 1181. In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those already acquired, shall depend upon the happening of the event which constitutes the condition. Conditional Obligation Its effectivity is subject to the fulfillment or nonfulfillment of a condition, which is characterized to be a FUTURE and UNCERTAIN event. SUSPENSIVE CONDITION

Obligation shall only be effective upon the fulfillment of the condition [Art.1181]. What is acquired by the obligee upon the constitution of the obligation is mere hope or expectancy, but is protected by law. RESOLUTORY CONDITION

Exclusively upon the Debtor’s Will in case of a Suspensive Condition [Art. 1182] Condition and obligation are void because to allow such condition would be equivalent to sanctioning obligations which are illusory. It also constitutes a direct contravention of the principle of mutuality of contracts. There is nothing to demand until the debtor wishes to.

Exclusively upon the Debtor’s Will in case of a Resolutory Condition [Art. 1179, par. 2] Condition and obligation are valid because in such situation, the position of the debtor is exactly the same as the position of the creditor when the condition is suspensive. It does not render the obligation illusory.

Osmeña v. Rama (1909): Defendant executed an endorsement saying that she’ll pay her debt if the house in which she lives is sold. Such condition depended upon her exclusive will; thus, it is void.

Obligation becomes demandable immediately after its establishment or constitution. The rights are immediately vested to the creditor, but always subject to the threat or danger of extinction by the happening of the resolutory condition [Tolentino, 1987].

Hermosa v. Longara (1953):

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(3) The mere intention of the debtor to prevent, without actually preventing fulfillment is not sufficient. Constructive fulfillment will not hold when the debtor acts pursuant to a right. There is constructive fulfillment when: (a) Intent of the obligor is to prevent fulfillment; and (b) There is actual prevention of compliance.

The condition that payment should be made by Hermosa as soon as he receives funds from the sale of his property in Spain is a mixed condition. The condition implies that the obligor already decided to sell the house and all that was needed to make the obligation demandable is that the sale be consummated and the price thereof remitted to the islands. There were still other conditions that had to concur to effect the sale, mainly that of the presence of a buyer, ready, able and willing to purchase the property under the conditions set by the intestate.

Principle of Retroactivity in Suspensive Conditions Art.1187, par.1: Once the condition is fulfilled, its effects must logically retroact to the moment when the essential elements, which gave birth to the obligation have taken place. The condition which is imposed is only accidental, not an essential element of the obligation. (This is applied only to consensual contracts. No application to real contracts which can only be perfected by delivery.)

EFFECT OF THE HAPPENING OF SUSPENSIVE CONDITION (ART. 1187); RESOLUTORY CONDITION ARTICLE 1187 Art. 1187. The effects of a conditional obligation to give, once the condition has been fulfilled, shall retroact to the day of the constitution of the obligation. Nevertheless, when the obligation imposes reciprocal prestations upon the parties, the fruits and interests during the pendency of the condition shall be deemed to have been mutually compensated. If the obligation is unilateral, the debtor shall appropriate the fruits and interests received, unless from the nature and circumstances of the obligation it should be inferred that the intention of the person constituting the same was different.

To Give

To Do/Not To Do

If reciprocal, the fruits and interests shall be deemed to have been mutually compensated as a matter of justice and convenience [Art. 1187, par. 1].

In obligations to do or not to do, the court shall determine the retroactive effect of the condition that has been complied with [Art. 1187, par. 2]. The power of the court includes the determination of whether or not there will be any retroactive effect. This rule shall likewise apply in obligations with a resolutory condition [Art. 1190 par. 3].

If unilateral, the debtor shall appropriate the fruits and interests received, unless from the nature and circumstance it should be inferred that the intention of the persons constituting the same was different. Resolutory Condition

In obligations to do and not to do, the courts shall determine, in each case, the retroactive effect of the condition that has been complied with.

Suspensive Condition Before Fulfillment The demandability and acquisition or effectivity of the rights arising from the obligation is suspended. Anything paid by mistake during such time may be recovered.

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After Fulfillment The obligation arises or becomes effective. The obligor can be compelled to comply with what is incumbent upon him.

Before Fulfillment Preservation of creditor’s rights (Art. 1188, par. 1) also applies to obligations with a resolutory condition.

Doctrine of Constructive Fulfillment of Suspensive Conditions Art. 1186: The condition shall be deemed fulfilled when the obligor actually prevented the obligee from complying with the condition, and that such prevention must have been voluntary or willful in character. (1) Applicable to suspensive conditions but not to resolutory conditions. (2) The article can have no application to an external contingency which is lawfully within the control of the obligor. PAGE 144

After Fulfillment Whatever may have been paid or delivered by one or both of the parties upon the constitution of the obligation shall have to be returned upon the fulfillment of the condition. There is no return to the status quo. However, when the condition is not fulfilled, rights are consolidated and they become absolute in character.

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EFFECT OF LOSS OF SPECIFIC THING, OR DETERIORATION OR IMPROVEMENT OF SPECIFIC THING BEFORE FULFILLMENT OF SUSPENSIVE CONDITION [ART. 1189]; OR IN CASE OF A RESOLUTORY CONDITION IN AN OBLIGATION TO DO OR NOT TO DO [ART. 1190, PAR. 3]

the obligation OR bringing an action for specific performance, with damages in either case. Improvement mprovement at the Improvement by the debtor’s expense, the thing’s nature or by time debtor shall ONLY have shall inure to the benefit usufructuary rights. of the creditor.

ARTICLE 1189

Art. 1189. When the conditions have been imposed with the intention of suspending the efficacy of an obligation to give, the following rules shall be observed in case of the improvement, loss or deterioration of the thing during the pendency of the condition:

Loss, defined: “when [the thing] perishes, or goes out of commerce, or disappears in such a way that its existence is unknown or it cannot be recovered” [Art. 1189, no. 2].

(1) If the thing is lost without the fault of the debtor, the obligation shall be extinguished;

OBLIGATIONS WITH A PERIOD OR TERM ARTICLE 1193 Art. 1193. Obligations for whose fulfillment a day certain has been fixed, shall be demandable only when that day comes.

(2) If the thing is lost through the fault of the debtor, he shall be obliged to pay damages; it is understood that the thing is lost when it perishes, or goes out of commerce, or disappears in such a way that its existence is unknown or it cannot be recovered;

Obligations with a resolutory period take effect at once, but terminate upon arrival of the day certain.

(3) When the thing deteriorates without the fault of the debtor, the impairment is to be borne by the creditor;

A day certain is understood to be that which must necessarily come, although it may not be known when.

(4) If it deteriorates through the fault of the debtor, the creditor may choose between the rescission of the obligation and its fulfillment, with indemnity for damages in either case;

If the uncertainty consists in whether the day will come or not, the obligation is conditional, and it shall be regulated by the rules of the preceding Section.

(5) If the thing is improved by its nature, or by time, the improvement shall inure to the benefit of the creditor; (6) If it is improved at the expense of the debtor, he shall have no other right than that granted to the usufructuary.

Period or Term: Interval of time, which either suspends demandability or produces extinguishment. The period must be: future, certain, and possible [Tolentino, 1987]. A fortuitous event does not interrupt the running of the period. It only relieves the contracting parties from the fulfillment of their respective obligations during the period.

ARTICLE 1190

Art. 1190, par. 3. As for the obligations to do and not to do, the provisions of the second paragraph of Article 1187 shall be observed as regards the effect of the extinguishment of the obligation. Without Debtor’s Fault/Act

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Kinds of Period [Art. 1193]: (1) Ex die - period with a suspensive effect. Obligation becomes demandable after the lapse of the period. (2) In diem - period with a resolutory effect. Obligation is demandable at once but is extinguished upon the lapse of the period.

With Debtor’s Fault/Act

Loss is Obligation is converted into one of indemnity for damages. Deterioration Impairment to be borne Creditor may choose by the creditor. between bringing an action for rescission of Obligation extinguished.

ARTICLE 1180

Art. 1180. When the debtor binds himself to pay when his means permit him to do so, the obligation shall be deemed to be one with a period, subject to the provisions of Article 1197.

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(3) Debtor by his own acts Impaired said guaranties or securities after their establishment, and when through a fortuitous event they disappear, unless he immediately gives new ones equally satisfactory (4) Debtor Violates any undertaking, in consideration of which the creditor agreed to the period (5) Debtor attempts to Abscond (6) By Law or stipulation (7) Parties stipulate an Acceleration Clause

Term/Period and Condition Distinguished Term/Period Interval of time which is future and certain

Condition Fact or event which is future and uncertain

Must necessarily come, although it may not be known when Exerts an influence upon the time of demandability or extinguishment of an obligation No retroactive effect unless there is an agreement to the contrary When it is left exclusively to the will of the debtor, the existence of the obligation is not affected

May or may not happen

In the cases provided, the obligation becomes immediately due and demandable even if the period has not yet expired. The obligation is thus converted into a pure obligation [Tolentino, 1987].

Exerts an influence upon the very existence of the obligation itself Has retroactive effect

RESOLUTORY PERIOD

Obligation is demandable at once but is extinguished upon the lapse of the period.

When it is left exclusively to the will of the debtor, the very existence of the obligation is affected

DEFINITE OR INDEFINITE PERIOD (1) INSTANCES WHEN COURTS MAY FIX THE PERIOD (ART.

1197) Art. 1197: As a general rule, the court is not authorized to fix a period for the parties [De Leon, 2003].

SUSPENSIVE PERIOD

Benefit of the Period Presumption: The period in an obligation is presumed to be established for the benefit of both the creditor and debtor, UNLESS from the tenor of the obligation or other circumstances, it shall appear that the period has been established in favor of either the creditor or debtor [Art. 1196].

Araneta v. Phil. Sugar Estates, provides— First, the Court shall determine: (a) If the obligation does not fix a period, but from its nature and circumstances, it can be inferred that a period was intended. (b) If the period is void, such as when it depends upon the will of the debtor. (c) If the debtor binds himself when his means permit him to do so. Second, it must decide what period was “probably contemplated by the parties”.

Period for the Benefit of either Creditor or Debtor Creditor Debtor Creditor may demand the fulfillment or performance of the obligation at any time but the obligor cannot compel him to accept payment before the expiration of the period.

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Debtor may oppose any premature demand on the part of the obligee for the performance of the obligation, or if he so desires, he may renounce the benefit of the period by performing his obligation in advance.

Art. 1197 does not apply to contract of services and to pure obligations. The court, however, to prevent unreasonable interpretations of the immediate demandability of pure obligations, may fix a reasonable time in which the debtor may pay [Tolentino, 1987]. (2) CREDITOR MUST ASK COURT TO SET THE PERIOD, BEFORE HE CAN DEMAND PAYMENT.

If Period Given for the Benefit of Debtor Alone When Debtor Loses Right to Use Period Art.1198: I GIV A LA— (1) Debtor becomes Insolvent, unless he gives a guaranty or security for his debt, after obligation is contracted (2) Debtor fails to furnish the Guaranties or securities promised

THE ONLY ACTION THAT CAN BE MAINTAINED BY THE CREDITOR UNDER ART. 1197 IS THE ACTION TO ASK THE COURTS TO FIX THE TERM WITHIN WHICH THE DEBTOR MUST COMPLY WITH HIS OBLIGATION. THE FULFILLMENT OF THE OBLIGATION ITSELF CANNOT BE DEMANDED UNTIL AFTER THE COURT HAS FIXED THE PERIOD FOR

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THEREWITH,

AND

SUCH

PERIOD

The effect of the notice is to limit the obligation to the object or prestation selected. Notice of selection or choice may be in any form provided it is sufficient to make the other party know that the selection has been made. It can be: (a) oral (b) in writing (c) tacit (d) any other equivocal means

HAS

ALTERNATIVE OR FACULTATIVE DIFFERENCE BETWEEN ALTERNATIVE AND FACULTATIVE OBLIGATIONS

Alternative Obligations Several objects are due. May be complied with by delivery of one of the objects or by performance of one of the prestations which are alternatively due. Choice may pertain to debtor, creditor, or third person.

Facultative Obligations Only one object is due. May be complied with by the delivery of another object or by the performance of another prestation in substitution of that which is due. Choice pertains only to the debtor.

Loss/impossibility of all object/prestation due to fortuitous event shall extinguish the obligation. The loss/impossibility of one of the things does not extinguish the obligation. Culpable loss of any of the objects alternatively due before the choice is made may give rise to liability on the part of the debtor.

Loss/impossibility of the object/prestation due to fortuitous event is sufficient to extinguish the obligation.

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Choice of the debtor when communicated to the creditor does not require the latter’s concurrence. When the choice is rendered impossible through the creditor’s fault, the debtor may bring an action to rescind the contract with damages [Art. 1203]. Obligation is converted into a simple obligation when: (a) The person with the right of choice has communicated his choice [Art. 1201]. (b) Only one prestation is practicable [Art. 1202]. Facultative Obligation Only one prestation has been agreed upon but the debtor may render another in substitution [De Leon, 2003]. Debtor always has the right of choice.

Culpable loss of the object which the debtor may deliver in substitution before the substitution is effected does not give rise to any liability on the part of the debtor.

Effect of Loss of Substitute Before Substitution is After Substitution is Made Made If due to bad faith or fraud The loss or deterioration of obligor: obligor is liable. of the substitute on account of the obligor’s delay, negligence, or If due to the negligence of fraud, renders the the obligor: obligor is not obligor liable because liable. once the substitution is made, the obligation is converted into a simple one with the substituted thing as the object of the obligation.

Alternative Obligations Several prestations are due but the performance of one is sufficient [De Leon, 2003]. Right of Choice: Art. 1200: Belongs to the debtor, UNLESS: (1) when it is expressly granted to the creditor (2) when it is expressly granted to a third person

EFFECT OF LOSS OF SPECIFIC THINGS OR IMPOSSIBILITY OF PERFORMANCE OF ALTERNATIVE, THROUGH FAULT OF DEBTOR/CREDITOR OR THROUGH FORTUITOUS EVENTS

Limitations to the right of choice: (1) impossible prestations (2) unlawful prestations (3) those which could not have been the object of the obligation (4) only one prestation is practicable [Art. 1202; De Leon, 2003]

Art. 1204: Debtor’s Choice Fortuitous Event

Debtor’s Fault All Lost

When choice shall produce effect Art. 1201: Choice shall produce no effect except from the time it has been communicated.

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Debtor is released from Creditor shall have a the obligation. right to indemnity for damages based on the value of the last thing which disappeared or service which become impossible. Some Debtor to deliver that Debtor to deliver that which he shall choose which the creditor shall from among the choose from among the remainder. remainder without damages. One Remains Debtor to deliver that Debtor to deliver that which remains. which remains.

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PRESUMPTION OF JOINT OBLIGATION

Presumption: Obligation is presumed joint if there is a concurrence of several creditors, of several debtors, or of several creditors and debtors in one and the same obligation (Art. 1207). Exceptions: (1) When the obligation expressly states that there is solidarity (2) When the law requires solidarity i.e. quasi-delicts (3) When the nature of the obligation requires solidarity (4) When the nature or condition is imposed upon heirs or legatees, and the testament expressly makes the charge or condition in solidum (5) When the solidary responsibility is imputed by a final judgment upon several defendants PRESUMPTION OF EQUAL DIVISION

Presumption: Credit or debt shall be presumed to be divided into as many equal shares as there are creditors or debtors. Joint creditor cannot act in representation of the others, neither can a joint debtor be compelled to answer for the liability of others.

Art. 1205: Creditor’s Choice Fortuitous Event

Debtor’s Fault

All Lost Debtor is released from Creditor may claim the the obligation. price/value of any of them with indemnity for damages. Some Debtor to deliver that Creditor may claim any which he shall choose of those subsisting from among the without a right to remainder. damages OR price/value of the thing lost with right to damages. One Remains Creditor may claim the Creditor may claim the remaining thing without remaining thing without a right to damages OR a right to damages OR the price/value of the the price/value of the thing lost with right to thing lost with right to damages. damages.

EACH CREDIT IS DISTINCT FROM ONE ANOTHER, THEREFORE A JOINT DEBTOR CANNOT BE REQUIRED TO PAY THE SHARE OF ANOTHER DEBTOR, ALTHOUGH HE MAY PAY IF HE WANTS TO [ART. 1208]. EFFECT OF INSOLVENCY OF A JOINT DEBTOR [ART. 1209].

Each creditor can demand only for the payment of his proportionate share of the credit, while each debtor can be liable only for the payment of his proportionate share of the debt. Principal Effects of Joint Liability (1) Demand by one creditor upon the debtor, produces the effects of default only with respect to the creditor who demanded and the debtor on whom the demand was made, but not with respect to others. (2) Interruption of prescription by the judicial demand of one creditor upon a debtor does not benefit the other creditors nor interrupt the prescription as to other debtors. (3) Vices of each obligation arising from the personal defect of a particular debtor or creditor do not affect the obligation or right of the others. (4) Insolvency of a debtor does not increase the responsibility of his co-debtors, nor does it authorize a creditor to demand anything from his co-debtors. (5) Defense of res judicata is not extended from one debtor to another.

Joint and Solidary Obligation JOINT (DIVISIBLE) OBLIGATION One where a concurrence of several creditors, or of several debtors, or of several creditors and debtors, by virtue of which, each of the creditors has a right to demand, and each of the debtors is bound to render compliance with his proportionate part of the prestation which constitute the object of the obligation (obligacion mancomunada).

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JOINT (INDIVISIBLE) OBLIGATION

SOLIDARY OBLIGATION An obligation where there is concurrence of several creditors, or of several debtors, or of several creditors and several debtors, by virtue of which, each of the creditors has the right to demand, and each of the debtors is bound to render, entire compliance with the prestation which constitutes the object of the obligation (obligacion solidaria).

OBLIGATION CANNOT BE PERFORMED IN PARTS BUT DEBTORS ARE BOUND JOINTLY ARTICLE 1209

Art. 1209. If the division is impossible, the right of the creditors may be prejudiced only by their collective acts, and the debt can be enforced only by proceeding against all the debtors. If one of the latter should be insolvent, the others shall not be liable for his share.

ANYONE OF THE SOLIDARY CREDITORS MAY COLLECT OR DEMAND PAYMENT OF WHOLE OBLIGATION; THERE IS MUTUAL AGENCY AMONG SOLIDARY DEBTORS (ARTS.

Art. 1209: No creditor can act in representation of the other; no debtor can be compelled to answer for the liability of the others.

1214, 1215) ARTICLE 1214 Art. 1214. The debtor may pay any one of the solidary creditors; but if any demand, judicial or extrajudicial, has been made by one of them, payment should be made to him.

If there are two or more debtors, the fulfillment of or compliance with the obligation requires the concurrence of all the debtors, although each for his own share and for the enforcement of the obligation

ARTICLE 1215

Plurality of Creditors: If one or some of the creditors demands the prestation, the debtor may legally refuse to deliver to them, he can insist that all the creditors together receive the thing, and if any of them refuses to join the others, the debtor may deposit the thing in court by way of consignation [Tolentino, 1987].

Art. 1215. Novation, compensation, confusion or remission of the debt, made by any of the solidary creditors or with any of the solidary debtors, shall extinguish the obligation, without prejudice to the provisions of Article 1219. Active solidary obligation (solidarity among creditors): Each creditor has the authority to claim and enforce the rights of all, with the resulting obligation of paying everyone of what belongs to him.

IN CASE OF FAILURE OF ONE OF THE JOINT DEBTORS TO PERFORM HIS PART (SHARE), THERE IS DEFAULT BUT ONLY THE GUILTY DEBTOR SHALL BE LIABLE FOR DAMAGES

In case of breach where one of the joint debtors fails to comply with his undertaking, the obligation can no longer be fulfilled or performed.

Creation of a relationship of mutual agency among co-creditors. A solidary creditor cannot assign his rights without the consent of the others [Art. 1213].

Consequently, it is converted into one of indemnity for damages.

Each debtor may pay to any solidary creditor, but if any demand, judicial or extrajudicial, has been made by one of them, payment must be made to him [Art. 1214]

In case of insolvency of one of the debtors, the others shall not be liable for his share. To hold otherwise would destroy the joint character of the obligation. Joint Divisible Obligations In case of breach of obligation by one of the debtors, damages due must be borne by him alone.

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Mixed solidary obligation (solidarity among creditors and debtors): Solidarity is not destroyed by the fact that the obligation of each debtor is subject to different conditions or periods. The creditor can commence an action against anyone of the debtors for the compliance with the entire obligation minus the portion or share which corresponds to the debtor affected by the condition or period.

Joint Indivisible Obligations In case of breach where one of the joint debtors fails to comply with his undertaking, the obligation can no longer be fulfilled or performed. Thus, the action must be converted into one for indemnity for damages.

ANY OF THE SOLIDARY DEBTORS MAY BE REQUIRED TO PAY THE WHOLE OBLIGATION; THERE IS MUTUAL GUARANTY AMONG SOLIDARY DEBTORS [ARTS. 1216,

1217, 1222]

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(2) Those personal to him (3) Those pertaining to his own share (4) Those personally belonging to other co-debtors but only as regards that part of the debt for which the latter are responsible.

ARTICLE 1216

Art. 1216. The creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. The demand made against one of them shall not be an obstacle to those which may subsequently be directed against the others, so long as the debt has not been fully collected.

Demand Upon a Solidary Debtor The demand made against one of them shall not be an obstacle to those which may subsequently be directed against the others so long as the debt has not been fully collected [Art. 1216]. The creditor may proceed against any one of the solidary debtors or all simultaneously [Art. 1216].

ARTICLE 1217

Art. 1217. Payment made by one of the solidary debtors extinguishes the obligation. If two or more solidary debtors offer to pay, the creditor may choose which offer to accept. He who made the payment may claim from his codebtors only the share which corresponds to each, with the interest for the payment already made. If the payment is made before the debt is due, no interest for the intervening period may be demanded. When one of the solidary debtors cannot, because of his insolvency, reimburse his share to the debtor paying the obligation, such share shall be borne by all his co-debtors, in proportion to the debt of each.

A creditor’s right to proceed against the surety exists independently of his right to proceed against the principal

ARTICLE 1222

Art. 1222. A solidary debtor may, in actions filed by the creditor, avail himself of all defenses which are derived from the nature of the obligation and of those which are personal to him, or pertain to his own share. With respect to those which personally belong to the others, he may avail himself thereof only as regards that part of the debt for which the latter are responsible.

Payment by a Debtor Full payment made by one of the solidary debtors extinguishes the obligation [Art. 1217].

If two or more solidary debtors offer to pay, the creditor may choose which offer to accept [Art. 1217]. The solidary debtor who made the payment shall have the right to claim from his co-debtors the share which corresponds to them with interest, UNLESS barred by prescription or illegality [Art. 1218].

When a solidary debtor pays the entire obligation, the resulting obligation of the co-debtors to reimburse him becomes joint. If payment was made before the debt became due, no interest during the intervening period may be demanded [Art. 1217 par. 2]. When one of the solidary debtors cannot reimburse his share to the debtor paying the obligation due to insolvency, such share shall be borne by all his codebtors, in proportion to the debt of each [Art. 1217, par. 2].

Passive solidary obligation (solidarity among debtors): Each debtor can be made to answer for the others, with the right on the part of the debtor-payor to recover from the others their respective shares. Creation of a relationship of mutual guaranty among co-debtors. The total remission of the debt in favor of a debtor releases all the debtors. All the debtors are liable for the loss of the thing due, even if such loss is caused by the fault of only one of them, and for delay, even if it is caused by just one of them.

Inchausti v. Yulo (1914): Debtors obligated themselves solidarily, so creditor can bring its action against any of them. Remission of any part of the debt, made by the creditor in favor of one of the solidary debtors, inures to the benefit of the rest of them.

The interruption of prescription as to one debtor affects all the others; but the renunciation by one debtor of prescription already had does not prejudice the others. Defenses Available to a Solidary Debtor [Art. 1222] (1) Those derived from the nature of the obligation

Each one of the solidary creditors may do whatever maybe useful to the others, but not anything prejudicial to them [Art. 1212]; however, any novation, compensation, confusion or remission of debt executed by any solidary creditor shall extinguish the

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obligation without prejudice to his liability for the shares of the other solidary creditors

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DIVISIBLE AND INDIVISIBLE, ART. 1225 Divisible Obligations Ones which are susceptible to partial performance, that is, the debtor can legally perform the obligation by parts and the creditor cannot demand a single performance of the entire obligation [Tolentino, 1987].

ARTICLE 1212

Art. 1212. Each one of the solidary creditors may do whatever may be useful to the others, but not anything which may be prejudicial to the latter. ARTICLE 1215

Indivisible Obligations Ones which cannot be validly performed in parts [Tolentino, 1987].

Art. 1215. Novation, compensation, confusion or remission of the debt, made by any of the solidary creditors or with any of the solidary debtors, shall extinguish the obligation, without prejudice to the provisions of Article 1219.

(a) Divisibility/indivisibility refers to the performance of the prestation and not to the thing which is the object thereof. The thing may be divisible, yet the obligation may be indivisible. (b) When the obligation has for its object the execution of a certain number of days of work, the accomplishment of work by metrical units, or analogous things which by their nature are susceptible of partial performance, it shall be divisible [Art.1225, par. 2]. (c) Even though the object or service may be physically divisible, an obligation is indivisible if so provided by law or intended by the parties. (d) In obligations not to do, divisibility or indivisibility shall be determined by the character of the prestation in each particular case. (e) When there is plurality of debtors and creditors, the effect of divisibility/indivisibility of the obligation depend upon whether the obligation is joint or solidary. (f) A joint indivisible obligation gives rise to indemnity for damages from the time any one of the debtors does not comply with his undertaking [Art. 1224].

ARTICLE 1219

Art. 1219. The remission made by the creditor of the share which affects one of the solidary debtors does not release the latter from his responsibility towards the co-debtors, in case the debt had been totally paid by anyone of them before the remission was effected. Effects of Prejudicial and Beneficial Acts [Art.1212] (1) Each one of the solidary creditors may do whatever may be useful or beneficial to the others, but not anything which may be prejudicial to the latter. (2) As far as the debtors are concerned, a prejudicial act performed by a solidary creditor is binding. (3) As between the solidary creditors, the creditor who performed such act shall incur the obligation of indemnifying the others for damages.

Effect Creditor cannot be compelled to receive partially the prestation in which the obligation consists; neither may the debtor be required to make the partial payment [Art. 1248], UNLESS: (1) The obligation expressly stipulates the contrary. (2) The different prestations constituting the objects of the obligation are subject to different terms and conditions. (3) The obligation is in part liquidated and in part unliquidated.

Indivisibility Solidarity It refers to the prestation It refers to the legal tie which constitutes the or vinculum, and object of the obligation. consequently, to the subjects or parties of the obligation. Plurality of subjects is not Plurality of subjects is required. indispensable. In case of breach, When there is liability obligation is converted into on the part of the indemnity for damages debtors because of the because the indivisibility of breach, the solidarity the obligation is among the debtors terminated. remains.

OBLIGATIONS WITH A PENAL CLAUSE, ARTS. 1226, 1228-1230 ARTICLE 1226 Art. 1226. In obligations with a penal clause, the penalty shall substitute the indemnity for damages and the payment of interests in case of

The indivisibility of an obligation does not necessarily give rise to solidarity. Nor does solidarity itself imply indivisibility [Art. 1211].

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noncompliance, if there is no stipulation to the contrary. Nevertheless, damages shall be paid if the obligor refuses to pay the penalty or is guilty of fraud in the fulfillment of the obligation.

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Chartacteristics of Penalty (1) The penalty shall substitute the indemnity for damages and payment of interest in case of noncompliance [Art. 1226], UNLESS: (a) There is a stipulation to the contrary (b) The obligor refuses to pay the penalty (c) The obligor is guilty of fraud

The penalty may be enforced only when it is demandable in accordance with the provisions of this Code.

(2) Debtor cannot exempt himself from the performance of the principal obligation by paying the stipulated penalty unless this right has been expressly reserved for him [Art. 1227].

ARTICLE 1228

Art. 1228. Proof of actual damages suffered by the creditor is not necessary in order that the penalty may be demanded.

(3) Creditor cannot demand the fulfillment of the principal obligation and demanding the satisfaction of the penalty at the same time unless the right has been clearly granted to him [Art. 1227]. Tacit or implied grant is admissible. (a) If the creditor has chosen fulfillment of the principal obligation and the performance thereof becomes impossible without his fault, he may still demand the satisfaction of the penalty. (b) If there was fault on the part of the debtor, creditor may demand not only the satisfaction of the penalty but also the payment of damages. (c) If the creditor chooses to demand the satisfaction of the penalty, he cannot afterwards demand the fulfillment of the obligation.

ARTICLE 1229

Art. 1229. The judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor. Even if there has been no performance, the penalty may also be reduced by the courts if it is iniquitous or unconscionable. ARTICLE 1230

Art. 1230. The nullity of the penal clause does not carry with it that of the principal obligation. The nullity of the principal obligation carries with it that of the penal clause. Penal Clause: An accessory undertaking to assume greater liability in case of breach [De Leon, 2003]. It is attached to an obligation in order to ensure performance. The enforcement of the penalty can be demanded by the creditor only when the nonperformance is due to the fault or fraud of the debtor.

Proof of Actual Damage Art. 1228: That proof of actual damages is not necessary is applicable only to the general rule stated in Art. 1226, but not to the exceptions. The penalty is exactly identical with what is known as “liquidated damages” in Art. 2226.

If the principal obligation is void, the penal clause shall also be void. However, the nullity of the penal clause does not carry with it the nullity of the principal obligation [Art.1230].

When Penalty may be Reduced [Art. 1229]: (1) If the principal obligation has been partly complied with. (2) If the principal obligation has been irregularly complied with. (3) If the penalty is iniquitous or unsconscionable even if there has been no performance.

Purposes of Penalty (1) Funcion coercitiva de garantia - to insure the performance of the obligation. (2) Funcion liquidatoria - to liquidate the amount of damages to be awarded to the injured party in case of breach of the principal obligation (compensatory). (3) Function estrictamente penal - to punish the obligor in case of breach of the principal obligation (punitive).

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In the meantime, the action derived from the original obligation shall be held in the abeyance. EXTRAORDINARY INFLATION OF DEFLATION [ART. 1250] ARTICLE 1236

PAYMENT, ARTS. 1236-1238 ARTICLE 1236 Art. 1236. The creditor is not bound to accept payment or performance by a third person who has no interest in the fulfillment of the obligation, unless there is a stipulation to the contrary.

Art. 1250. In case an extraordinary inflation or deflation of the currency stipulated should supervene, the value of the currency at the time of the establishment of the obligation shall be the basis of payment, unless there is an agreement to the contrary.

Whoever pays for another may demand from the debtor what he has paid, except that if he paid without the knowledge or against the will of the debtor, he can recover only insofar as the payment has been beneficial to the debtor.

APPLICATION OF PAYMENT [ART. 1252-1254] Application of Payment [Art. 1252] Designation of the debt to which should be applied a payment made by a debtor who owes several debts to the same creditor.

ARTICLE 1237

Rules on Application (1) Preferential right of debtor - debtor has the right to select which of his debts he is paying. (2) The debtor makes the designation at the time he makes the payment. (3) If not, the creditor makes the application, by so stating in the receipt that he issues, unless there is cause for invalidating the contract. (4) If neither the creditor nor debtor exercises the right to apply, or if the application is not valid, the application is made by operation of law. (5) If debt produces interest, the payment is not to be applied to the principal unless the interests are covered. (6) When no application can be inferred from the circumstances of payment, it is applied: (a) to the most onerous debt of the debtor; or (b) if debts due are of the same nature and burden, to all the debts in proportion (7) Rules of application of payment may not be invoked by a surety or solidary guarantor.

Art. 1237. Whoever pays on behalf of the debtor without the knowledge or against the will of the latter, cannot compel the creditor to subrogate him in his rights, such as those arising from a mortgage, guaranty, or penalty. ARTICLE 1238

Art. 1238. Payment made by a third person who does not intend to be reimbursed by the debtor is deemed to be a donation, which requires the debtor's consent. But the payment is in any case valid as to the creditor who has accepted it. DATION IN PAYMENT [ART. 1245] ARTICLE 1245

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. Delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation (dacion en pago).

Reparations Commission vs. Universal Deep Sea Fishing Corp. (1978): Rules on application of payment cannot be made applicable to a person whose obligation as a mere surety is both contingent and singular. There must be full and faithful compliance with the terms of the contract.

FORM OF PAYMENT [ART. 1249] ARTICLE 1249

Art. 1249. The payment of debts in money shall be made in the currency stipulated, and if it is not possible to deliver such currency, then in the currency which is legal tender in the Philippines. The delivery of promissory notes payable to order, or bills of exchange or other mercantile documents shall produce the effect of payment only when they have been cashed, or when through the fault of the creditor they have been impaired.

TENDER OF PAYMENT AND CONSIGNATION [ARTS.

1261]

1256-

Tender of payment: Manifestation made by the debtor to the creditor of his desire to comply with his obligation, with offer of immediate performance. (1) Preparatory act to consignation (2) Extrajudicial in character

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Consignation: Deposit of the object of obligation in a competent court in accordance with the rules prescribed by law whenever the creditor unjustly refuses payment or because of some circumstances which render direct payment to the creditor impossible or inadvisable. (1) Principal act which constitutes a form of payment (2) Judicial in character

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Requisites and Effects Application of Tender and Dation Payment Consignation Requisites (1) Plurality of (1) Should not (1) There is a debts be prejudicial debt due (2) Debts are of to other (2) Consignation the same creditors is made kind (2) Should not because of (3) Debts are constitute a some legal owed to the pactum cause same creditor commissoriu (3) Previous and by the m notice of same debtor consignation (4) All debts was given to must be due those (5) Payment persons made is not interested in sufficient to the cover all performance debts of the obligation (4) Amount or thing due was placed at the disposal of the court (5) After the consignation has been made, the persons interested were notified thereof

When Tender and Refusal Not Required [Art. 1259] (1) Creditor is absent or unknown, or does not appear at the place of payment. (2) Creditor is incapacitated to receive the thing due at the time of payment. (3) Without just cause, creditor refuses to give receipt. (4) Two or more persons claim the same right to collect. (5) Title of the obligation has been lost. Effects of Withdrawal by Debtor [Arts. 1260- 1261] (1) Before approval of the court - Obligation remains in force. (2) After approval of the court or acceptance by the creditor, with the consent of the latter Obligation remains in force, but guarantors and co-debtors are liberated. Preference of the creditor over the thing is lost. (3) After approval of the court or acceptance by the creditor, and without creditor’s consent Obligation subsists, without change in the liability of guarantors and co-debtors, or the creditor’s right of preference. What constitutes valid consignation In order that the consignation of the thing due may release the obligor, it must first be announced to the persons interested in the fulfilment of the obligation. The consignation shall be ineffectual if it is not made strictly in consonance with the provisions which regulate payment. [Art. 1257].

Payment of debt designated as to corresponding amount

How consignation is made Consignation shall be made by depositing the things due at the disposal of judicial authority, before whom the tender of payment shall be proved, in a proper case, and the announcement of the consignation in other cases. The consignation having been made, the interested parties shall also be notified thereof. Who bears the expenses The expenses of consignation, when properly made, shall be charged against the creditor. [Art. 1259]

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Effects Extinguishment of debt as an equivalent of the performance of the obligation

If accepted by the creditor or declared properly made by the Court: (1) Debtor is released in same manner as if he had performed the obligation at the time of consignation (2) Accrual of interest is suspended

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Dation

Effects of Loss Obligation to Deliver a Specific Thing Extinguishment of the obligation if the thing was destroyed without fault of the debtor and before he has incurred delay.

Tender and Consignation from the moment of consignation. (3) Deterioration or loss of the thing or amount consigned, occurring without the fault of debtor, must be borne by creditor from the moment of deposit Any increment or increase in the value of the thing after consignation inures to the benefit of the creditor.

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Obligation to Deliver a Generic Thing Loss of a generic thing does not extinguish an obligation, EXCEPT in case of delimited generic things, where the kind or class is limited itself, and the whole class perishes.

Action against third persons - creditor shall have all the rights of action the debtor may have against third persons by reason of the loss. Presumption: The loss was due to the debtor’s fault, UNLESS there is proof to the contrary. Other cases where loss is attributed to debtor: (1) Law provides that the debtor shall be liable even if the loss is due to fortuitous events [Arts. 1942, 1979, 2147, 2159]. (2) Obligor is made liable by express stipulation. (3) Nature of the obligation requires an assumption of risk. (4) Fault or negligence concurs with the fortuitous event. (5) Loss occurs after delay. (6) Debtor has promised to deliver the same thing to two or more different parties. (7) Obligation arises from a criminal act. (8) Borrower in commodatum: saves his own things and not the thing of the creditor during a fortuitous event.

Payment by Cession [Art. 1255] The debtor may cede or assign his property to his creditors in payment of his debts. This cession, unless there is stipulation to the contrary, shall only release the debtor from responsibility for the net proceeds of the things assigned. The agreements which, on the effect of the cession, are made between the debtor and his creditors shall be governed by special laws.

In Reciprocal Obligations Extinguishment of the obligation due to loss of the thing or impossibility of performance affects both the creditor and debtor; the entire juridical relation is extinguished.

Cession or assignment of rights in favor of creditors (1) Process by which debtor transfers property to his creditors so that the latter may sell them and thus apply the proceeds to their credits. (2) What is given to creditors is not ownership (as distinguished from dacion en pago) but only authority to sell. (3) Debtor is released only for the net proceeds unless there is a stipulation to the contrary.

Partial loss Art. 1264: Partial loss due to a fortuitous event does not extinguish the obligation; thing due shall be delivered in its present condition, without any liability on the part of the debtor, UNLESS the obligation is extinguished when the part lost was of such extent as to make the thing useless.

LOSS OF DETERMINATE THING DUE OR IMPOSSIBILITY OR DIFFICULTY OF PERFORMANCE, ARTS. 1262, 1266-1267 Loss A thing is lost when it perishes, goes out of commerce or disappears in such a way that its existence is unknown or it cannot be recovered [Art. 1189, no. 2]

Loss of the thing when in possession of the debtor: Loss was due to the debtor’s fault. Burden of explaining the loss of the thing falls upon him, UNLESS due to a natural calamity: earthquake, flood, storm, etc. Subjective impossibility: Where there is no physical or legal loss, but the thing belongs to another, the

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performance by the debtor becomes impossible. The debtor must indemnify the creditor for damages.

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Effect Art. 1273: Renunciation of the principal debt shall extinguish the accessory obligations, but remission of the latter leaves the principal obligation in force.

Impossibility of Performance [Arts. 1266-1267] When prestation becomes legally or physically impossible (by fortuitous event or force majeure), the debtor is released. Impossibility must have occurred without fault of debtor, and after the obligation has been constituted.

EXPRESS – FORMALITY OF DONATION [ART. 1270]

Made formally; in accordance with forms of ordinary donations.

Partial Impossibility (1) Courts shall determine whether it is so important as to extinguish the obligation. (2) If debtor has performed part of the obligation when impossibility occurred, creditor must pay the part done as long as he benefits from it. (3) If debtor received full payment from creditor, he must return excess amount corresponding to part which was impossible to perform.

IMPLIED [ARTS. 1271, 1272, 1274]

Presumptions [Arts. 1271, 1272, 1274] (1) Whenever the private document in which the debt is found is in the possession of the debtor, it shall be presumed that the creditor delivered it voluntarily, unless the contrary is proved. (2) Delivery of a private document evidencing credit made voluntarily by the creditor to the debtor implies the renunciation of the action of creditor against the latter. (3) Accessory obligation of pledge has been remitted when thing after its delivery is found in the possession of the debtor or third person.

Doctrine of Unforeseen Events When the service has become so difficult as to be manifestly beyond the contemplation of all the parties, the obligor may be released in whole or in part [De Leon, 2003]. Requisites (1) Event could not have been foreseen at the time of the constitution of the contract. (2) Event makes performance extremely difficult but not impossible. (3) Event not due to any act of the parties. (4) Contract is for future prestation.

CONFUSION, ARTS. 1275-1272 Confusion - The meeting in one person of the qualities of creditor and debtor of the same obligation. Requisites (1) It should take place between principal debtor and creditor. (2) It must be complete and definite – Parties must meet all the qualities of creditor and debtor in the obligation/ in the part affected.

CONDONATION OR REMISSION OF DEBT, ART. 1270 ARTICLE 1270 Art. 1270. Condonation or remission is essentially gratuitous, and requires the acceptance by the obligor. It may be made expressly or impliedly.

Effects [Arts. 1275- 1277]: (1) The obligation is extinguished from the time the characters of the debtor and creditor are merged in the same person. (2) In joint obligations, confusion does not extinguish the obligation except as regards the corresponding share of the creditor or debtor in whom the two characters concur. (3) In solidary obligations, confusion in one of the solidary debtors extinguishes the entire obligation.

One and the other kind shall be subject to the rules which govern inofficious donations. Express condonation shall, furthermore, comply with the forms of donation. Condonation An act of liberality, by virtue of which, without receiving any equivalent, creditor renounces the enforcement of the obligation. The obligation is extinguished either in whole or in such part of the same to which remission refers.

Obligation is not extinguished when confusion takes place in the person of subsidiary debtor (e.g. guarantor), but merger in the person of the principal debtor shall benefit the former.

Requisites: (1) Debt must be existing and demandable. (2) Renunciation must be gratuitous; without any consideration. (3) Debtor must accept the remission.

COMPENSATION Compensation - Offsetting of two obligations which are reciprocally extinguished if they are of the same

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value, or extinguished to the concurrent amount if of different values.

obligations of a depositary or of a bailee in commodatum.

Compensation There must always be two obligations.

Confusion Involves only one obligation.

Neither can compensation be set up against a creditor who has a claim for support due by gratuitous title, without prejudice to the provisions of paragraph 2 of Article 301.

There are two persons who are mutually debtors and creditors of each other in two separate obligations, each arising from the same cause.

There is only one person whom the characters of the creditor and debtor meet.

ARTICLE 1288

Art. 1288. Neither shall there be compensation if one of the debts consists in civil liability arising from a penal offense. ARTICLE 1289

Art. 1289. If a person should have against him several debts which are susceptible of compensation, the rules on the application of payments shall apply to the order of the compensation.

Compensation: Requisites (1) Each obligor is bound principally, and at the same time a principal creditor of the other (2) Both debts must consist in a sum of money, or if the things due are FUNGIBLE, of the same kind & quality (3) Both debts are due (4) Debts are liquidated and demandable (5) There must be no retention or controversy over either of the debts, commenced by third persons and communicated in due time to the debtor (6) Compensation is not prohibited by law

Effects (1) Effects rise from the moment all the requisites concur. (2) Debtor claiming its benefits must prove compensation; once proven, effects retroact from the moment when the requisites concurred. (3) Both debts are extinguished to the concurrent amount, even though the creditors and debtors are not aware of the compensation. (4) Accessory obligations are also extinguished.

ARTICLE 1290

Art. 1290. 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. (2) AGREEMENT [ART. 1282] Parties agree to compensate their mutual obligations even when some requisite in Art. 1279 is lacking. (3) VOLUNTARY [ART. 1282] ARTICLE 1282 Art. 1282. The parties may agree upon the compensation of debts which are not yet due. (4) JUDICIAL [ART. 1283] Decreed by court when there is counterclaim; effective upon final judgment

KINDS (1) LEGAL COMPENSATION [ARTS. 1286-1290]

ARTICLE 1283

Art. 1283. If one of the parties to a suit over an obligation has a claim for damages against the other, the former may set it off by proving his right to said damages and the amount thereof.

Takes place by operation of law ARTICLE 1286

Art. 1286. Compensation takes place by operation of law, even though the debts may be payable at different places, but there shall be an indemnity for expenses of exchange or transportation to the place of payment.

(5) FACULTATIVE When it can be claimed by one of the parties who, however, has the right to object to it.

ARTICLE 1287

Compensation which can only be set up at the option of a creditor, when legal compensation cannot take place because some legal requisites in favor of the creditor are lacking. Creditor may renounce his right

Art. 1287. Compensation shall not be proper when one of the debts arises from a depositum or from the

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to compensation, and he himself may set it up. As opposed to conventional compensation, facultative compensation is unilateral and does not depend upon the agreement of the parties.

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Effects In General

If Original Obligation is Void Old Novation is void if obligation is the original extinguished obligation was and replaced void, except when by the new annulment may one be claimed only stipulated. by the debtor, or when ratification validates acts that are voidable [Art. 1298] 1. Original obligation is void: No novation 2. Original obligation voidable: Effective if contract is ratified before novation.

OBLIGATIONS NOT COMPENSABLE [ARTS. 1287-1288]

Compensation is prohibited in: (1) Contracts of depositum (2) Contracts of commodatum (3) Future support due by gratuitous title (4) Civil liability arising from a penal offense (5) Obligations due to the government (6) Damage caused to the partnership by a partner NOVATION, [ARTS. 1291-1304] 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 the person of the debtor, or by subrogating a third person in the rights of the creditor. A juridical act of dual function—it extinguishes an obligation, and at the same time, it creates a new one in lieu of the old.

If New Obligation is Void New obligation is void, the old obligation subsists, unless the parties intended that the former relations shall be extinguished in any event [Art. 1297] 1. New obligation void: No novation 2. New obligation voidable: Novation is effective

Accessory obligations are also extinguished, but may subsist only insofar as they may benefit third persons who did not give their consent to the novation OR those who may be affected, upon agreement between the parties.

Requisites (1) A previous valid obligation (2) Agreement of all the parties to the new obligation (3) Extinguishment of the old obligation (4) Validity of the new obligation

Original or new obligation with suspensive or resolutory condition Art. 1299: If original obligation was subject to a suspensive or resolutory condition, the new obligation shall be under the same condition, unless it is otherwise stipulated.

Novation is not presumed. Express novation: Parties must expressly disclose their intent to extinguish the old obligation by creating a new one. Implied novation: No specific form is required. There must be incompatibility between the old and new obligation or contract.

Compatible Conditions (a) Fulfillment of both conditions: new obligation becomes demandable (b) Fulfillment of condition concerning the original obligation: old obligation is revived; new obligation loses force (c) Fulfillment of condition concerning the new obligation: no novation; requisite of a previous valid and effective obligation lacking

California Bus Line v. State Investment [2003]: In the absence of an unequivocal declaration of extinguishment of the pre-existing obligation, only proof of incompatibility between the old and new obligation would warrant a novation by implication. Test of Incompatibility Whether or not the old and new obligation can stand together, each one having an independent existence. No incompatibility exists when they can stand together. Hence, there is no novation. Incompatibility exists when they cannot stand together. Hence, there is novation.

Incompatible Conditions (a) Original obligation is extinguished, while new obligation exists (b) Demandability shall be subject to fulfillment/ nonfulfillment of the condition affecting it

Objective Novation (1) Change of the subject matter (2) Change of cause or consideration

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(3) Change of the principal conditions or terms

Conventional subrogation Debtor’s consent is necessary. Extinguishes an obligation and gives rise to a new one.

Subjective Novation (1) Substitution of the Debtor: Consent of creditor is an indispensable requirement both in expromision and delegacion. Expromision Initiative for change does not emanate from the debtor, and may even be made without his knowledge.

Delegacion Debtor (delegante) offers or initiates the change, and the creditor (delegatorio) accepts a third person (delegado) as consenting to the substitution. Requisites (1) Consent of the Consent of old debtor, creditor and the new new debtor, and creditor debtor (2) Knowledge or consent of the old debtor is not required Effects (1) Old debtor is (1) Insolvency of the new released debtor revives the (2) Insolvency of the new obligation of the old debtor does not debtor if it was revive the old anterior and public, obligation in case the and known to the old old debtor did not debtor. agree to expromision (2) New debtor can (3) If with knowledge demand and consent of old reimbursement of the debtor, new debtor entire amount he has can demand paid from the original reimbursement of the debtor. He may entire amount paid compel creditor to and with subrogation subrogate him to all of creditor’s rights. of his rights. (4) If without knowledge of the old debtor, new debtor can demand reimbursement only up to the extent that the latter has been benefited without subrogation of creditor’s rights.

Defects/vices in the old obligation are cured.

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Assignment of credit Debtor’s consent is not required. Refers to the same right which passes from one person to another, without modifying or extinguishing the obligation. Defects/vices in the old obligation are not cured.

(b) Legal subrogation: by operation of law Legal subrogation is not presumed, except in the following circumstances: (1) When creditor pays another creditor who is preferred, even without the debtor’s knowledge (2) When a third person not interested in the obligation pays with the express or tacit approval of the debtor (3) When, even without the knowledge of the debtor, a person interested in the fulfillment of the obligation pays, without prejudice to the effects of confusion as to the latter’s share Effects Total (1) Transfers to the person subrogated the credit with all the rights thereto appertaining, either against the debtor or third persons. (2) Obligation is not extinguished, even if the intention is to pay it. (3) Defenses against the old creditor are retained, unless waived by the debtor.

(2) Subrogation of a third person in the rights of the creditor (a) Conventional subrogation: by agreement of the parties; Requisites: the consent of the third person, and of the original parties (Art. 1301).

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Partial (1) A creditor, to whom partial payment has been made, may exercise his right for the remainder, and shall be preferred to the person subrogated in his place in virtue of the partial payment.

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Essential Requisites

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position to deliberate whether or not he would purchase the yacht and invitation to a proposal being made to him, which might be accepted by him or not”

ARTICLE 1318

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.

OFFER TERMINATES upon: (a) Rejection by the offeree (b) Incapacity (death, civil interdiction, insanity, or insolvency) of the offeror or offeree before acceptance is conveyed (c) Counter-offer (d) Lapse of the time stated in the offer without acceptance being conveyed (e) Revocation of the offer before learning of acceptance (f) Supervening illegality before acceptance [J.B.L. Reyes]

CONSENT (a) The meeting of the minds between the parties on the subject matter and the cause of the contract. (b) The manifestation of the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. Requisites of Consent: (1) It must be manifested by the concurrence of the offer and acceptance [Arts. 1319-1326]. (2) The contracting parties must possess the necessary legal capacity [Arts. 1327-1329]. (3) It must be intelligent, free, spontaneous, and real (not vitiated) [Arts. 1330-1346].

ACCEPTANCE

Requisites: (a) Unqualified and unconditional, i.e. it must conform with all the terms of the offer, otherwise it is a counter-offer (Art. 1319) (b) Communicated to the offeror and learned by him (Arts. 1319, 1322). If made through an agent, the offer is accepted from the time the acceptance is communicated to such agent. (c) Express/implied, but is not presumed.

CONCURRENCE OF OFFER AND ACCEPTANCE

Offer: a unilateral proposition which one party makes to the other for the celebration of the contract [Tolentino].

OPTION CONTRACT: A preparatory contract in which one party grants to the other, for a fixed period, the option to decide whether or not to enter into a principal contract [Art. 1324].

Requisites: (a) Definite (b) Intentional (c) Complete

With consideration

Invitation to make offers (advertisements) (a) Business advertisements of things for sale are NOT definite offers, just invitations to make an offer, UNLESS the contrary appears (Art. 1325). (b) Advertisements for bidders are invitations to make proposals, the advertiser is NOT bound to accept the lowest or highest bid; UNLESS the contrary appears. The bidder is the offeror (Art. 1326). (c) Statements of intention: no contract results even if accepted.

Without consideration

Offeror cannot Offeror may withdraw by unilaterally withdraw his communicating offer. withdrawal to the offeree before acceptance. LEGAL CAPACITY

Persons Incapacitated to Give Consent (a) Minors, UNLESS, the minor’s consent is operative in contracts: (1) For necessaries [Art.1427] (2) Where the minor actively misrepresents his age (estoppel) Mercado v. Espiritu, 1917: Minors held in estoppel through active misrepresentation. Bambalan v. Maramba, 1928: There is no estoppel if the minority was known by the other party. (b) Insane or demented persons, UNLESS they contract during a lucid interval. (c) Deaf-mutes who do not know how to read AND write.

Rosenstock v. Burke (1924): FACTS: Elser, in a letter, informed Burke that he was “in a position and is willing to entertain” the purchase of the yacht under some terms. HELD: “The word “entertain” applied to an act does not mean the resolution to perform said act, but simply a position to deliberate for deciding to perform or not to perform said act. It was merely a

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Disqualified to contract [art. 1329]: (a) Those under civil interdiction for transactions inter vivos [RPC Art. 34]. (b) Undischarged insolvents [Insolvency Law, Sec. 24]. (c) Husband and wife cannot donate to each other [Art. 123, FC], nor sell if the marriage is under ACP [Art.1490]. (d) The ff. cannot purchase [Art. 1491]: (1) The guardian: his ward’s property (2) The agent: the principal’s property (3) Executors and administrators: property under administration (4) Public officers-state: property under their administration (5) Justices, judges, prosecutors, clerks of court, lawyers: property attached in litigation.

Martinez v. HSBC (1910): The conveyance of several properties by the wife to her husband’s creditors, though reluctant, is still consent. She assented to the requirements of the defendants in order that the civil and criminal actions against them would be dropped. A contract is valid even though one of the parties entered into it against his wishes and desires, or even against his better judgment. (3) Violence Irresistible force used to extort consent (J.B.L. Reyes). (4) Undue Influence When a person takes improper advantage of his power over the will of another, depriving the latter of a reasonable freedom of choice [Art. 1337]. Circumstances: (a) Relationship of the parties (family, spiritual, confidential etc.) (b) That the person unduly influenced was suffering from infirmity (mental weakness, ignorance etc.) (Art.1337).

VICES OF CONSENT

(1) Mistake Inadvertent and excusable disregard of a circumstance material to the contract [J.B.L. Reyes]. In order that mistake may invalidate consent, it should refer to the substance of the thing which is the object of the contract, or to those conditions which have principally moved one or both parties to enter into the contract [Art.1331].

(5) Fraud When through insidious words or machinations of one of the contracting parties, the other is induced to enter into a contract which, without them, he would not have agreed to [Art. 1338].

Mistake which vitiates consent is an error of fact, and not an error of law. Ignorance of the law excuses no one from compliance therewith (Art. 3); but the modern tendency is to allow an excusable mistake of law to be invoked as vitiating consent (Tolentino). Mistake of Fact When one or both contracting parties believe that a fact exists when in reality it does not, or vice versa.

Mistake of Law When one or both parties arrive at an erroneous conclusion on the interpretation of a question of law or its legal effects.

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ARTICLE 1339

Art. 1339. Failure to disclose facts, when there is a duty to reveal them, as when the parties are bound by confidential relations, constitutes fraud.

Mutual Mistake (1) Must be as to the legal effect of an agreement (2) Must be mutual (3) Real purpose of the parties must have been frustrated

ARTICLE 1340

Art. 1340. The usual exaggerations in trade, when the other party had an opportunity to know the facts, are not in themselves fraudulent. ARTICLE 1341

Art. 1341. A mere expression of an opinion does not signify fraud, unless made by an expert and the other party has relied on the former's special knowledge, ARTICLE 1342

Art. 1342. Misrepresentation by a third person does not vitiate consent, unless, such misrepresentation has created substantial mistake and the same is mutual.

(2) Intimidation When one of the contracting parties is compelled by a reasonable and well-grounded fear of an imminent and grave evil upon his person or property, or upon the person or property of his spouse, descendants or ascendants, to give his consent [Art. 1335].

ARTICLE 1343

Art. 1343. Misrepresentation made in good faith is not fraudulent but may constitute error.

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SIMULATION OF CONTRACTS takes place when the parties do not really want the contract they have executed to produce the legal effects expressed by its wordings. It may be absolute or relative [Arts. 1345-1346].

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(b) Aleatory contract, where one of the contracting parties assumes the risk that the thing will never come into existence, e.g. insurance. CAUSE DEFINITION

Absolute Simulation No real transaction is intended. Fictitious contract. Void.

The essential and impelling reason why a party assumes an obligation (Manresa). Motive, on the other hand, is the particular reason for a contracting party which does not affect the other.

Relative Simulation Real transaction is hidden. Disguised contract. Bound as to hidden agreement, so long as it does not prejudice a third person and is not contrary to law, morals, good customs, public order or public policy.

REQUISITES:

1. Must exist at the time of the contract is entered into [Arts. 1352, 1409, par. 3]. 2. Must be lawful (ibid). 3. Must be true or real [Art.1353]. CAUSE IN

Onerous Contracts

OBJECT

Renumeratory Contracts

The undertaking The service or or the promise benefit which is of the thing or remunerated service by the other party

DEFINITION:

The subject matter; the thing, right or service which is the subject matter of the obligation arising from the contract [Tolentino]. REQUISITES:

Pure Beneficence Mere liberality of the benefactor

In Villaroel v. Estrada (1940), where a moral obligation is based upon a previous civil obligation, which has already been barred by the statute of limitations at the time the contract is entered into, it constitutes a sufficient cause or consideration to support a contract (natural obligation).

(a) Must be within the commerce of men [Art. 1347] (b) Must not be impossible, legally or physically

[Art.1348] (c) For things as object of contract, must be in

existence or capable of coming into existence [See Arts. 1461, 1493, 1495] (d) Must be determinate or determinable, without the need of a new contract between the parties [Arts. 1349, 1460, par.2]

BUT, In Fisher v. Robb (1939), if the moral obligation arises wholly from ethical consideration, it cannot constitute a sufficient cause to support an onerous contract, as when the promise is made on the erroneous belief that one was morally responsible for the failure of an enterprise (moral obligation).

All things or services may be the object of contracts, EXCEPT: (a) Things which are outside the commerce of men (b) Intransmissible rights (c) Future inheritance except in cases authorized by law (d) Impossible things or services (e) Objects which are indeterminable as to their kind, the genus should be expressed

Cause

Effect

Lack of Cause – If there is no cause absence or total lack whatsoever, contract is VOID; of cause a fictitious sale is VOID.

In order that a thing, right, or service, may be the object of a contract, it should be in existence at the moment of the celebration of the contract, or at least, it can exist subsequently or in the future.

NOTE: Cause must exist at the time of the perfection of the contract; it need not exist later.

A FUTURE THING may be the object of a contract, such contract may be interpreted as a: (a) Conditional contract, where 3its efficacy should depend upon the future existence of the thing.

Contrary to law, If cause is unlawful, morals, good transaction is VOID. customs, public policy

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Cause and public order

REAL Contracts which are perfected not merely by consent but by delivery, actual or constructive, of the object of the obligation [Art.1316]. Example: contract of pledge, commodatum, mutuum.

Effect If parts of a contract are illegal but the rest are supported by lawful cause, claimant of such has the burden of showing proof; otherwise, the whole contract is VOID.

FORMAL OR SOLEMN Contracts for which a special form is necessary for its perfection [Art. 1356].

Contract with illegal cause may still produce effect in certain cases where parties are not of equal guilt: (1) innocent party can’t be compelled to perform his obligation and he may recover what has already been given; (2) if both parties are guilty, neither can sue the other, the law leaving them as they are (in pari delicto).

DONATIONS (ARTS. 748-749) ARTICLE 748

Art. 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.

Falsity of cause – Contract with a false cause is cause is stated but is merely revocable/voidable. untrue Parties are given a chance to show that a cause really exists, and that said cause is true and lawful. Lesion or inadequacy of cause – cause is not proportionate to object

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ARTICLE 749

Art. 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.

Inadequacy of cause shall not invalidate the contract except when: (1) there is fraud, mistake, undue influence (2) when parties intended a donation

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.

Liguez v. CA (1957): In making the donation in question, Lopez was not moved exclusively by the desire to benefit Liguez, but also to secure her cohabiting with him, so that he could gratify his sexual impulses. The donation was an onerous transaction and clearly predicated upon an illicit causa.

PARTNERSHIP WHERE REAL PROPERTY IS CONTRIBUTED (ARTS. 1771, 1773) ARTICLE 1771

Art. 1771. A partnership may be constituted in any form, except where immovable property or real rights are contributed thereto, in which case a public instrument shall be necessary.

Kinds of Contracts

ARTICLE 1773

Art. 1773. A contract of partnership is void, whenever immovable property is contributed thereto, if an inventory of said property is not made, signed by the parties, and attached to the public instrument.

CONSENSUAL Contracts which are perfected by mere consent of the parties regarding the subject matter and the cause of the contract [Art.1315].

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ANTICHRESIS (ART. 2134) ARTICLE 2134

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Formal/Solemn Contract

Special Form Required by Law P500 (Art. 748). (3) Partnerships where real Must be in public property contributed instrument; otherwise the contract of partnership is void (Art.1771, 1773). (4) Contracts of antichresis The principal loan and the interest, if any, must be specified in writing; otherwise, the contract of antichresis is void (Art. 2134). (5) Agency to sell real Authority of the agent property or any interest must be in writing; therein otherwise, the sale is null and void (Art.1874). (6) Stipulation to pay Must be expressly interest on loans, interest made in writing for the use of money (Art.1956).

Art. 2134. The amount of the principal and of the interest shall be specified in writing; otherwise, the contract of antichresis shall be void. AGENCY TO SELL REAL PROPERTY OR AN INTEREST THEREIN (ART. 1874) ARTICLE 1874

Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void. STIPULATION TO CHANGE INTEREST (ART. 1956) ARTICLE 1956

Art. 1956. No interest shall be due unless it has been expressly stipulated in writing. STIPULATION LIMITING COMMON CARRIER’S DUTY OF EXTRAORDINARY DILIGENCE TO ORDINARY DILIGENCE (ART. 1744) ARTICLE 1744

(7) Stipulation limiting common carrier’s duty of extraordinary diligence to ordinary diligence

Art. 1744. A stipulation between the common carrier and the shipper or owner limiting the liability of the former for the loss, destruction, or deterioration of the goods to a degree less than extraordinary diligence shall be valid, provided it be: (1) In writing, signed by the shipper or owner;

(8) Chattel mortgage

(2) Supported by a valuable consideration other than the service rendered by the common carrier; and

(9) Transfer of large cattle

(3) Reasonable, just and not contrary to public policy.

Must be (1) in writing, signed by the shipper or owner; (2) supported by a valuable consideration; and (3) reasonable, just and not contrary to public policy. Must be recorded in the Chattel Mortgage Register (Art. 2140). Requires transfer of the certificate of registration (Rev. Adm. Code, Sec. 523).

CHATTEL MORTGAGE ARTICLE 2140

Art. 2140. By a chattel mortgage, personal property is recorded in the Chattel Mortgage Register as a security for the performance of an obligation. If the movable, instead of being recorded, is delivered to the creditor or a third person, the contract is a pledge and not a chattel mortgage.

Formality STATUTORY BASIS ARTICLE 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 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.

SALE OF LARGE CATTLE

Summary of Formal or Solemn Contracts Formal/Solemn Contract Special Form Required by Law (1) Donations of real Must be in a public property instrument (Art.749). (2) Donations of personal Must be in a written property contract if the donation exceeds

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GENERALLY, form is not required. It is enough that there be consent, subject matter and cause (Art.1318). EXCEPTIONS: (1) Formal contracts and (2) Real contracts

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The necessity for the public document in the contracts enumerated under this article is only for convenience, not for validity or enforceability. Fule v. Court of Appeals (1998): Article 1358, which requires the embodiment of certain contracts in a public instrument, is only for convenience, and registration of the instrument only adversely affects third parties.

When Form is Important: (a) For Validity – e.g. for formal or solemn contracts (b) For Enforceability – e.g. for agreements enumerated under the Statute of Frauds (Art.1403) (c) For Convenience – e.g. for contracts enumerated in Art. 1385

Defective Contracts

ARTICLE 1357

FOUR KINDS OF DEFECTIVE CONTRACTS (PARAS): (a) RESCISSIBLE: Valid until rescinded. All essential requisites of a contract exist but there is injury or damage to one of the parties or to third persons – external or extrinsic defect consisting of an economic damage or lesion. (b) VOIDABLE: Valid until annulled, unless ratified. Defect is more or less intrinsic, as in the case of vitiated consent. (c) UNENFORCEABLE: Cannot be sued upon or enforced, unless it is ratified. Intermediate ground between voidable and void contracts. (d) VOID: No legal effect at all and cannot be ratified or validated. RESCISSIBLE CONTRACTS (ART. 1381) ARTICLE 1381 Art. 1381. The following contracts are rescissible: 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; Those agreed upon in representation of absentees, if the latter suffer the lesion stated in the preceding number; Those undertaken in fraud of creditors when the latter cannot in any other manner collect the claims due them; 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; All other contracts specially declared by law to be subject to rescission.

Art. 1357. If the law requires a document or other special form, as in the acts and contracts enumerated in the following article, the contracting parties may compel each other to observe that form, once the contract has been perfected. This right may be exercised simultaneously with the action upon the contract. (1279a) This article applies only when form is needed for convenience, not for validity or enforceability. Thus, before the contracting parties may be compelled to execute the needed form, it is essential that the contract be: (1) perfected or valid (Art.1357) and (2) enforceable under the Statute of Frauds (Art.1356). ARTICLE 1358

Art. 1358. The following must appear in a public document: (1) Acts and contracts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property; sales of real property or of an interest therein a governed by Articles 1403, No. 2, and 1405; (2) The cession, repudiation or renunciation of hereditary rights or of those of the conjugal partnership of gains; (3) The power to administer property, or any other power which has for its object an act appearing or which should appear in a public document, or should prejudice a third person; (4) The cession of actions or rights proceeding from an act appearing in a public document. All other contracts where the amount involved exceeds five hundred pesos must appear in writing, even a private one. But sales of goods, chattels or things in action are governed by Articles, 1403, No. 2 and 1405.

ARTICLE 1382

Art. 1382. Payments made in a state of insolvency for obligations to whose fulfillment the debtor could not be compelled at the time they were effected, are also rescissible.

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Definition (1) Process designated to render inefficacious a contract validly entered into and normally binding, by reason of external conditions, causing an economic prejudice to a party or to his creditors (Scaevola). (2) Remedy granted by law to the contracting parties and to third persons in order to secure reparation for damages caused them by a contract, even if the contract is valid, by means of the restoration of things to their condition prior to the celebration of said contract (Manresa) (3) Relief to protect one of the parties or a third person from all injury and damages which the contract may cause, to protect some preferential right [Aquino v. Tañedo (1919)]. DIFFERENCE FROM RESCISSION ART. 1191 ARTICLE 1191

Art. 1191 – Rescission or Resolution damages for the breach is purely secondary.

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Art. 1381 – Rescission by reason of lesion subordinated to the existence of an economic prejudice. Hence, where the defendant makes good the damages caused, the action cannot be maintained or continued.

VOIDABLE CONTRACTS ARTICLE 1390 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 by mistake, violence, intimidation, undue influence or fraud.

(RESOLUTION) UNDER

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.

These contracts are binding, unless they are annulled by a proper action in court. They are susceptible of ratification.

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.

Three Ways or Modes of Convalidating a Voidable Contract [Jurado] (1) By prescription of the action for annulment (Art.1391) (2) By ratification or confirmation (Art. 1392-1396) (3) By loss of the thing which is the object of the contract through the fraud or fault of the person who is entitled to institute the action for the annulment (Art.1401)

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.

ARTICLE 1391

Art. 1391. The action for annulment shall be brought within four years.

Congregation of the Religious Virgin Mary v. Orola (2008): Art. 1191 – Rescission or Art. 1381 – Rescission by Resolution reason of lesion Applies only to Does not apply to reciprocal obligations, reciprocal obligation, and such that a party’s therefore, action is not breach thereof partakes based on a breach of an of a tacit resolutory obligation. condition which entitles the injured party to rescission. Predicated on breach of Predicated on injury to faith. economic interests of the party plaintiff/lesion. Principal action that is Subsidiary action. retaliatory in character. The reparation of The cause of action is

This period shall begin: In cases of intimidation, violence or undue influence, from the time the defect of the consent ceases. In case of mistake or fraud, from the time of the discovery of the same. And when the action refers to contracts entered into by minors or other incapacitated persons, from the time the guardianship ceases. UNENFORCEABLE CONTRACTS ARTICLE 1403 Art. 1403. The following contracts are unenforceable, unless they are ratified:

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General Rules of Application of Statute of Frauds (a) The Statute of Frauds is a Rule of Exclusion, i.e. oral evidence might be relevant to the agreements enumerated therein and might therefore be admissible were it not for the fact that the law excludes said oral evidence. (b) The defense of the Statute of Frauds may be waived [Art.1405]. (c) Applies only to executory contracts, not partially or completely executed (consummated) contracts. (d) The Statute of Frauds cannot apply if the action is neither for damages because of the violation of an agreement nor for the specific performance of said agreement [Lim vs. Lim, 10 Phil 635]. (e) The Statute of Frauds is exclusive, that is, it applies only to the agreements or contracts enumerated therein [See Quintos v. Morata (1930)]. (f) The Statute of Frauds is a personal defense, that is, a contract infringing it cannot be assailed by third persons [Art.1408]. (g) Contracts infringing the Statute of Frauds are not void, they are merely unenforceable [Art.1403]. (h) The Statute of Frauds does not determine the credibility or weight of evidence. It merely concerns itself with the admissibility thereof. (i) The Statute of Frauds does not apply if it is claimed that the contract does not express the true agreement of the parties. As long as the true or real agreement is not covered by the Statute of Frauds, it is provable by oral evidence [Cayuga v. Santos].

(1) Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers; (2) Those that do not comply with the Statute of Frauds as set forth in this number. In the following cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum, thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents: (a) An agreement that by its terms is not to be performed within a year from the making thereof; (b) A special promise to answer for the debt, default, or miscarriage of another; (c) An agreement made in consideration of marriage, other than a mutual promise to marry; (d) An agreement for the sale of goods, chattels or things in action, at a price not less than five hundred pesos, unless the buyer accept and receive part of such goods and chattels, or the evidences, or some of them, of such things in action or pay at the time some part of the purchase money; but when a sale is made by auction and entry is made by the auctioneer in his sales book, at the time of the sale, of the amount and kind of property sold, terms of sale, price, names of the purchasers and person on whose account the sale is made, it is a sufficient memorandum; (e) An agreement 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.

VOID CONTRACTS ARTICLE 1409 Art. 1409. The following contracts are inexistent and void from the beginning: Those whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy; Those which are absolutely simulated or fictitious; Those whose cause or object did not exist at the time of the transaction; Those whose object is outside the commerce of men; Those which contemplate an impossible service; Those where the intention of the parties relative to the principal object of the contract cannot be ascertained; 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.

Definition of Unenforceable Contracts Those that cannot be enforced in court or sued upon by reason of certain defects provided by law until and unless they are ratified according to law [De Leon]. Kinds of Unenforceable Contracts: (1) Unauthorized contracts – those entered into by one who has no authority or legal representation or who has acted beyond his powers [Art.1403, par.1]. (2) Those which did not comply with the Statute of Frauds [Art.1403, par.2]. (3) Those where both parties are incapable of giving consent to a contract [Art.1403, par.3].

Definition of Void Contract [De Leon] Those which, because of certain defects, generally produce no effect at all. They are considered as

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inexistent from its inception or from the very beginning.

ARTICLE 1346

Art. 1346. An absolutely simulated or fictitious contract is void. A relative simulation, when it does not prejudice a third person and is not intended for any purpose contrary to law, morals, good customs, public order or public policy binds the parties to their real agreement.

Special Classification of Void Contracts (Paras) (1)INEXISTENT CONTRACTS: like those where essential formalities are not complied with (a) Example: A donation of land in a private instrument (b) This produces no effect whatsoever.

Effect of Simulated Contract (a) If ABSOLUTELY simulated, the contract is void for utter lack of consent. (b) If RELATIVELY simulated, the hidden or intended contract is generally binding (Onglengco v. Ozaeta).

(2) ILLEGAL OR ILLICIT CONTRACTS: (a) Example: A donation made because of an immoral condition, such as illicit sexual intercourse (b) In some way, the donation produces some effect in that that he who gave the donation cannot get back what he has given.

Stipulations must not be contrary to MANDATORY AND PROHIBITIVE LAWS. (1) Pactum commissorium [Arts. 2088, 2130, 1390] A stipulation in a contract of mortgage or pledge which provides that the mortgagee will automatically own the property mortgaged in case the mortgagor fails to pay the loan is VOID [Art. 2088] (2) Pactum de non alienando [Art. 2130] A stipulation forbidding the owner from alienating the immovable mortgaged shall be VOID [Art.2130]. (3) Pactum leonina [Art. 1799] A stipulation which excludes one or more partners from any share in the profits or losses is VOID [Art.1799]

Non-Existing Cause or Object [Paras] Paragraph 3 speaks of contracts “whose object or cause did not exist at the time of the transaction.” This is not exactly correct because there can be valid contracts involving future property; example, sale of future or after-acquired property. Thus, Mr. Justice J. B. L. Reyes notes: “Did not exist at the time of the transaction” should be “Could not come into existence because the object may legally be a future thing.”

Rescissible Damage to a party or to a third person.

Valid until rescinded. 1381 – 1382 Necessary. Can’t be ratified. Prescriptible. Assailable by a party or by a third party who is damaged.

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Voidable

Unenforceable Void Defect Vitiation of Without or in excess of Absolute lack of essential consent authority, or doesn’t requisite in fact or in law. comply with Statute of Fraud, or both parties are incapacitated. Effect Valid until Cannot be enforced by Does not produce any annulled. court action. effect. Grounds 1390 1403 1409 Necessity of Damage Not necessary. Ratification May be ratified. Can’t be ratified. Prescription Imprescriptible. Assailability by third persons Assailable only by a party. Assailable by a party or by a third party who is damaged.

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Effects of Contracts STATUTORY BASIS ARTICLE 1311 Art. 1311. Contracts take effect only between the parties, their assigns and heirs, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law. The heir is not liable beyond the value of the property he received from the decedent. If a contract should contain some stipulation in favor of a third person, he may demand its fulfillment provided he communicated his acceptance to the obligor before its revocation. A mere incidental benefit or interest of a person is not sufficient. The contracting parties must have clearly and deliberately conferred a favor upon a third person. GENERAL RULE: Contracts are generally effective only between the parties, their assigns and their heirs (principle of relativity). EXCEPTIONS (a) Obligations arising from the contract are not transmissible by nature, stipulation or law [Art.1311]. (b) Where there is a stipulation pour autrui. STIPULATION POUR AUTRUI (definition): stipulation in favor of a third person conferring clear and deliberate favor which is merely art of the contract entered into by parties, neither of whom acted as agent of third person. (c) Third person induces another to violate his contract (Art. 1314). (d) Where third persons may be adversely affected by a contract where they did not participate [see Arts. 1312, 2150, 2151]. (e) Where law authorizes creditor to sue on a contract entered into by his debtor [accion directa, Art. 1313]

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Introduction

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(1) Specific or Determinate Thing – capable of particular designation, e.g. this car, the car with plate no. XNY 200 (2) Generic or Indeterminate Thing – refers only to a class, to a genus, and cannot be pointed out with particularity, e.g. a car (GENUS NUNQUAM PERIT)

DEFINITION OF SALES – ARTS. 1458, 1470 Art. 1458. By the contract of sale one of the contracting parties obligates himself to transfer the ownership and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent.

NATURE OF OBLIGATIONS CREATED PER DEFINITION IN

ART.1458 [VILLANUEVA]:

(1) For the SELLER: (a) To transfer ownership and (b) To deliver possession of the subject matter (2) For the BUYER: To pay the price

A contract of sale may be absolute or conditional. ESSENTIAL REQUISITES OF A CONTRACT OF SALE – ART. 1505 ESSENTIAL ELEMENTS OF A VALID CONTRACT OF SALE

[CORONEL V. COURT OF APPEALS, 1996]: (4) Consent or meeting of the minds to transfer ownership in exchange for the price (a) Being a consensual contract, the contract of sale is perfected at the moment there is a “meeting of the minds” upon the thing which is the object of the contract and upon the price. [Art. 1475] (b) Requisites: (1) Capacity, (2) Offer and acceptance, and (3) No vitiation of consent (5) Determinate subject matter (6) Price certain in money or its equivalent

CHARACTERISTICS OF A CONTRACT OF SALE (1) Consensual – perfected by mere consent. (2) Bilateral and Reciprocal – imposes obligations on both parties to the relationship. Consequently, power to rescind is implied. (3) Principal – can stand on its own and does not depend on another contract for validity, as contrasted from an accessory contract. (4) Onerous – imposes valuable consideration as prestation, as distinguished from a gratuitous contract. (5) Commutative – because a thing for value is exchanged for equal value, as contrasted from an aleatory contract. (6) Nominate – given a particular name by law

STAGES OF CONTRACT OF SALE PHASES OF A SALE CONTRACT [VILLANUEVA]: (1) Preparation, conception or generation stage – period of negotiation and bargaining, ending at the moment of agreement of the parties. (2) Perfection or “birth” of the contract – moment when the parties come to agree on the terms of the contract; and (3) Consummation or “death” of the contract – process of fulfillment or performance of the terms agreed upon in the contract.

SALE IS TITLE AND NOT MODE Delivery or Tradition is the mode to transfer ownership and possession to the buyer. When a contract of sale is perfected, the seller is merely obligated to transfer ownership and to deliver the property. Transfer of ownership is effected only upon delivery.

OBLIGATIONS CREATED – ART. 1165 Art. 1165. When what is to be delivered is a determinate thing, the creditor, in addition to the right granted him by Article 1170, may compel the debtor to make the delivery.

Equatorial Realty Dev. v. Mayfair Theater (2001): Sale is merely title that creates the obligation on the part of the seller to transfer ownership and deliver possession, but on its own, sale is not a mode that transfers ownership.

If the thing is indeterminate or generic, he may ask that the obligation be complied with at the expense of the debtor.

SALE DISTINGUISHED FROM OTHER CONTRACTS DONATION

Sale

If the obligor delays, or has promised to deliver the same thing to two or more persons who do not have the same interest, he shall be responsible for any fortuitous event until he has effected the delivery.

Donation

Onerous Perfected consent

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mere

Must comply with the formalities required by law. [Art 745, CC]

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When the price of the contract of sale is simulated, the sale may be void but the act may be shown to have been in reality a donation or some other contract. [Art.1471, CC]

There is a novation of the contract of loan into a contract of sale when the creditor agrees to accept a thing in payment of the debt. Hence, if the thing given in payment turns out to belong to another, the creditor’s remedy should be governed by the law on sales, not loan. [Baviera]

BARTER

Sale Consideration is price in money or its equivalent

Barter Consideration another thing

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Bilateral promise to buy and sell [Asked in 80, 91] A promise to buy and sell a determinate thing for a price certain is reciprocally demandable. [Art 479, CC]

is

Barter is a contract where one of the parties binds himself to give one thing in consideration of the other’s promise to give another thing [Art.1638, CC]

Like a sale, the thing must be determinate and the price, certain.

If consideration consists partly in money and partly in another thing, the intention of the parties determines whether the contract is one of sale or barter: If manifest intention is not clear: Barter when the value of thing is more than the amount of money or its equivalent; otherwise, sale. [Art.1468]

CONTRACT OF SALE/CONTRACT TO SELL Contract of Sale Contract to sell Ownership is transferred upon delivery Non-payment is a resolutory condition

CONTRACT FOR A PIECE OF WORK

Sale Goods are manufactured or procured in the ordinary course of business For the general market, whether on hand or not

Contract for a Piece of Work Goods are manufactured for customer upon his special order For a specific customer

Conditional Contract of Sale Sale is already perfected A subsequent buyer is presumed to be a buyer in bad faith

The fact that the object were made by the seller only when customers placed their orders, does not alter the nature of the contract of sale, for it only accepted such orders as called for the employment of such materials as it ordinarily manufactured or was in a position habitually to manufacture such. [Celestino Co & Co vs. Collector, 1956]

Price is more freely agreed upon, fixed by the parties

No perfected sale yet A subsequent buyer is presumed to be a buyer in good faith

CAPACITY OF PARTIES – ARTS. 1489-1492 All persons who have capacity to enter into obligations may enter into a contract of sale [Art 1489, CC] KINDS OF INCAPACITY

DACION EN PAGO

No pre-existing debt Creates an obligation

Contract to sell

Parties to a Contract of Sale

When each product or system executed is always UNIQUE and could not mass-produce the product because of its very nature, such is a contract for a piece of work. [Commissioner vs. Engineering Equipment and Supply Co., 1975]

Sale

Ownership is only transferred upon full payment of price Full payment is a positive suspensive condition, hence nonpayment would not give rise to the obligation to transfer ownership

(1) Absolute incapacity (2) Relative incapacity (3) Specific incapacity/Special disqualifications

Dacion en pago Pre-existing debt Extinguishes the obligation (mode of payment) Price is value of the thing given

ABSOLUTE INCAPACITY – ARTS. 1327, 1397, 1399 (MIND-CI) [ART. 1327, CC] (1) Minors (2) Insane or Demented

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(3) Deaf-mutes who do not know how to write (4) Civil Interdiction (5) Judicially-declared Incompetents (Art. 39) (a) Prodigals (b) Imbeciles (c) Absence & presumption of death (d) Persons not of unsound mind but by reason of age, disease, weak mind, and other similar causes, cannot take care of themselves and manage their property without outside aid (Easy prey for deceit and exploitation)

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(5) Lawyers Cannot acquire or purchase property or rights in litigation in which they take part by virtue of their profession Rationale: Lawyers may have undue influence over client; greed may get the better of the sentiments of loyalty and disinterestedness. [Valencia v Cabanting, 1991] Prohibition is definite and permanent and cannot be cured by ratification. [Rubias v Batiller, 1973]

RELATIVE INCAPACITY: MARRIED PERSONS (1) HUSBAND AND WIFE [ART. 1490, CC] General Rule: Cannot sell property to each other Exceptions: (1) Separation of property in marriage settlement, OR (2) Judicial separation of property.

Exceptions: An assignment to a lawyer by his client of an interest in the property does not violate Art 1491, where: (1) A judgment has been rendered and has become final; and (2) In case of contingency fee arrangements: the interest of the lawyer may be annotated as an adverse claim on the property awarded to his client [Director of Lands v Ababa, 1979]

(2) ALIENAGE [ART. 39, CC] General Rule: Aliens are disqualified from purchasing or acquiring real property. Exception: If acquisition is through hereditary succession

(6) Justices, Judges, prosecuting attorneys, clerks and other officers and employees connected with the administration of justice Cannot acquire or purchase property or rights in litigation or levied upon on execution before the court within whose jurisdiction or territory they exercise their respective functions.

(3) TRUSTEESHIP [ART. 39] SPECIAL DISQUALIFICATIONS – ARTS. 1491-1492 SPECIFIC INCAPACITY/ SPECIAL DISQUALIFICATIONS (ART. 1491, CC) (AGE-PLJ) (1) Agents Cannot purchase or acquire property whose administration or sale was entrusted to them

Rationale: to prevent fraud and to surround their profession with prestige. Prohibition applies only on sales or assignment during the pendency of litigation involving the property. [Macariola v Asuncion, 1963]

Exception: Principal gives consent. (2) Guardian Cannot purchase property of person under his guardianship

Art 1492: The prohibitions in the two preceding articles (Arts. 1490, 1491) are applicable to sales in legal redemption, compromises and renunciations.

Rationale: Guardianship is a trust of the highest order, and the trustee cannot be allowed to have any inducement or neglect his ward’s interest. [Phil Trust Co v Roldan, 1956]

EFFECTS OF INCAPACITY (1) Absolute Incapacity (a) If both parties are incapacitated: UNENFORCABLE [Art. 1403 (3)] (b) If only 1 party is incapacitated: VOIDABLE (c) If necessaries are sold and delivered to an incapacitated person: pay a reasonable price therefor. [Art 1489, CC] “Necessaries” – those which are indispensable for sustenance, dwelling, clothing, medical attendance, education and transportation. [Art 194, Family Code]

(3) Executors and Administrators Cannot acquire or purchase property of estate under their administration (4) Public Officers and Employees Cannot acquire or purchase property of State/any of its subdivisions, GOCC or administration, the administration of which was entrusted to them. Includes judges and government experts who, in any manner whatsoever take part in the sale.

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(2) Relative Incapacity Sale between spouses is VOID. Rationale: (1) To protect 3rd persons who may have contracted with the spouse (2) To avoid undue advantage of the dominant spouse over the weaker spouse. (3) To avoid circumvention of the prohibition against donations between spouses. [Medina v CIR, 1961]

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(b) Church (c) Narcotics or dangerous drugs except upon prescription (RA 6425, the dangerous drugs act of 1972) (2) When right is not intransmissible [Art 1347, CC] Sale of future inheritance is void. [Art. 1347, CC]— The rights to succession are transmitted from the moment of the death of the decedent [Art. 777, CC]. Thus, one cannot sell or promise to sell what he expects to inherit from a living person. [Rivero v. Serrano, 1950]

Such prohibition shall likewise apply to common law spouses. [Calimlim-Canulas v Fortun, 1984] BUT if already sold to a third person who relied on the title of his immediate seller, reconveyance to the seller spouse is no longer available [Cruz v CA, 1997]

When the subject matter is illicit, the contract of sale is void [Art. 1409 (7)] EXISTING, FUTURE, CONTINGENT

The goods which form the subject of a contract of sale may either be— (1) EXISTING goods owned or possessed by the seller; (2) Goods to be manufactured, raised, OR acquired by the seller – “FUTURE GOODS”; (3) Goods whose acquisition by the seller depends upon a CONTINGENCY which may or may not happen. [Art 1462, CC] (4) Things having POTENTIAL existence may be the object of a contract of sale. [Art 1461, CC]

(3) Specific Incapacity/ Special Disqualifications Contracts expressly prohibited by law are void and cannot be ratified. Neither can the right to set-up the defense of illegality be waived. [Art. 1409 (7), CC] Sales entered into by guardians, administrators, and agents (specific incapacities) in violation of Art. 1491 may be ratified by means of and in the form of a new contract when the cause of nullity has ceased to exist. Ratification is valid only from date of execution of the new contract and does not retroact.

Sale of MERE hope or expectancy Valid BUT subject to condition that the thing will come into existence

Those entered into by public officers/employees, justices and judges, and lawyers in violation of Art. 1491 are inexistent and void from the beginning. [Rubias v Batiller, 1973].

Example: “Next catch” of a fisherman. Valid BUT subject to condition that the thing will come into existence

Subject Matter

Example: “Next catch” of a fisherman.

REQUISITES OF A VALID SUBJECT MATTER –

ARTS. 1459-1465

(1) Licit (2) Existing, Future, Contingent (3) Determinate or determinable MUST BE LICIT [ART. 1459]

The thing is licit when— (1) Within the commerce of man [Art 1347, CC] Example of properties that are not within the commerce of man: (a) Those belonging to the State or its political subdivisions intended for public use or public service. (Art 420, CC).

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Sale of VAIN hope or expectancy Void Example: Sale of a falsified raffle ticket which will never win. Void Example: Sale of a falsified raffle ticket which will never win.

Emptio Rei Speratei

Emptio Spei

Valid Contract is dependent upon the existence of the thing (a) If the thing does not come into existence: contract is considered as not made and there is no obligation to pay the price

Void Parties intend the contract to exist at all events (a) Buyer will have to pay the price even if the thing does not actually come into existence

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(4) Things Subject to Resolutory Condition Sale of things subject to a resolutory condition may be the object of a contract of sale. [Art 1465, CC]

Emptio Spei

In case of doubt, the presumption is in favor of emptio rei speratae since it is more in keeping with the commutative character of the contract.

Examples: (a) things acquired under legal or conventional right of redemption; or (b) subject to reserva troncal,

DETERMINATE OR DETERMINABLE

A thing is DETERMINATE when it is particularly designated or physically segregated from all others of the same class. [Art 1460, CC]

(5) Quantity of Subject Matter not determinate The fact that the quantity is not determinate shall not be an obstacle to the existence of the contract provided it is possible to determine the same, without the need of a new contract between the parties. [Art. 1349, CC]

A thing is DETERMINABLE when it is capable of being made determinate at the time the contract was entered into without the necessity of a new or further agreement between the parties. [Art 1460, CC] Failure to state the exact location of the land does not make the subject matter indeterminate, so long as it can be located. [Camacho v CA, 2007] The fact that the exact area of the land specified in the contract of sale is subject to the result of a survey does not render the subject matter indeterminate. [Heirs of Juan San Andres v. Rodriguez, 2000]

Obligations of the Seller to Transfer Ownership

PARTICULAR KINDS (1) Future Goods Sale of future goods or those goods which are to be manufactured, raised, or acquired by seller after the perfection of the sale is valid (Art 1462, CC). “Future goods” are those capable of future existence.

SALE BY A PERSON NOT THE OWNER AT TIME OF DELIVERY – ARTS. 1462, 1505, 1459 General Rule: Ownership is not acquired by the buyer. One cannot give what one does not have. NEMO DAT QUOD NON HABET [Art 1505, CC] Exceptions: (RE-ROM) (1) Seller has a Right to transfer ownership (a) Seller need not be the owner of the thing at the time of perfection of the contract. It is sufficient that seller has a right to transfer ownership thereof at the time it is delivered. [Art. 1459] (b) One who sells something he does not own yet is bound by the sale when he acquires the thing later [Bucton vs Gabar, 1974]

(2) Sale of Undivided Interest or Share (a) Sole owner of a thing may sell an undivided interest therein. [Art 1463, CC] e.g.: a fraction (½) or percentage (50%), or “my share in the property.” (b) The sale of an undivided share in a specific mass of fungible goods makes the buyer a coowner of the entire mass in proportion to the amount he bought. [Art 1464,CC] (c) Co-owner cannot sell more than his share [Yturralde v CA, 1972]

(2) Estoppel: Owner is, by his conduct, precluded from denying the seller’s authority to sell. [Art. 1434]

(3) Sale of Things in Litigation (a) Sale of things under litigation entered into by defendant, without the approval of the litigants or the court is rescissible. [Art 1381 (4)] (b) NO RESCISSION where the thing is legally in the possession of 3rd persons who did not act in bad faith [Art 1385 (2)]

(3) Registered land bought in good faith (a) General rule: Buyer need not go beyond the Torrens title (b) Exception: When he has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make further inquiry (4) Order of courts; Statutory Sale

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(a) In execution sale, the buyer merely steps into the shoes of the judgment debtor [Rule 39, sec. 33, ROC]

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When buyer has an intention to pay and the seller has an expectation to receive the price (a) If simulated: Sale is VOID; BUT act may be shown to have been a donation or some other act or contract. [Art 1471, CC] (b) An admission of non-payment of any centavo in exchange of a property in a contract of sale renders the sale VOID. [Labagala vs. Santiago, 2001] (c) If Price is false – when the real consideration is not the price stated in the contract: i. Sale is void ii. UNLESS proved to be founded on another true and lawful price [Art 1353, CC]

(5) When goods are purchased in Merchant’s store, Fair, or Market [Art 1505, CC] (a) The policy of the law has always been that where the rights and interest of the vendor clash with that of an innocent buyer for value, the latter must be protected. [Sun Brothers and Co. vs. Velasco, 1958] SALE BY A PERSON HAVING A VOIDABLE TITLE – ARTS. 1506, 559 (1) True owner may recover the thing when the ff. requisites concur: (a) Subject matter is movable (b) Owner has either lost the thing or has been unlawfully deprived. [Art 559, CC]

HOW PRICE IS DETERMINED (1) Fixed by agreement of the parties (a) Fixing of price cannot be left to the discretion of one of the parties (b) BUT if such is accepted by the other, sale is perfected. [Art 1473, CC] (2) Determination is left to the judgment of a specified person (a) If unable or unwilling: Sale is inefficacious UNLESS parties subsequently agree about the price. (b) If in bad faith/by mistake: Courts may fix price (c) If 3rd person is prevented from fixing price by fault of seller or buyer: Innocent party may avail of remedies. (3) The price is made in reference to another thing, or when the price fixed is the price of the commodity on a definite day, or in a particular exchange or market, OR when the amount fixed is above or below the price on such day, exchange or market. [Art 1472, CC]

(2) Reimbursement is necessary before owner can recover when: (a) Buyer acted in good faith (b) Acquired at a public auction [Art 559, CC] (3) Recovery no longer possible when: (a) Buyer in good faith (b) Acquired it at a merchant’s store, fair or market. [Art 1506, CC]

Price MEANING OF PRICE – ARTS. 1469-1474 Price signifies the sum stipulated as the equivalent of the thing sold and also every incident taken into consideration for the fixing of the price put to the debit of the buyer and agreed to by him [Inchausti v. Cromwell, 1911]

INADEQUACY OF PRICE – ARTS. 1355, 1470 General Rule: Does not affect a contract of sale. [Art. 1470, CC] The stipulation in a contract of sale which states that the consideration is “P1 and other valuable considerations” does not make the contract void. Gross inadequacy of price does not affect the contract of sale except that it may indicate a defect in consent. [Bagnas v. C.A., 1989]

REQUISITES FOR A VALID PRICE (Ce-MoRe) (1) Certain or ascertainable at the time of perfection (2) In Money or its equivalent (a) Example of “equivalent”: Letters of credit (b) If price is partly in money and partly in another thing: Determine manifest intention of the parties to see whether it was barter or sale. [Art 1468,CC] (c) If intention does not clearly appear, it shall be considered a barter if the value of the thing exceed the amount of money or its equivalent. [Art 1468,CC] (3) Real

Exceptions: (1) It may indicate a defect in consent such as fraud, mistake, or undue influence (2) It may indicate that the contract was in reality a donation or some other act or contract (3) Inadequacy would make the contract of sale rescissible where a contract was entered into by the guardian of a ward or a representative of an absentee, without the court’s approval, and the

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owner suffers lesion by more than ¼ of the value of the thing sold. [Art 1381 (1) (2), CC]

(a) The contract of sale is perfected at the moment there is meeting of the minds upon the thing which is the object of the contract and upon the price. [Art. 1475, par.1, CC] (b) From that moment, the parties may reciprocally demand performance, subject to the provisions of law governing the form of contracts. [Art. 1475, par. 2, CC] (c) A private instrument signed by the defendant reciting that he bought from the plaintiff a property at a specific address for a specific price to be paid as soon as a bill of sale is signed is not a mere draft but a perfected agreement and hence, obligatory, even if there was no statement as to area or price per meter. [Goyena v. Tambunting, 1902] General Rule: Offer may be withdrawn at any time without even communicating such withdrawal to the interested buyer.

WHEN NO PRICE AGREED – ART. 1474 (1) Sale is inefficacious [Art. 1474, CC] (2) But if the thing or part thereof has been delivered and appropriated by the buyer, he must pay a reasonable price therefor. (a) What is a reasonable price is a question of fact dependent on the circumstances of each particular case. [Art 1474, CC] (b) The reasonableness of a price may be determined on the basis of a company’s balance sheet showing the book value or fair market value of its shares. [Philippine Free Press vs. CA, 2005] MANNER OF PAYMENT MUST BE AGREED UPON Disagreement on the manner of payment is tantamount to a failure to agree on the price. [Toyota Shaw vs. CA, 1995]

Exception: 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. [Art 1324, CC]

EARNEST MONEY VS. OPTION MONEY – ART.

1482

Earnest Money Definition: paid in advance of the purchase price agreed upon by the parties in a contract of sale, given by the buyer to the seller, to bind the latter to the bargain. [Asked in 93, 02]

Exception to the exception: Cannot be withdrawn within a certain period if offer is founded upon a consideration. [Art 1324 and 1479, CC]

Option Money vs. Earnest Money [Limson vs. CA, 2001] Option Money Earnest Money Separate and distinct consideration from the purchase price Given when sale is not yet perfected When given, the wouldbe-buyer is not required to buy, but may even forfeit it depending on the terms of the option Grantee of option is still undecided whether or not to buy or sell the property [Baviera]

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(2) OPTION CONTRACT – ARTS. 1479, 1324 (a) Definition i. An accepted unilateral promise to buy or sell supported by a consideration distinct from the price (Art 1479, CC) ii. An option contract is a privilege existing in one person, for which he had paid a consideration, which gives him the right to buy, for example, certain merchandise or certain specified property, if he chooses, at any time within the agreed period, at a fixed price. [De la Cavada vs. Diaz, 1918] iii. An option is not of itself a purchase, but merely secures the privilege to buy. iv. A consideration for an optional contract is just as important as the consideration for any other kind of contract. If there was no consideration for the option, then it cannot be enforced any more than any other contract where no consideration exists. [Baviera]

Part of purchase price [Art 1482, CC] Given only when there is already a sale When given, the buyer is bound to pay the balance Buyer manifests his earnest desire to buy the property

Formation of Contract of Sale

(b) Difference from Sale Sale

PREPARATORY – ART. 1479 (1) OFFER – ART. 1475 In General:

Bilateral

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Option Contract Unilateral: gives a right to buy or to sell, but imposes no obligation

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Option Contract

on the part of the option-holder, aside from the consideration for the offer Sale of right to purchase

buy or sell

only a right to match the 1st offer to buy should the grantor decide to sell

The promise made by one party is the consideration for the promise made by the other. [Baviera]

As to enforceability If the right to the first offer is embodied in the contract, it should be executed according to the terms stipulated. The right should be enforced according to the law on contracts and not on the panoramic and indefinite rule on human relations. This juridical relation is not amorphous nor is it merely preparatory. [Equatorial Realty Development vs. Mayfair, 1996]

PERFECTION – ARTS. 1475, 1319, 1325, 1326 WHEN PERFECTED

(1) Contract of sale is a consensual contract, hence perfected at the moment of the meeting of the minds of the parties as to the object of the contract and the price. [Art 1475,CC] (2) It is the proof of all the essential elements of the contract of sale, and not the mere giving of earnest money, which establishes the existence of a perfected sale. [Platinum Plans Phils. vs. Cucueco, 2006]

When the grantee fails to exercise the right Only after the grantee fails to exercise its right of 1st priority under the same terms and conditions within the period agreed upon, could the grantor validly offer to sell the property to a 3rd person under the same terms as offered to the grantee. [Paranaque Kings vs. CA, 1997]

EFFECT OF PERFECTION

From the moment of the perfection of the contract of sale, the parties may reciprocally demand performance, subject to the provisions of the Statute of Frauds. [Art 1475, CC]

As to the effects of the violation of the right (a) A sale made in violation of a right of first refusal is valid but rescissible, and may be the subject of an action for specific performance. [Rosencor Devt. Corp. Vs. Inquing, 2001] (b) However, before the sale to the 3rd person may be rescinded, he must have been actually or constructively aware of the right of 1st refusal at the time he bought it. (c) The sanction for the enforcement of the right of first refusal against third persons is based on Art. 19 of NCC, as no real right was created on the property.

FORM AND OFFER

(a) Offer must be certain as to the object and price [Art. 1319, CC] (b) Business advertisements of things for sale are not offers but mere invitations to make an offer Exception: If otherwise provided [Art. 1325, CC] (c) Advertisements for bidders are simply invitations to make proposals (Asked in 80) Advertiser is not bound to accept the highest or lowest bid. Exception: Unless the contrary appears [Art. 1326, CC]

st

Right of 1 Refusal

Bilateral Price and other terms of payment are certain

Unilateral Price and other terms are yet to be agreed upon The thing to be sold must be determinate

FORMALITIES OF THE CONTRACT – ART. 1403

(D) (E)

General rule: No form required as to validity since sale is perfected by consent of the parties.

Distinction from Option Contract st Option Contract Right of 1 Refusal Separate consideration is necessary Grantee has the right to

st

Right of 1 Refusal

(4) MUTUAL PROMISE TO BUY AND SELL – ART. 1479 A promise to buy and sell a determinate thing for a price certain is reciprocally demandable. [Art 1479]

(3) RIGHT OF FIRST REFUSAL

Difference from Sale Sale

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The sale may be [Art.1483, CC]: (1) Written (2) Oral (3) Partly written and partly oral

No need for a separate consideration No right to buy or sell,

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(4) Inferred from the conduct of the parties

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Where to Deliver (1) A hierarchy is followed (STOR): (a) Stipulation (b) Usage of trade (c) Seller’s place of business (office) (d) Seller’s residence

Exceptions: (1) Statute of Frauds [Art,1403 (2),CC] (a) Contract or some memorandum thereof must be in writing and subscribed by the party or his agent, otherwise contract is unenforceable; unless ratified by failure to object to oral evidence or acceptance of benefits under the contract (b) Statute of Frauds covers: i. Sale of goods, chattels, or things in action at a price not less than P500 ii. Sale not to be performed within 1 year iii. Sale of real property or an interest therein [Art 1358, CC] (c) Applies only to executory contracts, not to contracts either totally or partially performed. [Iñigo v. Estate of Maloto, 1967]

(2) In case of specific goods, which the parties knew to be at some other place when the contract was perfected, that place is the place of delivery (3) If goods are at the time of sale possessed by a third person, then there is no delivery until he acknowledges to the buyer that he holds the goods for the buyer. When to Deliver Absent a stipulation as to time, delivery must be made within a reasonable time; demand or tender of delivery shall be made at a reasonable hour.

(2) Sale of realty by an agent Agent’s authority must be in writing, otherwise the sale is void [Art.1874, CC]

WHEN DELIVERY DOES NOT TRANSFER TITLE (1) SALE ON APPROVAL, TRIAL, OR SATISFACTION General Rule: Title remains with the seller

(3) Sale of large cattle To be valid, transfer of large cattle must be registered with the municipal treasurer [Sec. 529, Revised Administrative Code]

Exceptions: (a) Buyer signifies his approval or acceptance to the seller or does any other act adopting the transaction (b) Retains the goods without giving notice of rejection after the time fixed has expired; if no time has been fixed, after the expiration of a reasonable time [Art 1502, CC]

Transfer of Ownership

Difference between Sale on Approval and Sale on Return Sale on Approval Sale on Return

MANNER OF TRANSFER – ARTS. 1477, 1496-1501 Obligation to transfer ownership and to deliver is implied in every contract of sale [Arts. 1458-1459]

Ownership does not pass upon delivery

Transfer of ownership requires delivery [Art. 1495] GENERAL CONCEPTS

Delivery comprises 2 obligations in Art. 1495: (1) Actual duty to deliver (2) Transfer of ownership – can only accomplished via delivery

be

Depends on the character or quality of goods Subject to a suspensive condition Risk of loss remains with the seller

What to Deliver (1) Thing sold [Art. 1495] (2) Fruits [Art. 1164 & 1537] (3) Accessions and accessories [Art. 1166 & 1537] (a) Improvements by seller at his expense grants him a usufructuary right. (b) No indemnification (c) But he may remove it to the extent that there is no damage [Art. 1538]

Ownership passes upon delivery, but buyer may revest ownership in the seller by returning or tendering the goods within the time fixed in the contract Depends on the will of the buyer Subject to a resolutory condition Risk of loss remains with the buyer

Express Reservation If it was stipulated that ownership in the thing shall not pass to the purchaser until he has fully paid the price [Art 1478, CC]

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the latter must be protected. [Sun Brothers and Co. vs. Velasco, 1958] Implied Reservation The following are instances when there is an implied reservation of ownership: (a) Goods are shipped, but by the bill of lading goods are deliverable to the seller or his agent, or to the order of the seller or his agent (b) Bill of lading is retained by the seller or his agent. (c) When the seller of the goods draws on the buyer for the price and transmits the bill of exchange and bill of lading to the buyer, and the latter does not honor the bill of exchange by returning the bill of lading to the seller.

(4) SALE BY PERSON HAVING A VOIDABLE TITLE (a) True owner may recover the thing when the ff. requisites concur: i. Subject matter is movable ii. Owner has either lost the thing or has been unlawfully deprived. [Art 559, CC] (b) Reimbursement is necessary before owner can recover when: i. Buyer acted in good faith ii. Acquired at a public auction [Art 559, CC] (c) Recovery no longer possible when: i. Buyer in good faith ii. Acquired it at a merchant’s store, fair or market. [Art 1506, CC]

(2) WHEN SALE NOT VALID eg. When the thing sold is a public property

KINDS OF DELIVERY (1) ACTUAL DELIVERY (a) When deemed made: when the thing sold is placed in the control and possession of the vendee [Art. 1497] (b) Not always essential to passing of title [Art. 1475] (c) Parties may agree when and on what conditions the ownership shall pass to the buyer [E.g.: Art 1478 where ownership will only pass after full payment of the price]

(3) WHEN SELLER IS NOT THE OWNER General Rule: Ownership is not acquired by the buyer. One cannot give what one does not have. [Art 1505, CC] Exceptions: (RE-ROM) (a) Seller has a Right to transfer ownership i. Seller need not be the owner of the thing at the time of perfection of the contract. It is sufficient that seller has a right to transfer ownership thereof at the time it is delivered. [Art. 1459] ii. One who sells something he does not own yet is bound by the sale when he acquires the thing later [Bucton vs Gabar, 1974]

(2) CONSTRUCTIVE DELIVERY (a) Execution of public instrument [Art 1498, par. 1] General rule: produces the same legal effects of actual delivery.

(b) Estoppel: Owner is, by his conduct, precluded from denying the seller’s authority to sell. [Art. 1434]

Exceptions: i. The intention of the parties is otherwise. ii. At the time of execution, the subject matter was not subject to the control of the seller which must subsist for a reasonable length of time after execution. [Pasagui v Villablanca, 1975] “Control” over thing sold must be such that seller is capable of physically transferring it to buyer

(c) Registered land bought in good faith i. General rule: Buyer need not go beyond the Torrens title iii. Exception: When he has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make further inquiry

(b) Symbolic Delivery i. Delivery of keys of the place or depositary where the movable is stored or kept. [Art 1498, CC] ii. Unless otherwise agreed, when symbolic delivery has been made, the seller is not obliged to remove tenants to place the buyer in actual possession of the property as he has already complied with his obligation to transfer ownership of and deliver the thing sold. [Power Commercial

(d) Order of courts; Statutory Sale In execution sale, the buyer merely steps into the shoes of the judgment debtor [Rule 39, sec. 33, ROC] (e) When goods are purchased in Merchant’s store, Fair, or Market [Art 1505, CC] The policy of the law has always been that where the rights and interest of the vendor clash with that of an innocent buyer for value,

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and Industrial Corp. v. CA, 1997; Sabio v. The International Corporate Bank, Inc., 2001]

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(3) 2 or more buyers with conflicting interests at odds over the rightful ownership of the thing sold; (4) Same seller

(c) Tradition Longa Manu (Long Hand) i. Delivery of thing by mere agreement. ii. Example: Seller points to the property without actually transferring physical possession thereof. iii. When an employer assigned all its rights and title to all surplus property salvaged by the contractor, tradition longa manu takes place. Delivery is upon the moment a thing is salvaged. [Board of Liquidators v. Floro, 1960]

RULES GOVERNING SALE OF MOVABLES, IMMOVABLES AND UNREGISTERED LANDS

(1) Sale of Movables Ownership shall be transferred to the person who may have first taken possession in good faith.

(2) Immovables

(a) Ownership belongs to the person who: i. In good faith first recorded it in the Registry of Property; OR ii. If there is no inscription, ownership passes to the person who in good faith was first in possession; OR iii.In the absence thereof, to the person who presents the oldest title, PROVIDED there is good faith.

(d) Tradition Brevi Manu (Short Hand) MOVABLE is delivered when the buyer had the thing already in his possession before the sale took place, not as owner but as lessee, borrower, or depositary. (e) Tradition Constitutum Possessorium Seller continues to be in possession of the property sold, by virtue of a lease contract agreement with the vendee.

“Oldest Title” – any public document showing acquisition of the land in good faith. To constitute “title,” the transmission of ownership must appear in a public document [Art. 1358 (1)]

(f) Delivery to a Common Carrier General Rule: Delivery to the courier or carrier is tantamount to delivery to buyer. Exceptions i. Seller reserved title by the form of the bill of lading, with intent to remain the owner, not merely for the purpose of securing payment, OR ii. Contrary intention appears in the contract (i.e. seller is required to deliver goods to buyer at the point of destination) iii. F.O.B. (Free on Board or Freight on Board): When seller bears the expenses of transportation up to the F.O.B. point. iv. C.I.F. (Cost, Insurance, Freight): Price quoted includes the costs of the goods, insurance, and freight charges on the goods up to the point of destination. v. F.A.S. (Free Alongside): Seller bears the expenses of transportation until he delivers the goods alongside a vessel at a named port.

Examples: Deed of Sale, Deed of Donation, Deed of Trust (b) Registration includes any entry made in the Primary Entry Book of the registry, including both registration in its ordinary and strict sense and cancellation, annotation, and even marginal notes. [Cheng v. Genato, 1998] i. Pencilled entries on the title are not considered registration [AFPMBAI v. Court of Appeals, 1999]. (3) Sale by Virtue of Execution and Attachment Art. 1544 does NOT apply to the sale of unregistered land at an execution sale because a buyer of unregistered land at an execution sale only steps into 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. [Carumba v. CA, 1970]

DOUBLE SALES – ART. 1544 General Rule: Prior tempore, potior jure (“he who is first in time is preferred in right”) applies.

(4) Sale of Unregistered Land (a) Instrument or deeds establishing, transmitting, acknowledging, modifying or extinguishing rights with respect to lands not registered under the Land Registration Act or the Spanish Mortgage Law, are required to be registered in the Registry of Property to prejudice 3rd persons, although such

Requisites [Cheng v Genato, 1998]: (1) 2 or more valid sales; (2) Same subject matter;

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registration is understood to be “w/o prejudice to a 3rd party with a better right”. [PD 1528 Sec 113] (b) Art. 1544 applies to unregistered land subject to a conventional sale (because of Art. 1358) but NOT to unregistered land subject to judicial sale.

Annotation of Adverse Claim causes which may not adjudged invalid or be attributable to the unmeritorious by the claimant Court Both are intended to protect the interest of a claimant by notifying and cautioning other persons that said property is subject to a claim. Lis Pendens

PROPERTY REGISTRATION DECREE (1) REQUISITES FOR REGISTRATION OF DEED OF SALE IN

The two are not contradictory or repugnant to one another; nor does the existence of one automatically nullify the other, and if any of the registrations should be considered unnecessary or superfluous, it would be the notice of lis pendens [A. Doronila Resources Development Inc v CA, 1988]

GOOD FAITH

Purchaser in good faith (a) General Characteristics i. One who buys the property of another, without notice that some other person has a right to or interest in such property, and who pays a full and fair price for the sale, at the time of the purchase or before he has notice of the claim/interest of some other person in the property. [Agricultural and Home Extension Development Group v CA, 1992]

(2) ACCOMPANIED BY VENDORS DUPLICATE CERTIFICATE OF TITLE, PAYMENT OF CAPITAL GAINS TAX, AND DOCUMENTARY TAX REGISTRATION FEES

Must be accompanied by: (a) Vendor’s duplicate certificate of title (b) Payment of capital gains tax – 6% of the selling price or zonal value, whichever is higher (c) Documentary tax registration fees – 1.5% of the selling price or zonal value, whichever is higher

(b) Presumption

General Rule: As a rule, he who asserts the status of a purchaser in good faith and for value has the burden of proving such assertion. This onus probandi cannot be discharged by mere invocation of the legal presumption of good faith, i.e., that everyone is presumed to act in good faith [Mathay v CA, 1998]

Risk of Loss GENERAL RULE – ARTS. 1263, 1189 Res perit domino: Owner bears risk of loss BASIS: Ownership is not transferred until delivery.

When buyer is presumed to be in bad faith: i. Annotation of adverse claim: Places any subsequent buyer of the registered land in bad faith. [Balatbat v CA, 1996] ii. Annotation of Lis Pendens: Buyer cannot be considered an innocent purchaser for value where it ignored the lis pendens on the title. iii.A purchaser of a parcel of land cannot close his eyes to facts which should put a reasonable man upon his guard, such as when the property subject of the purchase is in the possession of persons other than the seller. A buyer who could not have failed to know or discover that the land sold to him was in the adverse possession of another is a buyer in bad faith. (Heirs of Ramon Durano v Uy, 2010) Lis Pendens May be cancelled even before the action is finally terminated for

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WHEN LOSS OCCURRED BEFORE PERFECTION Such loss is borne by seller WHEN LOSS OCCURRED AT TIME OF PERFECTION – ARTS. 1493 AND 1494 Loss must have occurred before the contract was entered into, without the knowledge of both parties

Total Loss Contract is ineffective.  Because there can be no contract without an object

Annotation of Adverse Claim May be cancelled only in one instance, i.e., after the claim is

Partial Loss (Or loss which results in substantial change in character) Buyer may withdraw from the contract OR Buy the remainder at a proportionate price

WHEN LOSS OCCURRED AFTER PERFECTION BUT BEFORE DELIVERY

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Seller bears risk of loss Buyer does not bear risk of loss until goods are delivered to him WHEN OWNERSHIP IS TRANSFERRED – ART.

1504

WHEN OWNERSHIP IS TRANSFERRED TO THE BUYER, THE GOODS ARE AT THE BUYER’S RISK

(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. [Art 1504, CC]

Goods are deliverable to bearer

By delivery of the document to another

Endorsed in blank by the person to whose order the goods were supposed to be delivered Goods are deliverable to the order of a specified person

By indorsement of such person [Art. 1509, CC]

WHO MAY NEGOTIATE IT? [ART.1512, CC]

(1) Owner (2) Person to whom the possession or custody of the document has been entrusted by the owner (a) If bailee undertakes to deliver the goods to such person (b) If document is in such form that it may be negotiated by delivery

Documents of Title

A PERSON TO WHOM A DOCUMENT HAS BEEN NEGOTIATED ACQUIRES—

(1) Rights of the vendor (2) Rights of the original consignee

DEFINITION – ART. 1636 A document used in the ordinary course of business in the sale or transfer of goods, as proof of the possession or control of the goods, or authorizing or purporting to authorize the possessor of the document to transfer or receive, either by endorsement or by delivery, goods represented by such document. [Art. 1636]

NON-NEGOTIABLE DOCUMENTS OF TITLE Goods described in a non-negotiable document of title are deliverable only to a specified person. Carrier will not deliver the goods to any holder of the document or to whom such document may have been endorsed by the consignee.

Examples: bill of lading, quedan, warehouse receipts, trust receipts

Must present the deed of sale or donation in his favor.

PURPOSE OF DOCUMENTS OF TITLE (1) As evidence of possession or control of goods described therein (2) As a medium of transferring title and possession over the goods described therein without having to effect actual delivery thereof [Villanueva] (3) The custody of a negotiable warehouse receipts issued to the order of the owner, or to bearer, is a representation of title upon which bona fide purchasers for value are entitled to rely, despite breaches of trust or violations of agreement on the part of the apparent owner. [Siy Cong Bieng vs. HSBC, 56 Phil 598]

“Negotiation” [negotiable document of title] VS. “Transfer” [non-negotiable document of title]: Negotiation (Art. 1508) Transfer

NEGOTIABLE DOCUMENTS OF TITLE Definition: A document of title which states that the goods referred to therein will be delivered to the bearer, or to the order of any person named in such document [Art. 1508, CC] Terms of the Document

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How negotiated

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Delivery of a negotiable document of title to another if by the terms thereof, the goods are deliverable to bearer, or when the document was endorsed in blank by the person to whose order the goods are deliverable.

The assignment of rights of the consignee of a non-negotiable document of title to another; or

In a negotiable document of title, the buyer may acquire a better title than his transferor.

Transferee does not acquire a better title than his transferor

Document of title was ordered sold or assigned, without indorsement.

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Remedies of an Unpaid Seller

WARRANTIES OF SELLER OF DOCUMENTS OF TITLE – ART. 1516

DEFINITION OF UNPAID SELLER – ART. 1525 A seller is considered to be an unpaid seller if the whole price has not been paid or tendered, or when check received as a conditional payment was dishonored by non-payment or insolvency of the buyer [Baviera]

A PERSON WHO NEGOTIATES A DOCUMENT OF TITLE WARRANTS—

(1) Genuineness of document (2) Legal right to negotiate or transfer (3) No knowledge of fact which would impair the validity or worth of the document (4) Right to transfer the title to the goods and merchantability or fitness for a particular purpose, whenever such warranties would have been implied

Term also includes: (1) The agent of the seller to whom the bill of lading was endorsed, (2) The consignor or agent who had paid the price or is responsible for the price (3) Any other person who is in the position of a seller (i.e. buyer who paid the price and had a right to return the goods). [Baviera]

HE DOES NOT WARRANT THAT—

(1) Common carrier will fulfill its obligation to deliver the goods (2) Previous indorsers will fulfill their obligation [Art. 1516-1517, CC]

REMEDIES OF UNPAID SELLER JUDICIAL REMEDIES OF AN UNPAID SELLER

(1) Action for the price or specific performance [Art. 1595]— Conditions: (a) The goods has passed to the buyer (b) Price is payable on a certain day, irrespective of delivery of the goods (c) Buyer can set up the defense that seller could not or did not intend to deliver the goods (d) Seller was notified by the buyer of his repudiation of the contract after the seller has completed the manufacture of the goods or had procured the goods to be delivered and the goods could not readily be resold for a reasonable price

GOODS IN THE HANDS OF THE CARRIER COVERED BY A NEGOTIABLE DOCUMENT CANNOT BE ATTACHED OR LEVIED UPON, UNLESS—

(1) Document is first surrendered to the carrier; or (2) Impounded by the court; or (3) Its negotiation is enjoined. [Art. 1519-1520,CC] RULES ON LEVY/GARNISHMENT OF GOODS – ARTS. 1514, 1519, 1520 Goods in the hands of the carrier covered by a negotiable document cannot be attached or levied upon, UNLESS— (1) Document is first surrendered to the carrier; or (2) Impounded by the court; or (3) Its negotiation is enjoined. [Art. 1519-1520,CC]

(2) Action for damages for non-acceptance, if buyer wrongfully neglects or refuses to accept and pay for the goods (Art. 1596)

The levy of an attachment of execution upon the goods by a creditor of the transferor may defeat the title of the transferee and the right to acquire the obligation of such bailee when: (1) It was done prior to the notification to such bailee by the transferor of a non-negotiable document of title or (2) By a notification to such bailee by the transferor or a subsequent purchaser from the transferor of a subsequent sale of the goods by the transferor. [Art 1514 (3rd par)]

Measure of damages: Estimated loss directly and naturally resulting in the ordinary course of events from the buyer’s breach (a) Where there is available market for goods: Difference between the contract price and the market price at the time the goods ought to have been accepted or if no time was fixed, at the time of refusal to accept (b) If the resale was made with diligence: resale price is evidence of market value, taking into account whether or not the goods could be readily sold (c) Where labor/expense was necessary for seller to fulfill his obligation: Labor performed and expenses made by seller before receiving notice of buyer’s repudiation or countermand

A creditor whose debtor is the owner of a negotiable document of title shall be entitled to such aid from courts in regard to property which cannot be readily attached or levied by ordinary legal process [Art 1520]

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(d) Profit that the seller would have made if sale had been fully performed

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a foreclosure sale resulting in a deficiency. The payment of the sum of P1,250 of Sapinoso was a voluntary act on his part and did not result from a “further action” instituted by Northern Motors. [Motors vs. Sapinoso, 1970] iii.The purpose of the law is to remedy the abuses committed in foreclosure of chattel mortgages. It prevents mortgagees from seizing the mortgaged property, buying it at foreclosure sale for a low price and then bringing the suit against the mortgagor for a deficiency judgment. The almost invariable result of this procedure was that the mortgagor found himself minus the property and still owing practically the full amount of his original indebtedness. [Bachrach Motor Co., Inc. v. Millan, 1935] iv.Remedies are ALTERNATIVE, not cumulative, i.e. exercise of one bars exercise of the others. [Nonato vs. IAC, 1985]

(3) Rescission by giving the buyer notice of the election to rescind [Art. 1597] Under this rule, rescission would bar an action on the contract because it means cancellation of the contractual obligations between the parties. [Baviera] (4) Special rule for sale of movables by installments – Recto Law [Arts. 1484, 1485] Applies in cases of: (a) Sale of movables in installment i. The rule is intended to apply to sales of movables, the price of which is payable in two or more installments, but not to straight-term sales where the price is payable in full, after making a down payment because the law aims to protect improvident buyers who may be tempted to buy beyond their means. [Levy Hermanos vs. Gervacio, 1939] (b) Lease of personal property with option to buy i. When lessor has deprived the lessee of the possession or enjoyment of the thing (Ex.: When lessor files a complaint for replevin against lessee) ii. Also applies when seller assigns his credit to someone else

Performance of Contract DELIVERY OF THING SOLD (1) SALE OF MOVABLES – ARTS. 1522, 1537, 1480 (a) When Quantity less than expected i. Buyer may reject all ii. Buyer accepts with knowledge of seller’s inability to deliver the rest – buyer pays at contract price iii.Buyer has used or disposed prior to knowing seller’s inability to deliver the rest – buyer pays fair value (b) Quantity more than expected i. If divisible, buyer may reject excess ii. If indivisible, buyer may reject all (c) Quality different or different goods i. If divisible, buyer may accept the goods compliant with contract and reject those that are not ii. If indivisible, buyer may reject all [Art. 1522] (d) Sale of specific mass of goods i. In the sale of fungibles where the measure or weight has not been agreed upon nor is there a fixed rate based upon a measurement, the subject matter of the sale is a determinate object – the specific mass; seller is merely required to deliver such mass even if actual quantity falls short of parties’ estimate [Art. 1480] (e) Delivery by installments i. By default, buyer is not bound to accept delivery of goods by installments

ALTERNATIVE REMEDIES OF THE UNPAID SELLER UNDER RECTO LAW

(a) Specific Performance (b) Cancellation of sale: If vendee fails to pay 2 or more installments i. When the seller cancels the sale by repossessing the property sold, he is barred from exacting payment for its price. (c) Foreclosure of Chattel Mortgage: If vendee fails to pay 2 or more installments i. If seller chooses this remedy, he shall have no further action to recover any unpaid balance, and any stipulation to the contrary shall be void ii. What Art 1484 (3) prohibits is “further action against the purchaser to recover any unpaid balance of the price;” and although this Court has construed the word “action” to mean “any judicial or extrajudicial proceeding by virtue of which the vendor may lawfully be enabled to exact recovery of the supposed unsatisfied balance of the purchase price from the purchaser or his privy,” there is no occasion at this stage to apply the restrictive provision of the said article because there has not yet been

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ii. In a contract of delivery by installment to be

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(a) Express: buyer intimates acceptance (b) Implied: i. Goods are delivered to the buyer and he does any act in relation to the goods delivered that is inconsistent with the ownership of the seller. ii. After the lapse of a reasonable time, the buyer retains the goods without intimating to the seller that he has rejected them. [Art.1585]

paid by installment as well, delay or breach may not necessarily mean breach of the entire contract; depending on the circumstances, breach may be severable and the aggrieved party is entitled to damages and not rescission. [Art. 1583]

(2) SALE OF IMMOVABLES – ARTS. 1539, 1543 (a) Sale at a fixed rate per unit of measure i. Seller bound to deliver entire land ii. If the area is less than that stated, buyer may rescind or demand a proportionate reduction in price iii.If a part of the land is not of the quality stated in the contract, buyer may rescind or demand a proportionate reduction in price iv.Buyer may only avail of rescission if the area deficiency is 10% or more of total area or if the inferior value of the part of the land exceeds 10% of the price agreed upon. [Art. 1539] v. If the area turns out to be greater than that stated, buyer may accept area included and reject the excess or accept all and pay a proportionate increase in price [Art. 1540] (b) Sale for a lump sum i. Follows the same rule as the sale of a specific mass which is explained above ii. There is no change in price even if area or number turns out to be greater or lesser than that stated [Art. 1542] iii.Exception: when the excess or deficiency is no longer reasonable [Asian v Jalandoni, 1923: 644 m2 was unreasonable] iv.Exception to the exception: when buyer expressly assumes risk on actual area of the land. [Garcia v Veloso, 1941] v. If the price per unit or measure is not provided for in the contract, then the rules of lump sum sale should prevail. [Sta. Ana v Hernandez, 1966]

(2) Effect of Refusal to accept (a) If buyer refuses to accept goods, having the right to do so, he is not bound to return them to the seller, it being sufficient that he notifies the seller of his refusal to accept i. If he voluntarily constitutes himself a depositary of the goods, he shall be liable as such. [Art.1587] ii. Unjust refusal to accept still results to transfer of ownership. In such case, title to the goods passes to the buyer from the moment they are placed at his disposal, except if ownership has been reserved by the seller [Art.1588] PAYMENT OF PRICE PAY THE PRICE OF THE THING SOLD (ART. 1582)—

Payment of interest: Buyer is liable for interest when: (SFD) (1) Interest is stipulated; (2) Thing sold produces fruits or income; (3) Buyer is in default - interest accrues from the time of judicial or extrajudicial demand for payment Suspension of payments: Buyer may suspend payment when: (1) His ownership or possession of the thing is disturbed; OR (2) He has reasonable grounds to fear such disturbance by a vindicatory action or a foreclosure of mortgage

(3) INSPECTIONS AND ACCEPTANCE Inspections Right of Inspection: The buyer has reasonable opportunity to examine the goods upon delivery. If there is a stipulation that delivery is preconditioned on payment, then buyer has no right of inspection until he has paid. [Art.1584]

Exceptions: buyer cannot suspend payment when: (1) Seller gives security for the return of the price in a proper case (2) It has been stipulated that, notwithstanding any such contingency, the buyer shall be bound to pay [Art. 1590] (a) Suspension may continue until the seller has caused the disturbance or danger to cease

Exception: in case such right of inspection is permitted by agreement or usage of trade. Acceptance Accept Delivery— (1) Form

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(b) However, a mere act of trespass shall not authorize the suspension of the payment. [Art.1590]

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Condition thing or some other circumstance

Sale of real property (1) In the sale of immovable property, buyer may pay even beyond the expiration of the period agreed upon, as long as no demand for rescission of the contract has been made upon him either judicially or by a notarial act, despite a stipulation providing for ipso jure rescission [Art.1592] (2) After demand, court may not grant him a new term [Heirs of Escanlar, et.al. v. CA, 1997] (3) R.A. 6552 (Maceda Law) applies to sale or financing of real estate on installment [Rillo v. Court of Appeals,1997] (a) Buyer is awarded a grace period of 1 month per year of installments paid or 60 days, whichever is higher, within which he may pay without additional interest i. May be used once every 5 years of the life of the contract or any of its extensions (b) If contract is to be cancelled, seller must first: i. Give a 30-day notice of cancellation, and ii. Refund cash surrender value to buyer; iii. CSV is equivalent to 50% of total payments made including deposits, options and down-payments plus 5% for every year in excess of 5 years of the life of the contract or any of its extensions.

If seller has promised that the condition should happen or be performed, the buyer may treat the nonperformance of the condition as a breach of warranty. [Art.1545] EXPRESS WARRANTIES For there to be express warranty, the following requisites must concur: (APIR) (1) An affirmation of fact or any promise relating to the thing sold; (2) The natural tendency of such affirmation or promise is to induce the buyer to buy; (3) The buyer buys the thing relying thereon. [Art. 1546] (4) Made before the sale not upon delivery or any other point An express warranty can be made by and also be binding on the seller even in the sale of a second hand article. [Moles v. IAC, 1989] Express Warranty What is specifically represented as true in said document cannot be considered as mere dealer's talk. [Moles v. IAC, 1989]

Warranties Definition: A statement or representation made by the seller contemporaneously and as part of the contract of sale, having reference to the character, quality, or title of the goods, and by which he promises or undertakes to ensure that certain facts are or shall be as he then represents. CONDITION V. WARRANTY Condition Pertains to and affects the existence of the obligation Non-happening does not amount to breach of contract Must be stipulated May attach either to the seller’s duty to deliver

Warranty seller’s obligations as to the subject matter

Warranty

Dealer’s or Trader’s Talk (a) Affirmation of the value of the thing or statement of the seller’s opinion only is not a warranty unless: i. The seller made it as an expert; ii. It was relied upon by the buyer. [Art.1546] (b) Ordinarily, what does not appear on the face of the written instrument [Moles v. IAC, 1989]

EXPRESS WARRANTY DISTINGUISHED FROM FALSE REPRESENTATION

Goes into the performance of an obligation and may, in itself, be an obligation Non-fulfillment constitutes breach of contract Stipulation or operation of law Always relates to the subject matter or the

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Express Warranty

False Representation

Concealment of facts does not necessarily amount to false representation

When concealment of facts comes with an active misstatement of fact or a partial statement of fact such that withholding of that unsaid portion makes that which is stated absolutely false

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(c) Final judgment based on a right prior to the sale or an act imputable to the vendor (d) Seller is summoned and made co-defendant in the suit for eviction at the instance of the buyer. [Power Commercial and Industrial Corp. v. CA, 1997]

False Representation However, buyer who fails to inspect condition of property despite ample opportunity to do so when there is no opposition on the part of seller to inspect cannot later on allege false representation. [Phil Mftg Co. v Go Jucco, 1926]

IMPLIED WARRANTY AGAINST APPARENT SERVITUDES

ENCUMBRANCE/NON-

Requisites for breach: (1) Thing sold is an immovable (2) Burden or servitude encumbering the thing sold is: (a) Non-apparent to the naked eye (b) Not mentioned in the agreement (c) Of such nature that it must be presumed that the buyer would not have bought it had he been aware of it (d) Not recorded in the Registry of Property unless there is an express warranty that the thing is free from all burdens and encumbrances [Art.1560]

Reason: buyer’s duty to inspect remains despite false representation by the seller; he has the duty to exercise due diligence.

IMPLIED WARRANTY AGAINST HIDDEN DEFECTS

IMPLIED WARRANTIES – ART. 1547

Requisites for breach: (1) The defect renders the thing sold unfit for the use for which it was intended OR diminishes its fitness for such use to such an extent that had the buyer been aware thereof, he would not have bought it or would have paid a lower price; (2) The defect is not patent or visible; (3) The buyer is not an expert who, by reason of his trade or profession, should have known the defect (4) The seller is aware of the hidden fault or defect, OR even if he is not aware thereof, if there is no stipulation to the contrary [Arts.1561 &1566]

(TODS) (1) Implied Warranty of Title (2) Implied Warranty against Encumbrance/NonApparent Servitudes (3) Implied Warranty against Hidden Defects [Art. 1547] (a) Implied warranty as to Merchantable Quality and Fitness of Goods (b) Implied warranty against Redhibitory Defect in the Sale of Animals [Art. 1572] (c) Quality and Fitness of Goods in Sale by Sample or Description (4) Other Warranties

IMPLIED WARRANTY AS TO MERCHANTABLE QUALITY AND FITNESS OF GOODS

Merchantable Quality: (1) Where the goods are brought by description from a seller who deals in goods of that description [Art.1562] (2) In a sale by sample, if the seller is a dealer in goods of that kind and the defect is not apparent on reasonable examination of the sample [Art.1566]

IMPLIED WARRANTY OF TITLE

(1) Implied warranty arises by operation of law and need not be stipulated in the contract of sale. (2) Warranty of Seller’s Right to Sell: Seller warrants his right to sell at the time the ownership is to pass. (a) Inapplicable to a sheriff, auctioneer, mortgagee, pledgee, or other person professing to sell by virtue of authority in fact or law. [Art. 1547] (3) Warranty against Eviction: seller warrants that buyer, from the time ownership passes, shall have and enjoy legal and peaceful possession of the thing. Its requisites are: (a) Buyer is deprived of the whole or a part of the thing sold; (b) Eviction is by final judgment

Fitness for a particular purpose: (1) Where the buyer expressly or impliedly makes known to the seller the particular purpose for which the goods are acquired AND it appears that the buyer relied on the seller’s skill or judgment [Art.1562(1)]

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(following the general rule on rescission of contracts) (2) Remedies: (a) Accept goods + demand diminution/ extinction of price (b) Accept goods + damages (c) Refuse to accept goods + damages (d) Rescind (Refuse to accept or return or offer to return) + recover price paid (3) Rescission not available when buyer: (a) Knew of breach of warranty when he accepted the goods without protest (b) Fails to notify the seller about election to rescind within a reasonable period of time (c) Fails to return or offer to return the goods to the seller in substantially a good condition as they were when delivered, unless deterioration was due to breach of warranty (4) Measure of damages: Difference between value of goods at the time of delivery and the value they would have had if they had answered to the warranty (5) Effects of rescission: (a) Buyer no longer liable for price i. Entitled to the return of any part of price paid, concurrently with or immediately after an offer to return the goods (b) If seller refuses to accept offer to return goods: buyer deemed as bailee for seller and has right of lien to secure payment of part of price paid

IMPLIED WARRANTY AGAINST REDHIBITORY DEFECT IN THE SALE OF ANIMALS (ART. 1572)

Redhibitory defect- a hidden defect of animals of such nature that expert knowledge is not sufficient to discover it, even in a case where a professional inspection has been made No warranty in case of [Art. 1574]: (a) Animals sold at fairs or public auctions (b) Livestock sold as condemned The following sales are void [Art. 1575]: (a) Sale of animals suffering from contagious diseases (b) Sale of animals unfit for the purpose for which they are acquired as stated in the contract Veterinarian liable if he fails to discover or disclose the hidden defect through ignorance or bad faith [Art 1576] Seller liable if animal dies within 3 days after its purchase due to a disease that existed at the time of sale. [Art 1578] EFFECTS OF WARRANTIES (1) Natural tendency is to induce buyer to purchase the subject matter (2) Buyer purchases subject matter relying thereon (3) Seller liable for damages in case of breach

IMPLIED WARRANTY AGAINST EVICTION

EFFECTS OF WAIVERS Only applicable to waiver of warranty against eviction; parties may increase or decrease warranty against eviction but the effect depends on good/bad faith of the seller: (1) Seller in bad faith and there is warranty against eviction – null and void (2) Buyer without knowledge of a particular risk and made general renunciation of warranty – not waiver but merely limits liability of seller in case of eviction (pay value of subject matter at the time of eviction) (3) Buyer with knowledge of risk of eviction assumed its consequences and made a waiver – vendor not liable (4) Waiver to a specific case of eviction – wipes out warranty as to that specific risk but not as to eviction caused by other reasons

[ARTS. 1555,

1556] Total Eviction Enforce eviction

liability

Partial Eviction for

Demand from seller: (VICED) (a) Value of thing sold at time of eviction (b) Income or fruits, if he has been ordered to deliver them to the party who won the eviction suit (c) Costs of eviction suit and in a proper case, suit against seller for warranty (d) Expenses of the contract, if buyer has paid them (e) Damages and

BUYER’S OPTIONS IN CASE OF BREACH OF WARRANTY – ART. 1599 EXPRESS WARRANTY

(1) Prescriptive period: Period specified in express warranty OR 4 years, if no period is specified

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Enforce liability (demand VICED) OR Rescind (a) If he would not have bought the thing sold without the part lost; (b) BUT he must return the thing without other encumbrances than those which it had when he acquired it

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Total Eviction

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Partial Eviction

Due to hidden fault

interests, and ornamental expenses, IF sale was made in bad faith

Due to fortuitous event or fault of buyer

(a) Buyer may demand price and expenses BUT NOT damages Prescriptive period: 6 months from delivery

(1) Rules: (a) Buyer need not appeal from decision to hold seller liable for eviction (b) When adverse possession commenced before sale, but prescription period completed after transfer: seller is not liable (c) If property sold for nonpayment of taxes due and not made known to the buyer before the sale: seller liable (d) Judgment debtor also responsible for eviction in judicial sales, unless it is otherwise decreed in the judgment

IMPLIED WARRANTY AGAINST REDHIBITORY DEFECTS OF ANIMALS

(1) Remedies (a) Withdraw from contract + damages (b) Demand a proportionate reduction of the price + damages (2) If sale is rescinded: (a) Buyer must return animal in the condition in which it was sold and delivered (b) Buyer shall be liable for injury due to his negligence.

(2) If there is waiver of warranty: (a) Seller acted in bad faith: Waiver is void, seller liable for eviction (b) Buyer made waiver without knowledge of risks of eviction: Seller liable only for the value of the thing sold at time of eviction (c) Buyer made waiver with knowledge of risks: Seller not liable; buyer assumed the consequences IMPLIED WARRANTY AGAINST ENCUMBRANCES

1560]

(3) Prescriptive period: 40 days from delivery WARRANTY IN SALE OF CONSUMER GOODS [RA

SEC.68]

IMPLIED WARRANTY AGAINST HIDDEN DEFECTS

7394,

If implied warranty accompanies express warranty, both will be of equal duration. Express Warranty

Implied Warranty

(1) Demand repair (1) Retain the goods within 30 days and recover (a) Extendible for damages causes beyond OR the control of (2) Reject the goods, the warrantor cancel contract (2) Demand refund of and recover from price minus seller so much of amount directly the purchase price attributable to the as has been paid + use of the damages consumer prior to the discovery of the non-conformity

[ART.

(1) Rescission: Within 1 year from execution of deed of sale OR (2) Damages: Within 1 year from execution of deed of sale or discovery of the burden or servitude

1567-1571]

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[ARTS.

(1) If thing is not lost: (a) Withdraw from contract (accion redhibitoria) + damages (b) Demand a proportionate reduction of the price (accion quanti minoris) + damages (2) If thing is lost: Due to hidden fault If seller aware of defect, buyer may demand: (a) Return of price (b) Refund of expenses (c) Damages If seller not aware of defect:

Due to fortuitous event or fault of buyer Demand: (a) Price paid minus value of thing when it was lost (b) Damages, if seller acted in bad faith

Breach of Contract General Remedies [Art. 1191, CC] The following remedies arise from the bilateral nature of the contract of sale: (1) Specific performance (2) Rescission General rule: Rescission of a contract will not be permitted for a slight or casual breach, but only

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for such substantial and fundamental breach as would defeat the very object of the parties in making the agreement. [Song Fo & Co. vs. Hawaiian-Philippine Co., 1925] (3) Damages Neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him [Art 1169, CC]

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Available when: Vendee becomes INSOLVENT When are goods in transit? (1) From the time of delivery to the carrier or other bailee by the seller, for the purpose of transmission to the buyer, until the buyer or his agent takes such delivery from the carrier. (2) Even when goods have reached their ultimate destination, if buyer rejects them and carrier retains possession (a) To terminate transit by delivery to a middleman, delivery must be to keep, not to transport.

Prescriptive periods (1) 10 years if based on written contract (2) 6 years if based on oral contract REMEDIES OF THE SELLER – ARTS. 1636, 1594

When are goods no longer in transit? (1) Buyer obtained delivery of the goods before they have reached their ultimate destination (2) Goods have arrived at ultimate destination, but carrier refuses to deliver (3) Carrier enters into a new contract with the buyer upon arrival of the goods at their ultimate destination

(1) SALE OF MOVABLES Extrajudicial or Self-Help Remedies- No need to resort to the courts as long as possession of the goods has not yet passed to the buyer (a) Possessory lien over the goods Right to retain possession of goods until payment or tender of the whole price, or unless he agrees to sell on credit [Arts. 15261529, 1503, 1535]

How exercised? (1)By obtaining actual possession of the goods (2) By giving notice of his claim to the carrier/other bailee who has possession of the goods (a) Carrier must redeliver goods to seller, or according to his instructions (b) Carrier not obliged to redeliver until the negotiable document of title, if any, has been surrendered for cancellation

When available: (1) Goods are sold without stipulation as to credit (2) Goods are sold on credit, but term of credit has expired (3) Buyer becomes INSOLVENT When lost: (1) Seller delivers goods to carrier or other bailee for transmission to the buyer under a straight or non-negotiable bill of lading (2) Buyer/his agent lawfully obtains possession of goods (3) Seller waives it (a) But it is not lost with respect to the remainder of the goods when only partial delivery is made (unless such is symbolic delivery of the whole) (b) It is not lost by the mere fact that seller obtained a judgment for the price

Seller’s right to stoppage in transitu is not affected even if buyer has sold or disposed of the goods unless the seller has given his assent thereto. (c) Special right of resale Available to unpaid seller who has a right of lien or who has stopped the goods in transitu [Art. 1533]

When revived: Goods are returned by the buyer in a wrongful repudiation of the contract

Purpose: For seller to liquidate his damages (1) He must do so within a reasonable time and in such manner as to obtain the best price possible. (2) Resale is deemed to be a fair sale if it is undertaken in accordance with established business practices, with no attempt to take advantage of the original buyer.

(b) Right of stoppage in transitu An extension of the lien for the price; entitles unpaid seller to resume possession of the goods while they are in transit before the goods come in possession of the vendee [Arts. 1530-1532, 1535, 1636[2]]

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(3) Resale may be in a private or public sale, but seller cannot buy directly or indirectly. (4) For resale to be valid, buyer need not be notified of an intention to resell or the time and place of the resale.

making a down payment because the law aims to protect improvident buyers who may be tempted to buy beyond their means. [Levy Hermanos vs. Gervacio, 1939] (2) Lease of personal property with option to buy (a) When lessor has deprived the lessee of the possession or enjoyment of the thing (Ex.: When lessor files a complaint for replevin against lessee) (b) Also applies when seller assigns his credit to someone else Alternative Remedies of the unpaid seller under Recto Law (1) Specific Performance (2) Cancellation of sale: If vendee fails to pay 2 or more installments (a) When the seller cancels the sale by repossessing the property sold, he is barred from exacting payment for its price. (3) Foreclosure of Chattel Mortgage: If vendee fails to pay 2 or more installments (a) If seller chooses this remedy, he shall have no further action to recover any unpaid balance, and any stipulation to the contrary shall be void (b) What Art 1484 (3) prohibits is “further action against the purchaser to recover any unpaid balance of the price;” and although this Court has construed the word “action” to mean “any judicial or extrajudicial proceeding by virtue of which the vendor may lawfully be enabled to exact recovery of the supposed unsatisfied balance of the purchase price from the purchaser or his privy,” there is no occasion at this stage to apply the restrictive provision of the said article because there has not yet been a foreclosure sale resulting in a deficiency. The payment of the sum of P1,250 of Sapinoso was a voluntary act on his part and did not result from a “further action” instituted by Northern Motors. [Motors vs. Sapinoso, 1970] (c) The purpose of the law is to remedy the abuses committed in foreclosure of chattel mortgages. It prevents mortgagees from seizing the mortgaged property, buying it at foreclosure sale for a low price and then bringing the suit against the mortgagor for a deficiency judgment. The almost invariable result of this procedure was that the mortgagor found himself minus the property and still owing practically the full amount of his original indebtedness. [Bachrach Motor Co., Inc. v. Millan, 1935] (d) Remedies are ALTERNATIVE, not cumulative, i.e. exercise of one bars exercise of the others. [Nonato vs. IAC, 1985]

Effects: (1) Seller is no longer liable to the original buyer upon the contract of sale or for any profit made by the resale (2) Buyer at resale acquires good title as against the original owner (3) In case resale is at a loss, seller is entitled to recover the difference from the original buyer (4) Seller may recover damages from original buyer for breach of contract (d) Special right to rescind: RETURN of the title over the undelivered goods to the seller, and right to recover DAMAGES for breach of contract [Art. 1534] Available to unpaid seller who has a right of lien or who has stopped the goods in transitu When available: (1) Seller expressly reserved his right to rescind in case buyer defaults (2) Buyer has been in default in payment for an unreasonable time Transfer of title shall not be held to have been rescinded by the unpaid seller until he manifests by notice to the buyer or some other overt act an intention to rescind. (e) When the whole of the price has not been paid or tendered; (f) When a bill of exchange or other negotiable instrument has been received as conditional payment and the condition on which it was received has been broken by reason of the dishonor of the instrument, the insolvency of the buyer, or otherwise. RECTO LAW: SALE OF MOVABLES INSTALLMENT – ARTS. 1484-1486

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ON

Applies in cases of: (1) Sale of movables in installment (a) The rule is intended to apply to sales of movables, the price of which is payable in 2 or more installments, but not to straight-term sales where the price is payable in full, after

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(1) SALE OF IMMOVABLES (a) PD 957, sec. 23, 24 Non-forfeiture of payments (1) No installment payment made by the buyer shall be forfeited in favor of the owner or developer of the condominium or subdivision project, after due notice, when the buyer desists from paying due to the failure of the developer or owner to develop the project according to the approved plans or within the time limit stated. (2) Buyer’s Remedy: At his option, he may reimburse the total amount paid including amortization interest with interest thereon at the legal rate (3) If the buyer fails to pay the installments for reasons other than the failure of the owner or developer to develop the project, his rights shall be governed by RA 6552. (b) Maceda Law: Installment

Sale

of

Immovables

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(4) Seller may go to court for judicial rescission in lieu of a notarial act of rescission (5) During the grace period, buyer shall have the right: (a) To sell or assign his rights, to be evidenced in a notarial instrument (b) To update his account (c) To pay in advance any installment, or the full unpaid balance of the price, without any interest In the sale of immovables (1) Rescission for Anticipatory Breach [Art. 1591] (a) Available when seller has reasonable grounds to fear the loss of the immovable property sold and its price (b) Example: Buyer destroys the building sold, there being no security therefor, and buyer becomes insolvent (c) Court has no discretion to compel the seller to wait for the expiration of the period to pay, or to grant the buyer more time to pay (2) Specific Performance + Damages [Art. 1191] (a) Seller may choose between specific performance and rescission, with damages in either case (b) Court has discretion, for a just cause, to give the buyer more time to pay even if the seller chooses rescission (3) Rescission + Damages [Art. 1191] (a) If seller chose specific performance, and such becomes impossible, he may still avail of rescission (b) If absolute sale, seller must make a demand for rescission i. Judicially, OR ii. By a notarial act (c) Necessary even if automatic rescission is stipulated (d) Effect of lack of demand: Buyer can still pay (e) Effect of demand: Court may not grant buyer a new term

on

RA 6552: An Act To Provide Protection for Buyers of Real Estate on Installment Payments DOES not apply to: (1) Industrial lots (2) Commercial buildings (3) Sale to tenants under Agricultural Reform Code [RA 3844] Imposes ADDITIONAL REQUIREMENTS FOR A VALID RESCISSION: (1) If buyer has paid at least 2 years of installments: (GRN) (a) Grace period: 1 month per year of installment payments made. BUT buyer may only avail of it only once in every 5 years (b) Refund of Cash Surrender Value (CSV): 50% of total amount paid + 5% for every year after the 1st 5 years of installments i. BUT not greater than 90% of total amount paid (c) Notice of cancellation of demand for rescission by notarial act is effective 30 days from the buyer’s receipt thereof and upon full payment of CSV (2) If buyer has paid less than 2 years: (GN) (a) Grace period: at least 60 days (b) Notice of cancellation or demand for rescission by notarial act, effective 30 days upon receipt thereof (3) Down payments, deposits, or options on the contract shall be included in the total number of installments made

REMEDIES OF THE BUYER General rule: Courts will refuse to decree specific performance with respect to chattels, because damages are a sufficient remedy Exception: Buyer is entitled to the specific thing which to him has special value and which he cannot readily obtain in the market OR where damages would not furnish a complete and adequate remedy [Baviera] (1) SALE OF MOVABLE (1) Remedy for breach of obligation to preserve If thing is lost—

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(1) Without fault of seller: No breach; Obligation is extinguished (2) Through fault of seller (or through fortuitous event, if seller is liable): Damages

of price OR Rescission, if: (a) Lack in area is at least 1/10 of what is stated, or inferior value of thing sold exceeds 1/10 of price (b) Buyer would not have bought the property has he been aware of the inferior quality or smaller area

A thing is lost when it— (1) Perishes (2) Goes out of commerce (3) Disappears in such a way that its existence is unknown or it cannot be recovered If thing deteriorates Without fault of seller NO BREACH. Impairment shall be borne by buyer

Through fault of seller Rescission + damages OR Specific performance + damages

OR Accept the whole and pay at contract rate

This rule also applies to judicial sales [Art. 1541] (b) If for a lump sum: Everything is within Not everything is within boundaries, even if less or boundaries more than stated area No remedy Proportional reduction in Where both the area and price the boundaries of the OR immovable are declared, Rescission the area covered within the boundaries of the immovable prevails over the stated area. (Rudolf Lietz, Inc. v. CA, 2005)

(2) Remedy for breach of obligation to deliver Delivery of wrong quantity [Art. 1522]— Goods are less than More what was contracted Reject the goods Reject the excess (Or OR the whole, if indivisible) Accept and pay OR (a) At contract rate if Accept the whole and buyer accepts pay at contract rate knowing that seller won’t perform in full (b) At fair value: If goods were used before knowing that seller won’t be able to perform in full

Prescriptive period: 6 months, counted from date of delivery

Extinguishment of Sale CAUSES – ARTS. 1600, 1231 Generally, extinguished by the same causes as all other obligations [Arts.1600, 1231]

Art. 1464. Civil Code. In the sale of an undivided share of a specific mass of fungible goods, if the mass contains less than the number, weight, or measure bought, the buyer becomes the owner of the whole mass and the seller is bound to make good the deficiency from goods of the same kind and quality, UNLESS a contrary intent appears.

(P-PLAN-C3-R3) (1) Payment/performance (2) Prescription (3) Loss of thing due (4) Annulment (5) Novation (6) Condonation/remission (7) Confusion/merger (8) Compensation (9) Rescission (10) Resolutory condition fulfilled (11) Redemption (Conventional or Legal)

(2) SALE OF IMMOVABLES Real Estate [Arts. 1539-1543] (a) If at the rate of a certain price per unit of measure or number: Less (in area or quality) than what was agreed upon: Proportional reduction

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More Reject the excess

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CONVENTIONAL REDEMPTION – ART. 1601

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(c) Necessary and useful expenses made on the thing sold (2) Complying with any other stipulation agreed upon, if any.

DEFINITION

(1) Vendor reserves the right to repurchase the thing sold, with the obligation to comply with the provisions of Article 1616 and other stipulations which may have been agreed upon. [Art 1601,CC] (2) Available when the seller reserves the right to repurchase the thing sold in the same instrument of sale as one of the stipulations of the contract [Villarica v CA, 1968]

The general rule in redemption is that it is not sufficient that a person offering to redeem manifests his desire to do so. The statement of intention must be accompanied by an actual and simultaneous tender of payment for the full amount of the repurchase price. [BPI Family Savings Bank, Inc. v. Veloso, 2004]

PERIOD

General Rule: Follow period stipulated in contract, but should not exceed 10 years. (1) If no period stipulated, then it shall be four years from the execution of the contract (2) But vendor may still exercise the right to repurchase within thirty days from the time final judgment was rendered in a civil action on the basis that the contract was a true sale with right to repurchase

Tender of payment is enough (i.e., consignation is not necessary), if made on time, as a basis for action against the buyer to compel him to resell. But that tender does not in itself relieve the buyer from his obligation to pay the price when redemption is allowed by the court. [Paez v. Magno, 1949] EFFECT OF REDEMPTION

(1) The seller shall receive the thing free from all charges or mortgages constituted by the buyer BUT he shall respect leases executed by the buyer in good faith and in accordance with local custom. (2) If there are growing fruits at the time of sale and at the time of redemption: no reimbursement or prorating if the buyer did not pay indemnity at the time of sale (3) If there were no growing fruits at the time of sale, but some exist at the time of redemption: fruits prorated (buyer entitled to part corresponding to time he possessed the land in the last year, counted from the anniversary of the date of sale)

BY WHOM EXERCISED

(1) Vendor (2) His heirs, assigns or agents (3) Creditor, if he has exhausted the property of the vendor (4) Co-owners of an immovable, if they sold their interests to the same person, may only redeem their respective shares (a) Vendee cannot be compelled to agree to a partial redemption (b) If the co-owners sold their interest to the same person who previously bought the share of a co-owner subject to a right of redemption, then the latter may be compelled to redeem the whole property

EFFECT OF NON-REDEMPTION

Ownership is consolidated in the buyer BUT the consolidation shall not be recorded in the Registry of property without a judicial order, after the vendor has been duly heard.

FROM WHOM TO REDEEM

(1) Vendee a retro (2) His heirs, assigns or agents (3) Subsequent purchaser of property, even if the right to redeem was not mentioned in the subsequent contract; except if registered land, where the right to redeem must be annotated on the title (4) If several heirs, then the right of redemption can be exercised against each heir for his share of the property

RIGHT TO REDEEM VS. OPTION TO PURCHASE (VILLANUEVA)

HOW EXERCISED

(1) By returning the ff. to the buyer: (PEN) (a) Price of the sale; (b) Expenses of the contract and other legitimate payments made by reason of the sale;

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Right to Redeem

Option to Purchase

Not a separate contract but part of a main contract of sale, and cannot exist unless reserved at the time of the perfection of the main contract of sale Does not need its separate consideration to be valid and effective

Generally a principal contract and may be created independent of another contract

Must have a consideration separate and distinct from the purchase price to be valid and effective [Arts.

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(3) Period of redemption extended (or granted anew) upon or after the expiration of the right to repurchase; (4) Part of the purchase price retained by the seller; (5) Payment of taxes on the thing sold borne by the seller; (6) Any other case where it may be fairly inferred that the Real intention of the parties is for the transaction to secure a debt or other obligation.

Option to Purchase 1324 and 1479]

The maximum period for the exercise of the right to repurchase cannot exceed 10 years Requires in addition a tender of payment of the amount required by law, including consignment thereof if tender of payment cannot be made effectively on the buyer

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The period of the option contract may be beyond the 10-year period May be exercised by notice of its exercise to the offeror

FOR THE PRESUMPTION OF AN EQUITABLE MORTGAGE TO ARISE UNDER ART. 1602, 2 REQUISITES MUST CONCUR (MOLINA V. CA, 2003)

(1) That the parties entered into a contract denominated as a contract of sale, and (2) That their intention was to secure an existing debt by way of a mortgage.

EQUITABLE MORTGAGE – ARTS. 1602-1604 Definition: An equitable mortgage is defined as one which, although lacking in some formality, or form or words, or other requisites demanded by a statute, nevertheless reveals the intention of the parties to charge real property as security for a debt, and contains nothing impossible or contrary to law. [Molina v. CA, 2003]

In case of doubt, a contract purporting to be a sale with right to repurchase shall be construed as an equitable mortgage [Art. 1603] RATIONALE BEHIND PROVISION ON EQUITABLE MORTGAGE

(1) Circumvention of usury law (2) Circumvention of prohibition against pactum commissorium – creditor cannot appropriate the things given by way of pledge or mortgage since remedy is foreclosure.

The Valdehuezas having remained in possession of the land and the realty taxes having been paid by them, the contracts which purported to be pacto de retro transactions are presumed to be equitable mortgages, whether registered or not, there being no third parties involved. [Tan v. Valdehueza, 2003]

REMEDIES OF APPARENT VENDOR

(1) If the instrument does not reflect the true agreement: remedy is reformation (2) If decreed to be an equitable mortgage: any money, fruits or other benefit to be received by the buyer as rent or otherwise considered as interest. (3) If decreed as a true sale with right to purchase: seller may redeem within 30 days from finality of judgment, even if the period for redemption has expired.

A pactum commissorium is a stipulation enabling the mortgagee to acquire ownership of the mortgaged properties without need of foreclosure proceedings which is a nullity being contrary to the provisions of Article 2088 of the Civil Code. The inclusion of such stipulation in the deed shows the intention to mortgage rather than to sell. [Legaspi v. Spouses Ong, 2005]

PERIOD OF REDEMPTION – ART. 1606 Art. 1606. The right referred to in Article 1601, in the absence of an express agreement, shall last four years from the date of the contract.

A pactum commissorium is contrary to the nature of a true pacto de retro sale since ownership of the property sold is immediately transferred to the vendee a retro upon execution of the sale, subject only to the repurchase of a vendor a retro within the stipulated period.

Should there be an agreement, the period cannot exceed ten years.

DISTINGUISHED FROM OPTION TO BUY – ART.

However, the vendor may still exercise the right to repurchase within thirty days from the time final judgment was rendered in a civil action on the basis that the contract was a true sale with right to repurchase.

1602

PRESUMPTION THAT A CONTRACT IS AN EQUITABLE MORTGAGE ARISES WHEN (5P-R)— ART. 1602

(1) Price unusually inadequate; (2) Possession retained by the seller as lessee or otherwise;

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LEGAL REDEMPTION – ART. 1619

Period of Redemption (a) No stipulation: 4 years from the date of contract (b) When there is agreement: Period not to exceed 10 years (c) General Rule: Period starts to run from the date of the execution of the contract (d) Exception: When the efficacy of the sale is subject to a suspensive condition, period should be counted not from the date appearing on the instrument, but from the date when the condition is fulfilled, marking the consummation of the sale [Tolentino citing Manresa].

DEFINITION

(1) Right to be subrogated: (a) upon the same terms and conditions stipulated in the contract, (b) in the place of one who acquires a thing by purchase or dation in payment, or by any other transaction whereby ownership is transmitted by onerous title [Art 1619, CC] (2) Applies to transfers of ownership by onerous title where subrogation is possible. Hence, it cannot apply to barter or to transfer by gratuitous title or hereditary succession. (3) Applies to sales with pacto de retro [Baviera citing MANRESA]

Additional 30 days for Repurchase The last paragraph of Art. 1606 giving the vendor the right to repurchase within 30 days from the time of the rendition of final judgment applies only where the nature and the character of the transaction, whether as a pacto de retro or an equitable mortgage, was put in issue before the court [Gonzales v. De Leon, 4 SCRA 332].

MANNER

(1) a formal offer to redeem or (2) filing of an action in court together with the consignation of the redemption price within the reglementary period PERIOD TO REDEEM

EXERCISE OF THE RIGHT TO REDEEM – ART.

To whom granted

1616

Period

(a) Co-owner [Art 1620]

30 days from notice (a) In writing (b) Adjoining owner of (b) By the seller Rural Land [Art 1621] (c) Of the actual execution and (c) Adjoining owner of delivery of the deed urban land [Art. 1622] of sale

The seller can avail himself of the right of repurchase by returning to the buyer: (a) the price of the sale (b) the expenses of the contract and any other legitimate payments made by reason of the sale (c) the necessary and useful expenses made on the thing sold [Art.1616].

Actual knowledge of the sale is immaterial , absent any showing that the co-owner has been shown a copy of the deed of sale through a written communication. [Doromal v. CA, 1975]

How redemption is exercised (a) The vendor de retro must complete the repurchase before the expiration of the redemption period [Panganiban v. Cuevas, 7 Phil 477]. (b) A sincere or genuine tender of payment is enough. The deposit of the amount of the repurchase money with the Clerk of Court was simply and additional security [Legazpi v. Court of Appeals, 1986] (c) When tender of payment cannot be validly made because the buyer cannot be located, it becomes imperative for the seller a retro to file a suit for consignation with the courts of the redemption price [Catangcatang v. Legayada, 1978]. (d) If the offer or tender of payment for repurchase is refused, it is not necessary for the vendor a retro to consign in court or make judicial deposit of the repurchase price [Rosales v. Reyes, 25 Phil 495].

Debtor in case a credit or incorporeal right in litigation is sold [Art.1634] Taxpayer in case of tax sale [Sec. 215, NIRC] Judgment debtor,

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The law did not provide for a particular mode of written notice, thus any compliance with “written notice” should suffice, including the giving of a copy of the deed of sale. [Conejero v. CA, 1966] 30 days from the date the assignee demands payment from debtor 1 year from date of forfeiture 1 year from the date of

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To whom granted successor–in- interest, or creditor with subsequent lien, in case of execution sale [Rule 39, Sec.27, ROC] Debtor-mortgagor, successors-in- interest, judicial/judgment creditor, any person having a lien on the property, in case of extrajudicial foreclosure of mortgage [Act No. 3135. Sec. 6.] Debtor-mortgagor in case of judicial foreclosure of real estate mortgage IF the mortgagee is a bank or a banking institution. [The General Banking Law of 2000] Agricultural lessee w/o knowledge of sale of landholding [Agrarian Land Reform Code, Sec.12]

Period registration of certificate of sale

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Rationale: Public Policy, since co-ownership is a hindrance to the development and administration of the property. [Baviera]

the

(2) Redemption by Adjoining Land-owners of rural land [Art. 1621]

1 year from the date of the sale

The ff. Requisites must concur: (a) A piece of rural land is alienated (b) Area does not exceed one hectare When not applicable: (a) The grantee does not own any rural land (b) Adjacent lands are separated by brooks, drains, roads and other apparent servitudes for the benefit of other estates

90 days from finality of judgment

Order of preference if two or more wishes to exercise the right: (a) Owner with smaller land area (b) If same land area, then the one who first requested the redemption 2 years from the registration of the sale

What constitutes “rural” or “urban” is to be determined from the character of the community or vicinity in which it is found, and NOT from the nature of the land itself nor the purpose to which it is devoted. [Ortega v. Orcine, 1971]

INSTANCES OF LEGAL REDEMPTION

(3) Redemption by adjoining land-owners of urban land (applies only to small portions of urban land) [Art. 1621]

(1) Redemption by Co-owners [Art. 1621] A co-owner of a thing may exercise the right of redemption in case the shares of all the coowners or any of them are sold to a third person (a) “Third person” refers to all persons who are not heirs of the vendor, by will or intestate succession (b) The right is available not only to original coowners, but to those who had later acquired the share of the co-owner (c) But the right of redemption may be exercised by a co-owner only when part of the community property is sold to a stranger. When the portion is sold to another co-owner, the right does not arise because a new participant is not added to the co-ownership [Fernandez v. Tarun, 2002] If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one. Should two or more co-owners desire to exercise the right, they may also do so in proportion to the share they may respectively have in the thing owned in common.

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Right of Pre-emption

Right of Redemption

Owner of any adjoining land has a right of preemption at a reasonable price when: (a) Urban land is so small and so situated that a major portion of it cannot be used for any practical purpose w/in a reasonable time; (b) Was bought merely for speculation; (c) Was resold Arises before sale No rescission because no sale exists yet The action is directed against prospective seller

If the resale has been perfected, the owner of the adjoining land shall have a right of redemption, also at a reasonable price Priority if 2 or more adjoining owners want to redeem: owner whose intended use of the land appears to be best justified Arises after sale There can be rescission of the original sale Action is directed against buyer

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Who may redeem

(4) Redemption of Credit Available when it is sold while in litigation (From the time the complaint is answered)

(a) within 1 year from the date of the sale

favor of a bank (a) within 1 year after the sale (not available in case of a corporate mortgagor) Amount of redemption (a) Amount of the purchase (b) Interest at 1% per month from the time of the sale up to the time of redemption (c) Any assessment or taxes which the purchaser may have paid

NOT available when the assignment is in favor of: (a) Co-heir/co-owner of right assigned (b) Creditor in payment of his credit (c) Possessor of a tenement or piece of land which is subject to the right assigned How exercised: reimburse the assignee for the: (a) Price paid (b) Judicial expenses incurred (c) Interest on the price from date of payment (5) Under the Public Land Act Coverage: (a) Every conveyance of land acquired under a free patent or homestead (b) The ownership of the land must have been transferred to another. If the transaction is a mere promise to sell, there is no right yet to redeem (c) This refers to conveyances made after the prohibited 5 years from the issuance of the patent or grant

months after the sale

(7) Under the Agrarian Land Reform Code Lessees right of pre-emption (a) The agricultural lessee shall have the preferential right to buy under the same reasonable terms and conditions, in case the lessor decides to hold the landholding (b) Conditions: i. The landholding must be pre-empted by the DAR ii. When two or more lessees, each shall have preferential right only to the extent of the area cultivated by him (c) Period: 180 days from notice in writing

Period: (a) Within 5 years from the date of conveyance (b) If pacto de retro sale, the period to redeem cannot be less than 5 years

Lessees right of redemption (a) Sec. 12 RA 3844: In case landholding is sold to 3rd person without the knowledge of the lessee, the latter shall have the right to redeem the same at a reasonable price and consideration (b) Period: within 180 days from notice in writing

Who may redeem: (a) General Rule: Applicant, widow, or heirs (b) Exception: land is sold to another member of the family of the applicant, or his direct descendant or heir (c) From whom: Subsequent purchasers

AGE REDEMPTION – ART. 1619

(6) Redemption in Foreclosure and Execution Sales Art. 1619. Legal redemption is the right to be subrogated, upon the same terms and conditions stipulated in the contract, in the place of one who acquires a thing by purchase or dation in payment, or by any other transaction whereby ownership is transmitted by onerous title.

Who may redeem In extra judicial foreclosure (a) Debtor (b) Successor in interest (c) Judicial or judgment creditor of said debtor (d) Junior encumbrancer

In execution sales (a) Judgment debtor (b) Successor in interest (c) Creditor having a lien on the property sold by attachment, judgment or mortgage on the property subsequent to the judgment Period to redeem Extra judicial Execution sale If land is foreclosure (a) within 12 mortgaged in

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The Law on Sale of Subdivision and Condominium (PD 957)

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REQUIREMENTS FOR OWNERS AND DEVELOPERS (1) Registration of projects (subdivision/condominium) with the NHA (2) Registration of the owner (3) License to sell of owner or dealer with performance bond [PB, exceptions in Section 7]

DEFINITIONS DEFINITION OF "SALE" OR "SELL" (a) include every disposition, or attempt to dispose, for a valuable consideration, of a subdivision lot, including the building and other improvements thereof, if any, in a subdivision project or a condominium unit in a condominium project. (b) also include a contract to sell, a contract of purchase and sale, an exchange, an attempt to sell, an option of sale or purchase, a solicitation of a sale, or an offer to sell, directly or by an agent, or by a circular, letter, advertisement or otherwise. (c) privilege given to a member of a cooperative, corporation, partnership, or any association and/or the issuance of a certificate or receipt evidencing or giving the right of participation in, or right to, any land in consideration of payment of the membership fee or dues, shall be deemed a sale within the meaning of this definition.

Registration of projects [Section 4, PD 957] The registered owner of a parcel of land who wishes to convert the same into a subdivision project shall submit his subdivision plan to the National Housing Authority. The same procedure shall be followed in the case of a plan for a condominium project except that NHA also approves the building thereon in accordance with the National Building Code. Registration of owner [Section 4, PD 957] The owner or the real estate dealer interested in the sale of lots or units, respectively, in such subdivision project or condominium project shall register the project with the Authority by filing therewith a sworn registration statement. Publication and issuance of registration certificate [Section 4, PD 957] A notice of the filing of the registration statement at the expense of the applicant-owner or dealer, in two newspapers general circulation, one published in English and another in Pilipino, once a week for two consecutive weeks. Notice shall state that subdivision lots or condominium units are open to inspection during business hours by interested parties. The project shall be deemed registered upon completion of the publication requirement. The fact of registration shall be evidenced by a registration certificate issued to the applicant-owner or dealer.

DEFINITION OF "BUY" OR "PURCHASE"

(a) include any contract to buy, purchase, or otherwise acquire for a valuable consideration a subdivision lot, including the building and other improvements, if any, in a subdivision project or a condominium unit in a condominium project. "Owner" shall refer to the registered owner of the land subject of a subdivision or a condominium project. "Developer" shall mean the person who develops or improves the subdivision project or condominium project for and in behalf of the owner thereof.

License to sell [Section 5, PD 957] The registration certificate does NOT authorize the owner or dealer to sell any unit. They must first obtain a license to sell within two weeks from the registration of the project. The license to sell is issued upon examination of the registration statement filed by the owner or dealer showing that: (1) the owner or dealer is of good repute (2) that his business is financially stable (3) that the proposed sale of subdivision lots or condominium units to the public would not be fraudulent

"Dealer" shall mean any person directly engaged as principal in the business of buying, selling or exchanging real estate whether on a full-time or part-time basis. "Broker" shall mean any person who, for commission or other compensation, undertakes to sell or negotiate the sale of a real estate belonging to another.

Performance bond [Section 6, PD 957] A license to sell can only be issued by the NHA if the owner or dealer files a performance bond guaranteeing the construction and maintenance of

"Salesman" shall refer to the person regularly employed by a broker to perform, for and in his behalf, any or all functions of a real estate broker.

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the roads, gutters, drainage, sewerage, water system, lighting systems, and full development of the subdivision project or the condominium project and the compliance by the owner or dealer with the applicable laws and rules and regulations. The bond shall be executed in favor of the Republic of the Philippines and shall authorize the Authority to use the proceeds thereof for the purposes of its undertaking in case of forfeiture as provided in this Decree.

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(2) Payment of prescribed fee (3) Filing of bond or other security (amount fixed by NHA) conditioned upon his faithful compliance with provisions of PD 957 When registration of DBS terminates (1) Termination of employment with dealer or broker (2) Expiration (31st day of Dec each year) Registration of DBS may be renewed not less than 30 nor more than 60 days before Jan 1 and by payment of fee. If renewal is not within said period, it shall be treated as an original application.

When license to sell and performance bond not required [Section 7, PD 957] A license to sell and performance bond shall not be required in any of the following transactions: (a) Sale of a subdivision lot resulting from the partition of land among co-owners and co-heirs. (b) Sale or transfer of a subdivision lot by the original purchaser thereof and any subsequent sale of the same lot. (c) Sale of a subdivision lot or a condominium unit by or for the account of a mortgagee in the ordinary course of business when necessary to liquidate a bona fide debt.

Revocation of registration as DBS [Section 12, PD 957] Grounds (1) Has violated any provision of this Decree or any rule or regulation made hereunder; or (2) Has made a material false statement in his application for registration; or (3) Has been guilty of a fraudulent act in connection with any sale of a subdivision lot or condominium unit; or (4) Has demonstrated his unworthiness to transact the business of dealer, broker, or salesman, as the case may be. The NHA may suspend the DBS' registration pending hearing of the case. The suspension or revocation of the registration of a dealer or broker (DB) shall carry with it all the suspension or revocation of the registration of all his salesmen (S).

Grounds for suspension of license to sell [Section 8, PD 957] (1) misleading, incorrect, inadequate, or incomplete information in registration statement (2) fraud upon prospective buyers on the sale or offering for a sale Note: suspension is confidential unless orer of suspension has been violated.

Characteristics of sale of a condominium or subdivision unit and similar contracts (1) Contracts to sell, deeds of sale, and other similar instruments must be registered with the Register of Deeds (2) Mortgages on unit or lot by owner/developer needs prior written approval by NHA for the protection of buyers (3) Advertisements by owner of developer become part of sales warranties enforceable against owner or developer (4) No forfeiture of installments already paid by buyer if buyer stops paying because of failure by owner or developer to develop subdivision or condominium (5) Failure to pay installments governed by Maceda Law [RA 6552] (6) Title is issued to the buyer upon full payment (7) Realty tax is paid by owner or developer while not fully paid; but if the buyer occupies the unit/lot, the owner/developer may recover the taxes from the buyer (8) Owner or developer cannot demand any other charges allegedly for community benefit (may be done by homeowner's association)

Grounds for revocation of registration certificate and license to sell [Section 9, PD 957] (1) Insolvency of owner/dealer (2) Violation of owner of PD 957 or its IRR or any undertaking of his/its performance bond (3) Has been or is engaged or is about to engage in fraudulent transactions (4) Misrepresentation in any prospectus, brochure, circular or other literature about the subdivision project or condominium project that has been distributed to prospective buyers (5) Bad business repute of owner/dealer (6) Does not conduct his business in accordance with law or sound business principles Requirement for Dealers, Brokers, and Salesmen (DBS) Registration Dealers, brokers, and salesmen (DBS) must be registered (Section 11, PD 957) Requisites of registration: (1) Good reputation and compliance with NHA rules

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Issuance of title [Section 25, PD 957] The owner or developer shall deliver the title of the lot or unit to the buyer upon full payment of the lot or unit. No fee, except those required for the registration of the deed of sale in the Registry of Deeds, shall be collected for the issuance of such title. In the event a mortgage over the lot or unit is outstanding at the time of the issuance of the title to the buyer, the owner or developer shall redeem the mortgage or the corresponding portion thereof within six months from such issuance in order that the title over any fully paid lot or unit may be secured and delivered to the buyer in accordance herewith.

Registration of sale, etc [Section 17, PD 957] All contracts to sell, deeds of sale and other similar instruments relative to the sale or conveyance of the subdivision lots and condominium units, whether or not the purchase price is paid in full, shall be registered by the seller in the Office of the Register of Deeds of the province or city where the property is situated. Mortgages on unit or lot by owner or developer [Section 18, PD 957] (a) Need prior written approval of the NHA (b) Must show that proceeds of mortgage will be used for development of the condominium or subdivision (c) Value of each lot or unit determined by the buyer (if there is one) and the buyer shall be notified before release of loan (d) Buyer may pay directly to mortgagee

Realty tax [Section 26, PD 957] Real estate tax and assessment on a lot or unit shall de paid by the owner or developer without recourse to the buyer for as long as the title has not passed the buyer; Provided, however, that if the buyer has actually taken possession of and occupied the lot or unit, he shall be liable to the owner or developer for such tax and assessment effective the year following such taking of possession and occupancy.

Advertisements by the owner or developer [Section 19, PD 957] (a) Must reflect real facts, must not mislead or deceive public (b) Owner or developer shall be liable for any misrepresentation as to facilities, etc. (c) Advertisements shall form part of the sales warranties enforceable against the owner or developer (d) Failure to comply with sales warranties is punishable under PD 957

No other charges [Section 27, PD 957] No owner or developer shall levy upon any lot or buyer a fee for an alleged community benefit. Fees to finance services for common comfort, security and sanitation may be collected only by a properly organized homeowners association and only with the consent of a majority of the lot or unit buyers actually residing in the subdivision or condominium project.

Non-forfeiture of payments (Section 23, PD 957) No installment payment made by a buyer in a subdivision or condominium project for the lot or unit he contracted to buy shall be forfeited in favor of the owner or developer when the buyer, after due notice to the owner or developer, desists from further payment due to the failure of the owner or developer to develop the subdivision or condominium project according to the approved plans and within the time limit for complying with the same. Such buyer may, at his option, be reimbursed the total amount paid including amortization interests but excluding delinquency interests, with interest thereon at the legal rate.

The Condominium Act (RA 4726) DEFINITION OF A CONDOMINIUM Sec. 2. A condominium is an interest in real property consisting of separate interest in a unit in a residential, industrial or commercial building and an undivided interest in common, directly or indirectly, in the land on which it is located and in other common areas of the building. A condominium may include, in addition, a separate interest in other portions of such real property. Title to the common areas, including the land, or the appurtenant interests in such areas, may be held by a corporation specially formed for the purpose (hereinafter known as the "condominium corporation") in which the holders of separate interest shall automatically be members or shareholders, to the exclusion of others, in proportion to the appurtenant interest of their respective units in the common areas.

Failure to pay installments [Section 24, PD 957] The rights of the buyer in the event of this failure to pay the installments due for reasons other than the failure of the owner or developer to develop the project shall be governed by Republic Act No. 6552 [Maceda Law].

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(2) Exclusive right to mortgage, pledge or encumber his condominium and to have the same appraised independently of the other condominiums but any obligation incurred by such condominium owner is personal to him

(a) separate interest in a unit in a residential, industrial or commercial building (b) undivided interest in the land on which the building is located and other common areas i. common areas may not be partitioned even by judicial decree [Section 7] (c) title to land and common areas held by condominium corporation - owners of separate interest are automatically members/shareholders, exclusively.

PARTITION BY SALE [SECTION 8] This is an action that may be brought by one or more persons owning condominiums in a condominium project for the partition of the project by the sale thereof. The effect is as if the owners of all the condominiums in such project were co-owners of the entire project in the same proportion as their interests as their interests in the common areas.

OTHER DEFINITIONS Sec. 3. As used in this Act, unless the context otherwise requires: (a) "Condominium" means a condominium as defined in Section 2. (b) "Unit" means a part of the condominium project intended for any type of independent use or ownership, including one or more rooms or spaces located in one or more floors (or part or parts of floors) in a building or buildings and such accessories as may be appended thereto. (c) "Project" means the entire parcel of real property divided or to be divided in condominiums, including all structures thereon, (d) "Common areas" means the entire project excepting all units separately granted or held or reserved. (e) "To divide" real property means to divide the ownership thereof or other interest therein by conveying one or more condominiums therein but less than the whole thereof.

A partition by sale can only be done upon showing any of the following: (1) That three years after damage or destruction to the project which renders material part thereof unfit for its use prior thereto, the project has not been rebuilt or repaired substantially to its state prior to its damage or destruction (2) That damage or destruction to the project has rendered one-half or more of the units therein untenantable and that condominium owners holding in aggregate more than thirty percent interest in the common areas are opposed to repair or restoration of the project (3) That the project has been in existence in excess of fifty years, that it is obsolete and uneconomic, and that condominium owners holding in aggregate more than fifty percent interest in the common areas are opposed to repair or restoration or remodeling or modernizing of the project (4) That the project or a material part thereof has been condemned or expropriated and that the project is no longer viable, or that the condominium owners holding in aggregate more than seventy percent interest in the common areas are opposed to continuation of the condominium regime after expropriation or condemnation of a material portion thereof (5) That the conditions for such partition by sale set forth in the declaration of restrictions, duly registered in accordance with the terms of the Condominium Act, have been met

TRANSFERS OR CONVEYANCES OF A UNIT OR AN APARTMENT, OFFICE OR STORE, OR OTHER SPACE THEREIN [SECTION 5, RA 4726] (a) Transfer or conveyance of a unit or a space therein includes the transfer or conveyance of the i. undivided interests in common areas ii. membership or shareholding in the condominium corporation (b) Proviso: only Filipino citizens or corporations at least 60% of the capital stock are owned by Filipino citizens may be the transferee of common areas in cases where the common areas are owned by the owners of separate units as co-owners (not by condominium corporation) (c) Exception to proviso: hereditary succession

DECLARATION OF RESTRICTIONS BY OWNER OF PROJECT - PRECONDITION TO CONVEYANCE [SECTION 9] (a) The owner must register with the Register of Deeds a declaration of restrictions before the conveyance of any condominium in the project (b) The restrictions constitute a lien upon each condominium in the project and shall insure to and bind all condominium owners in the project

RIGHTS OF A CONDOMINIUM UNIT OWNER (ASIDE FROM RIGHTS ARISING FROM OWNERSHIP) [SECTION 6] (1) Absolute right to sell or dispose of his condominium unless the master deed unless there is a right of first refusal in favor of condominium owners

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(c) The lien may be enforced by any condominium

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POWER OF ATTORNEY HELD BY CORPORATION IN CASE OF VOLUNTARY DISSOLUTION OF CONDOMINIUM CORPORATION [SECTION 15] The condominium corporation is deemed to hold a power of attorney from all members/stockholders to sell and dispose of their separate interests in the project. To liquidate, the condominium corporation will sell the entire project as if it owned the whole project itself, subject to the corporate and individual condominium creditors.

owner or by the management body of the project

ASSESSMENT IN ACCORDANCE WITH DECLARATION OF RESTRICTIONS [SECTION 20] This is the "tax imposition power" of the condominium corporation. If unpaid, the management body may cause a notice of assessment to be registered with the Register of Deeds, which may be released only upon payment of the assessed fees. This lien is superior to all other subsequent liens except real property taxes liens and other liens provided for in the declaration of restrictions.

SALE, EXCHANGE, LEASE, OR DISPOSITION BY CORPORATION OF THE COMMON AREAS [SECTION 16] Generally not allowed unless authorized by affirmative vote of all of the stockholders/members.

HOW LIEN ENFORCED AFTER NON-PAYMENT OF ASSESSED FEES [SECTION 20] Judicial or extra-judicial foreclosure of real property mortgages, where the management body may bid unless disallowed by the declaration of restrictions.

STOCKHOLDER/MEMBER DEMANDING PAYMENT FOR SHARES OR INTEREST AKA APPRAISAL RIGHT [SECTION 17] By-laws of the condominium corporation shall provide that any shareholder/member demanding payment for his share or interest must also consent to sell his separate interest in the project to the corporation or any buyer of the corporation's choice.

CONTENTS OF A DECLARATION OF RESTRICTIONS [SECTION 9] (1) Provisions for the management of the project by any of the ff bodies: (a) Condominium corporation (b) Association of condominium owners (c) Board of governors elected by condominium owners (d) Management agent elected by the owners or by the board named in the declaration (2) Provisions for voting majorities quorums, notices, meeting date, and other rules governing such body or bodies (3) Powers of the management body (4) Maintenance of insurance policies (fire, casualty, workmen's compensation, etc) (5) Maintenance, utility, gardening and other services for the common areas (6) Amendment of the restrictions (7) Reasonable assessment to meet expenditures (8) And many other provisions - the common thread is the management and maintenance of the common areas and the manner of exercise of the management body's powers

REQUIREMENTS FOR REGISTRATION OF CONVEYANCE WITH THE REGISTER OF DEEDS [SECTION 18] (1) Certificate of the management body of the project that the conveyance is in accordance with the declaration of restrictions REALTY TAX ON CONDOMINIUMS [SECTION 25] Each condominium separately owned shall be separately assessed, for purposes of real property taxation and other tax purposes to the owners thereof and the tax on each such condominium shall constitute a lien solely thereon.

INVOLUNTARY DISSOLUTION OF THE CONDOMINIUM CORPORATION [SECTION 12] In case of involuntary dissolution, the common areas held by the corporation shall be transferred proindiviso and in proportion to their interest to the members/stockholders of the corporation, subject to the rights of creditors of the corporation. The common areas remain in undivided co-ownership.

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