Memory Aid-CIVIL (Property)

San Beda College of Law 2000 Centralized Bar Operations

Memory Aid CIVIL LAW PERSONS AND FAMILY RELATIONS NEW CIVIL CODE Theories on Personal Law: 1. Domiciliary theory - the personal laws of a person are determined by his domicile. 2. Nationality theory - the citizenship is the basis for determining the personal laws of an individual.

Lex Rei Sitae - principle which applies the law of the place where the property (real/personal) is situated (Art. 16, par.1)

Civil Personality - is the aptitude of being the subject, active or passive, of rights and obligations.

Juridical Capacity/Legal Capacity - it is the fitness to be the subject of legal relations.

Capacity to act - the power to do acts with legal effects.

Distinctions: Juridical Capacity Capacity to Act a) Passive b) Inherent c) Lost only through death

Exceptions: Successional Rights (CIAO) 1. 2. 3. 4.

Capacity to succeed Intrinsic validity of the will Amount of successional rights Order of succession

Lex Loci Celebrationis -

principle which applies the law of the place where the contract was executed as far as the formalities and solemnities (extrinsic validity) are concerned.

•

Prohibitive laws concerning persons, their acts and properties or those which have for their object public order, public policy or good customs shall not be rendered ineffective by laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign country.

PERSONS

d) Can exist without capacity to act e) Cannot be limited or restricted •

a) Active b) Merely acquired c) Lost through death and other means and circumstances d) Always exists with juridical capacity e) Can be limited by certain circumstances

Birth determines personality; the law, however, considers the conceived child as born for all purposes favorable to it, if it is later born alive. Its personality, therefore, has two characteristics: 1. it is essentially limited 2. it is provisional or conditional

Domicile - place of a person’s residence.

habitual

Elements: 1. physical presence in a fixed place; and

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2. intention to remain permanently.

• Domicile of natural persons: place of habitual residence • Domicile of juridical persons : place where their legal representation is established.

Kinds of Domicile:

5. municipal and city mayors. •

A marriage license may be used anywhere in the Phil. but not in a foreign country. It is valid for 120 days.

•

Art. 26 provides that where a marriage between a Fil. citizen and a foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien spouse, capacitating him/her to remarry, the Fil. spouse shall likewise have the capacity to remarry. Except: If the Fil. spouse is the one who obtains a foreign divorce.

1. Domicile of origin - received by a person at birth. 2. Domicile of choice - the place freely chosen by a person sui juris. 3. Constructive domicile - assigned to a child by law at the moment of his birth.

General Rule:

Marriages solemnized in a foreign country in accordance with the laws of the foreign countries shall be valid in the Phil.

FAMILY CODE

Exceptions: 1. either or both parties did not have the legal

Essential Requisites of Marriage: 1. legal capacity of the contracting parties, who must be male and female; and 2. consent freely given in the presence of a solemnizing officer.

capacity to get married;

2. the marriage is immoral being bigamous or polygamous;

3. consent of one party is lacking because of mistake as to the identity of the other;

Formal Requisites of Marriage:

4. one of the parties is psychologically

1. authority of the solemnizing officer; 2. valid marriage license; and 3. marriage ceremony where the contracting parties appear before the solemnizing officer and their personal declaration that they take each other as husband and wife in the presence of not less than 2 witnesses of legal age.

5. incestuous marriages; 6. void marriages by reason of public policy; 7. subsequent marriages which are considered

incapacitated at the time of the marriage;

Article 4 of the Family Code, provides that: a) The absence of any of the essential or formal requisites shall render the marriage void ab initio except as stated in Art. 35 (2). b) A defect in any of the essential requisites shall render the marriage voidable. c) An irregularity in the formal requisites shall not affect the validity of the marriage, but the party responsible for such shall be civilly, criminally and administratively liable.

Persons authorized to solemnize marriage: 1. 2. 3. 4.

void under Art. 53 of the Family Code.

Marriages EXEMPT from the license requirement: 1. Marriages in articulo mortis; 2. Marriages in remote places; 3. Marriages among Muslims or among members of the ethnic cultural communities, provided such was solemnized in accordance with their customs, rites and practices; 4. Marriages solemnized outside the Phil. where no marriage license is required by the country where it is solemnized; 5. Marriage of a man and a woman who have lived together as husband and wife for at least five years and without legal impediment to marry each other.

VOID Marriages: A. Due to absence of any of the essential requisites: 1. contracted by any party below 18 years of age even with parental consent; 2. solemnized by any person not legally authorized to perform marriages unless it was contracted with one or both of the parties believing in good faith that the

members of the judiciary; priests, rabbis, ministers of any church; ship captains or air plane chiefs; consul generals, consuls or vice-consuls; Page 2 of 55

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solemnizing officer had the legal authority; 3. those solemnized without a license except as otherwise provided; 4. those bigamous or polygamous marriages; 5. marriages contracted through mistake of one of the contracting parties as to the identity of the other; 6. those subsequent marriages that are void under Art. 53; 7. those contracted by a party who at the time of the celebration was psychologically incapacitated to comply with the marital obligations; B. Incestuous marriages, whether the relationship be legitimate or illegitimate: 1. between ascendants and descendants of any degree; 2. between bros. and sis. whether full or half blood. C. Those contrary to public policy: 1. bet. collateral blood rel. whether legitimate/illegitimate up to the 4th civil degree; 2. bet. step-parents and step children; 3. bet. parents-in-law and children-in-law; 4. bet. the adopting parent and the adopted child; 5. bet. the surviving spouse of the adopting parent and the adopted child; 6. bet. the surviving spouse of the adopted child and the adopter; 7. bet. an adopted child and a legitimate child of the adopter; 8. bet. the adopted children of the same adopter; 9. bet. parties where one with the intention to marry the other, killed that other person’s spouse, or his/her spouse.

PSYCHOLOGICAL INCAPACITY: •

The cause of the incapacity must be: a. clinically identified b. alleged in the complaint c. sufficiently proven by experts d. clearly explained in the decision

•

The incapacity must: a. exist at the time of the celebration of the marriage; b. be medically or clinically permanent or incurable; c. grave enough to bring about the disability of the party to assume the essential obligations of

Kinds of BIGAMOUS marriages: 1. the VOID bigamous marriage contracted during the marriage;

subsistence

of

a

previous

2. the VOIDABLE bigamous marriage under Art.41.

Effects of Termination of the Subsequent Marriage: 1. children 2.

3. 4. 5.

of the subsequent marriage conceived prior to its termination shall be considered legitimate; the absolute community of prop. or the conjugal partnership shall be dissolved and liquidated. If either spouse acted in bad faith, his/her share in the net profits shall be forfeited: a. in favor of the common children; b. if none, in favor of the children of the guilty spouse by previous marriage; c. in default of children, the innocent spouse. donations by reason of the, marriage remain valid except if the donee contracted the marriage in bad faith; the innocent spouse may revoke the designation of the spouse in bad faith as the beneficiary in any insurance policy; the spouse who contracted the subsequent marriage in bad faith shall be disqualified to inherit from the innocent spouse by testate or intestate succession. NOTE: The above effects apply in voidable bigamous marriage. Except for (1), the above effects shall also apply to marriages which are declared void ab initio or annulled.

VOIDABLE Marriages: 1. that the party in whose behalf it is sought to have the marriage annulled was 18 years of age or over but below 21, and the marriage was solemnized without the consent of the parents, guardian or person exercising substitute parental authority over the party, in that order, unless after attaining the age of 21, such party freely cohabited with the other and both lived together as husband and wife; 2. that either party was of unsound mind, unless such party after coming to reason, freely cohabited with the other as husband and wife; 3. that the consent of either party was obtained through fraud, unless such party afterwards, with full knowledge of the facts constituting the fraud, freely cohabited with the other as husband and wife; 4. that the consent of either party was obtained by force, intimidation or undue influence, unless the same having disappeared, such party freely cohabited with the other as husband and wife;

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5. that the other party was physically incapable of consummating the marriage with the other, and such incapacity continues and appears to be incurable; 6. that either party was afflicted with sexually transmitted disease found to be serious and appears to be incurable.

b) the rel., guardians or persons having legal charge of the insane

-at anytime before the death of either party

Fraud referred to in Art. 45(3):

c) the insane spouse

-during lucid interval or after regaining sanity

the injured party

w/in 5 years from the discovery of fraud

1. non-disclosure of a previous conviction by final judgment of the other party of a crime involving moral turpitude; 2. concealment by the wife of a fact that at the time of the marriage, she was pregnant by a man other than her husband; 3. concealment of a sexually transmissible disease regardless of its nature existing at the time of the marriage; 4. concealment of drug addiction, habitual alcoholism, homosexuality or lesbianism existing at the time of the marriage. Note: No other misrepresentation as to character, health, rank, fortune or chastity shall constitute such fraud as will give grounds for action for the annulment of marriage.

Ground

Persons Who May Sue

Prescriptive Period

1. Force, intimidation, undue influence

the injured party

w/in 5 years from the time the force, intimidation or undue influence ceased.

2. Incapability to consummate / STD 3. NonConsent

the injured party

w/in 5 yrs. after the celebration of the marriage

a) Parent/ legal guardian having charge of the “noconsent” party

-any time before the “no consent” party reaches 21

b) ”No consent “ party

-w/in 5 years after reaching 21

4. Fraud

Doctrine of Triennial Cohabitation - a presumption that the husband is impotent should the wife still remain a virgin after living together with the husband for 3 years.

LEGAL SEPARATION Grounds: 1. repeated physical violence or grossly abusive conduct directed against the petitioner, a common child, or a child of the petitioner; 2. physical violence or moral pressure to compel petitioner to change religious or political affiliation; 3. attempt of the respondent to corrupt or induce the petitioner, a common child or a child of the petitioner, to engage in prostitution, or connivance in such corruption or inducement; 4. final judgment sentencing the respondent to imprisonment of more than 6 years even if pardoned; 5. drug addiction, habitual alcoholism of the respondent; 6. lesbianism or homosexuality of the respondent; 7. contracting by the respondent of a subsequent bigamous marriage; 8. sexual infidelity or perversion; 9. abandonment of the petitioner by the respondent without justifiable cause for more than one year.

Defenses(C4MP): 1. Condonation 2. Consent 3. Connivance

4. Insanity

a) sane spouse

-at anytime before the death of either party

4. Mutual Guilt 5. Collusion 6. Prescription

Effects of filing a petition for legal separation: 1. The spouses are already entitled to live separately from each other; Page 4 of 55

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2. The husband has no more right to have sexual intercourse with his wife; 3. In the absence of an agreement between the parties, the court shall designate the husband, the wife or a 3rd person, to manage the absolute community or conjugal partnership property.

3) the local customs. Donations by reason of marriage Distinctions: Donations Propter Ordinary Nuptias Donations 1. do not require 1. express

Effects of decree of legal separation: 1. The spouses shall be entitled to live separately from each other but the marriage bond is not severed. 2. The absolute community or conjugal partnership shall be dissolved and liquidated. 3. The custody of the minor children shall be awarded to the innocent spouse subject to the provisions of Art. 213 of the Code. 4. The offending spouse shall be disqualified from inheriting from the innocent spouse by intestate succession and the provisions in favor of the offending spouse made in the will of the innocent spouse shall be revoked by operation of law. 5. The innocent spouse may revoke the donations made by him/her in favor of the offending spouse, as well as the designation of the latter as beneficiary in any insurance policy, even if the designation be irrevocable.

express acceptance; 2. may include future properties.

General Rule: Every donation or grant or gratuitous advantage, direct or indirect, between the spouses during the marriage shall be VOID.

Except: Moderate gifts. System of Absolute Community •

Effect of reconciliation of the spouses: 1. The legal separation proceedings, if still pending, shall thereby be terminated in whatever stage; 2. The final decree of legal separation shall be set aside, but the separation of property or any forfeiture of share of the guilty spouse already effected shall subsist, unless the spouses agree to revive their former property regime.

RIGHTS AND OBLIGATIONS OF THE SPOUSES •

The spouses are jointly responsible for the support of the family. Such support shall be satisfied in the following order: 1. from the community or conjugal property; 2. from the income or fruits of the separate properties of the spouses; 3. from the separate properties of the spouses.

PROPERTY RELATIONS BETWEEN THE HUSBAND AND THE WIFE: Governed by: 1) the marriage settlements; 2) the provisions of the Family Code;

acceptance necessary; 2. cannot include future property.

Community property shall consist of all property owned by the spouses at the time of the marriage or acquired thereafter. Except: 1. property acquired during the marriage by gratuitous title; 2. property for personal and exclusive use except jewelry 3. property acquired before the marriage by either spouse who has legitimate descendants by a former marriage

Charges Upon and Obligations of Absolute Community Property and Conjugal Property: 1. Support for family except for illegitimate children of either spouse; 2. Debts and obligations which must have been contracted in any of the following cases: a. by administrator spouse, for the benefit of the family; b. by both spouses c. by one spouse with the consent of the other 3. Debts without marital consent, provided the family was benefited; 4. All taxes, liens, charges and expenses, including major or minor repairs upon community or conjugal property; 5. All taxes and expenses for mere preservation made during the marriage upon separate property of either spouse used by the family; 6. Expenses for education or self-improvement of either spouse; 7. Ante-nuptial debts of either spouse in so far as they have redounded to the benefit of the family;

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8. The value of what is donated or promised by both spouses in favor of their common legitimate children for education or selfimprovement; 9. Expenses of litigation between spouses unless found to be groundless

3. If there is a subsequent marriage, a mandatory regime of complete separation of property shall govern the property relations of the subsequent marriage.

•

Conjugal Partnership Property :

The separate properties shall be solidarily and subsidiarily liable for the obligations if the community or conjugal properties are insufficient. • The absolute community properties shall also be liable for ante-nuptial debts not falling under no. 7, support of illegitimate children, and liabilities incurred by the other spouse by reason of a crime or quasi-delict in case of insolvency of the exclusive property of the debtor spouse. Payment of which shall be advanced by the absolute community property, subject to deduction from the share of the debtor spouse.

Grounds for Termination of Absolute Community/Conjugal Partnership 1. death of either spouse; 2. decree of legal separation; 3. annulment or declaration of nullity of marriage; 4. judicial separation of property, in the following cases:. a. petitioner’s spouse has been sentenced with a penalty which carries with it civil interdiction; b. petitioner’s spouse has been judicially declared absentee; c. loss of parental authority of the petitioner’s spouse as decreed by the court; d. abandonment by the petitioner’s spouse and failure to comply with the obligations to the family; e. spouse was granted power of administration in marriage settlement abused such power; f. at the time of the petition, spouses are separated in fact for at least 1 year and the possibility for reconciliation if highly improbable.

Liquidation of Absolute Community Property Regime by Reason of Death of one Spouse

Conjugal Partnership of Gains 1. acquired during the marriage with conjugal funds 2. obtained from labor, industry, work or profession 3. the fruits of the conjugal property 4. the net fruits of their exclusive property 5. share of either spouse in hidden treasure 6. property acquired through occupation such as fishing or hunting livestock existing at the dissolution of the partnership in excess of the number of each kind brought into the marriage 7. those acquired by chance

Exclusive property of each spouse 1. that which is brought to the marriage as his or her own 2. acquired during the marriage by gratuitous title 3. acquired by right of redemption, by barter or exchange with property belonging to either spouse 4. purchased with exclusive money of either spouses

Rule on Ownership of Improvements: •

If the value of the property before improvement is greater, the whole thing belongs to the owner-spouse, subject to reimbursement of conjugal partnership; otherwise, the whole thing belongs to the conjugal partnership, subject to reimbursement .

Regime of Separation of Property •

•

•

The spouses retain the ownership, management and control of their properties before the marriage and those acquired thereafter. The agreement may refer to present or future property or both, and may be total or partial; in the latter case, the property not agreed upon as separate shall pertain to the absolute community. Each spouse contributes to the family expenses proportionately with their income an the value of their properties. However, the liability of the spouses to the creditors for family expenses is solidary.

1. Must be made: a. during judicial settlement proceedings; b. if none, within 6 months after the death Property Regime of Unions Without of the deceased spouse Marriage 2. If no liquidation is made within 6 months: any disposition or encumbrance involving the community property shall be void; or Page 6 of 55

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1. Wages and Salaries - owned in equal shares. 2. Property acquired by both through work and industry - rules on co-ownership shall apply. 3. The care and maintenance of the family and household are deemed to be joined and equal. Family Home - the dwelling house where the family reside and the land on which it is situated. • Constituted jointly by the husband and the wife or an unmarried head of the family. • Constituted from the time it is occupied as a family residence and is thus exempt from execution, forced sale or attachment, EXCEPT for: 1. non-payment of taxes; 2. debts incurred prior to constitution; 3. debts secured by mortgages; 4. debts due to laborers, mechanics, architects, builders, material men and others who have rendered service or furnished materials for the construction of the building.

1. to use the surname of the mother; 2. to receive support 3. to be entitled to the legitime and other successional rights.

ADOPTION Republic Act 8852 (Domestic Adoption Act of 1998)

Who may adopt? 1. Filipino Citizen • of legal age • in possession of full civil capacity or legal rights • good moral character • has not been convicted of any crime involving moral turpitude • emotionally and psychologically capable of caring for children • in a position to support and care for his/her children in keeping with the means of the family • at least 16 years older than the adoptee, EXCEPT: • the adopter is the biological parent of the adoptee; • adopter is the spouse of the adoptee’s parent. 2. Alien • same qualifications as a Fil. • country has diplomatic relations with the Phil. • living in the Phil. For at least 3 continuous years prior to the application for adoption and maintains such residence until the adoption decree is entered; • certified to have legal capacity to adopt by his/her diplomatic or consular office; • has been certified by said offices that his gov’t allows the adoptee to enter his/her country as his/her adopted son/daughter. 1. Guardian - with respect to the ward after termination of the guardianship and clearance of his/her financial accountabilities.

PATERNITY AND FILIATION Filiation of a legitimate child may be established by: 1. record of birth appearing in the Civil register/ a final judgment; 2. admission of legitimate filiation in a public document/ a private hand written instrument and signed by the parent concerned; 3. in the absence of the foregoing: a) open and continuous possession of the status of a legitimate child; b) any other means allowed by the Rules of Court and special laws.

Grounds for impugning legitimacy: 1. Physical impossibility for the husband to have sexual intercourse with the wife within the first 120 days of the 300 days immediately preceding the child’s birth, due to: a) physical incapacity of the husband; b) the husband and the wife were living separately; c) serious illness of the husband which absolutely prevented sexual intercourse. 2. Biological or scientific proof that the child could not have been that of the husband; 3. Written authorization or ratification for artificial insemination was obtained through mistake, fraud, violence, intimidation or undue influence.

Exceptions to the residency requirement: 1. former Fil. citizen who seeks to adopt a relative within the 4th degree of consanguinity/affinity; 2. one who seeks to adopt the leg./ illeg. son/daughter of his/her Fil. spouse. 3. one who is married to a Fil. citizen and seeks to adopt jointly with his/her spouse a relative within the 4th degree of consanguinity/affinity of the Fil. spouse.

Rights of illegitimate children: Page 7 of 55

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General Rule: The husband and the wife shall jointly adopt.

2. leg. ascendants and descendants; 3. parents and their leg. children and the leg.

Exceptions:

4. parents and their illeg. children and the leg.

and illeg. children of the latter; 1. one spouse seeks to adopt the leg. son/daughter of the other; 2. one spouse seeks to adopt his/her own illeg. son/daughter; 3. if the spouses are legally separated.

Who may be adopted? 1. any person below 18 years of age who has been administratively/ judicially declared available for adoption; 2. leg. son/daughter of one of the spouse by the other spouse; 3. illeg. son/daughter by a qualified adopter to improve his/her status to that of legitimacy; 4. any person of legal age, if, prior to the adoption said person has been consistently considered by the adopter(s) as his/her own child since minority; 5. child whose adoption has been previously rescinded; 6. child whose biological/adoptive parent(s) has died.

Effects of adoption: 1. All legal ties between the biological parent(s) and the adoptee shall be severed and the same shall be vested in the adopters; Except: biological parent is the spouse of the adopter 2. The adoptee shall be considered as a legitimate child of the adopter for all intents and purposes; 3. In legal and intestate succession, the adoptee and adopter(s) shall have reciprocal rights of succession without distinction from leg. filiation. However, if a will was left, the rules on testamentary succession shall be followed.

and illeg. children of the latter;

5. leg. brothers and sisters whether full or half blood.

Order of liability in case 2 or more persons are obliged to give support: 1. spouse; 2. descendants in the nearest degree; 3. ascendants in the nearest degree. PARENTAL AUTHORITY (Patria Potestas) Substitute Parental Authority exercised in case of death, absence, or unsuitability of the parents; it is not exercised concurrently with parental authority. In default of parents, substitute parental authority is exercised in the order indicated: 1. surviving grandparent 2. oldest bro./sis. over 21 years of age unless unfit /disqualified 3. child’s actual custodian unless unfit/disqualified.

Termination of parental authority Permanent: 1. death of the parents; 2. death of the child; 3. emancipation of the child. Temporary: 1. adoption of the child; 2. appointment of a general guardian; 3. judicial declaration of abandonment; 4. final judgment divesting the parent(s) of parental authority; 5. judicial declaration of absence/ incapacity of the parent(s) exercising parental authority over the child.

Grounds for Rescission of Adoption: 1. repeated physical/verbal maltreatment by the adopter(s). 2. attempt on the life of the adoptee; 3. sexual assault or violence; 4. abandonment or failure to comply with parental obligations. • Adoption shall not be subject to rescission by the adopter(s) but they may disinherit the adoptee.

SUPPORT Persons obliged to support each other: 1. spouses;

Grounds for Suspension of Parental Authority: 1. conviction of a crime with the penalty of civil interdiction; 2. treats the child with excessive harshness and cruelty; 3. gives the child corrupting orders, counsel and example; 4. compels the child to beg; 5. subjects the child/allows him/her to be subjected to acts of lasciviousness; 6. cases of culpable negligence of the parent/person exercising parental authority.

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EMANCIPATION AND THE AGE OF MAJORITY • •

Age of majority: 18 years old Emancipation terminates parental authority over the person and property of the person who shall then be qualified and be responsible for acts of civil life.

ABSENCE Declaration of Absence:

1. General limitations imposed by the State for its benefit; 2. Specific limitations imposed by law; 3. Limitations imposed by the party transmitting the property either by contract or by will; 4. Limitations imposed by the owner himself; and 5. Inherent limitations arising from conflict with other rights.

Doctrine of Self-Help - the right of the owner

1. Absence without administrator - 2 years; 2. Absence with administrator - 5 years from the lapse of time without news about the absentee or since the receipt of last news.

Presumption of Death Ordinary Absence 1. Absence of 7 yrs. - it being unknown whether or not the absentee still lives, he is presumed death for all purposes except for those of succession. 2. Absence of 10 yrs. - for purposes of opening succession 3. If the person disappeared after the age of 75, an absence of 5 yrs. is sufficient.

Qualified/Extra-ordinary Absence: For all purposes including succession, a period of 4 yrs. is sufficient under the following circumstances: 1. person on board a vessel lost during a sea voyage or an aeroplane which is missing; period is counted from the loss of the vessel or aeroplane; 2. person in the armed forces who has taken part in war; 3. person in danger of death under other circumstances and his existence has not been known.

or lawful possessor to exclude any person from the enjoyment and disposal of the property by the use of such force as may be necessary to repel or prevent actual or threatened unlawful physical invasion or usurpation of his property.

Requisites (fido): 1. the force used is reasonably necessary to repel/prevent an invasion/usurpation of his property; 2. there must be actual/threatened physical invasion/usurpation 3. there is no delay; and 4. the person defending must be the owner or the lawful possessor;

Hidden Treasure - any hidden or unknown deposit of money, jewelry or other precious objects, the lawful ownership of which does not appear.

General Rule: it belongs to the owner of the land, building or other property on which it is found.

Exception: the finder is entitled to ½ if: 1. discovery was made on the property of another, of the State or any of its political subdivisions 2. discovery is made by chance 3. the finder is not a trespasser/ agent of the landowner

PROPERTY

Right of Accession

Property of Public Dominion • •

intended for public use those which belong to the State, without being for public use and intended for some public service or for the development of national wealth

Patrimonial Property of the State - property owned by the State but is not devoted to public use, public service, or the development of national wealth. Owned by the State in its private capacity.

OWNERSHIP

Accession - right of a property owner to everything which: 1. is produced thereby; or 2. is incorporated or attached thereto. NOTE: not a mode of acquiring ownership but a mere incident of which.

Classification: 1. Accession Discreta (fruits) a) natural fruits b) industrial fruits c) civil fruits

Limitations upon the right of ownership: Page 9 of 55

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2. Accession Continua (attachment/ incorporation) a) with respect to real property i) accession artificial a) building b) planting c) sowing ii) accession natural a) alluvion b) avulsion c) change of river beds id) formation of islands b) with respect to personal property i) adjunction/conjuction ii) commixtion/confusion iii) specification

2)Receive indemnity for value of mat’ls.

Bad Faith

Good Faith

Acquire after paying value & indemnity for damages but subject to the right of the owner of the materials to remove

1)Remove the mat’ls. in any event

Good Faith

Bad Faith

Acquire w/o paying indemnity

Bad Faith

General Rule: – To the owner belongs the natural, industrial and civil fruits.

Exceptions:

Good Faith Land Owner has the option to:

Basic Principles of Accession Continua: 1. Accessory follows the principal. 2. Union or incorporation must generally be

3. 4. 5. 6.

effected in such a manner that to separate the principal from the accessory, would result in substantial injury to either; He who is in good faith may be held responsible but not penalized; He who is in bad faith may be penalized; No one shall unjustly enrich himself at the expense of another; and Bad faith of one party neutralizes bad faith of the other so that they shall be considered in good faith.

Right of Accession with respect to Immovable Property: 1. Land Owner is the Improver Land Owner and Builder, Planter, Sower Good Faith Acquire the bldg., etc. after paying indemnity for the value of mat’ls.

Owner of Materials Good Faith 1)Remove them if w/o injury to work constructed or w/o plantings or constructions being destroyed.

Lose mat’ls. w/o right to be indemnified

Bad Faith

same as though both acted in good faith (pari delicto) 2. Land Owner is not the Improver:

Land Owner

If the thing is (pula): 1. in possession of a possessor in good faith; 2. subject to a usufruct; 3. leased or pledged; 4. in possession of an antichretic creditor.

2)Be indemnified for damages

1)sell the land to builder/planter(bp) or collect rent from sower(s); unless the value of the land is considerably greater than bldg., etc., in which case, bp pay rent under the terms fixed by the parties.

Improver, Builder, Planter, Sower and Owner of Materials Good Faith In case land owner exercises (2), builder has the right to retain until indemnity is paid and cannot be required to pay rent.

2)acquire improvement after paying indemnity w/c could either be: a)orig. cost of improvements b)increase in the value of the whole

Good Faith 1)Option to: a)acquire improvements w/o paying indemnity and collect damages b)sell the land to bp, rent land to s and collect damages in both cases Page 10 of 55

Bad Faith 1)Lose them w/o right to be indemnified 2)Recover necessary expenses for preservation of land.

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c)order demolition of work or restoration to former condition and collect damages in both cases.

3) Pay damages to land owner

2)Pay necessary expenses for preservation.

Bad Faith

Good Faith

1)Land owner must indemnify bps, for improvements and pay damages

1)Remove them in any event and/or

2)Cannot compel bps, to buy land

2)Be indemnified for damages

Bad Faith

3. Land Owner, Improver and Material Owner are different persons

Good Faith 1)Acquire the improvements and pay indemnity to bps and be subsidiarily liable for mat’ls to om

Builder, Planter, Sower(bps) Good Faith

Owner of materials (om) Good Faith

1)Right of retention for necessary and useful expenses.

1)Collect value of mat’ls. primarily from bps or subsidiarily from lo if bps is insolvent.

2)Pay value of mat’ls to om

2)Remove only if w/o injury

2)a.sell the land to bp except: value of the land is considerably more. b.rent to s

Good Faith

1)Right of retention for necessary and useful expenses. 2)Keep bldg., etc. w/o indem-nity to om and collect damages from him.

1)Lose mat’ls. w/o right to indemnity. 2)Pay damages.

3)without subsidiary liability for cost of materials

Bad Faith

same as though both acted in good faith (in pari delicto)

Land Owner (lo)

1)Option to: a)acquire improvements and pay indemnity to bps b.i) sell to bp except: value of land is considerably more then, forced lease b.ii)rent to s

Good Faith

Bad Faith

1)Option to: a)acquire improvemen t w/o paying indemnity and collect damages b)demolition/restora -tion plus damages c)sell to bp or collect rent from s plus damages.

1)Recover necessary expenses for land preservation. 2)Loses improvement w/o right to indemnity from lo unless lo sells the land.

Bad Faith

2)If bps acquired improvement remove mat’ls if possible (w/o) injury.

Bad Faith

Bad Faith

same as though all acted in good faith

Alluvion

Good Faith

1)Recover value from bps(in pari delicto)

3)No action against LO and may be liable to LO for damages.

2)Pay necessary expenses to bps

Bad Faith

Bad Faith

Distinctions: Avulsion

1. gradual and imperceptible;

1. sudden/abrupt process;

2. soil cannot be identified; 3. belongs to the owner of the

5. identifiable and verifiable; 6. belongs to the owner from whose property it

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property to which it is attached; 4. merely an attachment

1. If the mixture is caused by one owner in good faith, or by the will of both owners, or by chance, or by a common agent - COOWNERSHIP results. 2. If mixture is made by the owner in bad faith, then he losses his material in favor of the other and he is liable for damages.

was detached; 7. first a detachment followed by an attachment

Formation of Islands Rules on Ownership: 1. If formed on the sea a. within territorial waters - State b. outside territorial waters - first country to occupy 2. If formed on lakes, navigable/floatable rivers - State 3. If formed on non-navigable/floatable rivers: a. if nearer in margin to one bank- owner of nearer margin is the sole owner b. if equidistant - island shall be divided longitudinally in halves

Right of Accession with respect to movable property: Adjunction - process by virtue of which two movable things belonging to different owners are united in such a way that they form a single object and each of the things united preserves its own nature.

Specification - giving a new form to another’s material through application of labor (labor is the principal)

Rules: 1. If the worker is in good faith: a) he appropriates the new thing; b) he must indemnify for the mat’ls. EXCEPT: if the mat’l is more precious than the new thing then the owner has the option to: i) get the thing but pay for the work; or ii) demand indemnity for the mat’l. 2. If the worker is in bad faith, owner of the material has the option to: a) appropriate the work without paying for the labor; b) demand indemnity for mat’ls plus damages.

Kinds: 1. 2. 3. 4. 5.

EXCEPT: if the value of the resultant work is more valuable for artistic or scientific reasons.

Engraftment/Inclusio Attachment/Soldadura Weaving/Tejido Painting/Pintura Writing/Escritura

Quieting of title

Tests to determine which is the principal: 1. That to which the other has been united as an ornament, or for its use or perfection; 2. That of greater value; 3. That of greater volume; 4. That which has greater merits. NOTE: In painting, sculpture, writings, printed matter, engraving and lithographs, the board, metal, stone, canvass, paper or parchment shall be deemed accessory.

Separation of things allowed in the following cases: 1. separation without injury; 2. accessory is more precious than the principal; or 3. owner of the principal acted in bad faith. Mixture - combination/union of materials where the respective identities of the component elements are lost.

Kinds: 1. Commixtion - mixture of solids 2. Confusion - mixture of liquids Rules:

Requisites: 1. Plaintiff must have a legal or equitable title to, or interest in the real property which is the subject matter of the action; 2. There must be a cloud in such title; 3. Such cloud must be due to some instrument, record, claim, encumbrance or proceeding which is apparently valid but is in truth invalid, ineffective, voidable/ unenforceable, and is prejudicial to the plaintiff’s title; and 4. The plaintiff must return to the defendant all benefits he may have received from the latter, or reimburse him for expenses that may have redounded to his benefit.

Prescriptive Period: 1. Plaintiff in possession - imprescriptible 2. Plaintiff not in possession - 10 or 30 years.

CO-OWNERSHIP - a state where an undivided thing/right belongs to two or more persons. • The share of the co-owners in the benefits and charges arising from the co-ownership shall be in proportion to their respective Page 12 of 55

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interest, any stipulation to the contrary shall be void.

Co-ownership

Partnership

1. No legal personality;

1. Has juridical personality;

2. Created by law, contract, succession, donation, chance or fortuitous event

2. Created by contract;

3. Purpose : profit

3. Purpose: collective enjoyment

4. Agreement to keep the thing undivided for more than 10 years - not allowed.

4. No limitation upon duration of partnership 5. Mutual representation;

5. No mutual representation;

6. Dissolved by death or incapacity of the partner;

6. Not dissolved by death or incapacity of the co-owners; 7. Can dispose of his share without consent of others;

8. Share in profit/ loss always depend on proportionate share;

b. Substitute another to its enjoyment except when personal rights are involved. c. Exempt himself from necessary expenses and taxes by renouncing part of his interest in the co-ownership. 3. No co-owner shall be obliged to remain in the co-ownership thus, he may demand partition of the thing owned in common so far as his share is concerned. Except: a. If by agreement (not exceeding 10 years), partition is prohibited; b. When partition is prohibited by donor/testator (not exceeding 20 years); c. When such is prohibited by law; d. When such would render the property physically unserviceable; e. When the nature of the property does not allow partition. 4. No co-owner may acquire ownership of the property co-owned by prescription, except when he: a. repudiates the rights of the other coowners; b. repudiation is brought to the knowledge of other co-owners; c. the evidence thereon is clear and conclusive; d. lapse of the period fixed by law.

Right of the co-owner to undertake: 1. Acts of preservation - may be made at the will of one of the co-owners, but he must, if practicable, first notify the others of the necessity of such repairs. 2. Acts of administration - can be performed only with the concurrence of the majority. 3. Acts of alteration - can be performed only with the consent of the other co-owners.

7. Cannot substitute another in his place without consent of other partners; 8. Share in profits/ loss may be subject to agreement.

Regalian Doctrine - doctrine recognized in our Constitution whereby ownership of minerals and sources of potential energy and other natural resources are reserved for the State.

POSSESSION - holding of a thing or enjoyment of a right, either by material occupation or by the fact of subjecting the thing or right to the action of our will.

Rules in Co-ownership:

Degrees of Possession:

1. Each co-owner has the right to use the property for the purpose intended. Limitations: a. Interest of the co-ownership must not be injured or prejudiced. b. Other co-owners must not be prevented from using it. 2. Rules regarding ideal share: each co -owner has full ownership of his part, and his share of the fruits and benefits, thus he may: a. Alienate, mortgage or assign such;

1. Possession without any title and in violation of the right of the owner; 2. Possession with juridical title, but not in concept of the owner; 3. Possession with just title, or a title which is sufficient to transfer ownership, but not from the true owner; 4. Possession with just title from the true owner.

Classes of possession:

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1. In one’s own name or in the name of another 2. In concept of an owner or in concept of a holder 3. In good faith or in bad faith

4. If all the above are equal, the fact of possession shall be judicially determined, and in the meantime, the thing shall be placed in judicial deposit.

USUFRUCT

Acts which do not give rise to possession:

Usufruct

Distinctions: Lease

1. Force or intimidation 2. Acts merely tolerated 3. Acts executed clandestinely

1. Covers all fruits and use

1. Covers only

Loss of possession:

2. Real right

2. Real right only if

1. 2. 3. 4.

Abandonment Assignment Destruction or total loss of the thing Recovery of the thing by the legitimate owner; 5. Possession of another subject to the provisions of Art. 537, if new possession lasted longer than 1 year (real right to possess- not loss until after the lapse of 10 years)

Effects of possession in good faith/ bad faith Good Faith Bad Faith 1. As to fruits received - entitled to fruits - reimburse fruits while possession is received or w/c still in good faith legitimate possessor would have received 2. Pending fruits - liable w/ legitimate - shall have no right possessor for expenses of cultivation and shall share in net harvest in possession to time of possession 3. Expenses (Necessary Expenses) - right of reimburse- right to ment and retention reimbursement only

the lease is registered

3. Created only by the owner

3. Lessor may not be the owner

4. Constituted by law, by donation inter vivos/mortis causa, and by prescription

4. Constituted by contract

5. Usufructuary is responsible for ordinary repairs and for the taxes on the fruits

5. Lessee is not responsible for ordinary repairs and for the payment of taxes

Abnormal Usufruct - those where the usufructuary does not have the obligation of preserving the form and substance of the property which is the object of the usufruct.

Obligations of the usufructuary:

(Useful Expenses) - limited to right of - none removal 4. Deterioration/Loss - no liability, unless, - always liable due to his fault or negligence

Rules of preference of possession: 1. Present/

particular use

actual possessor shall be preferred; 2. If there are two possessor, the one longer in possession; 3. If the dates of possession are the same, the one with a title; and

1. At the commencement of the usufruct: a. To make an inventory of the property; b. To give necessary security; 2. During the pendency of the usufruct: a. To take care of the property as a good father of the family; b. To make ordinary repairs; c. To notify the owner in case the need for extra-ordinary repairs in the property is urgent; d. To pay annual charges and taxes and those considered as a lien on the fruits; e. To notify the owner of any act of a 3rd person that may be prejudicial to the right of ownership; and f. To pay the expenses, costs and liabilities in suits with regard to the usufruct. 3. Termination of the usufruct: a. Deliver the thing to the owner.

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a. public legal easements - those for public or communal use b. private legal easements - those for the interest of private persons or for private use: i. waters v. drainage

Exemption from the obligation to give security: 1. No one will be injured by lack of the bond; 2. Donor reserved the usufruct of the property donated; 3. Parents who are usufructuaries of their unemancipated children’s property; 4. Usufructs subject to caucion juratoria.

ii. right of way iii. party wall nuisance iv. light& view

Caucion Juratoria - usufructuary, being unable to file the required bond or security, filed a verified petition in the proper court asking for the delivery of the house and furniture necessary for himself and his family without any bond or security.

Extinguishment of Usufruct: 1. Death of the usufructuary, unless contrary intention appears; 2. Expiration of the period or fulfillment of the resolutory condition; 3. Merger of the usufruct and ownership in the same person; 4. Renunciation of the usufructuary; 5. Total loss of the thing; 6. Termination of the right of the person constituting the usufruct; 7. Prescription.

EASEMENTS

OR SERVITUDESencumbrance imposed upon an immovable for the benefit or another immovable belonging to another. Modes of acquiring easements: 1. By title 2. By prescription of 10 years - continuous & apparent easements 3. By deed of recognition 4. By final judgment 5. By apparent sign established by the owner of two adjoining estates

Kinds:

viii. internal & adjacent support

Extinguishment: 1. Merger of ownership of the dominant and servient estate; 2. Non-user - discontinuous: 10 years from cessation of usage; • continuous: 10 years from the day on which act contrary to the same took place. 3. When either or both estates fall into such a condition that the easement could not be used; 4. By expiration of the term or fulfillment of the condition; 5. Renunciation of the owner of the dominant estate; 6. Redemption agreed upon.

NUISANCE-

any acts, omission, establishment, business or condition of property or anything else which (ISAHO) : 1. Injures/endangers the health or safety of others; 2. Shocks, defies or disregards decency or morality; 3. Annoys or offends the senses; 4. Hinders or impairs the use of property. 5. Obstructs or interferes with the free passage to any public highway or street, or body of water;

Classes:

1. Continuous Easements - those the use of which is, or may be, incessant without the intervention of any act of man 2. Discontinuous Easements - those which are used at intervals and depend upon the acts of man. 3. Apparent Easements - those which are made known and are continually kept in view by external signs that reveal the use and enjoyment of the same 4. Non-apparent Easements - those which show no external indication of their existence 5. Legal Easements - easements imposed by law which have for their object either public use or interest of private persons.

Kinds:

vi. intermediate distances vii. against

1. Per se - nuisance at all times and under all circumstances regardless of location and surrounding. 2. Per accidens - considered nuisance by reason of circumstances, location, and surrounding. 3. Public - affects the community or a considerable number of persons. 4. Private - affects only a person or a small number of persons.

Remedies against public nuisance: 1. Prosecution under the RPC or local ordinance; 2. Civil Action; 3. Abatement without judicial proceedings.

Remedies against private nuisance: Page 15 of 55

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1. Civil action 2. Abatement, without judicial proceedings

2. Constructive Tradition a) traditio symbolica -parties make use of a

Requisites for summary abatement of private nuisance:

b)

1. Must be specially injurious to the person affected; 2. No breach of peace or unnecessary injury must be committed; 3. Demand made; 4. Demand has been rejected; 5. Approval by district health officer and assistance of local police; and 6. Value of destruction does not exceed Ps 3,000.

c) d)

e)

Doctrine of Attractive Nuisance - a person who maintains in his premises a dangerous instrumentality of a character which is attractive to children of tender years at play and who fails to exercise due diligence to prevent such children from playing therewith or resorting thereto, is liable to a child who is injured thereby, even if the child is technically a trespasser.

MODES OF ACQUIRING OWNERSHIP

f)

INTELLECTUAL CREATION - mode where the author acquires ownership over the products of his intellect and consists, fundamentally, in the power to authorize or refuse the publication or production of such creations or products. (governed by the Intellectual Property Code of the Phil. - R.A. 8293)

DONATION

Modes recognized under the Civil Code (PISTOLD): 1. Prescription 2. Intellectual creation 3. Testate and Intestate succession 4. In consequence of certain contracts, tradition 5. Occupation 6. Law 7. Donation

OCCUPATION

the seizure of a corporeal thing, without an owner, with the intention to acquire ownership in accordance with law.

- an act of liberality whereby a person disposes gratuitously a thing or a right in favor of another, who accepts it.

Classification: 1. As to their effectivity: a) Inter vivos b) Donation mortis causa 2. As to perfection/extinguishment a) pure b) with a condition c) with a term

Distinctions: Donation Inter Donation Mortis Vivos Causa

TRADITION Requisites:

1. takes effect independently of the donor’s death;

1. Right transmitted should have previously existed in the patrimony of the grantor;

2. Transmission should be by just title; 3. Grantor and grantee should have intention and capacity to transmit and acquire; 4. Transmission should be manifested by some act which should be physical, symbolical or legal.

Kinds: 1. Real Tradition - actual delivery

token symbol to represent the thing delivered; traditio longa manu - by mere consent of the parties if the thing sold cannot be transferred to the possession of the vendee at the time of the sale; traditio brevi mano - when the vendee already has possession of the thing sold by virtue of another title; traditio constitutum possessorium when the vendor continues in possession of the thing sold not as owner but in some other capacity; quasi-tradition - exercise of the right of the grantee with the consent of the grantor; traditicion por ministerio de la ley delivery by operation of law.

1. takes effect upon the death of the donor;

2. title conveyed to

2. title conveyed

the donee before the donor’s death;

upon donor’s death;

3. valid if donor survives donee; Page 16 of 55

3. void if donor survives donee;

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4. generally

9. Made by individuals, associations, or corporations not permitted by law to make donations; and 10. Made by spouses to each other during the marriage or to persons of whom the other spouse is a presumptive heir.

4. always

irrevocable during donor’s lifetime;

revocable

Forms of donations: 5. must comply

5. must comply

with the formalities required by Arts. 748 and 749 of the Civil Code.

with the formalities required by law for execution of wills.

Donations prohibited by law: 1. Made by persons guilty of adultery or concubinage at the time of donation; 2. Made between persons found guilty of the same criminal offense in consideration thereof; 3. Made to a public officer or his/her spouse, descendant or ascendants in consideration of the office; 4. Made to the priest who heard the confession of the donor during the latter’s last illness, or a minister of the gospel who extended spiritual aid to him during the same period; 5. Made to relatives of such priest, etc. within the 4th degree, or to the church to which such priest belong; 6. Made by a ward to the guardian before the approval of accounts; 7. Made to attesting witness of execution of donation, if there is any, or to the spouse, parents, or children, or anyone claiming under them. 8. Made to a physician, surgeon, nurse, health officer or druggist who took care of the donor during the last illness;

1. Of movable property: a) with simultaneous delivery of property donated • it may be oral/written - Ps5,000 or less • value exceeds Ps5,000 - written in public or private document a) without simultaneous delivery • the donation and acceptance must be written, public or private instrument, regardless of value. 2. of immovable property a) must be in a public instrument specifying property donated and burdens assumed by donee regardless of value. b) acceptance must be either: • in the same instrument • in another public instrument, notified to the donor in authentic form, and noted in both deeds

Limitations upon the extent of property which may be donated inter vivos: 1. Donee must reserve sufficient means for his support and for those relatives who are entitled to be supported by him; 2. Donation cannot comprehend future property; 3. No person may give by way of donation more than he may give by will.

RESUME OF RULES ON REVOCATION GROUNDS

PRESCRIPTION

TRANSMISSIBILITY OF ACTION

EFFECT OF REVOCATION

LIABILITY FOR FRUITS

1) Birth, appearance or adoption of a child

within 4 years from: • birth of the 1st child, legitimation, adoption, judicial declaration of filiation or receipt of information of existence

transmitted to children and descendants of donor upon his death.

Property must be returned or its value if sold or redeem the mortgage with the right to recover the property.

Donee must return the fruits accruing from the filing of the complaint.

2) Non-

within 4 years from

to donor’s heirs property returned, Page 17 of 55

Donee must return

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compliance with conditions

non-compliance

against the donee’s heirs

alienations and mortgages are void subject to the rights of 3rd persons against the donee.

the fruits received after non-fulfillment of the condition.

3) Act of ingratitude

within one year from the knowledge of the fact of ingratitude

not transmitted to heirs of the donor

property to be returned; aliena-tions and mort-gages before notation of com-plaint in the Registry of Prop. subsists.

Donee must return the fruits accruing from the filing of the complaint.

RESUME OF RULES ON REDUCTION GROUNDS

PRESCRIPTION OF ACTION

TRANSMISSIBILITY OF ACTION

1) Failure of the donor to reserve sufficient means for support 2) Inofficiousness

anytime during the donor’s lifetime

not transmissible

donation reduced to extent necessary to provide support

donee entitled to fruits

within 5 years after the donor’s death

transmissible to donor’s heirs

donee appropriates fruits

3) Birth, reappearance , adoption of a child

anytime during the lifetime of the donor

not transmissible

donation effective during the donor’s lifetime subject to reduction only upon death with regard to the excess donation reduced to the extent necessary for support

4) Fraud against creditors

within 4 years from perfection of donation or from knowledge

transmitted to creditors, heirs or successors in interest

property returned for benefit of creditors subject to right of innocent 3rd persons

RIGHTS TO FRUITS

donee appropriated fruits not affected by reduction; with regard to the excess, liable for fruits accruing from the filing of the complaint fruits shall be returned; if unable to do so, indemnify the donor’s creditors for damages

Instances where the distinctions between heirs and devisees/legatees are important (PDA):

SUCCESSION Inheritance - the universality of all the property, rights and obligations constituting the patrimony of the decedent which are not extinguished by his death.

Heir - succeeds to the whole or aliquot portion of the inheritance either by virtue of a will or by operation of law.

Devisee/ Legatee - succeeds to individual items of property by virtue of a will.

EFFECT OF REDUCTION

1. 2. 3.

Preterition; Defective disinheritance; and After acquired properties.

Testamentary Succession

Matters that cannot be left discretion of third persons:

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to the

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1. Duration or efficacy of the designation of heirs, devisees or legatees; 2. Determination of the portions which they are to take, when referred to by name; and 3. Determination of whether or not the testamentary disposition is to be operative.

Matters that the testator may entrust to a third person : 1. Distribution of specific property or sums money that he may leave in general specified classes or causes; and 2. Designation of the persons, institutions establishments to which such property sums are to be given or applied.

of to or or

Testamentary Capacity and Intent Requisites :

1. The number of pages used upon which the will is written, 2. The fact that the testator signed the will and every page thereof, or caused some other person to write his name, under his express direction, in the presence of the instrumental witnesses; and 3. That the witnesses witnessed and signed the will and all the pages thereof in the presence of the testator and of one another.

If the testator be deaf, or a deaf-mute, he must: 1. personally read the will, if able to do so; otherwise, 2. he shall designate two persons to read it and communicate to him, in some practicable manner, the contents thereof.

•

1. At least 18 years old; 2. The testator be of sound mind at the time of

•

its execution. To be of sound mind, the testator must be able at the time of making the will to: a. know the nature of the estate to be disposed of; b. the proper objects of his bounty; and c. the character of the testamentary act.

Common Formalities of Wills:

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

Special Formalities of Holographic Wills 1. Entirely written by the hand of the testator; 2. Entirely dated by the hand of the testator; and 3. Entirely signed by the hand of the testator.

Witnesses to Wills

1. Every will must be in writing; and 2. Executed in a language or dialect known to the testator.

Special Formalities of a Notarial Will : 1. Must be subscribed at the end thereof by the testator himself or by the testator's name written by some other person in his presence, and by his express direction, 2. Attested and subscribed by three or more credible witnesses in the presence of the testator and of one another. 3. The testator or the person requested by him to write his name and the instrumental witnesses of the will, shall also sign, each and every page thereof, except the last, on the left margin, 4. All the pages shall be numbered correlatively in letters placed on the upper part of each page. 5. There must be an attestation clause. 6. Every will must be acknowledged before a notary public by the testator and the witnesses.

The attestation clause shall state the following:

Requirements (DANANS): 1. 2. 3. 4. 5.

domiciled in the Philippines; able to read and write; not blind, deaf, nor dumb; at least 18 years of age; has not been convicted of falsification of document, perjury, or false testimony; and 6. of sound mind;

Revocation of Wills and Testamentary Dispositions Ways of Revoking a Will: 1. By implication of law; a. Legal separation; b. Preterition; c. Bringing an action for recovery of credit; d. Transformation, alienation, or loss of bequeathed property;

e. Unworthiness; f. Marriage in bad faith; and g. Void or annulled marriage. 2. By some will, codicil, or other writing

Page 19 of 55

executed as provided in case of wills; or

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3. By

burning, tearing, obliterating the will.

canceling,

been instituted simultaneously and not successively.

or

Requisites: a. Testamentary capacity; b. Intention to revoke; c. Actual physical act of destruction; and d. Performed by the testator himself or by some other person in his presence and express direction.

Doctrine

of Presumed Revocation – whenever it is established that the testator had in his possession or had access to the will, but upon his death it cannot be found or located the presumption arises that it must have been revoked by him by an overt act. [Rodelas vs. Aranza] Doctrine of Dependent Relative Revocation – a revocation subject to a condition does not revoke a will unless and until the condition occurs. Thus, where a testator “revokes’ a will with the proven intention that he would execute another will, his failure to validly make a later will would permit the allowance of the earlier will. [Molo vs. Molo, 90 Phil. 37]

Republication and Revival of Wills Republication- act of the testator, whereby he reproduces in a subsequent will the dispositions contained in a previous will which is void as to its form. Revival is the restoration to validity of a previously revoked will by operation of law.

Institution based on a FALSE CAUSE Requisites: 1. Cause for the institution must be stated in the will; 2. Cause must be shown to be false; and 3. It must appear from the face of the will that the testator would not have made the institution had he known the falsity of such cause.

Effect: The statement of a false cause for the institution of an heir shall be considered as not written. Preterition is the omission in the testator’s will of one, some, or all of the compulsory heirs in the direct line, whether living at the time of the execution of the will or born after the death of the testator.

Requisites (COS): 1. Heir omitted must be a compulsory heir in the direct line;

2. Omission must be a complete and total in character in such a way that the omitted heir does not and has not received anything at all from the testator by any title whatsoever; and 3. Compulsory heir omitted must survive the testator.

Effects: 1. The preterition shall annul the institution of heir;

Allowance and Disallowance of Wills

2. But the devises and legacies shall be valid

Issues Resolved in Probate Court (DIT): 1. Due execution; 2. Identity of will; and 3. Testamentary capacity of the testator.

3. If the omitted compulsory heirs should die

insofar as they are not inofficious.

Institution of Heir Presumptions: 1. Presumption of Equality - Heirs instituted without designation of shares shall inherit in equal parts. 2. Presumption of Individuality -When the testator institutes some heirs individually and others collectively, those collectively designated shall be considered as individually instituted, unless it clearly appears that the intention of the testator was otherwise. 3. Presumption of Simultaneity - When the testator calls to the succession a person and his children they are all deemed to have

before the testator, the institution shall be effectual, without prejudice to the right of representation. 4. The share of a child or descendant omitted in a will must first be taken from the part of the estate not disposed of by the will, if any; if that is not sufficient, so much as may be necessary must be taken proportionally from the shares of the other compulsory heirs

FIDEICOMMISSARY SUBSTITUTION: Requisites: 1. There must be a first heir primarily called to the enjoyment of the estate; 2. There must be a second heir; and 3. There must be an obligation clearly imposed upon the estate and to transmit it to the second heir.

Limitations: 1. Substitutions must not go beyond one degree from the heir originally instituted.

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“One degree” means the degree in relationship. [Vda. De Ramirez vs. Ramirez] 2. Fiduciary and fideicommissary must be living at the time of the death of the testator. 3. A fideicommissary substitution can never burden the legitime; 4. Every fideicommissary substitution must be expressly made in order that it may be valid.

•

(1) Relatives of the descendant-propositus, otherwise known as the reservatarios.

An absolute condition not to contract a first or subsequent marriage shall be considered as not written unless such condition has been imposed on the widow or widower by the deceased spouse, or by the latter's ascendants or descendants. Art. 874 impliedly authorizes the following: 1. A generic condition to contract marriage. 2. A specific condition to contract marriage with a determinate person. 3. A specific condition not to contract marriage with a determinate person

Disposition Captatoria - Any disposition made upon the condition that the heir shall make some provision in his will in favor of the testator or of any other person shall be void.

COMPULSORY HEIRS If the testator is a legitimate person 1. Legitimate children and descendants 2. In default of the foregoing, legitimate parents and ascendants 3. Widow or widower

operation of law by an ascendant from his descendant upon the death of the latter; 3. Property should have been previously acquired by gratuitous title by the descendant from another descendant from a brother or a sister; and

Personal Elements (RADO):

Conditional testamentary dispositions and testamentary dispositions with a term •

2. Property should have been acquired by

If the testator is an illegitimate person 1. Legitimate children and descendants 2. Illegitimate children

(2) Ascendant-reservista who is obliged to reserve the property.

(3) Descendant-propositus from whom the (4)

ascendant-reservista in turn acquired the property by operation of law. Ascendant, brother or sister, otherwise known as the origin of the property, from whom the descendant- propositus had acquired by gratuitous title.

Requisites: (a) within the third degree; (b) who belong to the line from which the property came; and (c) must be a relative by consanguinity of the origin or source of property. • All these personal elements must be joined by the bonds of legitimate relationship.

Extinction of Reserva: 1. Death of the ascendant-reservista. 2. Death of all relatives of the descendant-

Purpose: to prevent persons who are strangers

propositus within the third degree who belong to the line from which the property came. Loss of the reservable property for causes not attributable to the fault or negligence of the reservista. Waiver or renunciation by all of the reservatarios. Prescription of the right of the reservatarios, when the ascendant reservista holds the property adversely against them in the concept of an absolute owner. Registration by the reservista of the property as free property under the Land Registration Act.

to the family from acquiring, by some chance or accident, property which otherwise would have remained with the said family.

Steps in determining the legitime of compulsory heirs:

Requisites (DOG):

(1)

4. Illegitimate children

3. 3. In default of the foregoing, illegitimate parents 4. Widow or widower

4. 5.

Note: Sections 17 and 18 of R.A.8552.

RESERVA TRONCAL

6.

1. Descendant should have died without any legitimate issue in the direct descending line who could inherit from him.

(2)

Page 21 of 55

Determination of the gross value of the estate at the time of the death of the testator. Determination of all the debts and charges which are chargeable against the estate.

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(3)

(4) (5) (6)

(7)

Determination of the net value of the estate by deducting all the debts and charges from the gross value of the estate. Collation or addition of the value of all donations inter vivos to the net value of the estate. Determination of the amount of the legitime from the total thus found in accordance with the rules. Imputation of the value of all donations inter vivos made to compulsory heirs against their legitime and of the value of all donations inter vivos made to strangers against the disposable free portion and restoration to the hereditary estate if the donation is inofficious. Distribution of the residue of the estate in accordance with the will of the testator.

Concepts of Collation: 1. Fictitious mathematical process of adding the value of the thing donated to the net value of the hereditary estate 2. Act of charging or imputing such value against the legitime of the value against the legitime of the compulsory heir to whom the thing was donated. 3. Actual act of restoring to the hereditary estate that part of the donation which is inofficious in order not to impair the legitime of compulsory heirs.

Instances where there is imperfect disinheritance: 1. Disinheritance without a specification of the cause. 2. When the disinheritance specifies a cause the truth of which is contradicted, is not proved. 3. When the disinheritances specifies a cause which is not one of those set forth in the Code. Imperfect Disinheritance

Preterition

1. Person disinherited may be any compulsory heir.

1. Person omitted must be a compulsory heir in the direct line.

2. Attempt to deprive compulsory heir of legitime is always expressed

2. Attempt is always implied.

3. Always intentional

3. May be intentional or unintentional.

4. Effect: partial annulment of the institution of heirs.

4. Effect: total annulment.

Common causes for disinheritance of children or descendants, parents or ascendants and spouse: 1. When a heir has been found guilty of an attempt against the life of the testator, his or her descendants, or ascendants and spouse in case of children and parents; 2. When the heir has accused the testator of a crime for which the law prescribes imprisonment for six years or more, if the accusation has been found groundless; 3. When the heir by fraud, violence, intimidation, or undue influence causes the testator to make a will or to change one already made; 4. A refusal without justifiable cause to support the testator who disinherits such heir.

Peculiar causes for the disinheritance of: 1. Children and descendants: a. When the child or descendant has been convicted of adultery or concubinage with the spouse of the testator ; b. Maltreatment of the testator by word or deed, by the child or descendant; c. When the child or descendant leads a dishonorable or disgraceful life; d. Conviction of a crime which carries with it a penalty of civil interdiction. 2. Parents or ascendants: a. When the parents have abandoned their children or induced their daughters to live a corrupt or immoral life, or attempted against their virtue; b. When the parent or ascendant has been convicted of adultery or concubinage with the spouse of the testator; c. An attempt by one of the parents against the life of the other, unless there has been a reconciliation between them. 3. Spouse: a. When the spouse has given cause for legal separation; b. When the spouse has given grounds for the loss of parental authority. Effect of Reconciliation:

1. A subsequent reconciliation between the offender and the offended person deprives the latter of the right to disinherit; and 2. Renders ineffectual any disinheritance that may have been made.

Effects of valid disinheritance: Page 22 of 55

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1. Deprivation of the compulsory heir who is disinherited of any participation in the inheritance including the legitime. 2. The children and descendants of the person disinherited shall take his or her place and shall preserve the rights of compulsory heirs with respect to the legitime. 3. The disinherited parent shall not have the usufruct or administration of the property which constitutes the legitime.

Legacies and Devises STATUS OF PROPERTY BEQUEATHED OR DEVISED

9. Already belonged to the legatee or devisee at the time of the execution of the will even if another person may have some interest therein.

Ineffective

10. Already belonged to the legatee or devisee at the time of the execution of the will even if it may have been subsequently alienated by him.

Ineffective

11. Testator had knowledge that the thing bequeathed belonged to a third person and the legatee or devisee acquired the property gratuitously after the execution of the will.

The legatee or devisee can claim nothing by virtue of the legacy or devise.

No revocation clear intention to comply with legacy or devise.

12. Testator had knowledge that the thing bequeathed belonged to a third person and the legatee or devisee acquired the property by onerous title.

The legatee or devisee can claim reimbursement from the heir or estate.

The legatee or devisee can claim reimbursement from the heir or estate.

Revocation of legacies and devisees:

EFFECT ON THE LEGACY OR DEVISE

1. Belonging to the testator at the time of the execution of the will and up to his death.

Operative

2. Belonging to the testator at the time of the execution of the will but alienated in favor of a third person.

Revoked

3. Belonging to the testator at the time of the execution of the will but alienated in favor of the legatee or devisee gratuitously. 4. 4. Belonging to the testator at the time of the execution of the will but alienated in favor of the legatee or devisee onerously.

came into the possession of the testator by whatever title.

5.

Not belonging to the testator at the time of the will’s execution and thereafter.

Inoperative

6.

Not belonging to the testator at the time of the will’s execution and thereafter but the testator has ordered that the thing be acquired in order that it be given to a legatee or devisee.

Operative

7.

Not belonging to the testator at the time the will is executed and the testator erroneously believed that the thing pertained to him

Void

8.

Not belonging to the testator at the time the will is executed but afterwards

Effective

1. If the testator transforms the thing bequeathed in such a manner that it does not retain either the form or the denomination; 2. If the testator by any title or for any cause alienates the thing bequeathed or part thereof, in the latter case the legacy or devise shall be without effect only to the part thus alienated; 3. If the thing bequeathed is lost during the lifetime of the testator, or after his death without the heir’s fault.

Order of payment in case of insufficiency of estate to cover legacies and devises : 1. Renumenatory legacies or devises; 2. Legacies or devises declared by the testator to be preferential; 3. Legacies for support; 4. Legacies for education; 5. Legacies or devises of a specific, determinate thing which forms a part of the estate; 6. All others pro rata. [Art. 950] Page 23 of 55

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Legal or Intestate Succession Takes place when: 1. A person dies without a will, or with a void will, or one which has subsequently lost its validity; 2. When the will does not institute an heir to, or dispose of all the property belonging to the testator. In such case, legal succession shall take place only with respect to the property of which the testator has not disposed; 3. If the suspensive condition attached to the institution of heir does not happen or is not fulfilled, or if the heir dies before the testator, or repudiates the inheritance, there being no substitution, and no right of accretion takes place; 4. When the heir instituted is incapable of succeeding, except in cases provided in this Code.

Rules:

(6) Other collateral relatives within the fifth degree (7) State

Irregular order of succession: (1) (2) (3) (4) (5) (6)

Legitimate children or descendants Illegitimate children or descendants Legitimate parents Surviving spouse Brothers and sisters, nephews and nieces State

Provisions Common to Testate and Intestate Successions Right of Accretion Accretion is a right by virtue of which, when two or more persons are called to the same inheritance, devise or legacy, the part assigned to the one who renounces or cannot receive his share, or who died before the testator, is added or incorporated to that of his co-heirs, codevisees, or co-legatees

1. Rule of Proximity - In every inheritance, the

2.

3.

4.

5.

relative nearest in degree excludes the more distant ones, saving the right of representation when it properly takes place. Rule of Equal Division - Relatives in the same degree shall inherit in equal shares. Exceptions: (a) When the inheritance is divided between paternal and maternal grandparents. (b) When the inheritance is divided among brothers and sisters, some of the full blood, others of the half blood. (c) In cases where right of representation takes place. Rule of Preference between lines – those in the direct descending line shall exclude in the succession those in the direct ascending and collateral lines, and those in the direct ascending line shall, in turn, exclude those in the collateral line. Rule of barrier between the legitimate family and illegitimate family – the illegitimate family cannot inherit ab intestato from the legitimate family and vice-versa. Rule of double share for full blood collaterals – when full and half-blood brothers or sisters, nephews and nieces survive, the former shall take a portion in the inheritance double that of the latter.

Regular Order of Succession: (1) (2) (3) (4) (5)

Legitimate children or descendants Legitimate parents or ascendants Illegitimate children or descendants Surviving spouse Brothers and sisters, nephews and nieces

Testamentary Succession Legitime Predecease

1.Representation

Intestate Succession

Free Portion 1. Accretion 2. Intestate Succession

Incapacity

Same

Disinheritance

Same

Repudiation

Intestate Succession

Same _

Accretion

Same _

Accretion

Capacity to Succeed by Will or by Intestacy Requisites: 1. the heir, devisee or legatee must be living or in existence at the moment the succession opens; 2. the heir, devisee or legatee must not be incapacitated or disqualified by law to succeed.

The following are incapable of succeeding (PIG RAP): 1. The priest who heard the confession of the testator during his last illness, or the minister of the gospel who extended spiritual aid to him during the same period; Page 24 of 55

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2. Individuals, associations and corporations 3.

4.

5.

6.

not permitted by law to inherit. A guardian with respect to testamentary dispositions given by a ward in his favor before the final accounts of the guardianship have been approved, even if the testator should die after the approval thereof; nevertheless, any provision made by the ward in favor of the guardian when the latter is his ascendant, descendant, brother, sister, or spouse, shall be valid; The relatives of such priest or minister of the gospel within the fourth degree, the church, order, chapter, community, organization, or institution to which such priest or minister may belong; Any attesting witness to the execution of a will, the spouse, parents, or children, or any one claiming under such witness, spouse, parents, or children; Any physician, surgeon, nurse, health officer or druggist who took care of the testator during his last illness;

The following are incapable of succeeding by reason of unworthiness (A4F3P): 1. Parents who have abandoned their children

2. 3.

4. 5.

6.

7. 8.

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

Effect of reconciliation when the ground for disinheritance is also a cause for incapacity by reason of unworthiness:

1. The moment the testator uses one of those causes of unworthiness as a cause for disinheritance, he thereby submits it to the rules on disinheritance; and 2. Reconciliation renders the disinheritance ineffective. Pardon - act of the testator in condoning the cause of unworthiness and it must be in writing.

EXPRESS PARDON

IMPLIED PARDON

1. Made by the execution of a document or any writing in which the decedent condones the cause of incapacity. 2. Cannot be revoked

1. Effected when testator makes a will instituting the unworthy heir with knowledge of the cause of incapacity. 2. Revoked when the testator revokes the will or the institution.

Acceptance and Repudiation of the Inheritance The repudiation of an inheritance shall be made (PAP):

(1) Public instrument (2) Authentic instrument (3) Petition presented to the court having jurisdiction over the intestate proceedings.

testamentary

or

Collation Who are obliged to What to collate collate (1) Compulsory heirs Exceptions: (a) When the donor should have so expressly provided; and

Any property or right received by gratuitous title during the testator’s lifetime.

(b) When donee should have repudiated his inheritance. (2) Grandchildren who survives with their uncle and aunts or cousins and inherits by representation.

(a) All that they may have from the decedent during his lifetime. (b) All that their parents would have been obliged to bring if alive.

The following are not subject to collation:

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2. When it appears or may reasonably be 1. Absolutely no collation: a. Expenses for support, education, medical attendance(even in extraordinary illness),apprenticeship, ordinary equipment, customary gifts. 2. Generally not imputable to legitime: a. Expenses incurred by parents in giving their children professional, vocational or other career UNLESS the parents so provide or UNLESS they impair the legitime. b. wedding gifts by parents and ascendants consisting of jewelry, clothing and outfit EXCEPT when they exceed 1/10 of the sum disposable by will. • Take note that for purposes of addition all donations are subject to collation, except art. 1067.

inferred that the intention of the testator was otherwise.

Effect of inclusion of intruder in partition: 1. Between one true heir and several mistaken heirs – Partition is VOID 2. Between several true heirs and one mistaken heir – transmission to mistaken heir is VOID 3. Through error or mistake, share of true heir is allotted to mistaken heir – Partition shall not be rescinded unless there be bad faith or fraud on the part of other persons interested but the latter shall be proportionately obliged to pay to the person omitted the share which belongs to him, but partition with respect to the intruder is VOID.

Partition and Distribution of the Estate

OBLIGATIONS AND CONTRACTS

Who may effect partition: 1. decedent himself during his lifetime by an act inter vivos or by will 2. third person designated by the decedent 3. heirs themselves 4. competent court

1. When expressly prohibited by the testator

3. 4.

Quasi-Delict 1. affects private concern;

When Partition cannot be demanded (PAPU):

2.

OBLIGATIONS

himself for a period not exceeding 20 years. When the co-heirs agreed that the estate shall not be divided for a period which shall exceed 10 years, renewable for another 10 years. When such partition is prohibited by law. When to partition the estate would render it unserviceable for the use for which it is intended.

Requisites of Legal Redemption in favor of co-heirs: 1. 2. 3. 4.

There must be several co-heirs; One of them sells his rights to a stranger; Sale is made before partition is effected; Right of redemption must be exercised by one or more co-heirs within a period of one month counted from the time they were notified in writing by the co-heir vendor; and 5. Vendee is reimbursed for the price of the sale. General Rule: Partitions made by the testator cannot be impugned on the ground of lesion. Exceptions: 1. When the legitime of compulsory heir is thereby prejudiced; and

Crime 1. 1 1.affects public interest;

2. the Civil Code by means of indemnification, merely repairs the damage incurred;

2. the Penal Code punishes or correct the criminal act;

3. include all acts in which any kind of fault or negligence intervenes.

3. not as broad, punished only if there is a law clearly covering them.

Rights of the creditor: In determinate obligations: 1. specific performance; 2. damages, exclusive or in addition to specific performance. In generic obligations: 1. specific performance; 2. to ask that the obligation be complied with at the debtor’s expense; 3. damages.

Obligations of the debtor: In determinate obligations: 1. specific performance; 2. take care of the thing with the proper diligence of a good father of a family; 3. to deliver all accessions and accessories of the thing even though they may not have been mentioned;

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4. to pay damages in case of breach of the obligation by reason of delay, fraud, negligence or contravention of the tenor thereof. In generic obligations: 1. deliver the thing which is neither of superior nor inferior quality; 2. damages in case of breach of the obligation by reason of delay, fraud, negligence or contravention of the tenor thereof.

Fraud (Dolo) •

must be present during the performance of the obligation and not fraud at the time of the birth of the obligation (causal or incidental fraud)

Negligence (Culpa)

Breach of obligations

– consists in the omission of that diligence which is required by the nature of the circumstances of the persons, of the time and of the place.

Kinds:

TEST: Diligence of a good father of a family

Voluntary – debtor or obligor is liable for damages. If the debtor or obligor in the performance of his obligation is guilty of: a. default (mora); b. fraud (dolo); c. negligence (culpa); d. in any manner contravenes the nature thereof. 2. Involuntary – debtor or obligor is not liable for damages. 1.

Effect of Breach 1. Obligation to Do (Positive Personal Obligation): The Obligee can: 1. have the obligation performed or executed at the expense of the obligor; and at the same time 2. demand for damages by reason of the breach. 2. Obligation not to Do (Negative Personal Obligation): 1. to have the obligation undone at the expense of the obligor; and 2. to ask for damages

Delay General Rule: There must be a demand (judicial/extra-judicial)before incurred

delay

may

be

Exceptions: (When demand not necessary) 1. obligation or law expressly so declares; 2. time is of the essence; 3. demand is useless as when obligor has rendered beyond his power to perform; and 4. there is acknowledgement of default.

Effect of Delay: -

Distinctions : Culpa Contractual

Culpa Aquilana

1. the negligence is merely an incident in the performance of an obligation;

1. the negligence is substantive and independent;

2. there is always a pre-existing contractual relation;

2. there may or may not be a preexisting contractual relation;

3. source of the obligation: the breach of the contract;

3. source of the obligation: the negligent act or omission itself;

4. the existence of the contract and of its breach is sufficient prima facie to warrant recovery;

4. the negligence must be proved;

5. proof of diligence in the selection and supervision of employees is not available as defense.

5. proof of diligence in the selection and supervision of the employees is available as a defense.

Fortuitous Event Essential Characteristics:

1. cause is independent of the will of the debtor; the obligor/debtor can be held liable for 2. the event must be unforseeable or damages, his liability subsists even if the unavoidable; thing which constitutes the object of the 3. occurrence must be such as to render it obligation may have been lost or destroyed impossible for the debtor to fulfill his through a fortuitous event obligation in a normal manner; Page 27 of 55

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4. debtor must be free from any participation in the aggravation of the injury resulting to the creditor.

General Rule: No liability in case of fortuitous event.

Exceptions: 1. when expressly declared by law; 2. when expressly declared by stipulation or contract; 3. when the nature of the obligation requires the assumption of risk;

Distinctions: Suspensive Resolutory Condition Condition 1. if fulfilled, obligation arises or becomes effective; 2. if not fulfilled, no juridical relation is created; 3. rights are not yet acquired, but there is hope or expectancy that they will soon be acquired.

1. if fulfilled, obligation is extinguished;

damages 2. DETERIORATION a. without debtor’s fault – impairment to be borne by the creditor b. with debtor’s fault – creditor may choose between the rescission of the obligation and its fulfillment with indemnity for damages in either case 3. IMPROVEMENT a. by the thing’s nature or by time – improvement shall inure to the benefit of the creditor b. at the debtor’s expense – debtor shall have no other right than that granted to a usufructuary

1. exists only in reciprocal obligations; 2. can be demanded only if plaintiff is ready, willing and able to comply with his own obligation, and the other is not; 3. not absolute; 4. needs judicial approval in certain cases; 5. implied to exist, therefore, need not be expressly stipulated upon; 6. may be waived expressly or impliedly

3. rights are already acquired, but subject to the threat or danger of extinction.

When may Court Fix Term: 1. if the obligation does not fix a period, but

Impossible Conditions General Rule: shall annul the obligation which depends upon them.

Exceptions: 1. pre-existing obligations; 2. if obligation is divisible; 3. in simple or renumenatory donation; 4. in testamentary disposition; and 5. in case of conditions not to do an impossible thing. In the foregoing, the obligations remains valid, only the condition is void and deemed to have not been imposed.

Retroactivity of Effect of fulfillment of Condition: In an obligation to give: retroacts to the day of the constitution of the obligation In an obligation to do or not to do: the courts shall determine whether or not there will be a retroactive affect or when retroactivity will take effect (during the pendency of the condition) 1. LOSS

extinguished

b. with debtor’s fault – debtor pays

Characteristics of Right to Rescind:

2. if not fulfilled, juridical relation is consolidated;

Loss, Deterioration and Improvement

a. without debtor’s fault – obligation is

from its nature and the circumstances it can be inferred that a period was intended by the parties; 2. if the duration of the period depends upon the will of the debtor; 3. if the debtor binds himself when his means permit him to do so.

Debtor loses the right to make use of the period when: 1. after obligation has been contracted, he becomes insolvent, unless he gives guaranty or security for the debt (the insolvency need not be judicially declared); 2. he does not furnish to the creditor the guaranties or securities he promised; 3. by his own act he has impaired said guaranties or securities after their establishment, and when through fortuitous event they disappear, unless he gives new ones equally satisfactory; 4. debtor violates any undertaking, in consideration of which the creditor agreed to the period; or 5. debtor attempts to abscond. • The term/period is presumed for the benefit of both the debtor and the creditor

Distinctions: Page 28 of 55

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Facultative Obligations 1. fortuitous loss extinguishes the obligation; 2. culpable loss obliges the debtor to deliver substitute prestation without liability to debtor 3. choice pertains only to debtor;

1. fortuitous loss of all prestation will extinguish the obligation 2. culpable loss of any object due will give rise to liability to debtor

4. several objects are due;

5. may be complied with by substitution of one that was due;

5. may be complied with by fulfilling any of those alternately due;

6. choice pertain only to debtor.

6. choice may pertain even to creditor or 3rd person.

General Rule: creditor is not bound to accept payment or performance by a third person

Exceptions: 1. when made by a third person who has an interest in the fulfillment of the obligation 2. contrary stipulation

Rights of the third person who paid the obligation of another: 1. payment with the knowledge and consent of debtor – a. can recover entire amount paid; b. can be subrogated to all of the rights of the creditor 2. payment without the knowledge or against the will of debtor – can recover only insofar as payment has been beneficial to the debtor;

In alternative obligations, choice takes effect only upon communication of the choice to the other party and from such time the obligation ceases to be alternative.

Rules in Monetary Obligation: 1. 2.

General Rule: Obligation is presumed joint if there is concurrence of 2 or more debtors and/or 2 or more creditors in the same obligation

Exceptions: 1. when expressly stated to be solidary 2. when the law requires solidarity 3. when the nature of the obligation requires solidarity

When penalty may be reduced: 1. if the principal obligation has been partly complied with; 2. if the principal obligation has been irregularly complied with; 3. if the penalty is iniquitous or unconscionable even if there has been no performance.

MODES OF EXTINGUISHING OBLIGATIONS: 1. 2. 3. 4.

novation; annulment; rescission; fulfillment of the resolutory condition; prescription.

Payment or Performance

3. choice may even pertain to creditor or 3rd person.

4. only one object is due;

•

6. 7. 8. 9. 10.

Alternative Obligations

payment or performance; loss of the thing due; condonation or remission of the debt; confusion or merger of rights of the creditor and debtor; 5. compensation;

payment in cash - must be made in the currency stipulated, if not possible, then in the legal tender in the Philippines payment in check or other negotiable instrument – not considered payment, they are not considered legal tender and may be refused by the creditor Exceptions: a. when the document has been cashed; b. when it had been impaired through the fault of the creditor

Application of Payment – designation of the debt to which the payment must be applied when the debtor has several obligations of the same kind in favor of the same creditor Dation in Payment – property alienated by the debtor to the creditor in satisfaction of the debt in money; the transmission of the ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation • governed by the law on Sales Payment in Cession – debtor abandons all of his property for the benefit of his creditors in order that from the proceeds thereof, the latter may obtain payment of their credits

Distinctions: Dation in Payment in Payment Cession 1. one creditor;

Page 29 of 55

1. plurality of

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creditors; 2. not necessarily in state of financial difficulty;

2. debtor must be partially or relatively insolvent;

3. thing delivered which is considered as equivalent of performance;

3. universality of property of debtor is what is ceded;

4. payment 4. merely releases extinguishes debtor for net obligation to the proceeds of things extent of the value ceded or of the thing assigned, unless delivered as there is contrary agreed upon, intention. proved or implied from the conduct of the creditor. Consignation – deposit of the object of the obligation in a competent court in accordance with the rules prescribed by law after refusal or inability of the creditor to accept the tender of payment

General Rule: Consignation shall produce effects of payment only if there is a valid tender of payment

Exceptions: 1. creditor is absent or unknown, or does not appear at the place of payment; 2. creditor incapacitated to receive payment at the time it is due; 3. when 2 or more persons claim the right to collect; 4. when the title of the obligation has been lost; or 5. when , without just cause he refuses to give a receipt.

Effect of loss

g. when the debt of a certain and determinate thing proceeds from a criminal offense. 2. In Generic Obligations to Give: obligation is not extinguished, the genus of the thing cannot perish. Exception: in case of a generic obligation whose object is a particular class or group with specific or determinate qualities (limited generic obligations) 3. In Obligations To Do: obligation is extinguished when prestation becomes legally or physically impossible Confusion or Merger of Rights – merger of the characters of the creditor and the debtor in one and the same person by virtue of which the obligation is extinguished Compensation – extinguishment in the concurrent amount of the obligation of those persons who are reciprocally debtors and creditors of each other

Distinctions: Compensation Payment 1. takes effect by operation of law; 2. capacity to give and to acquire not necessary;

Compensation

1. takes effect by acts of the parties; 2. capacity to give and to acquire essential;

Confusion

1. two persons who are mutual debtors and creditors of each other;

1. one person where qualities of debtor and creditor are merged;

2. there must be at least two obligations.

2. only one obligation.

1. In Determinate Obligations to Give: will extinguish the obligation if thing is lost. Except: Debts Not Susceptible to Compensation: a. when by law, obligor is liable even for 1. debts arising from contract of deposit; fortuitous event; 2. debts arising from contracts of b. when by stipulation, obligor is liable commodatum; even for fortuitous event; 3. claims for support due by gratuitous title; c. when the nature of the obligation 4. obligations arising from criminal offense; requires the assumption of risks; 5. certain obligations in favor of government. d. when the loss of the thing is due partly to the fault of the debtor; Novation e. when the loss of the thing occurs after – substitution or change of an obligation by the debtor incurred in delay; another, resulting in the extinguishment or f. when debtor promised to deliver the modification, either by changing the object or same thing to 2 or more persons who do principal conditions or by substituting another in not have the same interests; Page 30 of 55

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place of debtor, or by subrogating a third person in the rights of the creditor.

3. When, even without the debtor’s knowledge, a person interested in fulfillment of the obligation pays, without prejudice to the effects of confusion as to the latter’s share.

Two Forms of Substitution of Debtors: 1.

2.

Expromision – effected with the consent of the creditor at the instance of the new debtor even without the consent or even against the will of the old debtor. Delegacion – effected with the consent of the creditor at the instance of the old debtor with the concurrence of the new debtor.

Two Forms of Subrogating a Third Person in the Rights of the Creditor: 1.

2.

Conventional Subrogation – takes place upon agreement of the original creditor, debtor and the third person subrogating the original creditor. Legal Subrogation – takes place by operation of law.

1. governed by Arts. 1624 to 1627;

2. debtor’s consent is required;

2. debtor’s consent not needed;

3. extinguishes the obligation and gives rise to a new one

3.transmission of right of the creditor to third person without modifying or extinguishing the obligation;

4. defects and vices in the old obligation are cured;

4. defects and vices in the old obligation are not cured;

5. takes effect upon moment of novation or subrogation.

5. as far as the debtor is concerned, takes effect upon notification.

General

Rule:

Subrogation

cannot

Stages in the life of a contract:

1. Preparation/Generation 2. Perfection/Birth 3. Consummation/Death Characteristics of Contracts: (ROMA) 1. 2. 3. 4.

Relativity (Art. 1311) Obligatoriness & Consensuality (Art. 1315) Mutuality (Art. 1308) Autonomy (Art. 1306)

Stipulation pour Autrui - stipulation in favor

Distinctions: Conventional Assignment of Subrogation Rights 1. governed by Arts 1300 to 1304;

CONTRACTS

of a 3rd party.

Requisites: 1. The stipulation must be part, not whole of the contract; 2. the contracting parties must have clearly and deliberately conferred a favor upon a 3rd person; 3. the 3rd person must have communicate his acceptance; 4. neither of the contracting parties bears the legal representation of the 3rd party.

General

Rule: Contracts (except real contracts) are perfected from the moment there is a manifestation of concurrence between the offer and the acceptance regarding the object and the cause. Except: Acceptance by letter or telegram which does not bind the offerror except from the time it came to his knowledge. Theories applied to perfection of contracts:

1. Manifestation theory - the contract is 2. be

presumed

3.

Except: 1. Creditor pays another creditor who is preferred, without debtor’s knowledge; 2. A 3rd person not interested in the obligation, pays with the express or tacit approval of the debtor;

4.

perfected from the moment the acceptance is declared or made; Expedition theory - the contract is perfected from the moment the offeree transmits the notification of acceptance to the offerror; Reception theory - the contract is perfected from the moment that the notification of acceptance is in the hands of the offerror; Cognition theory - the contract is perfected from the moment the acceptance comes to the knowledge of the offerror. This is the theory adopted in the Philippines.

Persons incapacitated to give consent: Page 31 of 55

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1. Unemancipated minors;

Falsity of cause

Except:

2. 3.

• Contracts for necessaries; • Contracts by guardians or legal representatives; • Contracts where the minor is estopped to urge minority through his own misrepresentation; • Contracts of deposit with the Postal Savings Bank provided that the minor is over 7 years of age. Insane or demented persons unless the contract was entered into during a lucid interval; Deaf-mutes who do not know how to write.

The following may not acquire by purchase, even by public or judicial auction, in person of though the mediation of another:

Form of Contracts Rules:

1. the guardian, with respect to the property of 2.

3. 4.

5. 6.

his ward; agents, with respect to the property whose administration or sale may have been entrusted to them, unless the consent of the principal has been given; executor or administrator, the property of the estate under administration; public officers and employees, with respect to the properties of the government, its political subdivisions, GOCCs, that are entrusted to them; judges, justices, prosecuting atty.’s, clerks of courts, etc., the property in custogia legis; and any other person specially disqualified by law.

Simulation of a contract Kinds of simulation:

1. Absolute - no real transaction is intended; 2.

Lesion

Effect: simulated contract is inexistent. Relative - the real transaction is hidden; Effect: the apparent contract is void, but the hidden contract is valid if it is lawful and has the necessary requisites. : as to third persons without notice the apparent contract is valid on the principle of estoppel.

1. Contracts shall be obligatory, in whatever form they may have been entered into, provided all the essential requisites for their validity are present. 2. Contracts must be in a certain form when the law requires that a contract be in some form to be: • valid; • enforceable; • for the convenience of the parties. 3. The parties may compel each other to reduce the verbal agreements to writing except: • Solemn contracts such as the following: a. Donations of real estate or of movables if exceeding Ps 5,000; b. Transfer of large cattle c. Stipulation to pay interest in loans d. Sale of land through an agent (authority must be in writing) e. Partnership to which immovables are contributed f. Stipulation limiting carrier’s liability to less than extra-ordinary diligence g. Contracts of antichresis h. Sale of vessels Note: in such case, if the contract is not in writing it is VOID • Real contracts that require delivery for perfection. • In contracts under the Statute of Frauds where the party sued makes a timely objection to the absence of a written memorandum.

Effect of: Absence of cause

Failure of cause Illegality of cause

the contract confers no right and produces no legal effect does not render the contract void the contract is null

and void the contract is void unless the parties can show that there is another cause which is true and lawful does not invalidate the contract unless: • there is fraud, mistake or undue influence • when the parties intended a donation or some other contract.

Reformation of instruments: Page 32 of 55

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2. Wills; 3. When the agreement is void.

Requisites:

1. Meeting of the minds to the contract; 2. The true intention is not expressed in the

3.

Classes of Defective Contracts: (RUVI) 1. Rescissible 2. Unenforceable 3. Voidable 4. Void or Inexistent

instrument by reason of mistake, accident, relative simulation, fraud, inequitable conduct (MARFI). Clear and convincing proof of MARFI.

Cases when there can be no reformation: 1. Simple, unconditional donations inter vivos;

COMPARATIVE TABLE OF DEFECTIVE CONTRACTS: VOID

VOIDABLE

RESCISSIBLE

1. defect is caused by lack of essential elements or illegality 2. not cured by prescription 3. cannot be ratified

1. defect is caused by vice of consent

4. not binding

4. binding until annulled

2. cured by prescription 3. can be ratified

UNENFORCEABLE

defect is caused by injury/ damage either to one of the parties of to a 3rd person 2. cured by prescription 3. need not be ratified 4. binding unless rescinded

1. defect is caused by lack of form, authority, or capacity of both parties 2. not cured by prescription 3. can be ratified

1.

4. binding unless the defect is raised against enforcement.

RESCISSIBLE CONTRACTS

1. consideration

Contracts which may be rescinded:

2.

1. those entered into by guardians where the

2.

ward suffers lesion of more than ¼ of the value of the things which are objects thereof; those agreed upon in representation of absentees, if the latter suffer lesion by more than ¼ of the value of the things which are subject thereof;

3. those undertaken in fraud of creditors when 4.

5. 6.

the latter cannot in any manner claim what are due them; those which refer to things under litigation if they have been entered into by the defendant without the knowledge and approval of the litigants and the court; all other contracts especially declared by law to be subject to rescission; payments made in a state of insolvency on account of obligations not yet enforceable;

Circumstances denominated as badges of fraud:

3. 4.

of the conveyance is inadequate or fictitious; transfer was made by a debtor after a suit has been begun and while it is pending against him; sale upon credit by an insolvent debtor; transfer of all his property by a debtor when he is financially embarrassed or insolvent;

5. transfer is made between father and son, where there are present some or any of the above circumstances; 6. failure of the vendee to take exclusive possession of the property; Distinctions:

RESCISSION 1. Action by the contracting parties even by a 3rd party; 2. based on lesion/fraud of creditors; 3. courts cannot grant periods for compliance

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RESOLUTION (Art. 1191) 1. Action only by the injured party;

2. based on nonfulfillment of the obligation; 3. courts may grant periods

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2. If both parties are incapacitated, ratification by their parents or guardians shall validate the contract retroactively.

VOIDABLE CONTRACTS Causes of extinction of action to annul:

1. Prescription

• the action must be commenced within 4 years from: • the time the incapacity ends; • the time the violence, intimidation or undue influence ends; • the time the mistake or fraud is discovered. 2. Ratification • Requisites: a. there must be knowledge of the reason which renders the contract voidable; b. such reason must have ceased; c. the injured party must have executed an act which expressly or impliedly conveys an intention to waive his right. 3. By loss of the thing which is the object of the contract through fraud or fault of the person who is entitled to annul the contract.

UNENFORCEABLE CONTRACTS

VOID OR INEXISTENT CONTRACTS The following contracts are void: 1. Those whose cause, object or purpose is contrary to law, morals good customs, public order or public policy; 2. Those whose object is outside the commerce of men; 3. Those which contemplate an impossible service; 4. Those where the intention of the parties relative to the principal object of the contract cannot be ascertained; 5. Those expressly prohibited or declared void by law; The following contracts are inexistent: 1. Those which are absolutely simulated or fictitious; 2. Those whose cause or object did not exist at the time of the transaction.

NATURAL OBLIGATIONS

Kinds of unenforceable contracts: 1. those entered into in the name of another by one without or acting in excess of authority; 2. those where both parties are incapable of giving consent; 3. those which do not comply with the Statute of Frauds.

Agreements within the scope of the Statute of Frauds: 1. Agreements not to be performed within one year from the making thereof; 2. Promise to answer for the debt, default or miscarriage of another; 3. Agreement in consideration of marriage other than a mutual promise to marry; 4. Agreement for the sale of goods, etc. at a price not less than Ps500.00 5. Contracts of lease for a period longer than one year; 6. Agreements for the sale of real property or interest therein; 7. Representation as to the credit of a 3rd person.

Instances of Natural Obligations:

1. Performance after the civil obligation has prescribed;

2. Reimbursement of a 3rd person for a debt 3. 4. 5. 6. 7.

that has prescribed; Restitution by minor after annulment of contract; Delivery by minor of money or fungible thing in fulfillment of obligation; Performance after action to enforce civil obligation has failed; Payment by heir of debt exceeding value of property inherited; Payment of legacy after will has been declared void.

ESTOPPEL - a condition or state by virtue of which, an admission or representation is rendered conclusive upon the person making it and cannot be denied or disproved as against the person relying thereon.

Modes of Ratification:

Kinds of Estoppel:

1. For contracts infringing the Statute of Frauds: • expressly • impliedly - by failure to object to the presentation of oral evidence to prove the contract, or by the acceptance of benefits under the contract.

1. Estoppel in Pais (by conduct) Types : a. Estoppel by silence b. Estoppel by acceptance of benefits 2. Technical Estoppel Types: a. Estoppel by deed

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b. Estoppel by record 3. Estoppel by judgment 4. Laches

immovable or any interest therein may be proved by parol evidences 5. Laches & prescription not a bar to enforcement

Distinctions:

Laches

Prescription

1. concerned with 2.

3. 4. 5.

1. concerned with

effect of delay; question of inequity of permitting the claim to be enforced; not statutory; applies in equity; not based on a fixed time.

fact of delay;

2. question or matter of time;

5. Laches & prescription may bar enforcement

Requisites in order that trustee will acquire trust property by acquisitive prescription:

3. statutory; 4. applies at law;

1. he repudiates the right of the beneficiary; 2. repudiation is brought to the knowledge of such beneficiary; 3. evidence thereon is clear and conclusive; and

5. based on a fixed time.

4. after lapse of the period fixed by law. applies only to express trusts.

TRUSTS Kinds: Express- those created by the intention of the trustor and the trustee; 2. Implied- created by operation of law; a. resulting trust- there is intent to create a trust but it is not effective as an express trust; and b. constructive trust- created by law to prevent unjust enrichment or oppression. 1.

Parties to a Trust:

Trust Pursuit Rule - equity will pursue property that is wrongfully converted by the fiduciary, or otherwise compel restitution to the beneficiary. A trust will follow the property through all changes in its state and form, provided its product or proceeds are capable or identification. Purchase Money Resulting Trust - that which arises in favor of a person from whom a consideration comes for a conveyance of property, whether realty or personalty, to anther (De Leon p. 688; Art. 1448, NCC)

1. trustor- he establishes the trust; 2. trustee- he holds the property in trust for the benefit of another; 3. beneficiary or cestui que trust- the person for whose benefit the trust has been created.

Proof of Trust (Rule) - A trust, whether express or implied, can be proved by parol or oral evidence EXCEPT an express trust over an immovable property or any interest therein (De Leon p. 709)

Distinctions:

SALES

Express Trust 1. Created by intention of trustor or of parties 2. Created by direct and positive acts of parties

3. Intent to establish trust is clear

4. No trust concerning an

Implied Trust 1. Created by operation of law

Distinctions:

Emptio rei speratae

2. Deductible from the nature of transaction by oper’n of law as matters of equity, independent of intention of the parties 3. Intent to establish taken from circumstances or other matters indicative of such intent 4. May be proved by parol evidence

1. Sale of thing having a potential existence

Emptio spei 1.

Sale of a hope

Sale produces effect even if the thing does not come into existence, unless it is a vain hope. The uncertainty is regard with the existence of

2.

Sale is subject to the condition that the thing will exist, if it does not , there is no contract.

2.

3.

The uncertainty is with regard the quantity &

3.

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4.

•

quality of the thing Object is a future thing.

the thing.

Distinctions:

Object is a present thing which is the hope or expectancy.

4.

Contract of Sale 1.

A sale of future goods is valid only as an executory contract to be fulfilled by the acquisition and delivery of goods specified.

RELATED CONCEPTS: 1. Policitation - unaccepted unilateral promise to buy or sell. Even if accepted by the other party, it does not bind the promissor and maybe withdrawn anytime. 2. Option contract - a contract granting a person the privilege to buy certain objects at anytime within the agreed period at a fixed price. • The optioner offerror 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 on the proposed contract. (Asuncion v. CA) 3. Right of First refusal - 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. (Equatorial Realty Inc. v. Carmelo & Bauerman Inc.) 4. Earnest money - a partial payment of the purchase price and considered as proof of the perfection of a sale. Distinctions:

Earnest money

Option money

1. Title passes to the buyer upon delivery of the thing sold. 2.

In case of nonpayment, an action for specific performance or for rescission can be filed by the injured party.

1. Ownership is reserved to the seller and is not to pass until full payment. 2.

Title passes to the buyer upon delivery of the thing sold.

In case of nonpayment, an action for specific performance or for rescission can be fulfilled by the injured party. 3. Non-payment is a negative resolutory condition 2.

Contract to Sell Ownership is reserved to the seller and is not to pass until full payment. 2. In case of nonpayment, there can be no action for specific performance 1.

3. Full paymentpositive suspensive condition

6. Pactum reservati dominii (Contractual Reservation of title) - A stipulation stating that despite delivery, the ownership of the thing shall remain with the seller until the buyer has fully paid the price. 7. Assignment of Credit - a contract by virtue of which one person transfers to another his rights and actions against a third person in consideration of a price certain in money or its equivalent. 8. Barter - One of the parties binds himself to give one thing in consideration of the other's promise to give another thing. • If the consideration is partly in money and partly in another thing, RULES: a. The manifests intention of the parties. b. If the intention is unclear, it shall be a barter if the value of the thing given as part of the consideration exceeds the amount of the money; otherwise, it is a sale.

Loss of the object: 1. 2.

In case of nonpayment, there can be action for specific performance.

3. 4.

Loss before perfection - seller bears the loss. Loss at the time of perfection - contract is void or inexistent. Seller bears the loss. Loss after the perfection but before delivery buyer bears the loss as an exception to the rule of res perit domino. Loss after delivery - buyer bears the loss.

Sale by a person not the owner General Rule - Buyer acquires no title even if

5. Contract to sell - exclusive right and privilege to purchase an object.

in good faith and for value under the maxim "Nemo dat qui non habet"(You cannot give what you do not have).

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Exceptions - In the ff. cases the buyer acquires a valid title: a. The owner is estopped by his conduct b. Under recording laws c. Sales sanctioned by judicial or statutory authority. d. Purchases in a merchant's store, fairs or markets.

Rules In Cases Of Double Sale (Art. 1544). 1. Personal Property - to the first possessor in good faith;

2. Real Property - To the person who first recorded it in the Registry of Property in good faith. • if not inscripted, to the first possessor in good faith; • if none of the above, to the person with the oldest title, in good faith.

Remedies of an unpaid seller In general, an unpaid seller has two remedies; an action for specific performance or an action for rescission, with damages in either case.

Special Remedies: 1. Sale of personal property in instalment

2.

3.

(1484) -the seller has the ff. alternative remedies: a. Specific performance in case the buyer fails to pay. b. Rescission of the sale in case of default of 2 or more instalments. c. Foreclose the chattel mortgage on the thing sold in case of default of 2 or more instalments. In this case, he shall have no further action for deficiency judgement. • Aside from the above remedies, the seller can also retain the instalments paid provided that the forfeiture is unconscionable. • These remedies are alternative and not cumulative. Sale of goods (Art. 1526) - An unpaid seller of goods has the ff. remedies: a. Lien on goods while in his possession b. Stoppage in transitu c. Resale of thing d. Rescission of the contract Sale of real estate in installments Under R.A. 6552, the seller's action for rescission and specific performance is subject to certain conditions. a. Right of specific performance - the seller must observe the grace period granted to the buyer to pay, w/o additional interest, the unpaid installment. 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. c. Right to installments - Seller can retain not more than 50% of the installments paid. But if the installments paid were less than 2 years, the seller can have absolute forfeiture over the installments paid.

Warranty - a statement or representation made by the seller of goods, contemporaneously and as a part of the contract of sale, having reference to the character, quality, or title of the goods, and by which he promises or undertakes to insure that certain facts are or shall be as he then represents.

Kinds of warranty: a. EXPRESS b. IMPLIED

Kinds of Implied Warranties: 1. Warranty against eviction Elements: a. Vendee is deprived of the thing purchased; b. The deprivation is by virtue of a final judgment; c. The judgment is based on a prior right to the sale or an act imputable to the vendor; d. The vendor was summoned in the suit for eviction at the instance of the vendee; e. No waiver of warranty by the vendee. Vendor's liability: a. Total eviction - the vendee can demand the ff.: i. Value of the thing at the time of eviction; ii. income or fruits if he has been ordered to deliver them to the party who won the suit; iii. costs of the suit; iv. expenses of the contract; v. damages and interests if the sale was in bad faith. b. Partial eviction - The vendee has the option to demand (i-v) above or rescind the contract. 2. Warranty against hidden defects Elements: a. defect must be serious or important; b. it must be hidden; c. it must exist at the time of the sale; d. vendee must give notice of the defect to the vendor within a reasonable time; e. no prescription (6 mos. from delivery of thing or 40 days in case of animals); f. no waiver of the warranty.

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Remedies of The Vendee a. Accion redhibitoria (rescission) b. Accion quanti minoris (reduction of the price). 3. Warranty as to Fitness or Merchantability

a. An equity of redemption in case of judicial foreclosures; b. A right of redemption in cases of extrajudicial foreclosures.

Extinguishment of Sale

LEASE

1. The same causes as all other obligations 2. Conventional Redemption - The vendor reserves to himself the right to reacquire the property sold. • Period for exercise of right of redemption: a. if there is an agreement - the period agreed upon cannot exceed 10 years; b. If no agreement as to the period - 4 years from date of the contract. Note: However, the vendor may still exercise the right to repurchase within 30 days from the time the final judgment was rendered in a civil action on the basis that the contract was a true sale with right of repurchase. 3. Legal Redemption - the right to be subrogated, upon the same terms and conditions stipulated in the contract, in the place of one who acquires a thing by purchase or dation in payment, or by any other transaction whereby ownership is transferred by onerous title.

A conventional redemption is deemed to be an equitable mortgage in any of the ff.: 1. Price of sale is unusually inadequate; 2. Vendor remains in possession; 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 any obligation.

Instances of redemption: 1. Under the Civil Code (legal redemption) a. Sale of a co-owner by this share to a stranger (Art. 1620). b. When a credit or other incorporeal right in litigation is sold (Art. 1634). c. Sale of a heir of his hereditary rights to a stranger (Art. 1088). d. Sale of adjacent rural lands not exceeding 1 hectare (Art. 1621). e. Sale of adjacent small urban lands bought merely for speculation (Art. 1622). 2. Under special laws

Distinctions:

Lease

Sale

1. Only use is transferred

1. Ownership is transferred

2. Transfer is temporary

2. Transfer is permanent

3. Lessor need not be the owner

3. Seller must be the owner at the time the property is to be delivered.

4. The price of the object is not usually mentioned.

4. The selling price is mentioned.

Kinds: 1. Lease of things 2. Lease of service 3. Lease of work/ contract for a piece of work Distinctions:

Lease of things

Lease of services

1. object of contract is a thing 2. lessor has to deliver the thing leased. 3. In case of breach there can be an action for specific performance.

1. object is some work or service

Lease of Services

Contract for a piece of work

1. the important object is the labor performed by the lessor. 2. the result is generally not important, hence the laborer is

1. the important object is the work done.

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2. lessor has to perform some work or service 3. in case of breach, no action for specific performance.

2. The result is generally important. Generally, the price is not

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entitled to be paid even if there is destruction of the work through fortuitous event.

Sublease 1. the lessee retains an interest in the lease, he remains a party to the contract.

2. the sublessee does not have any direct action against the lessor. can be done even without the permission of the lessor. •

payable until the work is completed, and said price cannot generally be lawfully demanded if the work is destroyed before it is finished and accepted.

When there is no implied new lease: 1. When before or after the expiration of the term, there is a notice to vacate given by either party.

2. When there is no definite fixed period in the original lease contract as in the case of successive renewals.

Special Provisions for Lease of Rural Lands:

Assignment 1. the lessee makes an absolute transfer of his interest as lessee, thus, he disassociates himself from the original contract of lease. 2. the assignee has a direct action against the lessor.

Effect of loss due to fortuitous event: 1. Ordinary fortuitous event - no reduction. 2. Extraordinary fortuitous event a. if more than ½ of the fruits were lost, there shall be a reduction, unless there is a stipulation to the contrary. b. if ½ or less, there shall be no reduction.

Special Provisions for Lease of Urban Lands: Repairs for which Urban lessor is liable: a. special stipulation b. if none, custom of the place.

3. cannot be done unless the lessor consents.

General Rules if duration of lease is not fixed:

Sublease - allowed unless expressly prohibited. The sublessee is subsidiarily liable for any rent due. The lessor has an accion directa against the sublessee for unpaid rentals and improper use of the object.

When lessee may suspend the payment of the rent: 1. Lessor fails to undertake necessary repairs; 2. Lessor fails to maintain the lessee in peaceful and adequate enjoyment of the property leased.

Implied New Lease (tacita reconduccion) - arises if at the end of the contract the lessee should continue enjoying the thing leased for 15 days with the acquiescence of the lessor, unless, a notice to the contrary had previously been given by either party.

Effects of Implied New Lease: 1. The period of the new lease is not that stated in the original contract but the time in Arts. 1682 and 1687. 2. Other terms of the original contract are revived.

1. If there is a fixed period - the lease shall be for that period. 2. If there is no fixed period, the following periods shall be applied: a. If the rent is paid daily, the lease is for day-to-day b. If the rent is paid weekly, the lease is from week-to-week c. If the rent is paid monthly, the lease is from month-to month d. If the rent is paid yearly, lease is from year-to-year.

PARTNERSHIP Rules to determine the existence of a partnership: 1. Persons who are not partners to each other are not partners as to third persons. Exception: partnership by estoppel. 2. Co-ownership of a property does not itself establish a partnership, even though the coowners share in the profits derived from the incident of joint ownership. 3. Sharing of gross returns alone does not indicate a partnership, whether or not the persons sharing them have a joint or common right or interest in any property from which the returns are derived;

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4. The receipt of the share in the profits is a strong presumptive evidence of partnership. However, no such inference will be drawn if such profits were received in payment: a. as a debt by installments or otherwise; b. as wages of an employee or rent to a landlord; c. as an annuity to a widow or representative of a deceased partner; d. as interest on a loan, though the amount of payment vary with the profits of the business; e. as the consideration for the sale of a goodwill of a business or other property by installments or otherwise. (Art. 1769) Distinctions:

PARTNERSHIP

CORPORATION

1. created by mere agreement of the parties;

1. created by operation of law

2. may be organized by only two persons

2. requires at least 5 incorporators;

3. juridical personality commences from the moment of execution of the contract of partnership

3. personality commences from the date of issuance of the certificate of incorporation by the SEC

2. may exercise any power authorized by the partners as long as it is not contrary to law, etc.

4. can exercise such powers expressly granted by law or incident to its existence

4. if no agreement as to mgt. every partner is an agent of the partnership

5. power to do business is vested in the board of directors/ trustees;

6. a partner as such may sue a co-partner who mismanages;

6. suit against the board of director who mismanages must be brought in the corp.’s name;

7. has no right of succession;

7. has right of succession;

8. the partners are liable personally and subsidiarily for partnership debts;

8. the stockholders are liable to the extent of the shares subscribed by them; 9. not based on delectus personam;

9. based on delectus personam; 10. may be established for any period of time stipulated by the partners; 11. may be dissolved at anytime by the will of any or all partners; 12. governed by the Civil Code

10. may not be formed for a period exceeding 50 years; 11. may be dissolved only with the consent of the State; 9. governed by the Corp. Code

Classification of Partnership

1. Page 40 of 55

as to object:

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a. universal partnership i. universal partnership of all present property ii. universal partnership of profits . b. particular partnership 2. as to liability of the partners: a. general partnership b. limited partnership 3. as to its duration: a. partnership at will b. partnership with a fixed period 4. as to the legality of existence: a. de jure partnership b. de jure partnership c. de facto partnership 5. as to representation to others a. ordinary/real partnership b. ostensible/partnership by estoppel 6. as to publicity a. secret partnership b. notorious/open partnership 7. as to purpose a. commercial/trading b. professional/ non- trading Principle of Delectus Personam- a rule inherent in every partnership wherein no one can become a member of the partnership association without the consent of all the partners Contract of Sub-partnership- one formed between a member of a partnership and a third person for a division of profits coming to him from the partnership enterprise. -

it is a partnership within a partnership distinct and separate from the main or principal partnership.

Distribution of profits & losses: 1. the partners share in the profits and losses according to their agreement; 2. in the absence of such: a. capitalist partner - in proportion to his contribution; b. industrial partner - what is just and equitable under the circumstances but he shall not be liable for losses.

Property rights of a partner: 1. his right to specific partnership property; 2. his interest in the partnership (his share in the profits and surplus)

3. his right to participate in the management. Rights of a partner in specific partnership property

1. 2. 3. 4.

has an equal right with other partners to possess specific partnership property for partnership purposes; not assignable, except in connection with the assignment or rights of all partners in the same property; not subject to attachment or execution, except on a claim against the partnership; and not subject to legal support.

Partner by Estoppel - a person who represents himself, or consents to another/others representing him to anyone, as a partner either in an existing partnership or in one that is fictitious or apparent. Effects of conveyance by a partner of his interest in the partnership: 1. conveyance of his whole interestpartnership may either remain or be dissolved; 2. assignee does not necessarily become a partner; 3. assignee cannot interfere in the management or administration of the partnership business or affairs; 4. assignee cannot also demand information, accounting and inspection of the partnership books. Dissolution – the change in the relation of the partners caused by any partner ceasing to be associated in carrying on the business (art. 1828) Winding Up- the process of settling the business or partnership affairs under dissolution. Termination- the point in time when all partnership affairs are wound up or completed and is the end of the partnership life

Order of payment in the winding up of partnership liabilities: 1. General partnership: a. those owing to creditors other than partners; b. those owing to partners other than for capital or profits; c. those owing to partners in respect of capital; d. those owing to partners in respect of profits. 2. Limited partnership a. those owing to creditors, except those to limited partners on account of their contribution, and to general partners; b. those to limited partners in respect to their share of the profits and other compensation by way of income in their contributions;

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c.

those to limited partners in respect of their capital contributions; d. those to general partners other than for capital and profits; e. those to general partners in respect to profits; f. those to general partners in respect to capital.

AGENCY

1. principle of representation is applied 2. extinguished at will of the principal 3. agent exercise discretionary power to attain an end for which he was appointed 4. preparatory contract

Authority - the right of an agent to effect the legal relations to his principal by the performance of acts effectuated in accordance with the principal’s manifestation of consent

Kinds: 1. express- clearly defined 2. implied- includes necessary acts to accomplish purpose 3. general- agent’s discretion is complete 4. special- particular instructions are given 5. apparent- agent or third person was led by the principal’s conduct or word to believe that the agent was indeed authorized, when in fact, he was not

Distinctions:

AGENCY

4. act must be capable of ratification 5. act must be done in behalf of the principal (De Leon, p. 572)

LEASE OF SERVICES 1. principle of employment is applied 2. concurrence of parties is necessary 3. employee exercises ministerial functions only

•

agent may appoint a substitute, except when he has been prohibited by the principal (art 1892)

4. principal contract

Agent shall be responsible for the acts of the substitute: (Art. 1892)

Implied Acceptance

Estoppel

1. when he was not given the power to appoint; or

1. De Jure Agent;

1. Not really an agent;

2. Binds the principal for acts within the scope of his authority.

2. Only the purported agent is liable.

2. when he was given such power but without designating the person and the person appointed was notoriously incompetent or insolvent. Commission Agent- one engaged in the purchase and sale for a principal of personal property, which for this purpose, has to be placed in his possession and at his disposal

Effects of Agent’s Acts: 1. With Authority a. in principal’s name- valid b. in his own name- not binding on the principal; agent and stranger are the only parties, except regarding things belonging to principal or when the principal ratifies the contract or derives benefit therefrom. 2. Without Authority a. in principal’s name- unauthorized and unenforceable but may be ratified, in which case, may be validated retroactively from the beginning b. in his own name- valid

Conditions for ratification: 1. principal must have capacity and power to ratify 2. principal must have had knowledge of material facts 3. principal must ratify the acts in its entirety

Broker - a middleman or intermediary who, in behalf of others and for a commission or fee, negotiates contracts/transactions relating to real or personal property. Factorage- compensation commission agent

of

a

factor

or

Ordinary Commission - compensation for the sale of goods which are placed at his possession or at his disposal Guaranty Commission (Delcredere) - fee that is given in return for the risk which the agent has to bear in the collection of credits

Modes of Extinguishment of Agency (Art. 1919) 1. 2.

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Revocation Withdrawal of the agent

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Death, civil interdiction, insanity or insolvency of the principal or of the agent Expiration of the period Accomplishment of the object or the purpose of the agency Dissolution of the firm or corporation which entrusted or accepted the agency (Just remember RWDEAD?)

3. 4. 5. 6.

General Rule: Agency is revocable at will of the principal.

Exceptions:

loaned

same kind and quality 7. Who bears the risk of loss? Bailor Bailee

Kinds of Commodatum: 1. 2.

Ordinary Commodatum (Art. 1933) Precarium - one whereby the bailor may demand the thing loaned at will (Art. 1947).

Rule:

1. If a bilateral contract depends upon it; 2. If it is the means of fulfilling an obligation

In Commodatum the bailee is liable for loss even if caused by fortuitous event, when:

already contracted; 3. If a partner is appointed manager of a partnership and his termination is unjustifiable; 4. If it is created not only for the interest of the principal but also for the interest of 3rd persons.

1.

CREDIT TRANSACTIONS

5.

2. 3. 4.

He devoted the thing for any purpose different from that which it has been loaned; He keeps it longer than period stipulated, or after accomplishment of use; Thing loaned has been delivered with appraisal of its value; If he lends or leases it to 3rd persons who are not members of his household; or If, being able to save either of the thing borrowed or his own, he chose to save the latter. (Art. 1942)

LOAN Kinds of Loan: 1.

2.

DEPOSIT

Commodatum - contract where the bailor (lender) delivers to the bailee (borrower) a non-consumable thing so that the latter may use it for a certain time and return the identical thing. Simple Loan (Mutuum) - contract where the lender delivers to the borrower money or other consumable thing upon the condition that the latter shall pay the same amount of the same kind and quality. Distinctions:

Commodatum

Mutuum

1. Object non-consumable consumable 2. Cause gratuitous may or may not be gratuitous 3. Purpose use or temporary consumption possession 4. Subject Matter real or personal only personal property property 5. Ownership of the thing retained by the passes to the debtor bailor 6. Thing to be returned the exact thing equal amount of the

Kinds of Deposit: Judicial (sequestration) or one which takes place when an attachment or seizure of property in litigation is ordered (Art. 2005). 2. Extra-judicial (Art. 1967) which may be: (a) voluntary or one wherein the delivery is made by the will of the depositor or by two or more persons each of whom believes himself entitled to the thing deposited (Art. 1968-1995); or (b) necessary or one made in compliance with a legal obligation, or on the occasion of any calamity, or by travelers in hotels and inns or by travelers with common carriers. 1.

Distinctions:

Deposit 1. purpose: safe

Mutuum 1. purpose:

keeping or mere custody 2. depositor can demand the return of the subject matter at will 3. object: movable or immovable

consumption of the object 2. lender must wait for the expiration of the period

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3. object: movable or immovable

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Deposit 1. purpose: safe keeping

2. may or may not be gratuitous 3. in extra-judicial deposit, only movable things may be the object • •

Suretyship

Commodatum 1. purpose: transfer

-

of the use 2. always gratuitous

contract where a person binds himself solidarily with the principal debtor to fulfill the obligation.

Nature of Surety's Undertaking:

3. both movable

1.

and immovable property may be the object.

2. 3.

Deposits of money in banks and similar institutions are contracts of mutuum. A contract for the rent of safety deposit boxes is really a contract of lease of things and not a contract of deposit.

When depositary liable for loss of thing through fortuitous event: 1. if stipulated 2. if he uses the thing without the depositor's permission 3. if he delays it return 4. if he allows others to use it, even though he himself may have been authorized to use the same (Art. 1979). • The depositary may retain the thing in pledge until the full payment of what may be due him by reason of the deposit. (Art.1994)

4. 5.

liability is contractual and accessory but direct liability is limited by terms of contract liability arises only if principal debtor is held liable surety is not entitled to exhaustion undertaking is to creditor, not to debtor. Distinctions: Guaranty

1. liability depends upon an independent agreement to pay the obligation if primary debtor fails to do so 2. collateral undertaking

3. guarantor is secondarily liable.

4. insurer of insolvency of debtor

Distinctions:

Judicial

Extra-judicial

1. surety assumes liability as regular party to the undertaking

2. original promissor 3. surety primarily liable 4. Insurer of the debt 5. surety cannot

5. guarantor can avail of benefit of excussion and division in case creditor proceeds against him Benefit of Excussion- right by which guarantor cannot be compelled to pay the creditor unless the latter has exhausted all the properties of the principal debtor, and has resorted to all of the legal remedies against such debtor.

1. Creation will of the court will of the parties 2. Purpose security of a party to custody and safe recover in case of keeping favorable judgment 3. Subject matter movable or movable property immovable 4. Cause always onerous may be compensated but gene-rally gratuitous 5. When must the thing be returned upon order of the upon demand of court depositor

Double or Sub-Guaranty - one constituted to guarantee the obligation of a guarantor. (Art. 2051 (2)). •

GUARANTY & SURETYSHIP

Guarantor's liability cannot exceed principal's obligation. It is a subsidiary and accessory contract.

Extent of Guarantor's Liability:

Guaranty -

Suretyship

contract whereby the guarantor binds himself to the creditor to fulfill the obligation of the principal debtor in case the latter should fail to do so.

1.

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Where guaranty definite- limited to the principal debt, to the exclusion of the accessories.

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2.

Where guaranty indefinite or simple- not only the principal obligation, but also all its accessories, including judicial costs.

the fulfillment of a principal obligation with the understanding that when the obligation is fulfilled the thing delivered shall be returned with all its fruits and accessions.

Exceptions to the benefit of excussion : 1.guarantor expressly renounced it 2.he has bound himself solidarily with the debtor 3.debtor is insolvent 4.debtor absconded or cannot be sued in the Philippines unless he left a manager or representative 5.execution upon property of principal debtor would not result in satisfaction of the obligation. 6.in the case of a judicial bondsman; or 7.when the guarantor has constituted in favor of the creditor a pledge or mortgage as additional security.

Distinctions: Pledge

1. constituted on movables

2. property is delivered to pledgee

3. not valid against 3rd persons unless a description of the thing pledged and the date of the pledge appear in public instrument

Rights of the guarantor after payment of the principal’s obligation: 1. Reimbursement (TIED) : a. T- total amount of the debt b. I-interest (legal) from the time payment was made known to the debtor c. E-expenses incurred by the guarantor after having notified the debtor that payment had been demanded of him d. D-damages, if they are due. (Art.2066) 2.Subrogation

Guarantor may proceed against Principal Debtor even before payment, when: 1. sued for payment 2. debtor is insolvent 3. guaranty with a period and period has expired 4. debt already demandable 5. after lapse of 10 years 6. reasonable ground to fear principal debtor will abscond 7. imminent danger of debtor becoming insolvent.

4. 5. 6.

when debtor’s obligation extinguished for same causes as all other obligations when creditor voluntarily accepts property in payment of debt release of co-guarantor without consent of others, to the extent of former's share extension granted to debtor without guarantor’s consent when subrogation prevented by some act of creditor

• • • •

immovables 2. delivery is not necessary

3. not valid against 3rd persons if not registered

Pledge must appear in a public instrument to bind third persons (Art. 2096). Pledgor retains ownership of the thing pledged. Debtor cannot demand for the return of the thing pledged until the debt secured by it is paid (Serrano vs. CA, 196 SCRA 107). The pledgee who is in possession of the thing pledged has no right to make use of it without permission from the owner. Pledgor transmits possession, not ownership.

Extinguishment of pledge: 1. 2. 3.

thing pledged returned to pledgor statement in writing by pledgee that pledge is renounced or abandoned. Public sale of thing when credit not satisfied in due time.

REAL MORTGAGE •

PLEDGE Pledge - an accessory, real and unilateral contract by virtue which the debtor or a 3 rd person delivers to the creditor or to a third person a movable or document evidencing incorporeal rights for the purpose of securing

1. constituted on

Pactum commissorium- a stipulation whereby the thing pledged or mortgaged or under antichresis shall automatically become the property of the creditor in the event of nonpayment of the debt within the term fixed. Such stipulation is null and void.

Extinguishment of guaranty: 1. 2. 3.

Real mortgage

Registration in the Registry of Property is necessary in order to bind 3rd persons but not for the validity of the contract.

Kinds of Mortgage: 1. Voluntary 2. Legal 3. Equitable (Art. 1602)

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• •

Future property cannot be object of a contract of mortgage. Must appear in a public document duly recorded in the Registry of Property. Alienation or assignment is valid even if it is not registered. Registration is necessary only to affect third persons.

Extent of Mortgage: natural accessions, improvements, growing fruits and rents or income not yet received when the obligation becomes due (Art. 2127). •

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

Foreclosureremedy available to the mortgagee by which he subjects the mortgaged property to the satisfaction of the obligation to secure which the mortgage was given.

Antichresis 1. refers to real property

1. refers to personal property

2. consensual

2. real contract

3. must be in writing

3.

Antichresis

1. property is

Stipulation of upset price -minimum price at which the property shall be sold is null and void.

Redemption, when allowed: 1. foreclosures in favor of banking or credit institutions 2. extrajudicial foreclosures.

2. 3. creditor

acquires only the right to receive the fruits of the property

3. creditor obliged to pay taxes & charges upon the estate unless stipulated otherwise 4.

Kinds of Redemption: Equity of Redemption: right of the mortgagor to redeem the mortgaged property after his default in the performance of the conditions of the mortgage but before the sale of the mortgaged property or confirmation of the sale. 2. Right of Redemption: right of mortgagor to redeem the mortgaged property within a certain period after it was sold for the satisfaction of the mortgage debt. (exercised within 1 year from registration of sale) 1.

•

Pacta De Non Alienando- a stipulation in a mortgage by which the mortgagor agrees not to alienate or encumber the mortgaged premises to the prejudice of the mortgagee.

ANTICHRESIS Antichresis - a contract whereby the creditor acquires the right to receive the fruits of an immovable of his debtor, with the obligation to apply them to the payment of the interest, if owing, and thereafter to the principal of his credit.(Art.2132) Distinctions: Page 46 of 55

requirement that it must be in a public document is merely to bind 3rd persons Real Mortgage

1. debtor

delivered to creditor

Kinds of Foreclosure: 1. Judicial 2. Extrajudicial

Pledge

there is express stipulation that creditor shall apply fruits to payment of interest, if owing and thereafter to principal of the debt

usually retains possession 2. creditor has no right to receive fruits, but mortgage creates real right against property 3. creditor has no such obligation

4. there is no such obligation on the part of the mortgagee

The amount of principal and of the interest shall be specified in writing; otherwise, the contract of antichresis shall be void.(Art. 2134) CHATTEL MORTGAGE Distinctions:

Chattel Mortgage

Pledge

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1. consensual contract 2. registration in Chattel Mortgage Register is necessary for validity.

3. If property is foreclosed, the excess over the amount due goes to the debtor

4. If property

2. contract must be in public instrument to bind 3rd persons

General Categories of Credit: 1.

3. debtor not entitled to excess unless otherwise agreed or except in case of legal pledge

4. creditor not entitled to deficiency notwithstanding stipulation to the contrary

foreclosed and there is deficiency, creditor is entitled to recover the deficiency from the debtor

5. possession

- where two or more creditors have separate and distinct claims against the same debtor who has an insufficient property. It refers to credits which are already due.

1. real contract

5. possession

remains with the debtor

vested in creditor

is the

Affidavit of good faith - an oath in a contract of chattel mortgage wherein the parties "severally swear that the mortgage is made for the purpose of securing the obligation specified in the conditions thereof and for no other purposes and that the same is just and valid obligation and one not entered into for the purpose of fraud. •

the absence of the affidavit vitiates a mortgage only as against third persons without notice like creditors and subsequent encumbrancers.

CONCURRENCE AND PREFERENCE OF CREDITS Concurrence of credits -

implies the possession by two or more creditors of equal rights or privileges over the same property or all of the property of a debtor.

Preference of credit -

the right held by a creditor to be preferred in the payment of his claim above others out of the debtor's assets.

When rules on preference of credits applicable :

Special Preferred Credits - those listed in Art. 2241 & 2242 shall be considered as mortgages and pledges of real or personal property (Art. 2243). Hence, they are not included in the insolvent debtor's assets. 2. Ordinary Preferred Credits - those listed in Art. 2244 3. Common Credits - under Art. 2245, shall be paid pro rata regardless of dates. • the pro rata rule does not apply to credits annotated in the Registry of Property in virtue of a judicial order, by attachments and executions which are preferred as to "later credits" (the rule is still preference according to the priority of the credits in the order of time). Reflectionary Credit - primarily indebtedness incurred in the repair or reconstruction of something previously made, such repair or construction being made necessary by the deterioration or destruction of the thing as it formerly existed.

TORTS Bases of Tort Liability: 1. Negligence 2. Intentional Acts 3. Strict liability Quasi-Delict Elements: 1. 2. 3. 4.

Act/omission Damage to another Existence of fault or negligence No pre-existing contractual relationship between the parties.

Requisites to hold defendant liable for Quasi-Delict: 1. fault/negligence 2. damage suffered or incurred by the plaintiff 3. relation of cause and effect between the fault or negligence of the defendant and the damages incurred by he plaintiff. Negligence - the failure to observe for the protection of the interest of another person that degree of care, precaution and vigilance which the circumstance justly demand, whereby such other person suffers injury.

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Test of Negligence - Would a prudent man, in the position of the person to whom negligence is attributed, foresee a harm to the person injured as a reasonable consequence of the course about to be pursued; if so, the law imposed a duty on the actor to refrain from that course or to take precaution against its mischievous results. • failure to do so constitutes negligence.

Presumptions 1. A motor vehicle mishap - owner is presumed negligent if he was in the vehicle and he could have used due diligence to prevent the misfortune 2. It is disputably presumed that a driver was negligent if he had been found guilty of reckless driving or violating traffic regulations at least twice for the next preceding two months. 3. The driver of a motor vehicle is presumed negligent if at the time of the mishap, he was violating any traffic regulation. 4. Prima facie presumption of negligence of the defendant if death or injury results from his possession of dangerous weapons or substances Except: when such possession or use is indispensable to his occupation or business.

complained of or was willing that it should occur. 3. The Emergency or Sudden Peril Doctrine applicable if: a. emergency situation is sudden and unexpected; b. is such that would deprive the actor of all opportunity for deliberation.

Contributory Negligence Rule: Plaintiff may still recover damages even if he was negligent, if his negligence was only contributory and the immediate and proximate cause of the injury being the defendant’s negligence, but, the courts shall mitigate the damages awarded.

Proximate Cause -

a. Causation test

• Cause in fact - the defendant’s negligence is the cause without which the injury would not have taken place. • Substantial factor test - to hold the defendant liable, it is sufficient if his negligent conduct was a substantial factor in bringing about the injuries. a. Policy test • Forseeability test • Natural and Probable Consequence Test • Ordinary and Natural or Direct Consequence Test • Hindsight test

the thing or transaction speaks for itself.

Requisites:

a. the accident was of a kind which does not ordinarily occur unless someone was negligent; b. the instrumentality which caused the injury was under the exclusive control of the person charged with negligence; c. the injury suffered must not have been due to any voluntary action or contribution on the part of the person injured; d. absence of explanation by the defendant.

Defenses: 1. Fortuitous Event Except: a. in cases specified by law; b. when otherwise declared by stipulation; c. there is an assumption of risk. 2. Assumption of Risk Volenti no fit injuria - one is not legally injured if he has consented to the act

and any the not

Tests:

Res Ipsa Loquitur -

that cause which in the natural continuous sequence unbroken by efficient intervening cause produces injury without which the result would have occurred.

Principle of Concurrent Cause: where the concurrent or successive negligent act/omission of 2 or more persons, although acting independently, are in combination, the direct and proximate cause of a single injury to a person, and it is impossible to determine what proportion each contributed to the injury, either is responsible for the whole injury, even though his act alone might not have caused the entire injury. Prescription : an action for quasi-delict must be instituted within 4 years Vicarious Liability - one is liable for the act of another under his authority irregardless of his negligence. Imputed Negligence - rule whereby negligence of a certain person in a transaction which gave

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rise to the injury complained of is imputable against the person for whom he was acting or against his associates.

Article 2180 - liability for acts or omission of those persons for whom one is responsible (FGOEST):

1. Father, or in case of death or incapacity, the

2.

3.

4.

5.

6. •

mother: • damage caused by minor children • living in their company Article 234 of the Family Code as amended by Sec. 6 of R.A. 6809 Guardian • for minors or incapacitated • under their authority • living in their company Owners and manager of establishment: • for their employees • in the service of the branches in which they are employed, or • on the occasion of their functions. Employers • for employees and household helpers • acting within the scope of their assigned task • even if employers are not engaged in any business or industry. State - acting through a special agent and not when the damage has been caused by the official to whom the task done properly pertains. Teachers or heads of establishments of arts and trades for pupils and students or apprentices they remain in their custody Applies to academic institutions as well – liability attaches to the teacher-in-charge.

Defense: exercise of diligence of a good father of a family to prevent damage.

Liability without fault– intent or negligence is immaterial:

3. Proprietor of a building or structure – damages resulting from its total or partial collapse, if it should be due to lack of necessary repairs. 4. Head of a family living in a building – damages caused by things thrown or falling from the same. 5. Breach of implied warranties 6. Consumer’s Act (R.A. 7394) - Any Filipino or foreign manufacturer, producer and importer, independently of fault shall be liable for redress, for damages caused to consumers by defects resulting from: a. design; b. manufacture; c. construction; d. assembly and erection; e. formulas and handling and making up; f. presentation or packing of their products as well as for the insufficient or inadequate information on the use and hazards thereof. Defenses: a. that it did not place the product on the market; b. that although it did place the product on the market such product has no defect; c. that the consumer or a third party is solely at fault. General Rule: Sellers are not liable Except: if it is not possible to identify the manufacturer, builder, producer, or importer; the product is supplied, without clear identification of the manufacturer, builder, producer or importer; he does not adequately preserve perishable goods.

DAMAGES

Damages: 1. A possessor of an animal or whomever may - a sum of money which the law awards or make use of the same for damages it may imposes a pecuniary compensation, cause recompense or satisfaction for an injury Defenses: done or a wrong sustained as a a. force majeure consequence of the breach of some duty or b. fault of the person suffering the damage violation of some right. c. act of third persons 2. Product liability of manufacturer and Kinds (MENTAL): processor of food stuff, drinks, toilet articles and similar goods, for death or injuries 1. Actual – for definite loss suffered by him as caused by any noxious or harmful duly proved. substances used, although no contractual 2 Kinds: relation exists between them and the consumers. Page 49 of 55

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a. Dano Emergente - value of the loss

–

suffered. b. Lucro Cesante - profits which the obligee failed to obtain. 2. Moral – for: a. physical suffering, b. mental anguish, c. fright, d. serious anxiety, e. besmirched reputation, f. wounded feelings, g. moral shock, h. social humiliation, and i. similar injury.

3.

Deed –

Nominal – amount awarded for vindication of right violated;

4. Temperate - compensation more than nominal but less than compensatory damages awarded when court finds that offended party suffered some pecuniary loss not ascertainable;

5. Liquidated – that agreed upon by parties to be paid in case of breach of contract; and

written instrument executed in accordance with law, wherein a person grants or conveys to another certain land, tenements or hereditaments

Probative Value of Torrens Title – Torrens Title should be received as evidence in all courts of the Philippines, and shall be conclusive as to all matters contained therein principally, the identity of the owner of the covered land thereby except so far as provided in the Land Registration Act

Classification of Lands: 1. 2. 3. 4.

Forest Agricultural Mineral Public Parks

Modes of Acquiring Land Title:

6. Exemplary – imposed by way of example or correction for public good in addition to the moral, temperate, liquidated or compensatory damages.

Exceptions to the Necessity of Proof In the ff. Cases, actual damages need not be proved: 1. In case liquidated damages had been previously agreed upon 2. In case loss is presumed as when a child (minor) or a spouse dies 3. In case of forfeiture of bonds in favor of the government for the purpose of promoting public interest or policy.

1. 2. 3. 4. 5. 6. 7. 8.

By public grant By adverse possession By accretion By reclamation By private grant or voluntary transfer By involuntary alienation By descent or devise By Emancipation Patent

Systems of Registration: 1. System under the Spanish mortgage law 2. Torrens System 3. System of recording for unregistered lands Original Registration Proceeding – proceeding brought before the Regional Trial Court (land registration court) to determine title of ownership to the land on the basis of an application filed for registration or of an answer filed by a claimant in a cadastral registration

REGISTRATION OF LAND TITLES & DEEDS Torrens Title –

that upon which ownership is based; it is the evidence of the right of the owner or the extent of his interest, and by which means he can maintain control and as a rule assert right to exclusive possession and enjoyment of property

certificate of ownership issued under the Torrens System of registration by the government, through the Registrar of Land Titles and Deeds; naming and declaring the owner in fee simple of the real property described therein, free from all liens and encumbrances except such as may be expressly noted thereon or otherwise reserved by law

Subsequent Registration Proceeding – where incidental matters after original registration may be brought before the land registration court by way of motion or petition filed by the registered owner or a party in interest

Steps in Land Registration Proceedings 1. Survey of the land by the Bureau of Lands or 2.

Land Title Page 50 of 55

a duly licensed private surveyor. Filing of application for registration by the applicant

SAN BEDA COLLEGE OF LAW 2000 CENTRALIZED BAR OPERATIONS

MEMORY AID IN CIVIL LAW

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3. 4.

5.

6. 7. 8. 9. 10.

11. 12. 13.

Setting of date for initial hearing by court Transmittal of application and date of initial hearing together with all documents or other evidences attached thereto by the Clerk of Court to the National Land Titles and Deeds Registration Administration Publication of Notice of Filing of Application and date and place of hearing once in Official Gazette and once in newspaper of general circulation in the Philippines Service of Notice upon contiguous owners, occupants and known to have interest in the property by the sheriff Filing of Answer or Opposition to application by any person whether named in the notice or not Hearing of case by court Promulgation of judgement by court Issuance of decree by court declaring the decision final and instructing the National Land Titles and Deeds Registration Administration to issue a decree of confirmation and registration Entry of decree of registration in National Land Titles and Deeds Registration Administration Sending of copy of decree of registration to corresponding Registrar of Land Titles and Deeds, and Transcription of decree of registration in the Registration in the registry book and issuance of the Owner’s Duplicate Original Certificate of Title of applicant by Registrar of Deeds upon payment of prescribed fees

Persons Who May Apply for Registration of Land Titles: 1. those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier 2. Those who have acquired ownership of private lands by prescription under the provisions of existing laws 3. Those who have acquired ownership of private lands or abandoned river beds by right of accession or accretion; and 4. Those who have acquired ownership of land in any other manner provided for by law

Private Corporations or Associations as Applicants The 1987 Philippine Constitution(Art. XII, Sec. 3), provides that “Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years,

and not to exceed one thousand hectares in area.” it is clear that if the land is still part of the alienable and disposable lands of the public domain at the time a corporation or association files an application for confirmation of imperfect or incomplete title thereto or at the time such applicant acquired the land from a Filipino citizen, then the aforequoted constitutional bar applies. Muniments of Title – instruments or written evidences which applicant holds or possesses to enable him to substantiate and prove title to his estate

Doctrine of Non-Collateral Decree or Title –

Attack

of

decree of a registration and a registered title can not be impugned, enlarged, altered, modified, or diminished in a collateral proceeding, not even by direct proceeding, after the lapse of the period prescribed by law

Reconstitution of a Certificate of Title denotes restoration of the instrument, which is supposed to have been lost or destroyed in its original form and condition

Procedure in Cadastral Cases: 1. 2. 3. 4. 5. 6. 7.

Cadastral survey Filing of petition Publication of Notice of Initial Hearing Filing of Answer Hearing of the case Decision Issuance of decree and certificate of title

Requirements for Deeds and Other Voluntary Acts of Conveyance to be Registrable: a. Presentation of owner’s duplicate certificate whenever any duly executed voluntary instrument is filed for registration b. Payment of prescribed registration fees and the requisite documentary stamps c. Evidence of full payment of real estate tax as may be due; and d. Inclusion of one extra copy of any document of transfer or alienation of real property, to be furnished the city or provincial assessor Requisites for Adverse Claim sufficient for purposes of registration a. adverse to registered owner b. arises after original registration c. cannot be registered under any other provisions of the Land Registration

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SAN BEDA COLLEGE OF LAW 2000 CENTRALIZED BAR OPERATIONS

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Statutory Liens Affecting Title 1. Liens, claims or rights arising or existing under the laws and constitution of the Philippines, which are not by law required to appear of record in the registry of deeds 2. Unpaid real estate taxes levied and assessed within two (2) years immediately preceding the acquisition of any right over the land by an innocent purchaser for value without prejudice to the right of the government to collect taxes payable before that period from the delinquent taxpayer alone 3. Any public highway or private way established or recognized by law or any government irrigation, canal or lateral thereof; and 4. Any disposition of the property or limitation on the use thereof by virtue of laws or regulations on agrarian reform Lis Pendens – indicates the control which a court has, during the pendency of an action over the property involved therein

Requisites for Entitlement to Compensation from the Assurance Fund: a. Claimant, who must be an owner, purchaser or encumbrancer in good faith, suffered actual damage by the loss of the land or interest therein b. No negligence is attributable to him c. Loss or damage suffered was not occasioned by the breach trust or any mistake in the resurvey of subdivision of the registered land d. Claimant is, by provisions of Land Registration Act, barred or in way precluded from bringing an action to recover the land or interest therein, or from obtaining compensation direct from the person responsible e. Action to recover from the assurance Fund has not prescribed; and f. Loss or damage was due to any of the following causes: 1. Through the omission, mistake or misfeasance of the Clerk of Court or Registrar of Deeds 2. By registration of any other person as owner of such land 3. By mistake, omission or misdescription in a certificate or owner’s duplicate, or in any entry or memorandum in the register or other official book; or 4. By any cancellation

Remedies Available to Aggrieved Party in Registration Proceedings: 1. 2. 3. 4. 5. 6.

New trial Appeal Review of Decree of Registration Relief from Judgement Reconveyance Recovery of Damages

TABLE OF LEGITIME SURVIVOR

LD

Any class alone

All classes only one LD

LA

SS

IC

½, unless the testator and the SS were married in articulo mortis and the testator died within 3 months from the time of such marriage, in which case, legitime of SS as sole heir is 1/3.

but

½

excluded

1/4

All classes but two or more LD (1) LA (2) SS

½

excluded

--

½**

Equal to that of each LD 1/4

--

½***

--

¼

--

--

1/3

1/3

--

½

1/8

¼

(1) (2) (1) (2) (1) (2) (3)

LA IC SS IC LA SS IC

½ of that of a LC, if free portion is not sufficient, divide equally among the LC. Same as above --

**If the testator is an illegitimate person, his natural parents are also excluded by the presence of illegitimate children. Page 52 of 55

SAN BEDA COLLEGE OF LAW 2000 CENTRALIZED BAR OPERATIONS

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***If natural parents concur with the the later is also ¼.

surviving spouse, the legitime of the former is , while that of

TABLE OF INTESTATE SHARES ill. children surviving spouse ill. children surviving spouse leg. parents leg. parents surviving spouse ill. parents surviving spouse surviving spouse bros./sisters/ nephews/nieces

½ ½ ¼ ¼ ½ ½ ½ ½ ½ ½ ½

any class alone

entire estate

illeg. children surviving spouse leg. children 1 leg. child surviving spouse 2 or more leg. children surviving spouse

satisfy legitime first then distribute free portion pro rata (1:2:2) ½ ½ consider spouse as leg. child then divide estate by total number

SAN BEDA COLLEGE OF LAW 2000 CENTRALIZED BAR OPERATIONS Executive Committee ARLENE CHING, Chair JOHN PIERRE RODRIGO, Over-all Vice Chair MARTIN YASAY, Vice Chair Acads STEPHANIE BALTAO, Vice Chair Secretariat GEORGE ORTHA, Vice Chair Finance RAFFY PALMA, Vice Chair EDP TONI DEL ROSARIO, Asst. Vice Chair for Secretariat MA. LEONORA TABLADILLO, Asst. Vice Chair for EDP Subject Chairpersons RACMA FERNANDEZ, Political Law CLIFFORD SOBREVILLA, Labor Law CELESTE LEGASPI, Civil Law GEROME TUBIG, Taxation ADONIS GABRIEL, Criminal Law ARLYN SARMIENTO, Remedial Law GLADYS GARCIA, Commercial Law RHEA JULIAN, Legal Ethics Civil Law Committee MA. CELESTE J. LEGASPI, Chairperson ANDREW AGUIRRE, EDP JESSICA GAMBOL, EDP

Page 53 of 55

SAN BEDA COLLEGE OF LAW 2000 CENTRALIZED BAR OPERATIONS

MEMORY AID IN CIVIL LAW

STRICTLY FOR BEDAN REVIEWEES Unauthorized reproduction of this copy is strictly prohibited!!!

Members: Kitchie Arias-Sumilong, Leah Ramirez, Weng Ruiz, Rex Austria, Levi Pidazo, Karen Matti, Michael So, Michelle Antonio, Maricel Echavez, Joanne Tatel SPECIAL THANKS TO : DEAN DOMINGO NAVARRO Adviser

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