Gn 2016 Civil Law

Green Notes 2016

Civil Law

Prepared by: Atty. Teresita Cruz CALIFORNIA CLOTHING, INC., ET. AL. vs QUINONES, G.R. 175822, October 23, 2013 The exercise of a right is not without limitations. Any abuse in the exercise of such right and in the performance of a duty causing damage to another is actionable under the Civil Code.

This provision recognizes that a man’s house is his castle, where his right to privacy cannot be denied or even restricted by others. It includes “any act of intrusion into, peeping or peering inquisitively into the residence of another without the consent of the latter.” However, it does not mean that only the residence is entitled to privacy. MARRIAGE

While it is true that they had the right to verify from the defendant whether she has paid or not, and collect from her if she did not, they however, went overboard, thus they abused their right. When they sent letters to the employer, on the guise of asking assistance, they imputed bad acts on the part of the defendant. They accused her that she was not completely honest. Clearly, these statements were accusatory which were intended to tarnish her reputation in the eyes of her employer. JOYCE ARDIENTE vs. SPS. PASTORFIDE, et. al., G.R. 161921, July 17, 2013 It is true that it is within petitioner's right to ask and even require Sps. Pastorfide to cause the transfer of the former's account with COWD to the latter's name pursuant to their MOA. However, the remedy to enforce such right is not to cause the disconnection of the respondent spouses' water supply. The exercise of a right must be in accordance with the purpose for which it was established and must not be excessive or unduly harsh; there must be no intention to harm another. Otherwise, liability for damages to the injured party will attach. SPS. HING vs. CHOACHUY, et. al., G.R. 179736, June 26, 2013

ACEBEDO vs. ARQUERO, A.M. P-94-1054, Mar. 11, 2003 The KASUNDUAN had absolutely no force & effect on the validity of the marriage between complainant and his wife. Article 1 of the Family Code provides that marriage is “an inviolable social institution whose nature, consequences and incidents are governed by law and NOT subject to stipulation”. It is an institution of public order or policy governed by rules established by law which CANNOT be made inoperative by the stipulation of the parties. ESPINOSA & GLINDO vs. Atty. JULIETA A. OMAÑA A.C. No. 9081, October 12, 2011 The extrajudicial dissolution of the conjugal partnership without judicial approval is VOID. A notary public should NOT facilitate the disintegration of a marriage and the family by encouraging the separation of the spouses and extra-judicially dissolving the conjugal partnership. VDA. DE AVENIDO vs. AVENIDO, GR 173540, January 22, 2014 This case involves a contest between two women both claiming to have been validly married to the same man, now deceased.

Art. 26. Every person shall respect the dignity, personality and peace of mind of his neighbors and other persons. The following and similar acts, though they may not constitute a criminal offense, shall produce a cause of action for damages, prevention and other relief: (1). Prying into the privacy of another’s residence; xxxx

Citing Añonuevo v. Intestate Estate of Rodolfo G. Jalandoni, GR 178221, Dec. 1, 2010, the Supreme Court HELD: While a marriage certificate is considered the primary evidence of a marital union, it is not regarded as the sole and exclusive evidence of marriage. Jurisprudence teaches us that the fact of marriage may be proven by relevant evidence other than the marriage certificate. Hence,

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Green Notes 2016

Civil Law

Prepared by: Atty. Teresita Cruz even a person’s birth certificate may be recognized as competent evidence of the marriage between his parents. VDA. DE CHUA vs. CA & VALLEJO, GR 116835, Mar. 5, 1998 The best proof of marriage between H & W is a marriage contract which Antonietta Chua failed to produce. The lower court correctly disregarded the photostat copy of the marriage certificate which she presented, this being a violation of the best evidence rule, together with other worthless pieces of evidence. TCTs, Residence Certificates, passports and other similar documents CANNOT prove marriage especially so when the respondent has submitted a certification from the LCR that the alleged marriage was NOT registered and a letter from the judge alleged to have solemnized the marriage that he has NOT solemnized said alleged marriage.

GO- BANGAYAN vs. BANGAYAN, GR 201061, JULY 3, 2013 The marriage between Sally & Benjamin was NOT bigamous. The 2nd marriage was VOID not because of the existence of the 1st marriage but because of the LACK OF A VALID MARRIAGE LICENSE. The marriage was “made only in jest” and a “simulated marriage”, NOT in existence in the eyes of law. In short, it was a fictitious marriage. Benjamin and Sally cohabited without the benefit of marriage, hence, their property relations is governed by Article 148 of the FC. Thus, only the properties acquired by them through their actual joint contribution of money, property, or industry shall be owned by them in common in proportion to their respective contributions. NIÑAL vs. BAYADOG, GR 133778, Mar. 14, 2000

REPUBLIC vs. ALBIOS, GR 198780, Oct. 16, 2013 Is a marriage contracted for the sole purpose of acquiring US citizenship in consideration of $2K void ab initio on the ground of lack of consent? Consent was not lacking between Albios & Fringer. That their consent was freely given is best evidenced by their conscious purpose of acquiring American citizenship through marriage. There was a full and complete understanding of the legal tie that would be created between them since it was that precise legal tie which was necessary to accomplish their goal.

Q: May the heirs of a deceased person file a petition for the declaration of nullity of his marriage after his death? A: YES. A VOID marriage can be attacked collaterally. Void marriages can be questioned even after the death of either party but voidable marriages can be assailed only during the lifetime of the parties and not after the death of either. The law makes either the action or defense for the declaration of absolute nullity of marriage imprescriptible. QUIAZON, et. al. vs. BELEN, GR 189121, JULY 31, 2013

RONULO vs. PEOPLE OF THE PHILIPPINES, GR 182438, JULY 2, 2014 One of the essential requisites of marriage is a valid marriage license. In the present case, petitioner conducted the marriage ceremony despite knowledge that the formal requirements of marriage set by law were lacking. The marriage ceremony was illegal. Petitioner’s knowledge of the absence of these requirements negates his defense of good faith.

ISSUE: Can an illegitimate child impugn the validity of the marriage of her father? In a VOID marriage, it was though no marriage has taken place, thus it cannot be the source of rights. Any interested party may attack the marriage directly or collaterally. A VOID marriage can be questioned even beyond the lifetime of the parties to the marriage.

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Prepared by: Atty. Teresita Cruz At the time of Amelia and Eliseo’s marriage, the law in effect was the Civil Code and NOT the Family Code, hence, the case of Ninal vs. Bayadog was applicable. AM No. 02-11-10 SC: Rule on the Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages effective on March 15, 2003 • Sec. 1. Scope: This Rule shall govern petitions for declaration of absolute nullity of marriage and annulment of voidable marriages under the Family Code. • Sec. 2 (a): That a petition for declaration of absolute nullity of a void marriage may be filed Solely by the husband or wife. CARLOS vs. SANDOVAL, GR 179922, Dec. 16, 2008 “ONLY A SPOUSE can initiate an action to sever the marital bond for marriages solemnized during the effectivity of the FC, except cases commenced PRIOR to March 15, 2003. The nullity and annulment of a marriage CANNOT be declared in a judgment on the pleadings, summary judgment, or confession of judgment.” REPUBLIC vs. JOSE DAYOT, GR 175581, March 28, 2008

where only ONE marriage can exist at any given time and divorce is NOT recognized. PD 1083 or the Muslim Code took effect on Feb. 4, 1977 and this law CANNOT retroactively override the Civil Code. A new law ought to affect the future, NOT what is past. In the case of subsequent marriage laws, NO vested rights shall be impaired that pertain to the protection of the legitimate union of a married couple. MORIGO vs. PEOPLE, GR 145226, Feb. 6, 2004 NO MARRIAGE CEREMONY at all was performed by a duly authorized solemnizing officer.” Morigo and Lucia merely signed a marriage contract on their own. The mere private act of signing a marriage contract bears NO semblance to a valid marriage and thus needs NO judicial declaration of nullity. Such act alone, without more, cannot be deemed to constitute an ostensibly valid marriage for which petitioner might be held liable for bigamy unless he first secures a judicial declaration of nullity before he contracts a subsequent marriage. FOREIGN DIVORCE OBTAINED BY ONE SPOUSE General Rule: Article 15 NCC Exception: Article 26(2) FC

The falsity of the allegation in the sworn affidavit relating to the period of Jose and Felisa’s cohabitation CANNOT be a mere irregularity, for it refers to a quintessential fact that the law precisely required to be deposed and attested to by the parties under oath. If the essential matter in the sworn affidavit is a lie, then it is a mere scrap of paper, WITHOUT force and effect. It is as if there was NO AFFIDAVIT at all. LLAVE vs. REPUBLIC and TAMANO, GR 169766, Mar. 30, 2011 The marriage between Sen. Tamano and Zorayda was celebrated in 1958, solemnized under civil and Muslim rites. The only law in force governing marriages between Muslims and non- Muslims was the Civil Code of 1950

REPUBLIC vs. CIPRIANO ORBECIDO III, GR 154380, October 5, 2005 Q: Is Article 26 (2) applicable in the case at bar? A: The twin elements for the application of Article 26 (2) are: 1. There is a valid marriage that has been celebrated between a Filipino citizen and a foreigner; and 2. A valid divorce is obtained abroad by the alien spouse capacitating him or her to remarry. 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

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Prepared by: Atty. Teresita Cruz valid divorce is obtained abroad by the alien spouse capacitating the latter to remarry.

LAVADIA vs. HEIRS of LUNA, GR 171914, JULY 23, 2014

CORPUZ vs. STO. TOMAS, G.R. 186571, Aug. 11, 2010

Divorce between Filipinos is VOID and ineffectual under the nationality rule adopted by Philippine law. Hence, any settlement of property between the parties of the first marriage involving Filipinos submitted as an incident of a divorce obtained in a foreign country lacks competent judicial approval, and CANNOT be enforceable against the assets of the husband who contracts a subsequent marriage.

ISSUE: Whether Article 26 (2) extends to foreigners the right to petition a court for recognition of a foreign divorce decree. HELD: The alien spouse can claim NO RIGHT under the 2nd paragraph of Article 26 of the Family Code as the substantive right it establishes is in favor of the Filipino spouse.

PSYCHOLOGICAL INCAPACITY The divorce obtained by the alien abroad may be recognized in the Philippines provided the divorce is valid according to his national law. The foreign judgment and its authenticity must be proven as facts under our rules on evidence, together with the alien’s applicable national law to show the effect of the judgment on the alien himself. CORPUZ vs. STO. TOMAS, G.R. 186571, Aug. 11, 2010

CHI MING TSOI vs. CA, GR 119190, JAN. 16, 1997 HELD: One of the essential marital obligations under the Family Code Is “To procreate children based on the universal principle that procreation of children through sexual cooperation is the basic end of marriage.” The senseless and protracted refusal of one of the parties to fulfil the above marital obligation is equivalent to psychological incapacity.

The alien spouse can claim NO RIGHT under the 2nd paragraph of Article 26 of the Family Code as the substantive right it establishes is in favor of the Filipino spouse. The divorce obtained by the alien abroad may be recognized in the Philippines provided the divorce is valid according to his national law. The foreign judgment and its authenticity must be proven as facts under our rules on evidence, together with the alien’s applicable national law to show the effect of the judgment on the alien himself.

SANTOS vs. CA, 310 SCRA 21 (1995) HELD: Psychological incapacity characterized by gravity, antecedence and incurability.

must be juridical

REPUBLIC vs. CA & MOLINA, GR 108763, FEB. 13, 1997 HELD: The Court laid down the guidelines in the interpretation and application of Article 36 of the Family Code.

FUJIKI vs. MARINAY, et. al., G.R. 196049, June 26, 2013

MARCOS vs. MARCOS, GR 136490, OCTOBER 19, 2000

Fujiki has the personality to file a petition to recognize the Japanese Family Court judgment nullifying the marriage between Marinay and Maekara on the ground of bigamy because the judgment concerns his civil status as married to Marinay. For the same reason, he has the personality to file a petition under Rule 108 to cancel the entry of marriage between Marinay and Maekara in the civil registry on the basis of the decree of the Japanese Family Court.

Psychological incapacity may be established by the totality of evidence presented. There is no requirement that the respondent be personally examined by a physician or a psychologist/ psychiatrist as a condition sine qua non for such declaration.

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Prepared by: Atty. Teresita Cruz NGO TE vs. YU-TE, GR 161793, February 13, 2009 Each case must be judged, NOT on the basis of a priori assumptions, predilections, or generalizations, but according to its own facts. Courts should interpret the provision on a case-to-case basis, guided by experience, the findings of experts & researchers in psychological disciplines and the decisions of church tribunals. KALAW vs. FERNANDEZ, GR 166357, September 19, 2011 The grounds cited by petitioner are his wife’s infidelity, habitual mah-jong sessions, frequent night-outs with friends, visits to the beauty parlor, and neglect of their children. What transpired between the parties is acrimony and infidelity, which may be grounds for legal separation, but not psychological incapacity that voids a marriage. KALAW vs. FERNANDEZ, GR 166357, January 14, 2015

perversion, emotional immaturity and irresponsibility, do not by themselves warrant a finding of psychological incapacity under Article 36 of the FC, as the same may only be due to a person’s refusal or unwillingness to assume the essential obligations of marriage and not due to some psychological illness that is contemplated by said rule. MALLILIN vs. JAMESOLAMIN & REPUBLIC, GR 192718, FEB. 18, 2015 Psychological incapacity as required by Article 36 must be characterized by (a) gravity, (b) juridical antecedence and (c) incurability. The incapacity must be grave or serious such that the party would be incapable of carrying out the ordinary duties required in marriage. It must be rooted in the history of the party antedating the marriage, although the overt manifestations may only emerge after the marriage. It must be incurable or, even if it were otherwise, the cure would be beyond the means of the party involved. ARTICLE 40. FAMILY CODE

The guidelines have turned- out to be rigid, such that their application to every instance practically condemned the petitions for declaration of nullity to the fate of certain rejection. Article 36 of the FC must not be so strictly and too literally read and applied. XXX. Every court should approach the issue of nullity “not on the basis of a priori assumptions, predilections or generalizations, but according to its own facts” in recognition of the verity that NO case would be on “all fours” with the next one in the field of psychological incapacity as a ground for the nullity of marriage. VIÑAS vs. VIÑAS, GR 208790, JAN. 21, 2015 Citing Navales vs. Navales, the SC HELD: Mere “difficulty,” “refusal” or “neglect” in the performance of marital obligations or “ill will” on the part of the spouse is different from “incapacity” rooted on some debilitating psychological condition or illness. Irreconcilable differences, sexual infidelity or

CAPILI vs. PEOPLE et. al., GR 183850, JULY 3, 2013 ISSUE: WON the declaration of nullity of the 2nd marriage is a ground for the dismissal of the bigamy case. The subsequent judicial declaration of the nullity of the 2nd marriage was immaterial because prior to the declaration of nullity, the crime of bigamy had already been consummated. The outcome of the civil case had no bearing upon the determination of petitioner’s innocence or guilt in the criminal case for bigamy, because all that is required for the 1st charge of bigamy to prosper is that the 2nd marriage be subsisting at the time the marriage is contracted. JARILLO vs. PEOPLE, GR 164435, JUNE 29, 2010 Under the law, a marriage, even one which is void or voidable, shall be deemed valid until declared otherwise in a judicial proceeding. Even if the accused eventually st obtained a declaration that her 1 marriage

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Civil Law

Prepared by: Atty. Teresita Cruz was void ab initio, the point is, both the 1st & 2nd marriage were subsisting before the 1st marriage was declared null & void. ABSENCE OF ONE SPOUSE UNDER ARTICLES 41 - 43 Family Code (Declaration of Presumptive Death)

terminated by mere reappearance, the children of the subsequent marriage conceived before the termination shall still be considered legitimate & the property regime will be the same as in a valid marriage. Moreover, a judgment declaring presumptive death is a defense against prosecution for bigamy.

REPUBLIC vs. CANTOR, GR 184621, DEC 10, 2013

ALMELOR vs. RTC OF LAS PINAS CITY, GR 79620, AUG. 26, 2008

The Requirement of Well-Founded Belief:

Q: Is homosexuality a ground to annul a marriage?

The law did not define what is meant by “well-founded belief.” It depends upon the circumstances of each particular case. Its determination remains on a case-to-case basis. To be able to comply with this requirement, the present spouse must prove that his/her belief was the result of diligent and reasonable efforts and inquiries to locate the absent spouse and that based on these efforts and inquiries, he/she believes that under the circumstances, the absent spouse is already dead. It requires exertion of active effort (not a mere passive one).

LAPUZ-SY vs. EUFEMIO, GR-L-30977, Sept.30, 1972 Q: Does the death of the wife before final decree in an action for legal separation, abate the action? A: An action for legal separation w/c involves bed and board separation of the spouses is purely personal. Being personal in character, the death of one party to the action causes the death of the action itself.

REPUBLIC vs. VILLANUEVA, GR 210929, July 29, 2015

VALINO vs. ADRIANO, et.al., GR 182894, APRIL 22, 2014

The strict standard approach ensures that a petition for declaration of presumptive death under Article 41 of the Family Code is not used as a tool to conveniently circumvent the laws in light of the State’s policy to protect and strengthen the institution of marriage. Courts should never allow procedural shortcuts but instead should see to it that the stricter standard required by the Family Code is met.

Q: Who is entitled to the remains of the decedent?

SANTOS vs. SANTOS, GR 187061, Oct. 8, 2014 The proper remedy for a judicial declaration of presumptive death obtained by extrinsic fraud is an action to annul the judgment. An affidavit of reappearance is not the proper remedy when the person declared presumptively dead has never been absent.” Celerina does not admit to have been absent. She seeks not merely the termination of the 2nd marriage but also the nullification of its effects. If the subsequent marriage is

A: It is clear that the law gives the right and duty to make funeral arrangements to Rosario, she being the surviving legal wife of Atty. Adriano. The fact that she was living separately from her husband and was in the United States when he died has no controlling significance. The right and duty to make funeral arrangements, like any other right, will not be considered as having been waived or renounced, except upon clear and satisfactory proof of conduct indicative of a free and voluntary intent to that end. ILUSORIO vs. ILUSORIO-BILDNER, GR 139789, May. 12, 2000 Q: May a wife secure a Writ of Habeas Corpus to compel her husband to live with her in conjugal bliss?

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Prepared by: Atty. Teresita Cruz A: NO. Marital rights including coverture and living in conjugal dwelling may not be enforced by the extra-ordinary writ of Habeas Corpus. No court is empowered as a judicial authority to compel a husband to live with his wife. PROPERTY RELATIONS BETWEEN HUSBAND AND WIFE

The REM on the conjugal property is VOID for lack of the wife’s written consent. MAXIMO ALVAREZ vs. SUSAN RAMIREZ GR 143439, Oct. 14, 2005 ISSUE: WON Esperanza can testify against her husband in the instant criminal case for arson. HELD: Where the marital and domestic relations between the husband & the wife are so strained that there is no more harmony, peace and tranquillity to be preserved, the marital disqualification rule is NO longer applicable.

PROPERTY REGIMES OF UNIONS W/O VALID MARRIAGES PNB vs. GARCIA and Children, GR 182839, JUNE 2, 2014 Registration of a property alone in the name of one spouse does not destroy its conjugal nature. What is material is the time when the property was acquired. Although the property appears to be registered in the name of the husband, it has the inherent character of conjugal property if it was acquired for valuable consideration during marriage. It retains its conjugal nature. TAN vs. ANDRADE et. al., GR NOS. 171904/172017, AUG. 7, 2013 Q: Were the subject properties conjugal or paraphernal? A: As a condition sine qua non for the operation of Art. 160 NCC in favor of the conjugal partnership, the party who invokes the presumption of conjugality must first prove that the property was acquired during the marriage. The presumption of conjugality does not apply if there is NO showing of when the property alleged to be conjugal was acquired. HOMEOWNERS SAVINGS & LOAN BANK vs. DAILO, GR 153802, Mar. 11 Under Art. 124 FC, in the absence of court authority or written consent of the other spouse, any disposition or encumbrance of the conjugal property shall be VOID. This provision does not qualify with respect to the rule on co-ownership under Art. 493 NCC.

HIYAS SAVINGS & LOAN BANK vs. ACUÑA, GR 154132, Aug. 31, 2006 Once a stranger becomes a party to a suit involving members of the same family, the law NO longer makes it a condition precedent that earnest efforts be made towards a compromise before the action can prosper. Art. 151 FC may be invoked ONLY by a party who is a member of that SAME FAMILY. FH EXEMPT from execution, forced sale, or attachment EXCEPT: (A155) a) Non-payment of taxes; b) Debts incurred prior to constitution of FH; c) Debts secured by mortgages on the premises before/after constitution of FH; d) Debts due to laborers, mechanics, architects, builders, etc. who rendered service/materials for construction of the building. RAMOS et. al. vs. PANGILINAN et. al., GR 185920, JULY 20, 2010 Petitioners claim that the FH was constructed prior to Aug. 3, 1988 or as early as 1944, hence, the property must be constituted either judicially or extra-judicially under the Civil Code. There being absolutely no proof that the Pandacan property was judicially or extrajudicially constituted as the Ramos‟ FH, the law’s protective mantle cannot be availed of by petitioners.

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Prepared by: Atty. Teresita Cruz ARRIOLA vs. ARRIOLA, GR 17703, Jan. 28, 2008

document or private handwritten instrument is made by the father XXX.

HELD: Fidel died on March 10, 2003, thus, for 10 years from his death or until March 10, 2013, or for a longer period if there is still a minor beneficiary residing therein, the FH he constituted CANNOT BE PARTITIONED.

Art. 176 FC gives illegitimate children the right to decide if they want to use the surname of their father or not. It is not the father or the mother who is granted by law the right to dictate the surname of their illegitimate child.

SPS. DE MESA vs. SPS. ACERO, et al, GR 185064, 1/16/2012

Art. 176, as amended, is free from ambiguity. The use of the word “MAY” readily shows that an acknowledged illegitimate child is under NO compulsion to use the surname of his illegitimate father. The word “MAY” is permissive and operates to confer discretion upon the illegitimate child.

The exemption of the FH from attachment, levy or forced sale must be invoked as soon as possible, otherwise, it is considered as waived. The FH’s exemption from execution must be set-up and proved to the Sheriff before the sale of the property at public auction. The right of exemption is a personal privilege granted to the judgment debtor & must be claimed by him, NOT by the Sheriff, at the time of the levy or before the sale at public auction.

DELA CRUZ et.al. vs. GRACIA, GR 177728, July 31, 2009 HELD: Dominique’s Autobiography, though unsigned by him, substantially satisfies the requirement of the law.

EQUITABLE PCIB, INC. vs. OJ-MARK TRADING INC., et. al., GR 165950, AUG. 8, 2010

1.

Assuming arguendo that the mortgaged condominium unit constitutes respondents' family home, the same will not exempt it from foreclosure as Article 155 (3) of the FC allows the execution or forced sale of a family home "for debts secured by mortgages on the premises before or after such constitution."

2. Where the private handwritten instrument is ACCOMPANIED by other relevant and competent evidence, it suffices that the claim of filiation be shown to have been made and handwritten by the acknowledging parent as it is merely corroborative of such other evidence.

GRANDE vs. ANTONIO, GR 206248, 2/18/14 ISSUE: Whether the father has the right to compel his illegitimate children to use his surname upon his recognition of their filiation. Art. 176 FC (as amended By R.A. 9255 (3/19/2004) now reads: Illegitimate children SHALL use the surname and SHALL be under the parental authority of their mother, and SHALL be entitled to support in conformity with this Code. However, illegitimate children MAY use the surname of their father if their filiation has been expressly recognized by their father through the record of birth appearing in the civil register, or when an admission in a public

Where the private handwritten instrument is the LONE piece of evidence submitted to prove filiation, there should be strict compliance with the requirement that the same must be signed by the acknowledging parent;

IN THE EYES OF SOCIETY, A CHILD WITH AN UNKNOWN FATHER BEARS THE STIGMA OF DISHONOR. GEOFFREY BECKETT vs. JUDGE OLEGARIO SARMIENTO, JR., A.M. NO. RTJ-12-2326, JAN. 30, 2013 Q: Did the order granting provisional custody to Eltesa disregard the res judicata rule? A: The matter of custody is not permanent and unalterable. If the parent who was given

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Prepared by: Atty. Teresita Cruz custody suffers a future character change & becomes unfit, the matter of custody can always be re-examined and adjusted xxx. To be sure, the welfare, the best interest, the benefit, and the good of the child must be determined as of the time that either parent is chosen to be the custodian. A judgment involving the custody of the minor child can never be res judicata. CONCEPCION vs. CA & ALMONTE, GR 123450, Aug. 31, 2005 The LAW and only the LAW determines who are legitimate or illegitimate children for one’s legitimacy or illegitimacy cannot ever be compromised. IT SHOULD BE WHAT THE LAW SAYS AND NOT WHAT THE PARENT SAYS IT IS. CABATANIA vs. CA & CAMELO REGODOS, GR 124814, Oct. 21, 2004 A high standard of proof is required to establish paternity and filiation. An order for recognition must be issued ONLY if paternity or filiation is established by CLEAR and CONVINCING EVIDENCE.

spouse has signified his/her consent thereto; 3. If the spouses are legally separated from each other. The law is clear. Petitioner having remarried at the time the petitions for adoption were filed, must jointly adopt with her husband. IN THE MATTER OF THE ADOPTION OF STEPHANIE NATHY ASTORGA GARCIA, GR 148311, Mar. 31, 2005 Q: May an illegitimate child, upon adoption by her natural father, use the surname of her natural mother as her middle name? A: Since there is no law prohibiting an illegitimate child adopted by her natural father, like Stephanie, to use as middle name her mother’s surname, there is NO cogent reason why she should NOT be allowed to do so. DEL SOCORRO vs. VAN WILSEM, GR 193707, DEC. 10, 2014 Issues: 1) WON a foreign national has an obligation to support his minor child under Phil. Law; 2) WON a foreign national can be held criminally liable under RA 9262 for his unjustified failure to support his minor child

VERCELES vs. POSADA, GR 159785, 4/27/07 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 acknowledgment of the child, and no further court action is required. IN RE PETITION FOR ADOPTION OF MICHELLE P. LIM, GR NOS. 168992-93, May. 21, 2009 ISSUE: WON petitioner, who has remarried, can singly adopt. Husband and wife shall JOINTLY ADOPT except in the ff. cases: 1. If one spouse seeks to adopt the legitimate son/daughter of the other; 2. If one spouse seeks to adopt his/her own illegitimate son/daughter: provided, however, that the other

The obligation to give support to a child is a matter that falls under family rights and duties. Since the respondent is a citizen of Holland, he is subject to the laws of his country, NOT to Philippine law, as to whether he is obliged to give support to his child, as well as the consequences of his failure to do so. While respondent pleaded the laws of the Netherlands in contending that he is not obliged to support his son, he never proved the same, hence the doctrine of processual presumption shall govern. Under this doctrine, if the foreign law involved is not properly pleaded and proved, our courts will presume that the foreign law is the same as our internal law, which enforces the obligation of parents

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Prepared by: Atty. Teresita Cruz to support their children and penalizing the non-compliance therewith. Foreign law should not be applied when its application would work undeniable injustice to the citizens or residents of the forum. Respondent may be made liable under Section 5(e) and (i) of R.A. No. 9262 for unjustly refusing or failing to give support to petitioner’s son. The deprivation or denial of financial support to the child is considered an act of violence against women and children. SPS. LIM vs. LIM et. al., GR 163209, Oct. 30, 2009 Q: Are Edward‟s parents concurrently liable with Edward to provide support to respondents? A: The obligation to provide legal support passes on to ascendants not only upon default of the parents but also for the latter’s inability to provide sufficient support. Art. 199 FC is applicable. PARENTAL AUTHORITY NO DESCENDANT shall be compelled, in a criminal case to testify against his parents and grandparents, EXCEPT when such testimony is INDISPENSABLE in a crime against the descendant or by one parent against the other (Art. 215). SALIENTES vs. ABANILLA, GR 162734, August 29, 2006 Under Article 211 of the FC, the father and mother have joint parental authority and custody over their son. Having been deprived of the right to see his child, the remedy of habeas corpus is available to the father.

Jayson looked into the test tube with a magnifying glass. The compound in the test tube spurted out hitting Jayson’s eyes and the different parts of the bodies of his group mates. Jayson had to undergo surgery and had to spend for his medication. Were petitioners negligent, hence, liable for damages to Jayson? The proximate cause of Jayson’s injury was the concurrent failure of petitioners to prevent the foreseeable mishap that occurred during the science experiment. Petitioners were negligent by failing to exercise the higher degree of care, caution, and foresight incumbent upon the school, its administrators and teachers. However, Jayson is partly responsible for his own injury, hence, he should not be entitled to recover damages in full but must bear the consequences of his own negligence. REPUBLIC vs. JENNIFER B. CAGANDAHAN, GR 166676, Sept. 12, 2008 HELD: Where the person is biologically intersex, the determining factor in his gender classification would be what he, having reached majority age, with good reason, thinks of his/her sex. ROMMEL SILVERIO vs. REPUBLIC GR 174689, Oct. 22, 2007 HELD: A person’s first name cannot be changed on the ground of sex reassignment. No law allows the change of entry in the birth certificate as to gender on the ground of sex reassignment. PROPERTY OWNERSHIP

ST. JOSEPH’S COLLEGE, et. al. vs. JAYSON MIRANDA, GR 182353, June 29, 2010

RIGHTS AS A CONSEQUENCE OF OWNERSHIP 1.

During a science experiment about fusion of sulphur powder and iron fillings with Rosalinda Tabugo as subject teacher and employee of SJC,

Enjoy and dispose of his property. (Art. 428) 2. Recover the property from any holder or possessor. (Art. 428)

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Prepared by: Atty. Teresita Cruz 3. Exclude any person from the enjoyment and disposal of the property. (Art. 429) 4. Enclose or fence his land/ tenement. (Art. 430) 5. Just compensation in expropriation. (Art. 435) 6. Construct any works or make any plantation or excavation on the surface or subsurface of his land. (Art. 437) 7. Own all or part of hidden treasures found in his property. (Art. 438) 8. Own all accessories to his property. (Art. 440) DEPT. OF EDUCATION vs. TULIAO, GR 205664, June 9, 2014 Between a certificate of title, which incontrovertible proof of ownership, accompanied with a tax declaration and a tax receipt on one hand, and a testimony of a lone witness who is a retired teacher on the other, the former prevails in establishing who has a better right of possession over the property, following the rule that testimonial evidence cannot prevail over documentary evidence. HIDDEN TREASURE: Any hidden and unknown deposit of money, jewellery, or other precious objects the lawful ownership of which does not appear. (Art. 439) RIGHTS TO HIDDEN TREASURE: Finder is: Owner of the land, building or property where treasure was found Not the owner thereof Merely employed by owner.

Trespasser Treasure is of interest to science or the arts

All the treasure belongs to him

½ to him; ½ to the owner No share in the treasure but should be paid his wages, unless there is an agreement to the contrary. No share in the treasure. State acquires them at their just price; division in

conformity above rules.

with

Art. 448. RULES WHEN LANDOWNER IS IN GOOD FAITH AND BUILDER, PLANTER, SOWER IS ALSO IN GOOD FAITH Rights & obligations of Landowner in Good Faith 1. Right of appropriation after payment of indemnity provided in Arts. 546 and 548; OR 2. Right to compel B/P to only pay the price of the land and S, the proper rent. EXC: Value of land is considerably more than value of the building or trees; hence, forced lease is the remedy, the terms of which is as per agreement of the parties. In case of disagreement, the court shall fix the terms thereof.

Rights & obligations B/ P/ S in Good Faith 1. Right of reimbursement of necessary and useful expenses; 2. Right of retention until paid; 3. Right to buy the land upon which the building has been built or trees have been planted. EXC: Value of land is considerably more than value of the building or trees; hence, forced lease shall result.

Art. 449 to 452. RIGHTS OF BULIDER IN BAD FAITH AND LANDOWNER IN GOOD FAITH Landowner in Good Faith 1. Right of appropriation without payment of indemnity, and damages; OR 2. Right to demand removal or demolition, at builder’s expense, plus damages; OR 3. Right to

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Builder in Bad Faith No right except reimbursement of necessary expenses for preservation of land.

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Civil Law

Prepared by: Atty. Teresita Cruz AVULSION (Art. 459) REQUISITES: 1. Segregates or transfer caused by the current of a river, creek, or torrent; 2. Segregation or transfer must be sudden or abrupt; 3. Portion of the land transported known or identified.

demand price of land or rent, regardless of value of land is considerably more than value of building or trees plus damages. SPS. BENITEZ vs. CA 266 SCRA 242, January 16, 1997 The option is to sell and not to buy the land and the choice belongs to landowner; there is no pre-emptive right to buy even as a compromise and compulsion to sell on the part of the landowner. SPS ALVIOLA vs. CA GR 117642, April 24, 1998 For Article 448 to apply “the construction must be of permanent character, attached to the soil, with an idea of perpetuity. But if it is of a transitory character or is transferable, there is no accession and the builder must remove the constructive.” JOSEFA vs. SAN BUENAVENTURA, GR 163429, March 3, 2006 Lessees are NOT builders in good faith. They came into the possession of the lost by virtue of a contract entered into with the lessor. They are estopped to deny their landlord’s title, or to assert a better title not only in themselves, but also in some 3rd person while they remain in possession of the leased premises and until they surrender possession to the landlord. ALLUVIUM (Art. 457) REQUISITES: 1. Deposit of soil is gradually imprescriptible; 2. Cause is the current of the river; 3. River must continue to exist; 4. Increase must be comparatively little; 5. Lands where accretion takes place must be adjacent to the banks of the river. EFFECT: Soil deposited belongs to the owner of the land adjoining the river bank where accretion took place.

EFFECT: The owner of the land to which the segregated portion belongs retains ownership thereof, provided he removes (not merely claims) the same within 2 years from such segregation. ABANDONED RIVER BED (Art. 461) REQUISITES: 1. Change in the course of river must be sudden so the old river bed may be identified; 2. Change in the course must be more or less permanent; 3. Change of the river bed must be a natural one; 4. Definite abandonment by the government; 5. River must continue to exist. EFFECT: Abandoned riverbeds belong to the owners whose lands are occupied by the new course in proportion to the area lost; however, the owners of the lands adjoining the old bed shall have the right to acquire the same by paying the value thereof, which value shall not exceed the value of the area occupied by the new bed. CO-OWNERSHIP 1. Full ownership of his part, i.e. his undivided interest or share in the common property; 2. Full ownership of the fruits and benefits pertaining thereto; 3. May alienate, assign, or mortgage his ideal interest or share; 4. May even substitute another person in the enjoyment of his part, except when personal rights are involved; 5. Rights of redemption in case the shares of all the other co-owners or any of them are sold to a third person; 6. To renounce so much of his interest as may be equivalent to his share of the

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Prepared by: Atty. Teresita Cruz expenses and taxes to exempt himself from said obligation; 7. To demand partition.

4. ACTS ALTERATION (Art. 491) a.

CONSENT OF CO-OWNERS REQUIRED 1. ACTION IN EJECTMENT (ART. 487) Includes forcible entry, unlawful detainer, accion publiciana, accion reinvidicatoria, quieting of title and replevin 2. ACTS OF PRESERVATION (Art. 488) Include expenses for preservation, maintenance or necessary repairs and taxes Compel contribution of other co-owners, even if incurred w/o prior notice or knowledge

3. ACTS OF ADMINISTRATION (Art. 492) a) include those that: 1. do not involve an alteration 2. improve or embellish the thing 3. may be renewed from time to time 4. have transitory effects 5. do not give rise to a real right over the coowned property 6. do not affect the substance or nature of the thing

more or permanent changes the of the thing prejudices condition of thing or enjoyment by others

b)

ONE CO-OWNER

c)

Not only against a stranger but even against a co-owner

OF

less use

ALL CO-OWNERS i.e., UNANIMOUS CONSENT, express or implied, to make alteration valid; but to recover expenses, express consent is required.

the the its the

RURAL BANK of CABADBARAN, INC. (RBCI) vs. MELECIO-YAP, GR 178451, JULY 30, 2014

ONE CO-OWNER,

But he must, if practicable, first notify his co-owners of the necessity of repairs Co-owner may not contribute by RENOUNCING so much of his undivided interest = to his share of the expenses (and taxes) but no such renunciation if it is prejudicial to the coownership FINANCIAL MAJORITY

i.e., approval by those who represent the CONTROLLING INTEREST in the coownership;

Q: If the entire property subject of coownership was mortgaged by a co-owner using a forged SPA, is the mortgage valid, voidable or void? ARAMBULO, et. al. vs NOLASCO, et. al., GR 189420, MAR. 26, 2014 Q: May a co-owner be compelled to give consent to a sale of his share by the other coowners? A: The sale by the petitioners of their parts shall not affect the full ownership by the respondents of the part that belongs to them. XXX With the full ownership of the respondents remaining unaffected by petitioners’ sale of their parts, the nature of the property, as co-owned, likewise stays. In lieu of the petitioners, their vendees shall be coowners with the respondents. SPOUSES SI vs. CA, GR122047, October 12, 2000 There is NO CO-OWNERSHIP when the different portions owned by different people are already concretely determined and separately identifiable, even if not technically described. The right of legal pre-emption or redemption is no longer available. SPOUSES ABAD vs. CA, GR No. 84908, Dec. 4, 1989 Q: Can a co-owner sell a particular portion of the co-ownership before partition?

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Prepared by: Atty. Teresita Cruz Art. 494. PARTITION 1. A co-owner can demand partition at any time, insofar as his share is concerned. 2. Action imprescriptible; cannot be barred by laches, absent a repudiation of the co-ownership by a co-owner. 3. NO PARTITION if: a. Prohibited by agreement for a period not exceeding 10 years; may be extended after original period has prescribed provided each does not exceed 10 years. b. Prohibited by testator/donor for a period not exceeding 20 years. c. Prohibited by law. d. Legal nature of the common property does not allow partition. e. Physical partition would render the property unserviceable for its intended use. Art. 498. LEGAL PARTITION 1. Resorted when the thing is essentially indivisible. 2. Procedure: a. Give the whole to one coowner who will be required to indemnify the rest. b. If not agreed upon, public or private sale and its proceeds divided among the co-owners. QUINTOS, et. al. vs. NICOLAS, et. al., GR 210252, JUNE 25, 2014 Under Article 494 of the NCC, NO co-owner is obliged to remain in the co-ownership, and his proper remedy is an action for partition which he may bring at any time insofar as his share is concerned. Article 1079 of the NCC defines partition as the separation, division and assignment of a thing held in common among those to whom it may belong. Xxx A substantive law CANNOT be amended by a procedural rule. SPOUSES MARCOS vs. Heirs of BANGI et. al., GR 185745, OCT. 15, 2014 Q: Is an oral partition of land valid? A: Partition is the separation, division and assignment of a thing held in common among those to whom it may belong. Every act which is intended to put an end to in division among

co-heirs and legatees or devisees is deemed to be a partition. Oral partition is effective when the parties have consummated it by the taking of possession and the exercise of ownership of the respective portions set off to each. It is obvious that Eusebio took possession of his share and exercised ownership over it. DELA CRUZ vs. DELA CRUZ, GR 192383, 12/4/13 Affidavit of Waiver “That to put everything in proper order, I hereby waive all my share, interest & participation to ½ portion of this lot in favour of my brother Isabelo, xxx and the other half to my niece, Emelinda, xxx”. The phrase “hereby waive” means that Lucila was, by executing the affidavit, already waiving her right to the property, irreversibly divesting herself of her existing right to the same. After he and his co-owner accepted the donation, Isabelo became the owner of half of the property having the right to demand its partition. Art. 538. RULES REGARDING POSSESSION AS A FACT 1. GEN. RULE: Cannot be recognized at the same time in two different personalities. 2. EXCEPTION: a. co-possessors; b. Possession indifferent concepts or degrees. 3. In case of conflict/dispute regarding possession a. present possessor shall be preferred; b. If both are present, the one longer in possession; c. If both began to possess at the same time, the one who presents or has a title; d. If both present a title, the court will determine. POSSESSION OF MOVABLE ACQUIRED IN GOOD FAITH (Art. 559) 1. Equivalent to title 2.

Owner

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may

POSSESSION OF MOVABLE ACQUIRED IN BF 1. NOT equivalent to title a criminal offense

Green Notes 2016

Civil Law

Prepared by: Atty. Teresita Cruz A: It is incumbent upon the dominant estate owner to establish by clear & convincing evidence the presence of all the requisites before his claim for the legal easement of ROW may be granted. IF IT CANNOT BE PROVEN.

RECOVER a. if he lost the same OR b. he has been unlawfully deprived* EXCEPTION : a. possessor acquired the movable in GF at a public sale, hence, owner must REIMBURSE the price paid by the possessor

DICHOSO, JR. et.al. vs. PATROCINIO MARCOS, GR 180282, April 11, 2011

Subic Bay Legend Resorts & Casinos, Inc. vs. Bernard Fernandez, G.R. 193426, Sept. 29, 2014 Applying Article 559 of the NCC, respondent had the legal presumption of title to or ownership of the casino chips. This conclusion springs from respondent’s admission during trial that the chips represented payment by a Chinese customer for services he rendered to the latter in his car shop. Since respondent became the owner of the chips, he could very well have given them to Ludwin and Deoven, who likewise held them as “possessors in good faith and for value” and with “presumptive title” derived from the respondent. EASEMENT OF RIGHT OF WAY (Arts.649657): by which one person or a particular class of persons is allowed to Passover another’s land, usually thru one particular path or line. A. REQUISITES: (Art. 649) 1. Property (dominant) is surrounded by other estates; 2. No adequate outlet to a public highway; 3. Absolutely necessary for use or cultivation of the enclosed estate of the claimant; 4. Isolation not due to claimant’s own act; 5. Established at the point least prejudicial to servient estate; 6. Claimant must be the owner or one with a real right thereto; 7. Payment of the proper indemnity. CRISTOBAL vs. CA, GR No. 125339, June 22, 1998 Q: Who has the burden of proving entitlement to an easement of right of way?

Q: May petitioners who were already granted ROW by another landowner still compel respondent to grant them a ROW contending that the alternative route given to them was longer and circuitous? A: Convenience of the dominant estate has never been the gauge for the grant of a compulsory ROW. The true standard for the grant of the legal EOROW is “adequacy”. QUINTANILLA vs. Abangan & Daryl’s Collection International Inc., GR 160613, February 18, 2008 The criterion of least prejudice to the servient estate must prevail over the criterion of shortest distance. As between a ROW that would demolish a fence of strong materials and warehouses to provide ingress and egress to a public highway and another ROW which, although longer, will only require a vehicle to make a turn, the 2nd alternative should be preferred. Mere convenience of the dominant estate is NOT the criterion to grant the legal EOROW. CHAN vs. CA, GR No. 105294 Feb. 26, 1997 The owner of a lot who built a concrete fence on the southern portion of her property to separate it from her neighbors and closed the 28-inch clearance which was her means to reach the national highway is NOT entitled to the legal easement of right of way. She was the one who caused her own isolation. Bicol Agro-Industrial Producers Coop. Inc., (BAPCI) vs. Obias, et. al., GR 172077, Oct. 9, 2009 The easement of right of way–the privilege of persons or a particular class of persons to pass over another’s land, usually through one particular path or line–is characterized as a discontinuous easement because its use is in

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Prepared by: Atty. Teresita Cruz intervals and depends on the acts of men. Because of this character, AN EASEMENT OF RIGHT OF WAY MAY ONLY BE ACQUIRED BY VIRTUE OF A TITLE, NOT BY PRESCRIPTION. Unisource Commercial & Dev. Corp. vs Chung et. al., G.R. 1732, July 17, 2009 The opening of an adequate outlet to a highway can extinguish only legal or compulsory easements, NOT VOLUNTARY easements. A voluntary easement of right of way, like any other contract, could be extinguished only by MUTUAL AGREEMENT or by RENUNCIATION OF THE DOMINANT ESTATE OWNER SPS. SALIMBAGON vs. SPS. TAN, GR 185240, Jan. 21, 2010 Q: What is the effect if the servient estate owners in an easement of right of way later become the dominant estate owners? A: The easement is extinguished by operation of law. The existence of a dominant estate and a servient estate is incompatible with the idea that both estates belong to the same person. GANCAYCO vs. City Gov’t. Of Q.C. & MMDA, GR 177807, Oct. 11, 2011 In 2003, MMDA demolished the “wing walls” of Justice Gancayco’s bldg. constructed on his 375 sq.m. lot in EDSA, claiming it to be a nuisance per se, alleging violation of the Bldg. Code and Q.C. Ordinance No. 2904. Are the “wing walls” nuisance per se? A nuisance per se affects the immediate safety of persons and property & may be summarily abated under the undefined law of necessity. When Justice Gancayco was given an exemption from constructing an arcade and issued a permit to construct his bldg., the City Council did NOT consider the wing walls as nuisance per se. An ordinance may declare a structure illegal but it does not necessarily make the same a nuisance. The MMDA does not have the power to declare a thing a nuisance. Only courts of law have the power to determine whether a thing is a nuisance.

Perez, both in his personal & official capacity as Chief, Marikina Demolition Office vs. Sps. Madrona, GR 184478, March 21, 2012 May the owners of an H&L who constructed a concrete fence with a steel gate on their property be ordered by the Chief of the Demolition Office to demolish said fence on the contention it was encroaching on the side walk? Respondent’s fence is NOT a nuisance per se. By its nature, it is not injurious to the health or comfort of the community. It was built primarily to secure respondent’s property and to prevent intruders from entering it. The sidewalk still exists. If petitioner believes that respondent’s fence indeed encroaches on the sidewalk, it may be so proven in a hearing conducted for that purpose. DONATION DONATION includes: 1. An act of liberality where by a person disposes gratuitously of a thing or right in favor of another, who accepts it. (Art. 725). 2. Giving 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 (Art. 726). 3. Giving to another a thing or right and imposes upon the donee a burden which is less than the value of the thing given (Art. 726). FORMALITIES OF A DONATION INTER VIVOS A. For movable property (Art.748) 1. May be made orally or in writing; 2. Oral donation requires simultaneous delivery of the thing or of the document representing the right donated; 3. Donation AND acceptance must be in writing if the value of the property exceeds P5,000.00; B. For immovable property (Art. 749) 1. Donation must be in a public instrument, specifying there in the property donated and the value of the charges which the donee must satisfy ;

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Prepared by: Atty. Teresita Cruz 2. Acceptance may be in same deed or in a separate public document; 3. If in a separate document, donor shall be notified thereof in an authentic form and this step shall be noted in both instruments. QUILALA vs. ALCANTARA GR No. 132681, Dec. 3, 2001 DONATION INTER-VIVOS The instrument should be treated in its entirety. It cannot be considered a private document in part and a public document in another part. The fact that it was acknowledged before a notary public converts the deed of donation in its entirety to a public instrument. It is the conveyance that should be acknowledged as a free and voluntary act. Donee’s acceptance, explicitly set forth on the 1st page of the notarized deed of donation, was made in a public instrument. LAGAZO vs. CA, GR 112796March 5, 1998 Where the acceptance of a donation of real property was made in a separate instrument but not formally communicated to the donor, may the donation be nonetheless considered complete, valid and subsisting? Where the deed of donation did not expressly impose any burden – the expressed consideration being purely one of liberality & generosity – but the recipient actually paid charges imposed on the property like land taxes & instalment arrearages, may the donation be deemed onerous and thus governed by the law on ordinary contracts? CALANASAN vs. DOLORITO, G.R 171937, Nov. 25, 2013 The donor has no factual and legal basis for the revocation of the donation. First, the ungrateful acts were committed not by the donee; it was her husband who committed them. Second, the ungrateful acts were perpetrated not against the donor; it was the petitioner’s sister who received the alleged ill treatments.

HELD: This is a donation inter vivos. The donor stipulated that “if the Donee predeceases me, the property will not be reverted to the Donor, but will be inherited by the heirs of Rodriguez,” signalling the irrevocability of the passage of title to the donee’s estate, waiving donor’s right to reclaim title. This transfer of title was perfected the moment she learned of the donee’s acceptance of the disposition which, being reflected in the Deed, took place on the day of its execution on 3 May 1965. The donee’s acceptance underscores its essence as a gift in presenti, NOT in futuro, as only donations inter vivos need acceptance by the recipient. DEL ROSARIO vs. FERRER, GR 187056, 9/20/10 The express "irrevocability" of the donation is the "distinctive standard that makes the document a donation inter vivos." Here, the donors plainly said that it is "our will that this Donation Mortis Causa shall be irrevocable and shall be respected by the surviving spouse." The intent to make the donation inter vivos becomes even clearer by the proviso that the surviving donor shall respect the irrevocability of the donation. Consequently, the donation was in reality a donation inter vivos. TANQUETO vs. POMBUENA GR No. 35648, Feb. 2, 1987 An oral donation of land is VOID: it cannot be considered a valid donation inter vivos because it was not executed in a public instrument; it cannot also be a valid donation mortis causa because it did not comply with the formalities of a will. ROMAN CATHOLIC ARCHBISHOP OF MANILA vs CA, GR No. 77425 and 77450, June 19, 1991 Donation of a parcel of land was subject to a resolutory condition that property should not be sold within 100 years from the execution of the Deed of Donation, violation of which would render the donation ipso facto null and void.

VILLANUEVA vs. Sps. BRANOCO, GR 172804, Jan. 24, 2011

ARCABA vs. TABANCURA Vda. DE BATOCAEL, GR 146683, 11/22/2001

DEED OF DONATION

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Prepared by: Atty. Teresita Cruz At the very least, cohabitation is the public assumption by a man and a woman of the marital relation, and dwelling together as man and wife, thereby holding themselves out to the public as such.

prohibition to partition such property in a coownership can only last for 20 years.

Cirila admitted that she and Francisco resided under one roof for a long time. It is very possible that the two consummated their relationship, since Cirila gave Francisco therapeutic massage and they slept in the same bedroom. Their public conduct indicated that theirs was not just a relationship of caregiver and patient, but that of exclusive partners akin to husband and wife, hence the inescapable conclusion is that the donation made by Francisco in favour of Cirila is VOID under Article 87 of the Family Code.

“A will is the testator speaking after death.

SUCCESSION FERRER vs. SPS. DIAZ, G.R. 165300, April 23, 2010 Is a waiver of hereditary rights in favour of another person executed by a future heir while the parents are still alive valid? Is an adverse claim annotated on the title of a lot based on such waiver likewise valid and effective as to bind the subsequent owners and hold them liable to the claimant? For the inheritance to be considered “future”, the succession must not have been opened at the time of the contract. In this case, at the time of the execution of Reina’s waiver of hereditary rights, succession to either of her parents’ properties has not yet been opened since both of them are still living, hence, Reina’s waiver is NOT VALID. As no right or interest flows from Reina’s invalid waiver, petitioners adverse claim is without any basis and must be adjudged INVALID and INEFFECTIVE and per force be CANCELLED. In Re Petition for Probate of Last Will and Testament of Basilio Santiago, GR 179859, Aug. 9, 2010 The provision in the will which states that a house and lot in Manila shall be transferred in the names of testator’s 2 children, for purposes of ADMINISTRATION ONLY, but NO ONE shall be the OWNER thereof, is NOT VALID. It is contrary to public policy. When a will provides for in division of property, it is subject to statutory limitation that the

REYES vs. CA, GR 124099, 10/30/97

Its provisions have the same force and effect in the probate court as if the testator stood before the court in full life making the declarations by word of mouth as they appear in the will. That was the special purpose of the law in the creation of the instrument known as the Last Will & Testament. Men wished to speak after they were dead and the law, by the creation of that instrument, permitted them to do so. All doubts must be resolved in favor of the testator’s having meant just what he said.” BALTAZAR vs. LAXA, GR 174489, April 7, 2012 The state of being forgetful does not necessarily make a person mentally unsound so as to render her unfit to execute a valid will. Under Art. 799 NCC, to be of sound mind, it is enough that the testator, at the time of making the will, knows the nature of the estate to be disposed of, the proper objects of her bounty, and the character of the testamentary act. A testator is presumed to be of sound mind at the time of the execution of her will and the burden is on the oppositor to prove otherwise. (Art.800NCC). ARTS. 804/ 805/ 806. FORMALITIES OF A NOTARIAL WILL AZUELA vs. CA, GR No. 122880, April 12, 2006 A will whose attestation clause does not contain the number of pages upon which the will is written is fatally defective. A will whose attestation clause is not signed by the instrumental witnesses is also fatally defective. A will which contains a mere jurat and not an acknowledgment is, likewise, fatally defective. Anyone of these defects is sufficient to deny probate. A notarial will with all these three defects is just aching for judicial rejection.

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Prepared by: Atty. Teresita Cruz TRUE TEST OF “SIGNING IN THE PRESENCE” OF T AND 3 WITNESSES.

ART. 837. EXPRESS REVOCATION WILL #1 Notarial Will

ECHAVEZ vs. Dozen Construction & Dev. Corp. & RD of Cebu City, GR 192916, Oct. 11, 2010 The attestation clause & an acknowledgment CANNOT be merged in one statement. An acknowledgment is made by one executing a deed, declaring before a competent officer that the deed or act is his own. The attestation of a will refers to the act of the witnesses who certify to the execution of the instrument before them and to the manner of its execution. An attestation must state all the details the 3rd paragraph of Article 805 requires. In the absence of the required avowal by the witnesses themselves, no attestation clause can be deemed embodied in the Acknowledgement of the Deed of Donation Mortis Causa. CRUZ vs. VILLASOR, 54 SCRA 31 NOVEMBER 26, 1973 Notarial will was executed by T. One of the 3 attesting witnesses was the Notary Public before whom the will was acknowledged and subscribed. Is the will valid or void? Arts. 810 - 814 HOLOGRAPHIC WILLS AJERO vs. CA, 236 SCRA 488 SEPTEMBER 15, 1994 Probate of the HW was opposed on the following grounds: 1. the will and the signature were not in decedent’s handwriting; 2. some dispositions were signed but were not dated by T; 3. There were alterations and corrections not signed by T. ART. 837. EXPRESS REVOCATION WILL #1 LWT

WILL #2 LWT

A

B 2014

2 credible witness

T

T

C

X

Y

Z

“Expressly revoking will # 1” 2015

WILL #2 Holographic Will

A

B

Only copy burned by T in advertently

T

T

C

X

Y

Z

“I am expressly revoking will # 1”

2014

Testimonies of 10 witnesses

2015

DOCTRINE OF DEPENDENT RELATIVE REVOCATION If T revokes his will with the present intention of making a new one and as a substitute, if the new will is NOT MADE or even if made, it FAILS to take effect for any reason whatsoever, it will be presumed that the T prefers the old will rather than intestacy. Where the act of destruction is connected with the making of another will so as fairly to raise the inference that the T meant the revocation of the 1st will to depend upon the efficacy and validity of the 2nd will, the revocation shall be CONDITIONED and DEPENDENT upon the validity of the 2nd will and if, for any reason, the 2nd will intended to be a substitute is INOPERATIVE, the revocation of the 1st will fails and it remains in full force and effect. ART. 838. PROBATE OF WILLS NUGUID vs. NUGUID 17 SCRA 449 Legitimate parents were completely omitted in the will of the spinster testatrix who instituted as sole heir her sister. Considering that the testatrix left no descendant, her parents were her compulsory heirs in the direct line who were preterited, hence, the institution of the sister as sole heir should be annulled. T has legitimate sons, A and B. A was instituted as sole and universal heir to an estate of P100K and a legacy of P10K was given to friend F.

Disallowed by Probate Court

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Civil Law

Prepared by: Atty. Teresita Cruz T - -- - --

leg.

100k / 2 = P 50k

ART. 891. RESERVA TRONCAL

P 50k FP A P 25k P 20 k

B P 25k P 20k

F P 10k

Suppose the legacy given t o F was P70T instead of P10T, what is the effect? T------

A P 25k

B P 25k

F P 50k

ART. 856. VOLUNTARY/ COMPULSORY HEIRS WHO DIE/ARE INCAPACITATED/ RENOUNCE INHERITANCE VOLUNTARY HEIR

COMPULSORY HEIR P 900k / 2 = P 450k leg. P 450k FP T (+ 2015)

T (+ 2015)

RESERVATARIOS (Relative within the 3rd degree belonging to the line where the property comes from)

ORIGIN (Ascendant, bro/sis. Where property came from)

PROSIPITUS (Descendant who acquired property gratuitously)

ART. 874. CONDITION NOT TO MARRY SURVIVING RELATIVE legitimate children

F (+ 2014)

A

Estate is 1M

(+ 2014)A P 150K

X P 75K

B C P 150K P 150K P 225K P 225K

legitimate parents illegitimate children illegitimate parents surviving spouse 1 legitimate child; surviving spouse 2 or more legitimate children; surviving spouse

Y P 75K

Estate is 900k

ART. 863. FIDEICOMMISSARY SUBSTITUTION T - fideicomitento

Only 1 degree Apart in Relationship

A - 1st heir (fiduciary heir) preserved & transmit the property B - 2nd heir (fideicommissary heir) C

RESERVOR (Ascendants who acquired property by operation of law)

2 or more legitimate children; surviving spouse; illegitimate children legitimate parents; surviving spouse illegitimate parents; surviving spouse illegitimate children; surviving spouse 11. legitimate parents; illegitimate children; surviving spouse

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TABLE OF LEGITIMES TESTATE SUCCESSION ½ NHE ÷number of legitimate children ½ NHE ½ NHE 1/2; 1/3; 1/2; 0 1/2; 1/4 1/2 NHE ÷no. of legitimate children; same share as 1 legitimate child; ½ NHE no. of legitimate children; same share as 1 legitimate child; 1/2 share of 1 legitimate child 1/2; 1/4 1/4; 1/4 1/3; 1/3 1/2; 1/4; 1/8

Green Notes 2016

Civil Law

Prepared by: Atty. Teresita Cruz F

M

WITH REPRESENTATION

P - - - - -- - - - - -T

X

Y

S P150K leg. P 30k

A

B

C

P 75k P75k leg. P 150k P 150k P 150k leg. P 15k P 15k P 30k P 30k P 30k 900k / 2 =P 450k leg. P 450k FP

D’s estate is P900T; A, B, C are children of D who died with a revoked will; a) Predecease D b) incapacity c) repudiation (+) A B C P 300T P 300T P 300T P 150T P 150T X Y P 150T P 150T

ARTICLE 915. DISINHERITANCE

ART. 969. REPUDIATION OF INHERITANCE

ART. 918. INEFFECTIVE DISINHERITANCE

A. Estate = P 1.2 M

COMBINATION PRETERITION AND DISINHERITANCE 1.

A

A, B and C are T’s legitimate children. T instituted A as sole heir, completely omitted B from inheritance and disinherited C for having been found guilty of an attempt against T’s life. Distribute T’s estate of P900T.

1. 2. 3. 4.

T A P450K

B P450K

V W X Z A, B, C repudiate inheritance Only C repudiated inheritance A, B, C predeceased D A predeceased D

C 0

(+2001) A P 10M

P150K P225

B

DIAZ vs. IAC 182 SCRA 427 CACHO vs. UDAN 13 SCRA 693

C

P150K

ART. 968. ACCRETION

A, B, C are legitimate brothers of D who died without a will; A predeceased the decedent; estate is P900T A P 300T D

B P 300T P 150T C P 300T P150T

B P 10M

X Y – repudiated his inheritance P 10M P5M from A P 5M

T A

C

B. Estate of A = P 10M Estate of D = P 20M D (+2002)

2. Same facts as #1 but the disinheritance of C was because he immediately married X right after he graduated from FEU with a degree of Bachelor of Laws. Distribute T’s estate of P900T.

P150K P225

B

D

In RE: Intestate Estates of Josefa Delgado and Guillermo Rustia, GR No. 155733, January 27, 2006 RELATE TO ART. 902. RIGHTS OF ILLEGITIMATE CHILDREN OBLIGATIONS AND CONTRACTS ART. 1169. GENERAL RULE: NO DEMAND, NO DELAY EXCEPTIONS: WHEN –

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Prepared by: Atty. Teresita Cruz 1. 2. 3. 4.

the obligation or the law expressly so declare; time is of the essence; demand is useless as when the obligor has rendered it beyond his power to perform; or There is acknowledgment of default.

GENERAL MILLING CORP. VS. SPS. RAMOS, G.R. 193723, JULY 20, 2011 The foreclosure of a mortgage where there was no demand for payment is VOID, because there was NO DELAY. Demand made before the foreclosure is effected is essential. If demand was made and duly received by the respondents and they still did not pay, then they were already in default and foreclosure was proper. In this case, GMC did not make a demand on Sps. Ramos but merely requested them to go to GMC’s office to discuss the settlement of their account. This meant that respondents had not defaulted in their payments and foreclosure by petitioner was premature. Art. 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay and those who in any manner contravene the tenor thereof, are liable for damages. ART. 1174. GENERAL RULE: No person shall be liable for a fortuitous event. REQUISITES OF A FORTUITOUS EVENT: 1. Cause of breach of obligation must be independent of the will of the debtor; 2. Event must be either unforeseen or unavoidable; 3. Event must be such as to render it impossible for the debtor to fulfil his obligation in a normal manner; 4. Debtor must be free from any participation in or aggravation to the injury to the creditor. RCPI vs. VERCHEZ G.R. 164349, January 31, 2006. RCPI bound itself to deliver the telegram within the shortest possible time. It took 25 days, however, for RCPI to deliver it. RCPI invokes force majeure, specifically, the alleged radio noise and interferences which

adversely affected the transmission and/or reception of the telegraphic message. Assuming that fortuitous circumstances prevented RCPI from delivering the telegram at the soonest possible time, it should have at least informed Grace of the non-transmission and the nondelivery so that she could have taken steps to remedy the situation. But it did not. There lies NOT ONLY DELAY but also NEGLIGENCE. FIL-ESTATE PROPERTIES, INC. ET. AL. VS. SPS. RONQUILLO, GR 185798, January 13, 2014 Q: Is the Asian Financial Crisis a Fortuitous Event? It is unfortunate that petitioner apparently met with considerable difficulty e.g. increase cost of materials and labor, even before the scheduled commencement of its real estate project as early as 1995. However, a real estate enterprise engaged in the pre-selling of condominium units is concededly a master in projections on commodities and currency movements and business risks. The fluctuating movement of the Philippine peso in the foreign exchange market is an everyday occurrence, and fluctuations in currency exchange rates happen every day. Thus, it is NOT an instance of caso fortuito. ART. 1189. Concept of loss/ effect of loss (determinate object): IF THE THING – 1. is lost without the fault of debtor → obligation is extinguished; 2. is lost through the fault of debtor → debtor liable for damages; 3. deteriorates without the fault of debtor → impairment shall be borne by the creditor; 4. deteriorates through the fault of debtor → creditor may choose between fulfilment or rescission of the obligation, with damages in either case; 5. is improved by its nature/ time → Improvement shall inure to the benefit of the creditor; 6. Is improved at the expense of debtor → debtor has no other right than that granted to a usufructuary.

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Prepared by: Atty. Teresita Cruz ART.1193.  Obligations with a period → demandable only when that day comes;  Obligations with a resolutory period → takes effect at once, but terminates upon arrival of the day certain. ART. 1180. Debtor binds himself to pay when his means permit him to do so → deemed to be an obligation with a period. Art. 1197. Obligation does NOT fix a period but from its nature and circumstances, it can be inferred a period was intended → courts may fix the duration of the period. ART. 1198. Right to a period is lost when debtor: 1. Becomes insolvent, after the obligation has been contracted, unless he gives a guaranty/ security for the debt; 2. Does not furnish to the creditor the guaranties or securities he has promised; 3. By his own acts, he has impaired said guaranties or securities after their establishment, and when through a fortuitous event, they disappear, unless he immediately gives new ones equally satisfactory; 4. Violates any undertaking, inconsideration of which the creditor agreed to the period; 5. Attempts to abscond. RADIOWEALTH FINANCE CO. vs. SPS. DEL ROSARIO, G.R. 138739, July 6, 2000 The act of leaving blank the due date of the 1st instalment did not necessarily mean that the debtors were allowed to pay as and when they could, since the presence of an acceleration clause and a late payment penalty, showed the intention of the parties that the installments should be paid at a definite date, hence, this is an obligation with a period. ALTERNATIVE VS FACULTATIVE OBLIGATIONS Alternative

ART.1199. Alternatively bound by different prestations shall completely perform one of them. Debtor has right of choice, unless expressly granted to creditor Facultative ART.1206. Only one prestation has been agreed upon but the obligor may render another in substitution. In SOLIDARYOBLIGATIONS: 1. Defense of one is defense of all except if the defense is personal to him interposing the defense; 2. Payment by one is payment by all but the one who paid is entitled to reimbursement by the other codebtors; 3. Fault of one is fault of all but the others have a right of recourse against the one at fault; 4. Remission secured by one is remission of the whole debt but the one who procured remission is not entitled to reimbursement from the others. ART. 1222. Available to a solidary debtor are DEFENSES: 1. Personal to him or pertain to his share; 2. Derived from the nature of the obligation; 3. Personally belong to the others but only with regard to that part of the debt which belong to the others. MANLAR RICE MILL, INC. vs. DEYTO, GR 19189, JAN. 29, 2014 Q: Are Deyto & Ang solidarily liable to Manlar? As a general rule, a contract affects only the parties to it, and cannot be enforced by or against a person who is not a party thereto. The allegations that Deyto guaranteed Ang’s checks and that she consented to be held solidarily liable with Ang under the latter’s rice supply contract with Manlar are hardly credible. Pua in fact admitted that this was not in writing, just a verbal assurance. But this will not suffice. "Well-entrenched is the rule that

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Prepared by: Atty. Teresita Cruz solidary obligation cannot lightly be inferred. There is a solidary liability only when the obligation expressly so states, when the law so provides or when the nature of the obligation so requires." CEMBRANO ET AL VS CITY OF BUTUAN ET AL. G.R. 163605, September 20, 2006 When there is concurrence of several creditors or of several debtors or of several creditors and debtors in one & the same obligation, it is presumed that the obligation is joint and not solidary, hence each creditor can demand only for the payment of his proportionate share of the credit while each debtor can be held liable for the payment of his proportionate share of the debt. The debt shall be presumed, in the absence of any law or stipulation to the contrary, to be divided in to as many shares as there are creditors and debtors, the credits or debts being considered distinct from one another. A joint creditor cannot act in representation of the others; a joint debtor cannot be compelled to answer for the liability of the others. INIMACO VS. NLRC, G.R. 101723, May 11, 2000 The absence of the word “solidary” in the dispositive portion of the Decision, renders the liability joint. Well-entrenched is the rule that solidary obligation cannot lightly be inferred, and there is solidary liability only when the obligation expressly so states, when the law so provides or when the nature of the obligation so requires. CALANG VS. PEOPLE OF THE PHILIPPINES, G.R. 190696, August 3, 2010 Philtranco bus has been held solidarily liable with its bus driver, Calang, when Calang accidentally collided with a jeepney killing a bystander and two jeepney passengers while other passengers were seriously injured. Since the cause of action against Calang was based on delict, Philtranco CANNOT be held jointly and severally liable with Calang, based on quasi-delict under Articles 2176 and 2180 of the Civil Code which pertain to the vicarious liability of an employer for quasi-delicts that an employee has committed.

ART. 1226. OBLIGATION WITH A PENAL CLAUSE GENERAL RULE: Penalty shall substitute for damages and the payment of interest. EXCEPTIONS: 1. Stipulation to the contrary; 2. Obligor refuses to pay the penalty; 3. Obligor is guilty of fraud in the fulfillment of the obligation. Penal clause ensures performance of the obligation ART. 1228. Proof of actual damages suffered by Creditor NOT necessary. ART. 1229. Judge can equitably reduce the penalty when: 1. Principal obligation partly/ irregularly complied with by the debtor; 2. Even if NO performance by debtor, if penalty is iniquitous/ unconscionable. ART. 1230.  Nullity of penal clause → does NOT carry with it the nullity of the principal obligation.  Nullity of the principal obligation → carries with it the nullity of the penal clause. EXTINGUISHMENT OF OBLIGATIONS (PALOCONMERCOMNO) PAYMENT ART. 1236-1238. If a 3rd person paid – 1. Without knowledge or against will of debtor → 3rd person has right of reimbursement to the extent beneficial to debtor; 2. With knowledge of debtor → 3rd person has right of reimbursement and subrogation; 3. Without intention to be reimbursed → DONATION → needs acceptance of debtor & compliance with formalities required by law. PCI BANK vs. FRANCO, GR 180069, March 5, 2014 Jurisprudence abounds that, in civil cases, one who pleads payment has the burden of

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Prepared by: Atty. Teresita Cruz proving it. When the creditor is in possession of the document of credit, he need not prove non-payment for it is presumed. The creditor's possession of the evidence of debt is proof that the debt has not been discharged by payment.

Delivery of Promissory Notes, Bills of exchange → considered payment when – 1. Encashed 2. Check is impaired through creditor’s fault

SPS. DELA CRUZ VS. CONCEPCION, G.R. 172825, October 11, 2012

ART. 1252. APPLICATION OF PAYMENT 1. 1 debtor, 1 creditor; 2. 2 or more debts of the same kind; 3. All debts due & demandable; 4. Amount paid by debtor insufficient to cover all debts.

Admittedly, payment of the remaining balance of P200K was not made to the creditors but allegedly to a certain authorized agent of petitioners. Respondent’s obligation consists of payment of a sum of money and as a general rule, to be effective to discharge an obligation, payment must be made to the oblige himself or to an agent having authority, express or implied, to receive the particular payment. Payment made to one having apparent authority to receive the money will, as a rule, be treated as though actual authority had been given for its receipt. ARANAS VS. TUTAAN, 127 SCRA 828 All dividends accruing to the said shares after the rendition of judgment belonged to Aranas but UTEX paid the co-defendants despite the knowledge and understanding of the final judgment. It is elementary that payment made by a judgment debtor to a wrong party CANNOT EXTINGUISH the obligation of such debtor to its creditor. DACION EN PAGO only one creditor debtor not insolvent transfer of ownership to creditor upon delivery of thing debtor delivers 1 or some of his properties to creditor obligation is extinguished to the extent of the value of thing delivered act of novation

CESSATION plurality of creditors debtor insolvent, either partially or totally no transfer of ownership to creditors debtor delivers ALL his properties to creditors obligation is extinguished to the extent of proceeds of the public sale not an act of novation

GENERAL RULE: DEBTOR → at the time of payment EXCEPTION: CREDITOR → gives a receipt in default thereof ART. 1256 - 1259. TENDER OF PAYMENT & CONSIGNATION REQUISITES: 1. Debt is due and demandable; 2. Prior valid tender of payment refused without just cause by creditor; 3. 1st notice to creditor; 4. Actual deposit with judicial authorities; 5. 2nd notice to creditor. SPS. CACAYORIN VS. AFPMBAI, GR 171298, April 15, 2013 Under Article 1256 of the NCC, the debtor shall be released from responsibility by the consignation of the thing or sum due, without need of prior tender of payment, when the creditor is absent or unknown, or when he is incapacitated to receive the payment at the time it is due, or when two or more persons claim the same right to collect, or when the title to the obligation has been lost. Tender of payment must be distinguished from consignation. Tender is the antecedent of consignation, that is, an act preparatory to the consignation, which is the principal, and from which are derived the immediate consequences which the debtor desires or seeks to obtain. Tender of payment may be extrajudicial, while consignation is necessarily judicial, and the priority of the first is the attempt to make a private settlement before proceeding to the solemnities of consignation.

ART. 1249. Payment of debts in money → legal tender in the Philippines.

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Prepared by: Atty. Teresita Cruz SOCO VS. MILITANTE, G.R. L-58961, June 28, 1983



If the creditor to whom tender of payment has been made refuses, without just cause to accept it, the debtor shall be released from responsibility by consignation, which is the act of depositing the thing due with the court or judicial authorities but it generally requires a prior tender of payment. Defendant contended that payments of rental through checks were made to Soco but the latter refused to accept them, hence defendant authorized the bank to make consignation with the Clerk of Court, but the bank did not send notice to Soco that the checks shall be consignated with the court. To be valid, tender of payment must be in lawful currency. Notice is essential to the validity of consignation to give the creditor the opportunity to reconsider his unjustified refusal to accept payment there by avoiding consignation & litigation. Failure to give such notice renders the consignation VOID.

Obligor is liable even for a fortuitous event.

ART. 1266. Obligor shall be released from the obligation when: 1. Obligation to do - is so difficult to be manifestly beyond the contemplation of the parties is legally or physically impossible CONDONATION/ REMISSION OF THE DEBT ART.1260. Condonation is essentially gratuitous; it requires acceptance by the debtor. ART.1273. Renunciation of principal obligation → accessory obligation is extinguished; waiver of the accessory shall leave the principal obligation in force. CONFUSION OR MERGER OF RIGHTS ART.1275. The obligation is extinguished from the time the characters of creditor and debtor are merged in the same person.

DALTON VS. FGR & DEV. CORP. ET. AL., G.R. 172577, January 19, 2011 In withdrawing the amounts consigned, Dayrit and FGR expressly reserved the right to question the validity of the consignation. Consignation is completed at the time the creditor accepts the same without objections, or, if he objects, at the time the court declares that it has been validly made in accordance with law. GO SINCOVS. CA ET AL, G.R. 151903, 10/9/2009 A refusal without just cause is not equivalent to payment; to have the effect of payment and the consequent extinguishment of the obligation to pay, the law requires the companion acts of tender of payment and consignation.

COMPENSATION ART. 1279. REQUISITES: 1. 2 parties who, in their own right, are principal creditors and debtors of each other; 2. Both debts consist in money, or if consumables, must be of the same kind and quality; 3. Both debts are due, demandable, and liquidated; 4. No retention or controversy commenced by 3rd persons over either of the debts and communicated in due time to debtor; 5. Compensation not prohibited by law. MONDRAGON VS. SOLA JR., G.R. 174882, January 21, 2013

LOSS OF THE THING DUE ART. 1262. Loss or destruction, without fault of debtor, & no delay EXCEPTIONS:  By law;  stipulation or by the nature of the obligation;

Respondent reneged on his promise to pay petitioner, hence, petitioner withheld the payment of respondent’s service fees and applied the same as partial payments of respondent’s debt by way of compensation. Compensation is a mode of extinguishing, to the concurrent amount, the obligations of

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Prepared by: Atty. Teresita Cruz persons, who in their own right and as principals, are reciprocally debtors and creditors of each other. Legal compensation takes place by operation of law when all the requisites are present, as opposed to conventional compensation which takes place by agreement of the parties. NOVATION

Requisites: 1. A previous valid obligation; 2. Agreement of the parties to the new obligation; 3. Extinguishment of the old obligation; 4. Validity of the new obligation. DELEGACION → new debtor proposed by old debtor EXPROMISSION → new debtor proposed by creditor/ 3rd person HEIRS OF FRANCO VS. SPOUSES GONZALES, G.R. 159709, June 27, 2012 There is novation when there is irreconcilable incompatibility in the old and new obligations. There is no novation in case of only slight modifications; hence, the old obligation prevails. Novation is not presumed. The parties to a contract should expressly agree to abrogate the old contract in favor of a new one. In the absence of express agreement, the old and new obligations must be incompatible on every point. LBP VS. ONG, G.R. 190755, 11-24-2010 Land Bank faults the CA for finding that novation applies to the instant case. It reasons that a substitution of debtors was made without its consent, thus it was not bound to recognize the substitution under the rules on novation. Novation, which consists in substituting a new debtor in the place of the original one, maybe made even without the consentor against the will of the latter, but not without the consent of the creditor. SPS. REYES VS. BPI FAMILY SAVINGS BANK, G.R. 149840-41, March 31, 2006 The obligation to pay a sum of money is not novated by an instrument that expressly

recognizes the old, changes only the terms of payment, adds other obligations not incompatible with the old ones or the new contract merely supplements the old one. CONTRACTS Art. 1305. A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. Art. 1306. Freedom/ Liberty/ Autonomy of Contracts 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. WILLIAM GOLANGCO CONSTRUCTION CORP. VS. PHIL. COMMERCIAL INTERNATIONAL BANK, G.R. 142830, March 24, 2006 The provision in the construction contract providing for a defects liability period was not shown to be contrary to law, morals, good customs, public order, or public policy, and by the nature of the obligation in such contract, the provision limiting liability for defects and fixing specific guaranty periods was not only fair and equitable but was also necessary. TIU VS. PLATINUM PLANS PHIL., INC., G.R. 163512, February 28, 2007 A non-involvement clause is not necessarily void for being restraint of trade as long as there are reasonable limitations as to time, trade and place. In this case, the noninvolvement clause has a time limit: 2 years from the time petitioner’s employment with respondent ends. It is also limited as to trade, since it only prohibits petitioner from engaging in any pre-need business akin to respondent’s. SPS. CABAHUG VS. NAPOCOR, G.R. 186069, January 30, 2013 Disregarding the stipulations in the contract allowing additional compensation for easement fee, the CA ruled that Cabahug’s attempt to collect further sums by way of additional easement fee and/ or just compensation is violative of such contract. It is settled that a contract constitutes the law

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Prepared by: Atty. Teresita Cruz between the parties who are bound by its stipulations which, when couched in clear and plain language, should be applied according to their literal tenor and the courts cannot supply material stipulations, which contradict the intent of the parties. Art. 1308. Mutuality of Contracts The contract must bind BOTH contracting parties; its validity or compliance cannot be left to the will of one of them. BPI EXPRESS CARD CORPORATION VS. ARMOVIT, G.R. 163654, Oct. 8, 2014 The relationship between the credit card issuer and the credit cardholder is a contractual one that is governed by the terms and conditions found in the card membership agreement. Such terms and conditions constitute the law between the parties. In case of their breach, moral damages may be recovered where the defendant is shown to have acted fraudulently or in bad faith. Malice or bad faith implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity.

EXCEPTIONS: 1. Art. 1311. STIPULATION POUR AUTRI. If a contract should contain some stipulation in favor of a 3rd 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 3rd person. REQUISITES OF STIPULATION POUR AUTRI: 1. Stipulation in favor of 3rd person should be a part, not the whole of the contract; 2. Contracting parties must have clearly and deliberately conferred a favor upon a 3rdperson; 3. Neither of the contracting parties bears the legal representation or authorization of the 3rd party; 4. Acceptance of the benefit by the 3rd person communicated to the obligor before it could be revoked.

PNB VS. SPS. ROCAMORA, G.R. 164549, September 18, 2009

2. Art. 1312. In contracts creating real rights, third persons who come into possession of the object of the contract are bound thereby, subject to the provisions of the Mortgage Law and the Land Registration laws;

Any increase in the rate of interest made pursuant to an escalation clause must not be left solely to the will of one of the parties, but must be the result of a mutual agreement between the parties, hence, a de-escalation clause that would authorize a reduction in the interest rates corresponding to downward changes made by law or by the Monetary Board must be included, otherwise the change carries no binding effect.

3. Art. 1313. Creditors are protected in cases of contracts intended to defraud them; 4. Art. 1314. Any third person who induces another to violate his contract shall be liable for damages to the other contracting party.

Art. 1311. Effectivity/ Relativity in Contracts 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 – 1. Their nature; 2. Bystipulation; 3. By provision of law. The heir is NOT liable beyond the value of the property he received from the decedent.

METROPOLITAN BANK VS. REYNADO ET. AL., G.R.164538, August 9, 2010 Respondents are not parties to the agreement, nor assigns or heirs of either of the parties but who rely on the debt settlement agreement entered in to between petitioner and Universal to preclude prosecution of the offense of estafa or prevent the incipience of any liability that may arise from the criminal offense.

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Prepared by: Atty. Teresita Cruz The civil law principle of relativity of contracts provides that “contracts can only bind the parties who entered in to it, and it cannot favor or prejudice a 3rd person, even if he is aware of such contract and has acted with knowledge thereof”. PRUDENTIAL BANK AND TRUST COMPANY (NOW BPI) VS. ABASOLO, G.R. 186738, Sept. 27, 2010 Contracts take effect only between the parties, their assigns and heirs, and if a contract should contain some stipulation in favor of a 3rd person, the contracting parties must have clearly and deliberately conferred a favor upon the 3rd person. In the absence of a lender-borrower relationship between petitioner and Liwayway, there is no inherent obligation of petitioner to release the proceeds of the loan to her. For Liwayway to prove her claim against petitioner, a clear and deliberate act of conferring a favor upon her must be present. Q:

How are contracts perfected?

A: Art. 1315. Contracts are perfected by MERE CONSENT, and from that moment the parties are bound not only to the fulfilment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. Art. 1316. REAL CONTRACTS, such as deposit, pledge and commodatum, are not perfected until the delivery of the object of the obligation. ONG YIU VS. CA, G.R. L-40597, June 29, 1979 Petitioner contends that respondent Court committed grave error when it limited PAL’s carriage liability to the amount of Php100.00 as stipulated at the back of the ticket and argues that he had not actually entered into a contract limiting the latter’s liability for loss or delay of the baggage of its passengers. While it may be true that petitioner had not signed the plane ticket, he is nevertheless bound by the provisions thereof, it being a contract of adhesion, wherein one party imposes a readymade contract on the other and the one who adheres to the contract is in reality free to

reject it entirely, but if he adheres, he gives his consent. ANGELES VS. CALASANZ, ET. AL., L-42283, March 18, 1985 Plaintiffs-appellees, eager to acquire a lot upon which they could build a home, affixed their signatures and assented to the terms and conditions of the contract and they had no opportunity to question nor change any of the terms of the agreement since it was offered to them on a “take it or leave it” basis. Such contracts are called contracts of adhesion, because the only participation of the party is the signing of his signature or his “adhesion” thereto, hence must be construed against the party causing it. ASIAN CATHAY FINANCE AND LEASINGCORP. VS. SPS. GRAVADOR, ET AL, G. R. 186550, July 5, 2010 A contract of adhesion may be struck down as VOID and unenforceable for being subversive to public policy, when the weaker party is completely deprived of the opportunity to bargain on equal footing. Q:

How is consent manifested?

A: Art1319. By the MEETING of the OFFER and the ACCEPTANCE upon the THING and the CAUSE. The offer must be CERTAIN and the acceptance ABSOLUTE. A qualified acceptance constitutes a COUNTEROFFER. PALATTAO VS. CA, G.R. 131726, May 7, 2002 Appellant made a qualified acceptance of appellee’s letter-offer of a parcel of land but appellee made a new proposal to pay the price in staggered amounts within 2 years in quarterly amortizations. To convert the offer in to a contract, the acceptance must be absolute and must not qualify the terms of the offer, for a qualified acceptance constitutes a counteroffer and is a rejection of the original offer and such acceptance is not sufficient to generate consent. Q:

What is an option contract?

A: Art.1324. When the offerer has allowed the offeree a certain period to accept, the offer maybe withdrawn at any time before

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Prepared by: Atty. Teresita Cruz acceptance by communicating such withdrawal, except when the option is founded upon a consideration, as something paid or promised. OPTION – contract granting a person the privilege to buy or not to buy, certain objects at any time within the agreed period at a fixed price. OPTION CONTRACT - An option is a preparatory contract in which one party grants to another, for a fixed period and at a determined price, the privilege to buy or sell, or to decide whether or not to enter in to a principal contract. It binds the party who has given the option not to enter in to the principal contract with any other person during the period designated, and within that period, to enter into such contract with the one to whom the option was granted, if the latter should decide to use the option. It is a separate and distinct contract from that which the parties may enter in to upon the consummation of the option. It must be supported by consideration distinct from the price. RIGHT OF FIRST REFUSAL - In a right of first refusal, on the other hand, while the object might be made determinate, the exercise of the right would be dependent not only on the grantor’s eventual intention to enter into a binding juridical relation with another but also on terms, including the price, that are yet to be firmed up. (Vasquez et.al., vs. Ayala Corporation, G.R.149734, November 19, 2004) EULOGIO VS. SPS. APELES, G.R.167884, January 20, 2009 An option is a contract by which the owner of the property agrees with another person that the latter shall have the right to buy the former’s property at a fixed price within a certain time. An option is not of itself a purchase, but merely secures the privilege to buy. It is not a sale of property but a sale of the right to purchase. Its distinguishing characteristic is that it imposes no binding obligation on the person holding the option, aside from the consideration for the offer. For an option contract to be valid and enforceable against the promissor, there must be a separate and distinct consideration that supports it. The consideration need not be monetary or actual cash but it must be

something of value, although its kind may vary. ECE REALTY AND DEVELOPMENT INC. VS. MANDAP, G.R. 196182, September 1, 2014 Article 1338 of the NCC provides that “there is fraud when through insidious words or machinations of one of the contracting parties, the other is induced to enter in to a contract which, without them, he would not have agreed to.” Article 1390 of the NCC states that a contract is voidable or annullable “where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud.” Article 1344 of the NCC provides that “in order that fraud may make a contract voidable, it should be serious and should not have been employed by both contracting parties.” Respondent proceeded to sign the Contract to Sell despite information contained therein that the condominium is located in Pasay City. This means that she still agreed to buy the property even if it is located in a place different from what she was originally informed. If she had a problem with the property's location, she should not have signed the Contract to Sell and, instead, immediately raised this issue with petitioner. But she did not. It took her more than 2 years from the execution of the Contract to Sell to demand there turn of the amount she paid on the ground that she was misled into believing that the property is located in Makati City. In the meantime, she continued to make payments. Art 1345. Simulation of a contract may be – 1. absolute –parties do not intend to be bound at all – void; 2. relative –when the parties conceal their true agreement when it does not prejudice a 3rd person and is NOT intended for any purpose contrary to law, morals, good customs, public order or policy BINDS the parties to their real agreement.

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Prepared by: Atty. Teresita Cruz URETA VS. URETA, G.R. 165748, September 14, 2011 Lacking in an absolutely simulated contract is consent which is essential to a valid and enforceable contract. Where a person, in order to place his property beyond the reach of his creditors, simulates a transfer of it to another, he does NOT really intend to divest himself of his title and control of the property, hence, the deed of transfer is but a sham. Art. 1359. REFORMATION OF INSTRUMENT REQUISITES: 1. there must have been a meeting of the minds upon the contract; 2. instrument evidencing the contract does NOT express the true agreement between the parties; 3. The failure of the instrument to express the agreement must be due to mistake, fraud, inequitable conduct or accident. INTERPRETATION OF CONTRACTS Art. 1370. If the TERMS of a contract are CLEAR and leave no doubt upon the INTENTION of the contracting parties, the LITERAL meaning of its stipulations shall control. If the words appear to be contrary to the EVIDENT INTENTION of the parties, the latter shall prevail over the former. Art. 1377. The interpretation of OBSCURE words or stipulations in a contract shall NOT FAVOR the party who CAUSED THE OBSCURITY. TUA VS. MANGROBANG, G.R. 170701, 1/27/14 Unenforceable contracts are those which cannot been forced by a proper action in court, unless they are ratified, because they are entered into without authority or in excess of authority or they do not comply with the Statute of Frauds or both of the contracting parties do not possess the required legal capacity. Where a person signs a Deed of Extrajudicial partition in behalf of co-heirs without the latter’s authority; where a mother, as judicial guardian of her minor children, executes a deed of judicial partition, where in one child is given more share of the estate to the prejudice of the other children; or where

one person holding an SPA, sells a property of his principal which is not included in said SPA, these are some analogous cases of unenforceable contracts. MACTAN-CEBU INTL AIRPORT AUTHORITY, ET. AL. VS. LOZADA,SR. ET. AL., G.R. 176625, February 25, 2010 The Statute of Frauds operates only with respect to executor contracts, and does NOT apply to contracts which have been completely or partially performed. In executor contracts, there is a wide field for fraud because unless they be in writing, there is no palpable evidence of the intention of the contracting parties. The Statute has precisely been enacted to prevent fraud. If a contract has been totally or partially performed, the exclusion of parol evidence would promote fraud or bad faith, for it would enable one party to keep the benefits he received from the transaction in litigation and at the same time, evade the obligations or liabilities he assumed or contracted. HEIRS OF URETA SR., ET. AL. VS. HEIRS OF URETA, ET. AL., G.R. 165748, September 14, 2011 While the Deed of Sale states that the purchase price was paid to the seller for the subject properties, it has been proven that there was no such payment as there was no money involved, the Deed of Sale is void for absence of consideration. The right to setup the nullity of avoid or inexistent contract is not limited to the parties, as in the case of voidable contracts; it is extended to 3rd persons who are directly affected by the contract. In this case, the parties are heirs and are not strangers to the parties to the contract, hence they have a right to question the same. SALES SALE - It is an agreement whereby one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other to pay there for a price certain in money or its equivalent. A contract of sale may be absolute or conditional (Art.1458).

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Prepared by: Atty. Teresita Cruz CONTRACT OF SALE 1.

title passes to the buyer upon delivery of the thing sold;

2. in case of non payment, an action for specific performance or for rescission can be filed by injured party; 3. non-payment of the price is a negative resolutory condition; 4. Vendor has lost and cannot recover the ownership of the thing sold until & unless the contract of sale itself is resolved and set aside.

CONTRACT TO SELL(exclusive right & privilege to purchase an object) 1. ownership is reserved to the seller & is not to pass until full payment of the price; 2. in case of nonpayment, there can be no action for specific performance but only for damages; 3. full payment is a positive suspensive condition; 4. Title remains in the vendor if the vendee does not comply with the condition precedent of making payment at the time specified in the contract.

expressly reserving the ownership of the property despite delivery thereof to the prospective buyer, binds himself to sell the property exclusively to the prospective buyer upon fulfillment of the condition agreed upon, i.e., the full payment of the purchase price. Bearing in mind its consensual nature, a contract of sale had been perfected at the precise moment ACE Foods, as evidenced by its act of sending MTCL the Purchase Order, accepted the latter’s proposal to sell the subject products in consideration of the purchase price of P646, 464.00. From that point in time, the reciprocal obligations of the parties –of MTCL to deliver the said products to ACE Foods, and of ACE Foods to pay the purchase price within 30 days from delivery – already arose and consequently may be demanded. Art. 1475. The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. ART. 1479. OPTION CONTRACT It is an accepted unilateral promise to buy or sell a determinate thing for a price certain supported by a consideration (option money) distinct from the price. The optioner is bound to comply with his undertaking but the optionee has the right but not the obligation to buy or sell. In case of breach, the optionee can sue for damages only – he cannot sue for specific performance. (ASUNCION VS. CA). EARNEST MONEY 1. part of the purchase price;

ACE FOODS, INC. VS MICROPACIFIC TECHNOLOGIES CO., LTD., G.R. 200602, December 22, 2013 Q: Did the parties agree to a Contract of Sale or to a Contract to Sell? A: A contract of sale is classified as a consensual contract, which means that the sale is perfected by mere consent. No particular form is required for its validity. Upon perfection of the contract, the parties may reciprocally demand performance, i.e., the vendee may compel transfer of ownership of the object of the sale, and the vendor may require the vendee to pay the thing sold. A contract to sell is defined as a bilateral contract whereby the prospective seller, while

2. given only when there is a perfected sale; 3. Buyer is bound to pay the balance of the price.

OPTION MONEY 1. money given as distinct consideration for an option contract; 2. sale not yet perfected; 3. optionee is not required to buy.

RIGHT OF FIRST REFUSAL - It is an innovative juridical relation. If such right is incorporated in a contract, it is enforceable by specific performance. Otherwise, the injured party can only sue for damages.

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Prepared by: Atty. Teresita Cruz ART. 1480 LOSS/ DETERIORATION OF THE OBJECT Who bears the risk of loss? Principle of “RES PERIT DOMINO” 1. lost before perfection –SELLER 2. lost at the time of perfection, contract is void or inexistent SELLER 3. lost after perfection but before delivery –BUYER (as exception to the rule of “res perit domino”) 4. lost after delivery –BUYER ART. 1525 AN UNPAID SELLER IS – 1. one has not been paid or tendered the whole price; 2. One who has received a bill of exchange or other negotiable instrument as conditional payment and the condition on which it was received has been broken by reason of the dishonor of the instrument. REMEDIES OF AN UNPAID SELLER A. IN GENERAL, an unpaid seller has 2 remedies: an action for specific performance or an action for rescission, with damages in either case. B. SPECIAL REMEDIES: a. SALE OF PERSONAL PROPERTY IN INSTALLMENT (Art. 1484) (RECTO LAW) – Seller has the following alternative remedies: a. specific performance in case buyer fails to pay; b. rescission of the sale in case of default of 2 or more installments; c. Foreclose the chattel mortgage on the thing sold in case of default of 2 or more installments. **in addition, seller can also retain installments paid provided that the forfeiture is not unconscionable. (Art.1486) b. SALE OF REAL ESTATE IN INSTALLMENTS – RA 6552 OR THE REALTY INSTALLMENT BUYER PROTECTION ACT (MACEDA LAW).

Applicable only to: a) transactions or contracts of sale or financing of real estate on installment payments, including sale of residential and condominium units; b) Buyer has paid at least 2 years of installments. Right of specific performance – seller must observe the grace period granted to the buyer to pay, without additional interest, the unpaid installments. 1. grace period is one month/ year of installments paid; 2. may be exercised only once every 5 years of the life of the contract/extensions; 3. in case of installment payments LESS than 2 years, period shall not be less than 60 days from the date the installment became due; 4. failure to pay within the grace period allows the seller to proceed to #(b) Right of rescission – cancellation can only take place after 30 days from receipt of the notice of cancellation or demand for rescission by a notarial act plus full payment of cash surrender value to the buyer. 1)

Seller shall refund to buyer cash surrender value of payments equal to 50% of the total payments made and after 5 years of instalments, an additional 5% every year but not to exceed 90% of the total payments made.

Right to retain instalments – seller can retain not more than 50% of the instalments paid. But if instalments paid were less than 2 years, seller can have absolute forfeiture over the instalments paid. Down payments, deposits, or options paid are included in the computation of total payments made. GATCHALIAN REALTY, INC. VS. ANGELES, G.R. 202358, November 27, 2013 For a valid and effective cancellation/ rescission under RA6552 (Maceda Law) it must comply with the mandatory twin requirements of a notarized notice of cancellation AND are fund of the cash surrender value.

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Prepared by: Atty. Teresita Cruz The actual cancellation of the contract can only be deemed to take place upon the expiry of a 30-day period following the receipt by the buyer of the notice of cancellation or demand for rescission by a notarial act AND the full payment of the cash surrender value. Mandatory Twin Requirements: 1. Notarized Notice of Cancellation and 2. Refund of Cash Surrender Value This Court has been consistent in ruling that a valid and effective cancellation under R.A.6552 must comply with the mandatory twin requirements of a notarized notice of cancellation AND are fund of the cash surrender value. In Olympia Housing, Inc. vs. Panasiatic Travel Corp., we ruled that the notarial act of rescission must be accompanied by their fund of the cash surrender value. The actual cancellation of the contract can only be deemed to take place upon the expiry of a 30-day period following the receipt by the buyer of the notice of cancellation or demand for rescission by a notarial act and the full payment of the cash surrender value. RULES IN CASE OF DOUBLE SALE (Art. 1544) 1. PERSONAL PROPERTY – to the first possessor in good faith. 2. REAL PROPERTY – a. to the first registrant in the Registry of Property, in good faith; b. if no inscription, to the first possessor, in good faith; c. if none of the above, to the person with the oldest title, in good faith. MIRROR DOCTRINE – One cannot close his eyes to facts which should put a reasonable and prudent man upon his guard, and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor. HEIRS OF SARILI vs. LAGROSA, G.R. 193517, January 15, 2014 The general rule is that every person dealing with registered land may safely rely on the correctness of the certificate of title issued there for and the law will in no way oblige

him to go beyond the certificate to determine the condition of the property. Where there is nothing in the certificate of title to indicate any cloud or vice in the ownership of the property, or any encumbrance thereon, the purchaser is not required to explore further than what the Torrens Title upon its face indicates in quest for any hidden defects or inchoate right that may subsequently defeat his right thereto. However, a higher degree of prudence is required from one who buys from a person who is not the registered owner, although the land object of the transaction is registered. In such a case, the buyer is expected to examine not only the certificate of title but all factual circumstances necessary for him to determine if there are any flaws in the title of the transferor. The buyer also has the duty to ascertain the identity of the person with whom he is dealing with and the latter’s legal authority to convey the property. HEIRS OF CABIGAS ET. AL. VS. LIMBACO ET. AL., G.R.175291, July 27, 2011 The law protects to a greater degree a purchaser who buys from the registered owner himself. It requires a higher degree of prudence from one who buys from a person who is not the registered owner, although the land object of the transaction is registered. While one who buys from the registered owner does not need to look behind the certificate of title, one who buys from one who is not the registered owner is expected to examine not only the certificate of title but all factual circumstances necessary for one to determine if there are flaws in the title of the transferor, or in the capacity to transfer the land. FLORENTINO AND ELENA LEONG, et.al. vs. EDNA C. SEE, G.R. 194077, December 3, 2014 Respondent is a purchaser in good faith for value who exercised the necessary diligence in purchasing the property. First, good faith is presumed, and petitioners did not substantiate their bold allegation of fraud. Second, respondent did not rely on the clean title alone precisely because of the possession by third parties, thus, she also relied on

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Prepared by: Atty. Teresita Cruz Florentino’s waiver of interest. Respondent even verified the authenticity of the title at the Manila Register of Deeds with her father and Carmelita. These further inquiries prove respondent’s good faith. EQUITABLE MORTGAGE It is a mortgage lacks the formalities, words or other requisites prescribed by law for a mortgage, but shows the intention of the parties to make the property as security for a debt. A conventional redemption is deemed to be an EQUITABLE MORTGAGE in any of the following: (Art. 1602) 1. price of sale is unusually inadequate; 2. vendor remains in possession as lessee or otherwise; 3. period of redemption is extended after expiration; 4. purchaser retains part of the purchase price; 5. vendor binds himself to pay the taxes of the thing sold; 6. Any other case where the parties really intended that the transaction shall secure the payment of a debt or the performance of an obligation. SPOUSES SOLITARIOS VS. SPOUSES JAQUE, G.R. 199852, November 12, 2014 The transaction between the parties is actually one of equitable mortgage pursuant to the provisions of the Civil Code. It was never denied by respondents that spouses Solitarios have remained in possession of the subject property and exercised acts of ownership over the said lot for almost 17 years even after the purported absolute sale until their filing of the complaint. To allow the transfer of the lot to the Jaques would amount to condoning the prohibited practice of pactum commissorium. Art. 2088 of the NCC provides that the creditor cannot appropriate or consolidate ownership over a mortgaged property upon failure of the mortgagor to pay a debt obligation.

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